================================================================================

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
(Mark One)

   [X]    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934


                   For the fiscal year ended December 31, 2001

                                       OR

   [ ]    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
          ACT OF 1934

             For the transition period from __________ to __________

                           COMMISSION FILE NO. 0-18438


                       VITAFORT INTERNATIONAL CORPORATION
                       ----------------------------------
                 (NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)


           DELAWARE                                     68-0110509
           --------                                     ----------
(State or Other Jurisdiction of             (I.R.S. Employer Identification No.)
 Incorporation or Organization)

        1925 CENTURY PARK EAST, 5TH FLOOR, LOS ANGELES, CALIFORNIA 90067
               (Address of Principal Executive Offices) (Zip Code)

                                 (310) 364-3977
                                 --------------
                (Issuer's Telephone Number, Including Area Code)

Securities registered under Section 12(b) of the Exchange Act:

                                                     Name of Each Exchange
     Title of Each Class                              on Which Registered
     -------------------                              -------------------
            None                                              None

Securities registered under Section 12(g) of the Exchange Act:

                         COMMON STOCK, PAR VALUE $.0001
                         ------------------------------
                                (Title of Class)

Check whether the issuer: (1) Filed all reports required to be filed by Section
13 or 14(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
                                                           Yes [X]   No [ ]

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this form 10-KSB.   [X]

State issuer's revenues for its most recent fiscal year:  $0.00.

The aggregate market value of the voting stock held by non-affiliates computed
by reference to the average bid and asked prices of such stock on May 15, 2002
was $152,812.

The number of shares outstanding of the issuer's common stock as of May 15, 2002
was 21,099,288.

Transitional Small Business Disclosure Format (check one):    Yes [ ]   No [X]
================================================================================
<PAGE>

                                     PART I

CERTAIN STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION ("SEC") FORM 10-KSB ("FORM 10-KSB") CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS THAT MAY CAUSE OUR OR OUR INDUSTRY'S ACTUAL RESULTS, LEVELS OF
ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT THAN ANY
EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE STATEMENTS MAY
BE CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, PRESS
RELEASES, AND WRITTEN OR ORAL PRESENTATIONS MADE BY OUR REPRESENTATIVES TO
ANALYSTS, RATING AGENCIES, STOCKHOLDERS, NEWS ORGANIZATIONS AND OTHERS. IN SOME
CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS "MAY,"
"WILL," "SHOULD," "INTEND," "EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES,"
"ESTIMATES," "PREDICTS," "POTENTIAL," "CONTINUE," OR THE NEGATIVE OF THESE TERMS
OR OTHER COMPARABLE TERMINOLOGY. ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS IN
THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE
RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS.


ITEM 1. DESCRIPTION OF THE BUSINESS

GENERAL

Vitafort International Corporation (the "Company" or "Vitafort" or "Registrant")
was formed as a California corporation in 1986, and reincorporated as a Delaware
corporation in 1989 prior to its initial public offering. The Company was
originally formed to develop value added foods and beverages for third parties.
In 1993 Vitafort changed its strategic direction and began developing,
distributing and marketing proprietary healthy snacks under Company owned
brands. This business model was continued throughout the 1990's but discontinued
in 2000 due to continuing losses. On September 13, 1999, pursuant to a Share
Exchange and Reorganization Agreement, the Company exchanged all the issued and
outstanding shares of Hollywood Partners, Inc., a California corporation that
previously operated as a wholly owned subsidiary of Vitafort for 5,000,000
shares of a reporting shell which changed its name to Hollywood Partners.com,
Inc. ("HP"). HP common stock is traded on the OTCBB (HLYP). Vitafort was the
majority shareholder of HP through February 2002 when HP issued an aggregate of
39,300,000 shares of its common stock to various employees and consultants.
(See "Subsequent Events.")

With the spin out of HP and the transition to Visionary Brands as the grocery
food and marketing company, Vitafort was positioned to announce its new
strategic direction. Due to the significant losses caused by the quality control
problems at the manufacturer of the Company's "Peanut Squeeze" product, Haarmann
& Reimer ("H&R"), and the Company's inability to raise additional capital
required to move the Company forward due to these losses, the Company has shut
down all operations of Visionary Brands and has focused its resources on
building its primary asset, the Company's HP subsidiary, which is described in
more detail below. The Board of Directors of Vitafort has focused its efforts on
creating value for the Vitafort shareholders by attempting to build value in HP
through structuring strategic acquisitions that can be rolled into the
subsidiary. The Board intends to leverage its ownership of HP to raise capital
for Vitafort and facilitate a new business opportunity for the Company. For a
complete update of HP, reference is made Hollywood Partners.com's Form 10-K
filing for the year 2001.

                                        2
<PAGE>
VISIONARY BRANDS
----------------

Visionary Brands is currently inactive, the following description is included
only because Visionary Brands was active during a part of 2000.

MANUFACTURING & WAREHOUSING

The Company manufactured its products by entering into agreements ("Co-Packer
Agreements") with established food manufacturers ("co-packers"), who have the
facilities, staff, quality assurance and process control programs for the
production of their own products, as well as the Company's products. Co-packer
relations are intended to enable the Company to secure the expertise of
qualified food manufacturers with respect to the development, manufacture and
packaging of the product. This arrangement is intended to achieve economies of
scale in production and staffing requirements, while providing production
flexibility to meet changes in product mix demanded by customers that the
Company could not achieve on its own. Additionally, the Company benefits from
the production experience and expertise of these companies while avoiding the
capital outlays, staffing requirements, quality control, legal process
requirements and other manufacturing costs and delays that the Company would
encounter were it to attempt to manufacture its products utilizing its own
facility. As described above, the Company experienced quality control problems
with its co-packers.

DISTRIBUTION AGREEMENT

In October 1999, the Company entered into a Distribution Agreement ("Agreement")
with Hollywood Partners.com that allowed Visionary Brands to continue to
distribute licensed products to retailers across the country. HP no longer
distributes licensed products and no future revenues will be realized from the
Agreement.

THE RETAIL TRADE

The Company's retail distribution strategy was to target the following classes
of trade: Supermarkets, mass merchandisers, drug stores, warehouse clubs,
convenience stores, natural food stores, military commissaries and exchanges,
sporting goods stores, health clubs, coffee houses and gourmet distributors.

INTELLECTUAL PROPERTY RIGHTS PROTECTION AND TRADEMARKS

The Company believed that its trademarks did afford it some degree of protection
from competition and do allow it to differentiate its products from those of its
competitors through brand loyalty and identity. There are, however, no
assurances that such trademarks may offer significant protection from
competitors or that the Company would be successful should litigation to protect
such trademarks become necessary. The Company relied upon non-disclosure,
secrecy agreements and its common law rights in order to protect its proprietary
formulae, procedures, and other information. No assurance can be given that such
steps will adequately protect the Company against competing products or that the
Company will be able to adequately enforce its rights against third parties who
may be utilizing the Company's proprietary formulae, procedures and other
information.

GOVERNMENTAL REGULATION

In general, production, packaging, processing and labeling of food and beverage
products are subject to various federal and state regulations. The Company
relied upon the experience and expertise of its co-packers to assure compliance
with applicable federal and state regulations. The Company believes that it was
in compliance with all applicable governmental regulations.

                                        3
<PAGE>
RESEARCH AND DEVELOPMENT

The Company did not spend any amounts on research and development in 2001 and
does not expect to incur such expenses in the future unless it enters a new line
of business.

ENVIRONMENTAL REGULATION AND SEASONALITY

Management believes that the costs associated with compliance with environmental
regulations did not impose a significant burden upon the Company's past
operations. Management does not believe that the Company's business was seasonal
to any significant extent.

EMPLOYEES

As of May 15, 2002, the Company had one employee and two part-time consultants.


HOLLYWOOD PARTNERS.COM
----------------------

THE COMPANY

Hollywood Partners.com, Inc. ("HP") is a holding company which was incorporated
in Delaware in 1989 under the name Guideline Capital Corporation ("Guideline").
After its incorporation, Guideline engaged in the business of locating an
acquisition. An acquisition was effected when, effective September 13, 1999,
pursuant to a Share Exchange and Reorganization Agreement, Guideline acquired
all of the issued and outstanding shares of Hollywood Partners, Inc., a
California corporation, which was a wholly owned subsidiary of Vitafort
International Corporation (OTCBB: VRFT) ("VIC") and changed its name to
Hollywood Partners.com, Inc. HP is presently engaged in the business of
developing entertainment properties through its subsidiary, Avenue of the Stars
Entertainment, Inc., a Nevada corporation ("AOSE"). While AOSE has retained
several consultants with substantial experience in the entertainment industry
and is seeking properties to develop, it has not yet identified the first
intellectual property to acquire. At the same time, HP is seeking other, larger,
company acquisition candidates which might realize the benefit of becoming a
public company trading on the Over the Counter Bulletin Board ("OTCBB"). HP is
presently in discussions with potential targets; however, it has not yet
identified any such acquisition target.

Until the first quarter of 2001, HP was a marketing and promotions company using
entertainment-themed Websites which presented both proprietary and sourced
content, while seeking to build building relationships with Website visitors to
collect their demographic and lifestyle information. HP's business model was to
obtain revenues from many sources including sweepstakes sponsorships, Website
sponsorships and allowing access to registered users who gave permission for us
to send offers from marketing partners. This business model was abandoned and
the various web-related businesses were discontinued in the first quarter of
2001.

Previous to its acquisition by HP, Hollywood Partners, Inc. was engaged
primarily in the business of designing, manufacturing and distributing food
products based upon brands licensed to its parent, Vitafort, from third parties,
such as Jurassic Park: The Lost World(TM) and The Wizard of Oz(TM).

In late September 1999, HP initiated an internet based strategy when it launched
its initial Website at www.hollywoodpartners.com. This Website was used to post
and manage a number of sweepstakes contests for the benefit of various customers
and partners, coming from industries such as food manufacturing, entertainment,
publishing, sporting goods and concert promotion. In the second quarter of

                                        4
<PAGE>

2000, HP expanded its Internet offerings with two new Websites under a Hollywood
Partners.com brand umbrella: PlanetFree.com - a sweepstakes Website designed to
host sweepstakes and promotions for retailers and manufacturers who we believed
were seeking a higher level of branding and capability to educate than generally
offered on other sweepstakes Websites; and BigTimeHollywood.com - an e-magazine
offering original content plus news, games and reference information about the
entertainment industry, primarily focused toward movies and television. The
features and other information provided on this Website were aimed to both
entertain and inform the visitor about the entertainment industry, how it works
and why.

Part of management's strategy was to use the Hollywood Partners.com brand as an
"umbrella" to build, partner or acquire additional complementary Websites that
offered unique content for our visitors. However, upon the launch of HP's
Websites, both the public valuations of Internet companies and the business
opportunities of Internet models began to collapse. This tightened the financial
markets for the majority of Internet companies and inhibited HP's ability to
raise capital. HP faced severe cash and liquidity problems resulting in the need
to cut staff and overhead tremendously. Due to the collapse of many Internet
companies and the severe liquidity constraints, HP shut down its
BigTimeHollywood.com and PlanetFree.com Websites in 2000 and abandoned its
Internet business model.

The Board of Directors began pursuing alternative business strategies.

In the fourth quarter of 2000 and the first quarter of 2001, the Company sought
to acquire two companies as part of a strategy that would create immediate
revenue for HP; one was a direct marketing company headquartered in Chicago,
Illinois, and the other a software technology company located in Bismarck, North
Dakota. In January 2001, HP entered into a binding letter agreement to acquire
BambooBiz, LLC, the direct marketing company. HP also entered into a letter
agreement with Pipeline Technologies, Inc., the software technology company, in
late January 2001. In March 2001, HP was informed that BambooBiz would not
proceed with the agreed upon acquisition structure and this plan was abandoned.
Also in March 2001, Pipeline notified HP that it would finalize closing
documents concurrent with BambooBiz executing its closing documents. At this
time, HP is continuing to explore its options.

Throughout 2001, the Board of Directors of Hollywood Partners continued to
explore various acquisition and strategic opportunities for HP. HP's subsidiary,
Hall of Fame Pro, Inc., attempted to raise funding for the sports marketing
subsidiary that was formed in the third quarter of 2000 to seek to market the
likeness of former football stars in conjunction with the Hall of Fame Players
Association and to sponsor events which would result in revenues for HP and
benefits for retired football players. Challenging financial markets made this
process very difficult to realize and it has been abandoned.

In the first quarter of 2001, HP was introduced to Giants Entertainment, the
owner of a feature film, "Very Mean Men." In March 2001, HP announced the
acquisition of the film. Based on the owner's exchange of all of the rights to
the film Very Mean Men," a Baio/White production of a Tony Vitale film, starring
Matthew Modine, Ben Gazzara, Charles Durning, Burt Young and Scott Baio, with
Louise Fletcher and Martin Landau, for preferred shares and his commitment of
short-term equity financing, the Board of Directors felt that acquiring this
film was in the best interest of the HP shareholders. Management felt this
acquisition would allow it to explore additional entertainment opportunities.
However, irreconcilable differences arose between the parties regarding the
transaction. During the second quarter, a Settlement Agreement was reached and
the transaction was terminated.

In June 2001, HP signed a Letter of Intent ("LOI") to merge with film producer
and production executive Peter Hoffman's Seven Arts Pictures, with Mr. Hoffman
to become CEO of HP upon the completion of the merger. Pursuant to its terms,
the LOI expired on August 15, 2001. Although Mr. Hoffman and HP continued
discussions subsequent to the LOI's termination date, the Board of Directors
determined that Mr. Hoffman's terms were fundamentally and materially different
than originally contemplated and discussed

                                        5
<PAGE>
and the merger, as available to HP, was not in the Company's shareholder's best
interests. In September 2001, all discussions between the parties regarding the
LOI ceased and the transaction contemplated by the LOI no longer is being
pursued.

In October 2001, HP formed Avenue of the Stars Entertainment, Inc. ("AOSE") to
further its efforts in the entertainment business. In November 2001, AOSE
amended and restated its Articles of Incorporation to increase the number of
authorized shares and to authorize the issuance of a Series A Preferred Stock.
Through the issuance of the Series A Preferred Stock that is convertible into
common shares of HP, HP was able to raise capital to fund its future operations.
HP's shares in AOSE are pledged to the Preferred shareholders in AOSE and are
held in escrow until such time as the shareholders convert their shares into
common shares of HP. Also as part of the operating plan of this new subsidiary,
in December 2001, HP hired a new chief executive officer, Nikolas Konstant. HP
is a development, production, film financing company and has been exploring the
acquisition of intellectual properties for the purpose of developing and
structuring for future productions. HP is also seeking strategic investments for
financing existing production projects, as well as projects that are looking for
bridge financing or additional production capital. In addition to the day-to-day
operations of the existing entertainment company, the chief executive officer
has been empowered to seek a company acquisition or merger to further enhance
the overall entertainment business vision.

SUBSEQUENT EVENTS

During the first quarter of 2002, the Company's ownership interest in HP was
reduced to 10% when HP issued an aggregate of 23,300,000 shares of its common
stock to various employees and consultants. For the year ending December 31,
2002, HP will be accounted for as an equity investment.

In February 2002, HP issued 16,000,000 shares of its common stock to the chief
executive officer as part of his compensation pursuant to the terms of his
employment agreement with HP.

In January 2002, the Company entered into a consulting agreement with Mel
Beychok through December 31, 2003, which provides for a lump sum compensation
payable in the form of up to 20,000,000 shares of the Company's common stock.

Vitafort continued to suffer from recurring losses in the first quarter of 2002,
and the Company's subsidiary, Visionary Brands has ceased all manufacturing,
distribution and marketing of its products. Management continues to pursue its
legal rights against Haarmann & Reimer, the manufacturer of the Company's
"Peanut Squeeze" product. However, no assurances can be made that the Company
will be successful in the litigation. Visionary Brands has suffered from severe
bad will in the food industry due to the suspension of operations and the trade
payables that are currently outstanding. Due to the lack of liquidity of HP.com,
Vitafort has been unable to liquidate HP common shares owned by the Company to
generate working capital. The Board is currently evaluating potential merger
candidates for Vitafort, but to date no transactions have been concluded.

ITEM 2. DESCRIPTION OF PROPERTY

The Company's principal executive office consisted of a portion of 4,759
rentable square feet located at 1800 Avenue of the Stars, Los Angeles,
California, which the Company subleased from Hollywood Partners.com, Inc. under
a two year lease at a rate of $4,753 per month until the lease expired on May
31, 2001. The Company condensed its operations and remained in a small portion
of the space it was previously leasing. In December 2001, the Company vacated
its headquarter offices and is currently leasing an executive office suite at
1925 Century Park East, 5th Floor, Los Angeles, California.

                                        6
<PAGE>

ITEM 3. LEGAL PROCEEDINGS

The Company has filed suit against the manufacturer of the peanut filling for
Peanut Squeeze, Haarmann & Reimer. The Company is seeking damages for the
manufacturer's inability to meet product specifications. As a result, the
Company incurred significant damages including lost sales and shelf space, lost
promotional costs and expenses associated with introducing and marketing Peanut
Squeeze, and damage to the Company's distribution network of brokers and
distributors. Haarmann & Reimer's motion to dismiss the complaint has been
denied. The lawsuit is proceeding and depositions are currently being taken.

In addition, the Company is a party to legal proceedings (which generally relate
to disputes between the Company and its suppliers or customers regarding payment
for products sold or supplied) that are typical for a company of its size and
scope and financial condition, and none of these proceedings are believed to be
material to its financial condition or results of operations.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of shareholders during the fourth quarter of
2001.
















                                        7
<PAGE>

PART II

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The table below sets forth the high and low closing bid prices for the common
stock during the period January 1, 2000 to March 31, 2002, as reported on the
Electronic Bulletin Board. The quotations represent inter-dealer quotations
without adjustment for retail mark-ups, mark-downs or commissions and may not
represent actual transactions:

                                               COMMON STOCK
                     PERIOD                 HIGH           LOW
              ------------------------ -------------- --------------
              1st Quarter 2000              0.77           0.31
              ------------------------ -------------- --------------
              2nd Quarter 2000              0.36           0.23
              ------------------------ -------------- --------------
              3rd Quarter 2000              0.24           0.07
              ------------------------ -------------- --------------
              4th Quarter 2000              0.08           0.02
              ------------------------ -------------- --------------
              1st Quarter 2001              0.06           0.02
              ------------------------ -------------- --------------
              2nd Quarter 2001              0.04           0.02
              ------------------------ -------------- --------------
              3rd Quarter 2001              0.03           0.01
              ------------------------ -------------- --------------
              4th Quarter 2001              0.02           0.01
              ------------------------ -------------- --------------
              1st Quarter 2002              0.02           0.01
              ------------------------ -------------- --------------


On May 15, 2002, the closing bid price for the common stock, as reported by the
Over The Counter Electronic Bulletin Board, was $0.005.

At the close of business on May 15, 2002, there were approximately 548 holders
of record of the common stock.

The Company has not paid any dividends on the common stock since inception and
intends to retain any future earnings for the development of its business.
Future dividends on the common stock, if any, will be dependent upon the
Company's earnings, financial condition, the dividend priority of any preferred
shares and other relevant factors as determined by its Board of Directors.

No dividends were paid on Series B Convertible Preferred Stock during 2000 or
2001. Cumulative unpaid dividends on the Series B Convertible Preferred Stock as
of December 31, 2001 totaled $45,169. All unpaid dividends on the preferred
stock must be paid before dividends can be paid on the Common Stock.

                                        8
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
        OPERATIONS

CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR PROVISIONS" OF THE PRIVATE
                   SECURITIES LITIGATION REFORM ACT OF 1995.

CERTAIN STATEMENTS CONTAINED IN THIS ANNUAL REPORT ON SECURITIES AND EXCHANGE
COMMISSION ("SEC") FORM 10-KSB ("FORM 10-KSB") CONSTITUTE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995. THESE STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS THAT MAY CAUSE OUR OR OUR INDUSTRY'S ACTUAL RESULTS, LEVELS OF
ACTIVITY, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT THAN ANY
EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. THESE STATEMENTS MAY
BE CONTAINED IN OUR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, PRESS
RELEASES, AND WRITTEN OR ORAL PRESENTATIONS MADE BY OUR REPRESENTATIVES TO
ANALYSTS, RATING AGENCIES, STOCKHOLDERS, NEWS ORGANIZATIONS AND OTHERS. IN SOME
CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY TERMINOLOGY SUCH AS "MAY,"
"WILL," "SHOULD," "INTEND", "EXPECTS," "PLANS," "ANTICIPATES," "BELIEVES,"
"ESTIMATES," "PREDICTS," "POTENTIAL," "CONTINUE," OR THE NEGATIVE OF THESE TERMS
OR OTHER COMPARABLE TERMINOLOGY. ALTHOUGH WE BELIEVE THAT THE EXPECTATIONS IN
THE FORWARD-LOOKING STATEMENTS ARE REASONABLE, WE CANNOT GUARANTEE FUTURE
RESULTS, LEVELS OF ACTIVITY, PERFORMANCE OR ACHIEVEMENTS.


YEARS ENDED DECEMBER 31, 2001 AND 2000
--------------------------------------

RESULTS OF OPERATIONS

VITAFORT
During 2000, due to quality control problems at the Company's manufacturer of
"Peanut Squeeze," Haarmann & Reimer, the Company was forced to shut down
production resulting in lost revenues and significant damages, including lost
sales and shelf space, lost promotional costs and expenses associated with
introducing and marketing Peanut Squeeze, and damage to the Company's
distribution network of brokers and distributors. In addition, the resulting
problems made it nearly impossible to raise the capital needed to continue
operations during 2001. This resulted in severe losses throughout the year and
significant damage to the Company's infrastructure.

In conjunction with Hollywood Partners.com, Visionary Brands introduced its
latest product, "Gravity Games Energy Bar." This snack was unveiled at the
Gravity Winter Games held at Mammoth Mountain, California in January 2000. The
Gravity Games is a joint venture between NBC Sports Ventures, the business unit
of NBC Sports, and eMap Petersen, Inc.

Visionary Brands began distribution of the Gravity Bar in February 2000. The
product was introduced and tested at various retailers including Smart & Final,
with over two hundred stores based in Los Angeles. However, the sales velocity
was not on a par with the competition and the product was later discontinued.
Management believes that the product taste was as good, if not better than the
competition, but the Gravity Bar license was not strong enough to pull the
product off the shelf without significant advertising and promotional spending.
So, the product was put on hold until the Company could appropriate the
investment needed to re-launch the product with a stronger license.

The Company also stopped production its other two product lines, "Toast N
Jammers" all natural toaster pastries and "The Wizard of Oz" marshmallows.

During 2001, the Board elected to cut back overhead of the Company throughout
the year and the current monthly cash expenses are severely decreased due to the
drastic reduction in overhead.

                                        9
<PAGE>
VITAFORT
--------

NET REVENUES

In 2001 the net revenues of the Company were $0, compared to $881,977 in 2000.
This decrease of $881,977 or 100% was primarily due to no sales of The Wizard of
Oz marshmallows as the Company phased out distribution, and no sales of Peanut
Squeeze caused by production problems.


GROSS LOSS

Gross loss in 2001 was $578, compared to a gross loss of $313,657 in 2000. This
decrease of $313,079 was due to the reduced sales levels of the "The Wizard of
Oz" brand products, which had a high profit margin and to closeout sales of
aging inventories at prices below cost.

OPERATING EXPENSES

Research and Development
------------------------

In 2001, product research development expenses were $24,452, compared to $41,105
in 2000, a decrease of $16,653 or 40.5%. The reduction was primarily due to the
Company's decision to curtail expenses in 2001 by closing its research and
development. In 2000, expenses are related to the development of Websites for
the Hollywood Partners.com, Inc. subsidiary of the Company.

Sales and Marketing
-------------------

Sales and marketing expenses were $20,727 in 2001 as compared to $1,890,908 in
2000. The decrease of $1,870,181 or 98.9% was primarily due to lower promotional
expenses as the Company phased out its product distribution

General and Administrative
--------------------------

General and Administrative costs in 2001 were $1,189,160 compared to restated
costs in 2000 of $3,724,567. This decrease of $2,535,407 or 68.1% is due to the
severe curtailment of overhead and expenses.

INCOME TAXES

As of December 31, 2001, the Company had unused Federal and California net
operating loss carryforwards of approximately $32,531,300 and $31,562,419
respectively, available to offset future Federal taxable income and future
California taxable income. The unused net operating loss and credit
carryforwards expire in various amounts through the year 2020. In contrast to
Federal net operating losses, only 50% of the California net operating losses
incurred subsequent to December 31, 1986 may be carried forward. The California
net operating losses will expire in various amounts through the year 2004.

Net deferred tax assets of approximately $32,531,300 resulting from net
operating losses have been offset by a valuation allowance since management
cannot determine whether it is more likely than not such assets will be
realized.

Due to restrictions imposed by the Internal Revenue Code regarding substantial
changes in ownership of companies with loss carryforwards, the utilization of
the above-mentioned net operating losses may be limited as a result of changes
in stock ownership. The annual utilization of these losses is limited to an

                                       10
<PAGE>

amount equal to the estimated fair value (for income tax purposes) of the
Company at the point of stock ownership change, multiplied by the long-term
tax-exempt rate then in effect. The annual limitation has not been quantified at
this time.

OTHER INCOME AND EXPENSE

Interest income was $1,859 in 2001 compared to $20,351 in 2000. The decrease of
$18,492 or 90.8% is due to the decrease of the Company's cash position during
the year.

Interest expense was $45,825 in 2001 compared to $29,117 in 2000. The increase
of $16,708 or 57.4% is due to the increase in interest due on the convertible
debentures outstanding.

Other expense was $42,910 in 2000 compared to other income of $0 in 2001. The
prior year's expense relates primarily to a write-off of a bad debt.


LIQUIDITY AND CAPITAL RESOURCES
                                                              December 31,
                                                          2001          2000
                                                      -----------   -----------
  Net Cash Used In Operations                         $  (736,309)  $(2,637,771)
  Net Cash Provided (Used) in Investing Activities        (66,643)      324,035
  Net Cash Provided By Financing Activities             1,237,204     1,217,215
  Working Capital (Deficit)                            (2,499,244)   (1,914,052)

At December 31, 2001 the Company had cash of $456,884 as compared to $22,632 in
2000. This increase is due to an increase in investors investment in a
subsidiary of HP.

During March and April 2000, the Company entered into a series of settlement
agreements and releases with certain lenders to resolve all outstanding issues
between them. The agreements were effective as of December 31, 1999, where under
the Company resolved its outstanding issues with certain lenders by satisfying
an aggregate of $1,510,560 of indebtedness, inclusive of accrued interest,
through the issuance of an aggregate of 377,640 shares of restricted stock of
its partially owned subsidiary, Hollywood Partners.com, Inc. These transactions
were recorded in the Company's consolidated financial statements as of December
31, 1999. (See Note 11.) Two of the lenders agreed to make market purchases of
an aggregate of 900,000 shares of the Company's common stock, during the period
ending May 31, 2000, but in no event more than a combined total purchase of
$750,000. The agreements require the lenders not to sell any of the shares until
after they have purchased the entire amount of shares as required pursuant to
the terms of the agreements. The two lenders also agreed not to sell, in any
calendar month, more than 25% of the shares they purchased. Notwithstanding this
25% restriction, the lenders are not precluded from taking any action that would
be necessary for them to meet their fiduciary responsibilities owed to their
investors and/or shareholders.

The Company has suffered recurring losses from operations as of December 31,
2001. Although the Company received a contribution of $2,000,000 as part of the
spin-off of Hollywood Partners, (see Note 16 to the Consolidated Financial
Statements), it has not generated sufficient revenue-producing activity to
sustain its operations. The Company's independent certified public accountants
have included a modification to their opinion which indicates there is
substantial doubt about the Company's ability to continue as a going concern.
See Note 1 to the Consolidated Financial Statements for additional information.
The Company is attempting to raise additional capital to meet future working
capital requirements, but may not be able to do so. Should the Company not be
able to raise additional capital, it may have to severely curtail operations.

                                       11
<PAGE>

ITEM 7. FINANCIAL STATEMENTS

SEE "INDEX TO CONSOLIDATED FINANCIAL STATEMENTS" BEGINNING ON PAGE F-1


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

On February 5, 2001, BDO Seidman, LLP resigned as the independent accountants
for the Company. The Company received notice of this resignation on February 8,
2001.

The report of BDO Seidman, LLP on the Company's financial statements for the
past two years contained no adverse opinion, or disclaimer opinion, and were not
qualified or modified as to uncertainty, audit scope or accounting principles.
During the Company's two most recent fiscal years and through February 5, 2001,
there were no disagreements between the Company and with BDO Seidman, LLP
regarding any matters with respect to accounting principles or practices,
financial statement disclosure or audit scope or procedure, which disagreements
if not resolved to the satisfaction of BDO Seidman, LLP, would have caused it to
make reference thereto in its reports on the Company's financial statements for
such years. During the Company's two most recent fiscal years and through
February 5, 2001, there were no reportable events as that term is defined in
Item 304 (a)(1)(v) of Regulation S-K.

The Company engaged Merdinger, Fruchter, Rosen & Corso, P.C. as its new
independent accountants as of February 12, 2001. During the two most recent
fiscal years and through February 12, 2001, the Company has not consulted with
Merdinger, Fruchter, Rosen & Corso, P.C. regarding either (i) the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial
statements; or (ii) any matter that was either the subject of a disagreement, as
that term is defined in Item 304 (a) (1) (iv) of Regulation S-K and the related
instructions to Item 304 of the Regulation S-K, or a reportable event, as that
term is defined in Item 304 (a) (1) (iv) of Regulation S-K.

The decision to change accountants was approved by the Board of Directors of the
Company.

                                       12
<PAGE>

ITEM 9: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS, COMPLIANCE
        WITH SECTION 16(A) OF THE EXCHANGE ACT

The directors and executive officers of the Company are as follows:

     Name                             Age        Positions Held
     ----                             ---        --------------
     Mel Beychok                       73        Chairman of the Board / CEO
     Valerie A. Broadbent              63        Director / President /
                                                   Corporate Secretary / CFO
     Mark Beychok                      45        Chairman of the Board *
     John Coppolino                    41        Director and President **
     Benjamin Tabatchnick              49        Director ***

* Mark Beychok resigned as Chairman of the Board in September 2001. ** John
Coppolino resigned as Director and President in September 2001. *** Benjamin
Tabatchnick resigned as Director in September 2001.


Mel Beychok was elected as Chairman of the Board and Chief Executive Officer in
September 2001. Mr. Beychok is a private investor with over forty years
experience as an owner and operator of various food manufacturing, marketing and
distribution companies whose products were sold to national retailers across the
country such as Wal-Mart, Kroger, Safeway, American Food Stores, etc. Mr.
Beychok has an extensive background in creating and developing brands and
visionary companies.

Valerie A. Broadbent was elected as Secretary of the Company in February 1999.
Ms. Broadbent began as Assistant to the COO/CFO in October 1997. Ms. Broadbent
also serves as Director, President, Corporate Secretary and Chief Financial
Officer of Hollywood Partners.com, Inc. Ms. Broadbent has over 30 years
experience working in corporate administration and reporting to boards of
directors, CEO's, CFO's and presidents of both public and private companies,
including an extensive background interfacing with legal, financial and
regulatory reporting agencies in the securities and banking industries.


ITEM 10: EXECUTIVE COMPENSATION

On October 1, 2001, the Company entered into a consulting agreement with Mel
Beychok through December 31, 2001, which provides for a lump sum compensation
payable in the form of up to 3,000,000 shares of the Company's common stock.

Due to the severe liquidity problems in the Company, the Board of Directors has
authorized Mark Beychok and Valerie Broadbent to enter into consulting
agreements for a term of two years with the Company commencing October 1, 2001.
Mark Beychok's severance agreement with the Company expired in September 2001.
Mr. Beychok has agreed to remain as a consultant to Vitafort at an annual
monthly compensation of $8,000 per month which he has agreed to defer until the
Company's cash position improves. Ms. Broadbent has agreed to remain as a
consultant to Vitafort and serve as Director / President / Corporate Secretary /
Chief Financial Officer at an annual monthly compensation of $4,000 per month
which she has agreed to defer until the Company's cash position improves.

                                       13
<PAGE>

The following table sets forth certain information with respect to the
compensation paid by the Company to Mel Beychok and Ms. Broadbent (the "named
individuals") during 2001, 2000 and 1999:

<TABLE><CAPTION>
                                    SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------------------------
                                                                                     Securities
 Principal Position                                               Compensation    All Other Annual
 & Name                  Year     Salary           Other         Options / SARs      Underlying
----------------------- ------ ------------ ------------------ ------------------ ----------------
<S>                     <C>    <C>          <C>                    <C>               <C>
Chief Executive Officer  2001   $     -      3,000,000 shares       $     -                 -
Mel Beychok              2000         -              - (1)                -                 -
                         1999         -              -                    -                 -
----------------------- ------ ------------ ------------------ ------------------ ----------------
President / CFO  /       2001   $     -              -              $12,000(2)
Corporate Secretary      2000    50,000(3)           -                9,423(4)
Valerie A. Broadbent     1999    60,000              -                    -           400,000
--------------------------------------------------------------------------------------------------
</TABLE>
(1)  Mr. Beychok was granted 3,000,000 of the Company's common stock for
     consulting services through December 31, 2001. As of December 31, 2001,
     the shares have not been issued.
(2)  Ms. Broadbent received $12,000 in consulting fees and is in arrears $12,000
     in consulting fees due her.
(3)  Ms. Broadbent received $40,520 in compensation, and is in arrears $9,480 in
     compensation due her.
(4)  Comprised of $9,423 accrued vacation.  Ms. Broadbent is in arrears $9,423
     in accrued vacation due her.


STOCK OPTION PLAN

Vitafort International Corporation
----------------------------------

In 1995, the Company adopted the 1995 Stock Option Plan (the "1995 Plan")
pursuant to which 2,000,000 shares of Common Stock were reserved for issuance
upon the exercise of options. Under the terms of the Plan, all directors,
officers and key employees of, and consultants to, the Company and all its
subsidiaries are eligible for option grants. The Board determines, at its
discretion, which persons will receive option grants, the number of shares
subject to each option, the exercise price, which may not be less than the par
value of the shares subject to the option, except that in the case of ISO's, the
exercise price must be at least one hundred percent (100%) of the fair market
value of the optioned shares on the date of grant, or one hundred and ten
percent (110%) of such fair market value if the optionee is the owner of more
than ten percent (10%) of the total combined voting power of all classes of
voting stock of the Company (a "10% Holder"), and the term (which may not be
more than ten (10) years from the date of grant, or five (5) years in the case
of an ISO granted to a 10% holder) thereof. The Plans permit options granted
thereunder to be exercised by the tender of shares of common stock having a fair
market value equal to the exercise price of such option.

Options granted under the Plan may, at the discretion of the Board, be
exercisable upon the tender of cash equal in amount to the aggregate par value
of the shares covered by such options, together with a one-year note bearing
interest at the "applicable federal rate" (as defined in the Code) and providing
for a required prepayment upon any disposition of the acquired shares.

                                       14
<PAGE>

During 1995 Mr. Mark Beychok was granted an aggregate of 687,500 options under
the Plan with an exercise price of $3.00. The exercise price of these options
was reduced to $0.91 in May 1997. In November 1998, the Company reduced the
exercise price of all outstanding options held by officers and directors to
$.10, the then market price of the Company's common stock.

Hollywood Partners.com, Inc.
----------------------------

In September 1999, HP adopted a Stock Option Plan (the "Plan") initially
reserving an aggregate of 3,000,000 shares of HP's common stock (the "Available
Shares") for issuance pursuant to the exercise of stock options ("Options")
which may be granted to employees and consultants to HP.

The Plan provides for the granting at the discretion of the Board of Directors
of both qualified incentive stock options and non-qualified stock options.
Consultants may receive only non-qualified stock options. The maximum term of
the stock options are three to five years and generally vest proportionately
throughout the term of the option.

There were no options granted to directors and officers in 2000.

The following chart sets forth the options granted to directors and officers as
of May 15, 2002:

<TABLE><CAPTION>
-----------------------------------------------------------------------------------------
                                        Percent of total
                          Number of       options/SARs
                         securities        granted to
                         underlying        Directors       Exercise of
                        options/ SARs     and Officers      base price     Expiration
     Name                 granted           in 2001         ($/Share)         Date
---------------------- --------------- ------------------ ------------- -----------------
<S>                          <C>              <C>            <C>             <C>
Mel Beychok                   0                00%            $0.00           None
---------------------- --------------- ------------------ ------------- -----------------
Valerie Broadbent         1,000,000            10%            $0.02      January 2, 2011
---------------------- --------------- ------------------ ------------- -----------------
Mark Beychok              5,000,000            50%            $0.02      January 2, 2011
---------------------- --------------- ------------------ ------------- -----------------
John Coppolino            3,000,000            30%            $0.02      January 2, 2011
---------------------- --------------- ------------------ ------------- -----------------
Benjamin Tabatchnick      1,000,000            10%            $0.02      January 2, 2011
-----------------------------------------------------------------------------------------
</TABLE>

The following chart sets forth certain information with respect to
options/warrants exercised during 2001 and outstanding as of May 15, 2002 to the
named individuals:

-------------------- ------------- ---------- --------------- ---------------
                                               Number of         Value of
                                               Securities       Unexercised
                                               Underlying      In-the-Money
                                               Unexercised     Options/SAR's
                         Shares                Options/SARs      at FY-End
                        Acquired     Value     Exercisable/     Exercisable/
Name                  on Exercise   Realized   Unexercisable   Unexercisable
-------------------- ------------- ---------- --------------- ---------------
Mel Beychok                0         $  -0-        0 / 0         $ 0 / $ 0
-------------------- ------------- ---------- --------------- ---------------
-------------------- ------------- ---------- --------------- ---------------
Valerie Broadbent          0         $  -0-    1,425,000 / 0     $ 0 / $ 0
-------------------- ------------- ---------- --------------- ---------------

                                       15
<PAGE>

ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the ownership of the common stock by each
director and by entities or persons known to the Company to own beneficially in
excess of 5% of such stock and by all officers and directors as a group, as of
May 15, 2002. Except as otherwise indicated, all stockholders have sole voting
and investment power with respect to the shares listed as beneficially owned by
them, subject to the rights of spouses under applicable community property laws.


Name and Address                         Number of Shares        Percentage of
of Beneficial Owner                      of Common Stock          Beneficial
Identity of Group                       Beneficially Owned         Ownership
-----------------                       ------------------         ---------
Mel Beychok (1)                            23,000,000(2)             37.5 %

Valerie A. Broadbent (1)                    1,475,000(3)              2.4 %

Mark Beychok (1)                            7,855,431(4)             12.8 %

John Coppolino (1)                          4,516,250(5)              7.4 %

Benjamin Tabatchnick (1)                    1,675,000(6)              2.8 %

Nikolas Konstant and                        7,000,000(7)             11.4 %
DYDX Consulting, LLC

All directors and officers as a group.
(5 persons)(2),(3),(4),(5) and (6)         38,521,681                62.8 %



(1) The address of these persons is 1925 Century Park East, 5th Floor, Los
Angeles, California 90067.

(2) Includes (i) 3,000,000 shares that have been issued as part of a consulting
agreement but are not yet issued; and (ii) 20,000,000 shares that have been
issued as part of an employment agreement but are not yet issued.

(3) Includes (i) 25,000 shares underlying a currently exercisable option with an
exercise price of $0.085 per share, expiring on October 29, 2003; (ii) 100,000
shares underlying a currently exercisable option with an exercise price of $0.33
expiring on July 1, 2004; (iii) 300,000 shares underlying a currently
exercisable option, with an exercise price of $0.25 per share, expiring on
October 21, 2004; (iv) 1,000,000 shares with a currently exercisable price of
$0.02 per share, expiring on January 2, 2011; and (v) 50,000 shares issued
through the exercise of options. Pursuant to Board of Director action on January
3, 2001, the exercise price on all of Ms. Broadbent's options was reduced to
$.02 per share and all options were made exercisable as of that date.

(4) Includes (i) 130,625 shares underlying a currently exercisable option with
an exercise price of $0.10 per share expiring on December 16, 2003; (ii) 100,000
shares underlying a currently exercisable option, expiring September 15, 2003,
which has an exercise price of $0.10 per share; (iii) 100,000 shares underlying
a currently exercisable option with an exercise price of $0.10 which expires on
December 31, 2005; (iv) 100,000 shares underlying a currently exercisable option

                                       16
<PAGE>
with an exercise price of $.10 which expires on December 31, 2005; (v) 450,000
shares underlying a currently exercisable option with an exercise price of $0.10
per share expiring September 3, 2005; (vi) 1,400,000 shares underlying a
currently exercisable option with an exercise price of $.25 per share, expiring
October 21, 2004; (vii) 5,000,000 shares underlying a currently exercisable
option, with an exercise price of $.02 per share, expiring January 2, 2011; and
(viii) 574,806 shares currently issued through the exercise of options. Pursuant
to Board of Director action on January 3, 2001, the exercise price on all of Mr.
Beychok's options was reduced to $.02 per share and all options were made
exercisable as of that date.

(5) Includes (i) 188,750 shares underlying a currently exercisable option with
an exercise price of $0.10 per share expiring on September 19, 2002; (ii)
1,125,000 shares underlying a currently exercisable option with an exercise
price of $.25 per share, expiring on October 21, 2004; (iii) 3,000,000 shares
underlying a currently exercisable option, with an exercise price of $.02 per
share, expiring January 2, 2011; and (vii) 202,500 shares currently issued
through the exercise of options. Pursuant to Board of Director action on January
3, 2001, the exercise price on all of Mr. Coppolino's options was reduced to
$.02 per share and all options were made exercisable as of that date.

(6) Includes (i) 275,000 shares underlying a currently exercisable option with
an exercise price of $0.25 per share, expiring October 21, 2004; (ii) 1,000,000
shares underlying a currently exercisable option, with an exercise price of $.02
per share, expiring January 2, 2011; and (ii) 400,000 shares issued through the
exercise of options at $.10 per share. Pursuant to Board of Director action on
January 3, 2001, the exercise price on all of Mr. Tabatchnick's options was
reduced to $.02 per share and all of Mr. Tabatchnick's options were made
exercisable as of that date.

(7) The number of shares beneficially owned is based on the Schedule 13D filed
with the Securities and Exchange Commission on January 3, 2001 by Nikolas
Konstant and DYDX Consulting, LLC ("DYDX"). Mr. Konstant and DYDX have shared
voting power on 1,813,795 shares.

The following table sets forth the ownership of the Series B Preferred Stock by
each director and by each entity or person known to the Company to own
beneficially in excess of 5% of such class of stock and by all officers and
directors as a group. To the Company's knowledge, all stockholders have sole
voting and investment power with respect to the shares listed as owned by them,
subject to applicable community property laws.

<TABLE><CAPTION>
------------------------- ---------------------------------- -------------- ------------
<S>                       <C>                                 <C>           <C>
Title of Class             Name and Address of                 Number of     Percentage
                           Beneficial Owner                   Shares Owned    Of Class
------------------------- ---------------------------------- -------------- ------------
                           Thomas Von Ledersteger
Series B Preferred Stock   23 Chemin des Meandres                 500            50%
                           CH-1287 Laconnex/GE, Switzerland
------------------------- ---------------------------------- -------------- ------------
                           Pictet et CIE
Series B Preferred Stock   29 Boulevard Georges Favon             500            50%
                           CH-1211 Geneva, Switzerland
------------------------- ---------------------------------- -------------- ------------
                           All officers and directors
Series B Preferred Stock   as a group (5 persons)                   0             0%
------------------------- ---------------------------------- -------------- ------------
1997 Series A              All officers and directors
Preferred Stock            as a group (5 persons)                   0             0%
------------------------- ---------------------------------- -------------- ------------
</TABLE>
                                       17
<PAGE>

ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On January 22, 1999, the Company completed a series of agreements including a
Common Stock Purchase Agreement (the "CSPA"), dated as of December 30, 1998, by
and among the Company; Terra Healthy Living, Ltd, a B.V.I. corporation
("Terra"); Sovereign Partners, a Connecticut limited partnership ("Sov"); and
Dominion Capital Fund, Ltd., a Bahamian corporation ("Dom"). All of the
transactions contemplated by the CSPA were deemed to have occurred on December
31, 1998. Pursuant to the CSPA:

Terra acquired 2,712,843 shares of the Company's common stock from Sov and Dom
for $235,000. Such shares were issued upon the conversion by Sov and Dom of an
aggregate of 235 shares of the Company's 1997 Series A Convertible Preferred
Stock ("Series A Preferred").

The Company borrowed $2,065,000 from Terra pursuant to a Promissory Note With
Warrant and Registration Rights (the "Terra Note"). The Terra Note is a
five-year note bearing interest at 6% per annum. Interest on the Terra Note is
payable annually. The Terra Note provided for the issuance to Terra of a five
year warrant (the "Terra Warrant") for the purchase of 500,000 shares of the
Company's common stock at $.25 per share. The Terra Note further provides that
the first year's interest on the Terra Note shall be applied to the partial
exercise of the Terra Warrant. The Company and Terra have entered into a
Registration Rights Agreement requiring the registration under the Securities
Act of 1933, as amended (the "Act") of the securities issuable upon exercise of
the Terra Warrant.

The Company applied the $2,065,000 proceeds of the Terra Note to redeem all
1,351 remaining shares of Series A Preferred held by Sov and Dom as well as a
convertible debenture in the amount of $548,352 held by Dom pursuant to an
Agreement and Consent to Redeem Series A Preferred Stock and Debentures (the
"Redemption Agreement").

The aggregate of $2,300,000 paid by Terra in connection with its purchase of the
2,712,843 shares of the Company's common stock from Sov and Dom and in
connection with the Terra Note was satisfied through the delivery to Sov and Dom
of marketable securities having a value of $2,300,000. Under the CSPA, Terra
made certain assurances to Sov and Dom and assumed certain obligations to assure
that Sov and Dom would realize $2,300,000 on the sale of the marketable
securities including the delivery of additional securities to them.

The Company borrowed $300,000 from each of Sov and Dom pursuant to a
non-negotiable nine-month promissory note bearing interest at 8% per annum (the
"Sov Note" and the "Dom Note"). These notes provide for their repayment, at the
option of the Company, in free trading registered common stock which shall be
valued at the then market for such stock. The Sov Note and the Dom Note provide
for the issuance to each of Sov and Dom of 60,000 warrants which expire on
December 31, 2003, half of which are exercisable at $.40 and half of which are
exercisable at $.25. If the Company repays the Sov Note or the Dom Note with
common stock, then the exercise price of the $.25 warrant is reduced to $.01.
The Company entered into a Registration Rights Agreement with Sov and Dom.

The CSPA granted the Company the right to redeem up to 2,000,000 of the shares
of its common stock acquired by Terra through June 30, 2000 based upon a formula
related to the market price of the common stock at the time of conversion.

The Company issued 571,232 shares of its common stock to Sov in connection with
the prior conversion of 40 shares of Series A Preferred Stock.

                                       18
<PAGE>

The Company had employment agreements with Mark Beychok and John Coppolino, and
had employment agreements, consulting agreements and settlement agreements with
certain of its former officers. See "Management - Executive Compensation."

Ms. Broadbent is a director and an officer of both the Company and of Hollywood
Partners. Ms. Broadbent has a consulting agreement with the Company and an
employment agreement with Hollywood Partners. Ms. Broadbent is in arrears on
receiving compensation due her from the Company and from Hollywood Partners.

Mark Beychok has a consulting agreement with the Company and with Hollywood
Partners. Payment on these consulting agreements is in arrears. Mark Beychok
resigned as Chief Executive Officer of the Company in February 2000 and is
currently receiving his severance package from the Company; however, Mr. Beychok
is in arrears on receiving severance compensation due him. Mr. Beychok's
severance package with the Company has been extended for one year. Mr. Beychok
has also loaned the Company approximately $28,000 to help cover overhead
expenses.

In March and April 2001, Mel Beychok, father of Mark Beychok, loaned the Company
money to help cover overhead expenses such as rent and telephones. As
consideration for the loan, Mel Beychok has received a convertible debenture for
up to $20,000 that converts into equity at Mel Beychok's option at one cent
($.01) per share.

In December 1998, the Company sold 1,000,000 shares to Terra Healthy Living,
Ltd., a principal stockholder, for $250,000 (or $.25 per share) which was paid
by delivery to the Company of marketable securities. The Company believes that
the price paid for such shares was no less favorable to the Company than that
which would have been paid by an unaffiliated purchaser.

In 1999, the Company issued 1,235,857 shares of the Company's common stock in
repayment of $543,775 of the Terra note. The remaining balance of $1,521,225 was
forgiven by Terra and was recorded as a contribution to capital by the Company,
net of the related non-cash unamortized financing cost.













                                       19
<PAGE>
                                     PART IV

ITEM 13: EXHIBITS LIST

(a)  The following exhibits are submitted herewith:

     3.l       Certificate of Incorporation of Registrant(i)
     3.2       By-laws of Registrant(i)
     3.3       Agreement and Plan of Merger between the Registrant and Vitafort
               International Corporation, a California corporation(i)
     3.4       Certificate of Designation - Series A Preferred Stock(v)
     3.5       Certificate of Designation - Series B Preferred Stock(v)
     3.6       Certificate of Amendment to the Certificate of Incorporation,
               November 1991(v)
     3.7       Certificate of Designation - Series C Preferred Stock(v)
     3.8       Certificate of Amendment to the Certificate of Incorporation,
               filed February 8, 1994 (vi)
     3.9       Certificate of Designation - Series D Preferred Stock(vi)
     3.10      Certificate of Amendment to the Registrant's Certificate of
               Incorporation, filed November, 1995. Incorporated by reference to
               Exhibit 4.10 filed with the Registrant's Registration Statement
               on Form S-8 filed January 25, 1996 File Number 33-300435 (the
               "January 1996 S-8").
     3.11      Certificate of Elimination - Series A Preferred Stock.
               Incorporated by reference to Exhibit 4.24 to the Registrant's
               Registration Statement on Form S-8 Filed May 22, 1996 File Number
               333-04271 (the "May 1996 S-8").
     3.12      Certificate of Elimination - Series D Preferred Stock.
               Incorporated by reference to Exhibit 4.25 to the May 1996 S-8.
     3.13      Certificate of Amendment to the Registrant's Certificate of
               Incorporation, filed October 4, 1996. Incorporated by reference
               to Exhibit 4.29 to the Registrant's Registration Statement on
               Form S-8 Filed December 12, 1996, File Number 333-17763 (the
               "December 1996 S-8").
     3.14      Amended Certificate of Designation of the Registrant's 1997
               Series A Preferred Stock filed May 1997 (ix)
     3.15      Amended Certificate of Designation of the Registrant's 1997
               Series A Preferred Stock filed March 1998 (xii)
     3.16      Amended Certificate of Designation of the Registrant's 1997
               Series A Preferred Stock filed October 1998 (xiii)
     3.17      Convertible Debenture dated August 1998 (xiii)
     4.1       Specimen Stock Certificate. Incorporated by reference to Exhibit
               4.1 Filed with the Registrant's Annual Report on Form 10K-SB for
               the Year ended December 31, 1996 (the "1996 10K-SB")
     4.2       Specimen Redeemable Common Stock Purchase Warrant(i)
     4.3       Form of Warrant Agreement(i)
     4.4       Proposed form of Underwriters Warrant Agreement(i)
     4.5
     4.6       Warrant Extension Agreement, December 18, 1992(v)
     4.7       Warrant Extension Agreement, December 18, 1994(vi)
     4.8       Warrant Extension Agreement, January 18, 1995(vi)
     4.9       Warrant Extension Agreement, April 3, 1995(vi)
     4.10      Warrant Extension Agreement, May 3, 1995. Incorporated by
               reference to Exhibit 4.18 to the January 1996 S-8.
     4.11      Warrant Extension Agreement, June 15, 1995. Incorporated by
               reference to Exhibit 4.19 to the January 1996 S-8.
     4.12      Warrant Extension Agreement, July 17, 1995. Incorporated by
               reference to Exhibit 4.20 to the January 1996 S-8.

                                       20
<PAGE>
     4.13      Warrant Extension Agreement, August 16, 1995. Incorporated by
               reference to Exhibit 4.21 to the January 1996 S-8.
     4.14      Warrant Extension Agreement, December 31, 1995. Incorporated by
               reference to Exhibit 4.21 to the January 1996 S-8.
     4.15      Warrant Extension Agreement, April 30, 1996. Incorporated by
               reference to Exhibit 4.23 to the May 1996 S-8.
     4.16      Warrant Extension Agreement, July 31, 1996. Incorporated by
               reference to Exhibit 4.26 to the December 1996 S-8.
     4.17      Warrant Extension Agreement, September 30, 1996. Incorporated by
               reference to Exhibit  4.27 to the December 1996 S-8.
     4.18      Warrant Extension Agreement, November 11, 1996. Incorporated by
               reference to Exhibit 4.28 to the December 1996 S-8.
     4.19      Warrant Extension Agreement, April 15, 1997. Incorporated by
               reference to Exhibit 4.19 to the 1996 10K-SB.
     4.20      Warrant Extension Agreement, October 31, 1997.(x)
     10.1      Loan Agreement, dated August 19, 1988, between the Registrant and
               Bishop Capital, L.P. and promissory note in the principal amount
               of $150,000(i)
     10.2      License Agreement, dated April 25, 1986, between the Registrant
               and Crystal Geyser Water Registrant and  amendment, dated January
               7, 1988(i)
     10.3      Demand Promissory Note, dated July 10, 1987, from Registrant to
               Joseph R. Daly in the principal amount of $300,000 and
               Modification, dated October 11, 1989(i)
     10.4      License Agreement, dated as of October 9, 1987, between the
               Registrant and Good Health Beverage, Inc. and amendment, dated
               November 23, 1988(i)
     10.5      Product Development Agreement, dated as of January 21, 1988,
               between the Registrant and International Multifoods, Inc.(i)
     10.6      Beverage Agreement, dated as of October 31, 1988, between the
               Registrant and PowerBurst Corporation(i)
     10.7      Amended and Restated Agreement, dated August 2, 1989, between the
               Registrant and Vitafort Far East Co., Ltd.(i)
     10.8      Agreement, dated August 11, 1989, between Barry Saltzman, MD. and
               Yoshio Tanaka(i)
     10.9      Lease, dated June 13, 1988, between Registrant and Shelterpoint
               Equities, Ltd. for offices at 591 Redwood Highway, Mill Valley,
               California(i)
     10.10     Agreement, dated July 25, 1989, between Nutrifish Corporation and
               Mt. Lassen Trout Farms(i)
     10.11     Salmon Rondelles Joint Development and Marketing Agreement, dated
               as of September 18, 1989, between Nutrifish Corporation and
               Norwegian Seafoods, Inc.(i)
     10.12     Whole Salmon Joint Development and Marketing Agreement, dated as
               of September 26, 1989, between Nutrifish Corporation and
               Norwegian Seafoods, Inc.(i)
     10.13     Employment Agreement, dated September 13, between the Registrant
               and Barry K. Saltzman(i)
     10.14     Employment Agreement, dated September 13, between the Registrant
               and Jeffrey Lewenthal(i)
     10.15     The Registrant's 1989 Stock Option Plan(i)
     10.16     Stock Option Agreement, dated as of July 17, 1989 between the
               Registrant and Jeffrey Lewenthal(i)
     10.17     Secrecy Agreement, dated as of May 2, 1986, between the
               Registrant and Hoffman-LaRoche, Inc.(i)
     10.18     Joint Venture Agreement, dated September 29, 1989, between the
               Registrant and Agrolife Technologies, Inc.(i)
     10.19     Consulting Agreement, dated September 13, 1989, between the
               Registrant and Randall S. Reis(i)
     10.20     Loan Agreement, dated June 15, 1989, between Union Bank and
               Joseph R. Daly(i)
     10.21     Form of Employee Confidentiality Agreement.(ii)

                                       21
<PAGE>
     10.23     Form of Escrow Agreement by and among the Registrant, Gilford
               Securities Corp., and certain stockholders of  Registrant(i)
     10.24     Promissory Note, made November 21, 1989, by Nutrifish Corporation
               and payable to Joseph R. Daly(i)
     10.25     Right of First Refusal Agreement, dated November 21, 1989,
               between Nutrifish Corporation and Joseph R. Daly(i)
     10.26     Production License Agreement for Nutrifish Norwegian Salmon,
               dated February 2, 1990, between Nutrifish Corporation and
               Norwegian Seafoods, Inc.(ii)
     10.27     Test Market Agreement, dated December 19, 1989, between
               International Multifoods Corporation and the Registrant.(ii)
     10.28     Amendment, dated as of December 19, 1989, to the Product
               Development Agreement between International Multifoods
               Corporation and the Registrant.(ii)
     10.29     Consulting Agreement, dated February 21, 1990, between the
               Registrant and Joseph R. Daly.(ii)
     10.30     License Agreement between the Registrant and Nulaid Foods, Inc.,
               dated April 30, 1990.(ii)
     10.31     License Agreement between the Registrant and Vitafort Latin
               America, dated July 30, 1990.(ii)
     10.32     Termination Agreement between the Registrant and Jeffrey D.
               Lewenthal, dated September 12, 1990.(ii)
     10.33     Settlement Agreement and Full Release between Nicholas J. Caputo
               and Registrant, dated October 4, 1990.(ii)
     10.34     Employment Agreement between the Registrant and Stephen D. Clow,
               dated December 1, 1990.(ii)
     10.35     Employment Agreement between the Registrant and Frank A. Corsini,
               dated January 2, 1991.(ii)
     10.36     Stock Option Agreement between the Registrant and Stephen D.
               Clow, dated January 2, 1991.(ii)
     10.37     Stock Option Agreement between the Registrant and Frank A.
               Corsini, dated January 2, 1991.(ii)
     10.38     Letter Agreement, dated February 1, 1991, amending Consulting
               Agreement between the Registrant and Joseph R. Daly.(ii)
     10.39     Letter Agreement, dated March 12, 1991, between the Registrant
               and Joseph R. Daly regarding debt reorganization.(ii)
     10.40     Consulting Agreement between Norman Kretchmer, MD., Ph.D., and
               the Registrant, dated December 20, 1988.(ii)
     10.41     Settlement Agreement between the Registrant and PowerBurst
               Corporation, dated September 23, 1991.(ii)
     10.42     Subscription Agreement between the Registrant and Societe Anonyme
               Financier Industrielle et Garantie, dated November 1, 1991.
               Incorporated by reference to Exhibit 1 to the Registrant's Report
               on Form 8-K dated November 1, 1991.
     10.43     Exclusive Distribution Agreement between Registrant and Chicago
               Fish House, dated June 13, 1991.(ii)
     10.44     Larry Lucas Settlement Agreement, dated March 25, 1993.(v)
     10.45     Frank Corsini, Separation Agreement, dated May 18, 1993.(v)
     10.46     Agreement dated October 5, 1993 between the Registrant and Second
               Nature Technologies, Inc.(iii)
     10.47     Food and Beverage Technology Agreement(iii)
     10.48     Asset Purchase and Sale Agreement, dated as of June 7, 1993 by
               and among Crystal Clear Farms, Inc., a Maine corporation, the
               Registrant and Salmon Distribution Subsidiary, Inc. a Maine
               corporation which was formerly known as Crystal Clear Farms,
               Inc.(iv)
     10.49     Temporary Operating Agreement dated June 7, 1993 by and among
               Samuel L. Thompson & Associates, Inc., a Maine  corporation, the
               Registrant and Crystal Clear Farms, Inc. a Maine corporation (now
               known as Salmon distribution Subsidiary, Inc.)(iv)

                                       22
<PAGE>

     10.50     Non-Competition Agreement dated July 27, 1993 by and between the
               Registrant and Crystal clear farms, Inc., a Maine corporation.
               (iv)
     10.51     Employment Agreement dated as of November 29, 1993, between the
               Registrant and Steven Westlund. Incorporated by reference to
               exhibit 99.01 to Form S-8 filed by the Registrant on March 4,
               1994 (the "1994 S-8").
     10.52     Stock Option Agreement dated as of November 29, 1993 between the
               Registrant and Steven Westlund. Incorporated by reference to
               exhibit 99.02 to the 1994 S-8.
     10.53     Stock Option Agreement dated as of September 15, 1993 between the
               Registrant and Steven Westlund. Incorporated by reference to
               exhibit 99.03 to 1994 S-8.
     10.54     Employment Agreement dated as of November 29, 1993 between the
               Registrant and Peter Benz. Incorporated by reference to exhibit
               99.04 to 1994 S-8.
     10.55     Stock Option Agreement dated as of November 29, 1993 between the
               Registrant and Peter Benz. Incorporated by reference to exhibit
               99.05 to 1994 S-8.
     10.56     Employment Agreement dated as of November 29, 1993 between the
               Registrant and Mark Beychok. Incorporated by reference to exhibit
               99.06 to the 1994 S-8.
     10.57     Stock Option Agreement dated as of November 29, 1993 between the
               Registrant and Mark Beychok. Incorporated by reference to exhibit
               99.07 to the 1994 S-8.
     10.58     Stock Option Agreement dated as of September 15, 1993 between the
               Registrant and Mark Beychok. Incorporated by reference to exhibit
               99.08 to the 1994 S-8.
     10.59     Consulting Agreement dated as of November 29, 1993 between the
               Registrant and Herman Jacobs. Incorporated by reference to
               exhibit 99.09 to the 1994 S-8.
     10.60     Stock Option Agreement dated as of November 29, 1993 between the
               Registrant and Herman Jacobs. Incorporated by reference to
               exhibit 99.10 to the 1994 S-8.
     10.61     Vitafort International Corporation 90 Day Operating Plan.
               Incorporated by reference to exhibit 99.21 to the 1994 S-8.
     10.62     Stock Option Agreement, dated September 15, 1993, between the
               Registrant and Stanley J. Pasarell. Incorporated by reference to
               exhibit 99.22 to the 1994 S-8.
     10.63     Separation and Release Agreement, dated as of December 1, 1994,
               between the Registrant and Peter Benz.(vi)
     10.64     Letter Agreement, dated September 14, 1995, between the
               Registrant and Peter T. Benz. Incorporated by reference to the
               like numbered exhibit to the Registrant's Form 10-KSB for the
               year ended December 31, 1995.
     10.65     Consulting Agreement and Mutual Release, dated as of March 1,
               1995, between the Registrant and Steven R. Westlund. Incorporated
               by reference to the like numbered exhibit to the Registrant's
               Form 10-KSB for the year ended December 31, 1995.
     10.66     Letter Agreement, dated November 30, 1995, between the Registrant
               and Steven Westlund. Incorporated by reference to the like
               numbered exhibit to the Registrant's Form 10-KSB for the year
               ended December 31, 1995.
     10.67     The Vitafort International Corporation 1995 Stock Option Plan.
               Incorporated by reference to exhibit 99.01 to the January 1996
               S-8.
     10.68     Form of Option granted to directors under The Vitafort
               International Corporation 1995 Stock Option Plan and schedule of
               grants to directors. Incorporated by reference to exhibit 99.02
               to the January 1996 S-8.
     10.69     Employee Option granted to Mark Beychok under The Vitafort
               International Corporation 1995 Stock Option Plan. Incorporated by
               reference to exhibit 99.03 to the January 1996 S-8.
     10.70     Amendment, dated December 16, 1995, to the Employment Agreement
               between the Registrant and Mark Beychok. Incorporated by
               reference to exhibit 99.10 to the January 1996 S-8.
     10.71     Option Agreement, dated December 16, 1995, between the Registrant
               and Mark Beychok. Incorporated by reference to exhibit 99.11 to
               the January 1996 S-8.
     10.72     Conversion Agreement, dated as of December 30, 1995, between the
               Registrant and Mark Beychok. Incorporated by reference to exhibit
               99.20 to the January 1996 S-8.

                                       23
<PAGE>

     10.73     Class A Option Agreement, dated as of December 30, 1995, between
               the Registrant and Mark Beychok. Incorporated by reference to
               exhibit 99.21 to the January 1996 S-8.
     10.74     Class B Option Agreement, dated as of December 30, 1995, between
               the Registrant and Mark Beychok. Incorporated by reference to
               exhibit 99.22 to the January 1996 S-8.
     10.75     Conversion Agreement, dated as of March 26, 1996, between the
               Registrant and John Coppolino. Incorporated by reference to
               Exhibit 9.18 to the May 1996 S-8.
     10.76     Class A Option Agreement, dated as of March 26, 1996, between the
               Registrant and John Coppolino. Incorporated by reference to
               Exhibit 9.19 to the May 1996 S-8.
     10.77     Class B Option Agreement, dated as of March 26, 1996, between the
               Registrant and John Coppolino. Incorporated by reference to
               Exhibit 9.20 to the May 1996 S-8.
     10.78     Employment Agreement, between the Registrant and John Coppolino.
               Incorporated by reference to Exhibit 10.78 to the 1996 Form
               10-KSB.
     10.79     Foreclosure Purchase Agreement related to the Acquisition of
               assets of Auburn Farms, Inc. Incorporated by reference to Exhibit
               1 to the Registrant's Form 8-K, dated May 2, 1996.
     10.80     Loan and Security Agreement, dated August 15, 1996, between the
               Registrant and Coast Business Credit, a division of Southern
               Pacific Thrift & Loan Association. Incorporated by reference to
               Exhibit 1 to the Registrant's Form 8-K, dated August 15, 1996.
     10.81     Agreement, dated as of July 10, 1996, between the Registrant and
               Second Nature Technologies, Inc. Incorporated by reference to
               Exhibit 10.81 to the 1996 Form 10-KSB.
     10.82     Employment Agreement dated June 16, 1997 between Jack Spencer and
               the Registrant. Incorporated by reference to Exhibit 10.12 of the
               Registrant's Form SB-2 filed July 23,1997
     10.83     Agreement, dated April 1997, between the Registrant and ATCOLP
               Investment Partners, a California Limited Partnership.
               Incorporated by reference to the Registrant's Form SB-2 filed
               July 23, 1997
     10.84     Employment Agreement dated September 1997 between the Registrant
               and Mark Beychok. (x)
     10.85     Employment Agreement dated September 1997 between the Registrant
               and John Coppolino.(x)
     10.86     Subscription Agreement with Global International Sourcing, Inc.,
               a Nevada corporation (xii)
     10.87     Administrative Services Agreement dated October 1, 1999 between
               the Registrant and Hollywood Partners.com, Inc. (xiv)
     10.88     Distribution Agreement dated October 1, 1999 between the
               Registrant and Hollywood Partners.com, Inc. (xiv)
     10.89     Consulting Agreement dated October 1, 2001 between the Registrant
               and Valerie Broadbent (filed herewith)
     10.90     Consulting Agreement dated October 1, 2001 between the Registrant
               and MBA & Associates (filed herewith)
     10.91     Employment Agreement dated January 2, 2002 between the Registrant
               and Mel Beychok (filed herewith)
     22.       Subsidiaries of the Registrant: Global International Sourcing,
               Inc. (xii)


(i)     Incorporated by reference to the same numbered exhibit to the
        Registrant's Registration Statement on Form S-18, file number 33-31883.
(ii)    Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1990 and 1989 Form 10-K's.

                                       24
<PAGE>

(iii)   Incorporated by reference to exhibits 1 & 2 to the Registrant's
        September 30, 1993 Form 10-QSB.
(iv)    Incorporated by reference to exhibits 1 through 4 to the Registrant's
        August 7, 1993 Form 8-K.
(v)     Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1993 Form 10-KSB.
(vi)    Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1994 Form 10-KSB.
(vii)   Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1995  Form 10-KSB.
(viii)  Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1996 Form 10-KSB.
(ix)    Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1997 Form 10-KSB.
(x)     Incorporated by reference to the same numbered exhibit to the
        Registrant's January 14, 1998 Form SB-2/A.
(xi)    Incorporated by reference to the same numbered exhibit to the
        Registrant's June 24, 1998 Form SB-2/A.
(xii)   Incorporated by reference to the same numbered exhibit to the
        Registrant's August 14, 1998 Form SB-2/A.
(xiii)  Incorporated by reference to the same numbered exhibit to the
        Registrant's November 12, 1998 Form SB-2/A.
(xiv)   Incorporated by reference to the same numbered exhibit to the
        Registrant's December 31, 1999 Form 10-KSB.


(b)     Reports on Form 8-K.

        There were no reports on Form 8-K filed during the fourth quarter ended
        December 31, 2001.

                                       25
<PAGE>

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act,
the Registrant has caused this report to be signed on its behalf by the
undersigned, thereby, duly authorized.

VITAFORT INTERNATIONAL CORPORATION


By: /s/ Mel Beychok
    -------------------------------
    Chief Executive Officer

Los Angeles, California
Date: May 17, 2002


Pursuant to the requirements of the Exchange Act, this report has been duly
signed below by the following persons on behalf of the Registrant and in the
capacities and on the dates indicated.


Name                             Title(s)                           Date
--------------------------------------------------------------------------------


 /s/ Mel Beychok                 Chief Executive Officer            May 17, 2002
-----------------------------    (Principal Executive Officer)
Mel Beychok



 /s/ Valerie A. Broadbent        Director, President and CFO        May 17, 2002
-----------------------------    (Principal Accounting Officer)
Valerie A. Broadbent














                                       26
<PAGE>

               VITAFORT INTERNATIONAL CORPORATION AND SUBSIDIARIES
                   Index to CONSOLIDATED Financial Statements


Independent Auditors' Report                                             F-2

Consolidated Balance Sheets                                              F-3

Consolidated Statements of Operations                                    F-4

Consolidated Statement of Stockholders' Deficiency                       F-5

Consolidated Statements of Cash Flows                                 F-6 - F-7

Notes to Consolidated Financial Statements                            F-8 - F-37





















                                       F-1
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF VITAFORT INTERNATIONAL CORPORATION

We have audited the accompanying consolidated balance sheets of Vitafort
International Corporation and subsidiaries as of December 31, 2001 and 2000, and
the related consolidated statements of operations, stockholders' deficiency, and
cash flows for the years then ended. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Vitafort
International Corporation and subsidiaries as of December 31, 2001 and 2000, and
the consolidated results of their operations and their cash flows for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company has suffered recurring losses
from operations, including a loss of $968,882 for the year ended December 31,
2001. These losses and other factors raise substantial doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are also described in Note 2. The consolidated financial statements do not
include any adjustments that might result from the outcome of this uncertainty.


                                    MERDINGER, FRUCHTER, ROSEN & CORSO, P.C.
                                    Certified Public Accountants

LOS ANGELES, CALIFORNIA
MAY 13, 2002





                                       F-2
<PAGE>
                  VITAFORT INTERNATIONAL, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

<TABLE><CAPTION>
                                                                                            DECEMBER 31,
                                                                                  -------------------------------
                                     ASSETS                                           2001               2000
                                     ------                                       ------------       ------------
                                                                                                      (restated)
<S>                                                                               <C>                <C>
CURRENT ASSETS
Cash and cash equivalents                                                         $    456,884       $     22,632
Restricted cash                                                                         66,643                 --
Accounts Receivable, less allowance                                                         --                 --
for doubtful accounts of $112,562 and $110,376                                              --              4,338
Prepaid expenses and other current assets                                               11,629             70,899
                                                                                  ------------       ------------
      Total current assets                                                             535,156             97,869
                                                                                  ------------       ------------

Property and Equipment
  Computer equipment                                                                   322,225            322,225
  Office equipment                                                                     109,654            109,654
  Manufacturing equipment                                                              106,019            106,019
  Less accumulated depreciation                                                       (438,993)          (370,659)
                                                                                  ------------       ------------
      Total property and equipment                                                      98,993            167,239
                                                                                  ------------       ------------

Otther assets                                                                              875                875
                                                                                  ------------       ------------
  TOTAL ASSETS                                                                    $    635,024       $    265,983
                                                                                  ============       ============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY
                    ----------------------------------------

CURRENT LIABILITIES
Accounts payable and accrued expenses                                             $  1,734,467       $  1,738,749
Capital lease obligations - Current                                                     16,060             12,479
Notes payable                                                                          672,857            260,693
Convertible notes payable                                                               50,000                 --
Due to related parties-Vitafort                                                        145,500                 --
Due to related parties-HP                                                              415,516                 --
                                                                                  ------------       ------------
      Total Current Liabilities                                                      3,034,400          2,011,921

Capital lease obligations -long-term                                                        --             15,307
                                                                                  ------------       ------------
      Total Liabilities                                                              3,034,400          2,027,228
                                                                                  ------------       ------------

COMMITMENTS AND CONTINGENCIES                                                               --                 --

MINORITY INTEREST                                                                      225,750                 --
                                                                                  ------------       ------------
STOCKHOLDERS' DEFICIENCY
Series B, cumulative convertible preferred stock, $.01 par value;
   110,000 shares authorized: 1,000 shares issued and outstanding,
   aggregate liquidation preference of $50,000                                              10                 10
Series C, convertible preferred stock, $.01 par value; 450 shares
   authorized: 50 shares issued and outstanding, aggregate liquidation
   preference of $50,000                                                                     1                  1
Common stock, $.0001 par value; 30,000,000 shares authorized;
   21,099,288 and 21,099,288 shares issued and outstanding                               2,110              2,110
Additional paid-in capital                                                          29,904,053         29,799,053
Accumulated deficit                                                                (32,531,300)       (31,562,419)
                                                                                  ------------       ------------
  Total Stockholders' Deficiency                                                    (2,625,126)        (1,761,245)
                                                                                  ------------       ------------
  TOTAL LIABILITIES AND STOCKHOLDERS'  DEFICIENCY                                 $    635,024       $    265,983
                                                                                  ============       ============
</TABLE>


                   The accompanying notes are an integral part
                    of the consolidated financial statements

                                       F-3
<PAGE>
                  VITAFORT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE><CAPTION>
                                                                       FOR THE YEAR ENDED
                                                                           DECEMBER 31,
                                                                 -------------------------------
                                                                     2001               2000
                                                                 ------------       ------------
                                                                                     (Restated)
<S>                                                              <C>                <C>
Revenue, net                                                     $         --       $    881,977

Cost of sales                                                             578          1,195,634
                                                                 ------------       ------------
      Gross profit                                                       (578)          (313,657)
                                                                 ------------       ------------
Operating expenses
  Research and development                                             24,452             41,105
  Sales and marketing                                                  20,727          1,890,908
  General and administrative                                        1,189,160          3,724,567
                                                                 ------------       ------------
      Total operating expenses                                      1,234,338          5,656,580
                                                                 ------------       ------------

      Loss from operations                                         (1,234,917)        (5,970,237)
                                                                 ------------       ------------
 Other income (expense)
  Interest expense                                                    (45,825)           (29,117)
  Interest income                                                       1,859             20,351
  Gain of exchange of subsidiary stock                                     --            400,000
  Impairment of intangible assets                                          --           (526,856)
  Other income (expense)                                                   --            (42,910)
                                                                 ------------       ------------
      Total other income (expense)                                    (43,966)          (178,532)
                                                                 ------------       ------------

Loss before provision for income taxes, minority                   (1,278,882)        (6,148,769)
  interest and extraordinary item
Provision for income taxes                                                 --              6,400
                                                                 ------------       ------------

Loss before minority interest and extraordinary item               (1,278,882)        (6,155,169)

      Minority interest in Hollywood Partners.com                     310,000          1,208,411
                                                                 ------------       ------------

Loss before extraordinary item                                       (968,881)        (4,946,758)
                                                                 ------------       ------------

Extraordinary item-forgiveness of debt, net of taxes                       --            213,290
                                                                 ------------       ------------
Net loss                                                         $   (968,881)      $ (4,733,468)
                                                                 ============       ============
NET LOSS PER SHARE
Net loss per common share, before extraordinary item             $      (0.04)      $      (0.24)
Loss before extraordinary item                                   $         --       $       0.01
                                                                 ------------       ------------
Basic and diluted net loss per common share                      $      (0.04)      $      (0.23)
                                                                 ============       ============
</TABLE>
                   The accompanying notes are an integral part
                    of the consolidated financial statements

                                       F-4
<PAGE>
                  VITAFORT INTERNATIONAL, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDING DECEMBER 31, 2001 AND 2000






<TABLE><CAPTION>
                                SERIES B             SERIES C
                               CONVERTIBLE          CONVERTIBLE                                                           TOTAL
                             PREFERRED STOCK      PREFERRED STOCK       COMMON STOCK      ADDITIONAL                   STOCKHOLDER'
                            -----------------   ------------------  -------------------    PAID-IN     ACCUMULATED       EQUITY
                             SHARES    AMOUNT    SHARES     AMOUNT    SHARES     AMOUNT    CAPITAL       DEFICIT       (DEFICIENCY)
                            -------   -------   -------   --------  ----------   ------  -----------   ------------    -----------
<S>                         <C>       <C>       <C>       <C>       <C>          <C>     <C>           <C>             <C>
Balance, January 1, 2000      1,000   $    10        50   $      1  17,487,288   $1,749  $28,398,646   $(26,828,941)   $ 1,571,465

Issuance of common stock
  for cash                       --        --        --         --   1,275,000      128      506,122             --        506,250

Issuance of common stock
  for services                   --        --        --         --      12,500        1       34,199             --         34,200

Issuance of common stock
for exercise of options
and warrants                     --        --        --         --   2,212,000      221      440,804             --        441,025

Contribution to paid in
capital of Hollywood
Partners.com, Inc.               --        --        --         --          --       --      419,282             --        419,282

Net loss                         --        --        --         --          --       --           --     (4,775,760)    (4,775,760)
                            -------   -------   -------   --------  ----------   ------  -----------   ------------    -----------

Balance, December 31, 2000    1,000        10        50          1  20,986,788    2,099   29,799,053    (31,604,701)    (1,803,538)

Prior period adjustment          --        --        --         --     112,500       11           --         42,282         42,293
                            -------   -------   -------   --------  ----------   ------  -----------   ------------    -----------

Balance, December 31, 2000    1,000        10        50          1  21,099,288    2,110   29,799,053    (31,562,419)    (1,761,245)
(Restated)

Issuance of options              --        --        --         --          --       --      105,000             --        105,000

Net loss                         --        --        --         --          --       --           --       (968,881)      (968,881)
                            -------   -------   -------   --------  ----------   ------  -----------   ------------    -----------
Balance, December 31, 2001    1,000   $    10        50   $      1  21,099,288   $2,110  $29,904,053   $(32,531,300)   $(2,625,126)
                            =======   =======   =======   ========  ==========   ======  ===========   ============    ===========
</TABLE>




                   The accompanying notes are an integral part
                    of the consolidated financial statements

                                       F-5
<PAGE>
                  VITAFORT INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE><CAPTION>
                                                                                       FOR THE YEAR ENDED
                                                                                           DECEMBER 31,
                                                                                 -------------------------------
                                                                                     2001               2000
                                                                                 ------------       ------------
                                                                                                     (restated)
<S>                                                                              <C>                <C>
Cash flows from operating activities:
   Net loss                                                                      $   (968,881)      $ (4,733,468)
   Extraordinary gain on extinguishment of debt                                            --           (613,291)
   Impairment of intangible assets                                                         --            526,856
   Depreciation and amortization                                                       68,246             65,225
   Allowance for doubtful accounts                                                         --             46,594
   Loss on sale of securities                                                              --            160,995
   Stock issued for services                                                               --             34,200
   Stock options issued and exercised for services                                    105,000                 --
   Minority interest in consolidated subsidiary                                            --           (277,161)
Adjustments to reconcile net loss to net cash used in operating activities:
Changes in operating assets and liabilities:
      Accounts Receivable                                                                  --             88,205
      Inventories                                                                          --            585,407
      Prepaid expenses and other current assets                                        63,609            653,237
      Other assets                                                                         --            137,131
      Accounts Payable and payroll taxes payable                                           --            115,151
      Accrued expenses                                                                 (4,283)           573,148
                                                                                 ------------       ------------
      Cash flow used in operating activities                                         (736,309)        (2,637,771)
                                                                                 ------------       ------------

Cash flows from investing activities:
      Proceeds from sale of marketable securites                                           --            375,672
      Restricted cash                                                                 (66,643)                --
      Purchase of computer equipment                                                       --            (51,637)
                                                                                 ------------       ------------
      Cash flow provided by (used in) investing activities                            (66,643)           324,035
                                                                                 ------------       ------------

Cash flows from financing activities:
      Increase in due to related parties                                              561,016                 --
      Proceeds from issuance of common stock                                               --            506,250
      Proceeds from exercise of options and warrants                                       --            441,025
      Repayment of notes payable                                                      (17,693)          (157,846)
      Proceeds from convertible notes payable                                              --                 --
      Increase in Minority Interest                                                   225,750                 --
      Proceeds from notes payable                                                     464,550            400,000
      Payments on capital lease                                                         3,581             27,786
                                                                                 ------------       ------------
      Cash flow provided by financing activities                                    1,237,204          1,217,215
                                                                                 ------------       ------------

Increase (decrease) in cash and cash equivalents                                      434,252         (1,096,521)
Cash and cash equivalents, beginning                                                   22,632          1,119,153
                                                                                 ------------       ------------

Cash and cash equivalents, ending                                                $    456,884       $     22,632
                                                                                 ============       ============

Supplemental information:
Cash paid for:
   Income Taxes                                                                  $         --       $         --
                                                                                 ============       ============
   Interest expense                                                              $         --       $        992
                                                                                 ============       ============
</TABLE>

                   The accompanying notes are an integral part
                    of the consolidated financial statements

                                       F-6
<PAGE>
               VITAFORT INTERNATIONAL CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Non-cash items are as follows:

     o     During December 2001, HP issued 233,333 shares of HP's common stock
           at $.15 per share to settle a convertible note payable for $35,000.

     o     In February 2001, directors and officers of HP exercised 500,000
           cashless options granted at $1.07 per share. HP issued 291,017 shares
           of HP's common stock based upon the conversion formula for the
           exercise of these options.

     o     During the year ended December 31, 2001, HP issued 230,000 shares of
           HP's common stock for services valued at $75,100.

     o     During the year ended December 31, 2001, HP issued 50,000 shares of
           HP's common stock for debt issuance cost valued at $4,500.

     o     During March 2001, an investor of HP exercised 100,000 cashless
           warrants granted at $1.37 per share. HP issued 50,302 shares of HP's
           common stock based upon the conversion formula for the exercise of
           these warrants.

     o     During the year ended December 31, 2001, HP issued 50,000 shares of
           HP's common stock for debt issuance cost valued at $4,500.

     o     During March 2001, an investor of HP exercised 100,000 cashless
           warrants granted at $1.37 per share. HP issued 50,302 shares of HP's
           common stock based upon the conversion formula for the exercise of
           these warrants.

     o     During the year ended December 31, 2001, HP issued 415,000 warrants
           to investors and 152,500 warrants for debt issue cost for $.01 per
           share which was below the price HP's common stock was trading for at
           date of grant. The amount charged to expense was $17,025.

     o     For the year ended December 31, 2001, HP recognized $21,000 of
           expense on the 7% preferred dividend on HP's convertible preferred
           stock.

     o     During the year ended December 31, 2000, HP issued 1,768,000 shares
           of HP's common stock for services valued at $197,160.

     o     During the year ended December 31, 2000, HP issued options for
           services valued at $420,266.

     o     For the year ended December 31, 2000, HP recognized $21,000 of
           expense on the 7% preferred dividend on HP's convertible preferred
           stock.

                                       F-7
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         Basis of Presentation
         ---------------------
         The accompanying consolidated financial statements include the accounts
         of Vitafort International Corporation and Subsidiaries, (the
         "Company"), organized under the laws of the State of Delaware on
         September 28, 1989 (previously organized under the laws of the State of
         California on February 7, 1986), and the following subsidiaries:

         a) Visionary Brands, Inc., ("Visionary"), organized under the laws of
            the State of Nevada on January 7, 1998 (owned 100% by the Company);

         b) Hollywood Partners.com, Inc. ("HP"), organized under the laws of the
            State of Delaware on August 31, 1989 (owned 10% by the Company);

         c) Hall of Fame Pro, Inc. ("HOFP") organized under the laws of the
            State of Delaware on May 22, 2000 (inactive), (owned 85% by HP);

         d) Hollywood Partners, Inc ("HPI") organized under the laws of the
            State of California on August 7, 1995 (inactive) (owned 100% by HP);

         e) Avenue of the Stars Entertainment, Inc. ("AOSE") organized under the
            laws of the State of Nevada on November 13, 2001 (owned 100% by HP);

         f) Global International Sourcing, Inc. ("GIS"), organized under the
            laws of the State of Nevada on October 21, 1997 (inactive) (owned
            100% by the Company);

         g) Great Grocers.com, Inc. ("GGI"), organized under the laws of the
            State of Delaware on April 24, 2000 (inactive) (owned 100% by the
            Company);

         h) Visionary Foods.com, Inc. ("VFI"), organized under the laws of the
            State of Delaware on April 24, 2000 (inactive) (owned 100% by the
            Company);

         i) Net Entree.com, Inc. ("NEI"), organized under the laws of the State
            of Delaware on May 23, 2000 (inactive) (owned 100% by the Company);

         All significant intercompany accounts and transactions have been
         eliminated in consolidation.

         Line of Business
         ----------------
         The Company was engaged in sourcing, developing and formulating
         products that it sold and marketed under brands for healthy food
         products, for licensed products and for low-priced sourced products
         through its wholly-owned subsidiary, Visionary. During the year ended
         December 31, 2000, the Company wound down the operations.

                                       F-8
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Line of Business (continued)
         ----------------------------
         HP was a marketing and promotions company building a family of content,
         community and commerce Internet Websites. HP used sweepstakes offerings
         on the Internet to help clients to build brands, to make commerce
         offerings and to acquire customers. As Website visitors register to
         enter the sweepstakes, HP collected demographic and lifestyle
         information, and gained permission to send announcements and offerings
         in the future. HP was developing additional and enhanced offerings to
         increase its presence on the Internet. Due to the collapse of many
         Internet companies and the severe liquidity constraints, HP has shut
         down and suspended its BigTimeHollywood.com and PlanetFree.com Websites
         and its basic Internet model that it incorporated in the fourth quarter
         of 1999 and the first three quarters of 2000. In October 2001, a
         subsidiary, AOSE, was formed setting the direction of HP as a
         development, production, film financing company that has been exploring
         the acquisition of intellectual properties for the purpose of
         developing, structuring and partnering for future productions. HP is
         also seeking strategic investments for financing existing production
         projects, as well as projects that are looking for bridge financing or
         additional production capital. As of December 31, 2001, HP is exploring
         the possibility of merging with or acquiring potential businesses. (See
         also note 2.)

         Use of Estimates
         ----------------
         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America requires
         management to make estimates and assumptions that affect the reported
         amounts of assets and liabilities and disclosure of contingent assets
         and liabilities at the date of the financial statements and the
         reported amounts of revenue and expenses during the periods presented.
         Actual results could differ from those estimates.

         Reclassification
         ----------------
         Certain prior year amounts have been reclassified to conform with
         current year presentation.

         Revenue Recognition
         -------------------
         Product sales were recognized when the Company's products were shipped
         from the commercial warehouse used by the Company or the contract
         manufacturer to the customer. Revenues from Internet services were
         recognized when the service had been rendered

         Cash and Cash Equivalents
         -------------------------
         The Company considers all highly liquid investments purchased with
         original maturities of three months or less to be cash equivalents.

                                       F-9
<PAGE>
                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Concentration of Credit Risk
         ----------------------------
         The Company places its cash in what it believes to be credit-worthy
         financial institutions. However, cash balances may have exceeded FDIC
         insured levels at various times during the year. The Company has not
         experienced any losses in such accounts and believes it is not exposed
         to any significant credit risk on cash and cash equivalents.

         Marketable Securities
         ---------------------
         The Company classifies its entire investment portfolio as
         available-for-sale, if any, in accordance with the provisions of SFAS
         No. 115, "Accounting for Certain Investments in Debt and Equity
         Securities." Available-for-sale securities are stated at fair value
         with unrealized gains and losses included in stockholders' equity.
         Realized gains and losses are included in other income (expense). The
         cost of securities sold is based on the specific identification method.

         Property and Equipment
         ----------------------
         Property and equipment is stated at cost. Depreciation is computed
         using the straight-line method based upon the estimated useful lives of
         the various classes of assets. Maintenance and repairs are charged to
         expense as incurred.

         Intangible Assets
         -----------------
         Intangible assets are comprised of acquisition costs of Auburn Farms
         and Natures Warehouse trademarks, debt issuance costs and customer
         acquisition costs and are recorded at cost. The acquisition costs
         associated with trademarks are being amortized on a straight-line basis
         over twenty years. All other intangible assets are being amortized on a
         straight-line basis over periods not exceeding five years.

         These assets are reviewed by management periodically and written down
         if necessary to the value of the future benefit expected to be derived.
         As of December 31, 2000, these assets were deemed impaired and were
         written off as expense in the consolidated statement of operations.

         Income Taxes
         ------------
         Income taxes are provided for based on the asset and liability method
         of accounting pursuant to Statement of Financial Accounting Standards
         ("SFAS") No. 109, "Accounting for Income Taxes." The asset and
         liability method requires the recognition of deferred tax assets and
         liabilities for the expected future tax consequences of temporary
         differences between the reported amount of assets and liabilities and
         their tax basis.

         Advertising Costs
         -----------------
         Advertising costs are expensed as incurred and included in selling,
         general and administrative expenses. For the years ended December 31,
         2001 and 2000, advertising expense amounted to $848 and $138,132,
         respectively.
                                      F-10
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Fair Value of Financial Instruments
         -----------------------------------
         The carrying value of cash and cash equivalents, accounts receivable,
         other receivables, accounts payable and accrued expenses, and payroll
         taxes payable approximates fair value due to the relatively short
         maturity of these instruments. The fair value of long-term payables was
         determined based upon interest rates currently available to the Company
         for borrowings with similar terms. The fair value of long-term
         borrowings approximates their carrying amounts as of December 31, 2001
         and 2000.

         Long-Lived Assets
         -----------------
         SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and
         for Long-Lived Assets to be Disposed Of," requires that long-lived
         assets be reviewed for impairment whenever events or changes in
         circumstances indicate that the carrying amount of an asset may not be
         recoverable. The Company has adopted this statement and determined that
         no impairment loss needs to be recognized as of December 31, 2001, but
         recognized an impairment loss for the year ended December 31, 2000.


         Stock Based Compensation
         ------------------------
         SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123")
         allows an entity to elect to continue to measure compensation cost
         under Accounting Principles Board Opinion No. 25, "Accounting for Stock
         Issued to Employees" ("APB No. 25"), but requires pro forma disclosures
         of net loss and loss per share as if the fair-valued-based method of
         accounting had been applied. In accordance with SFAS 123, the Company
         elected to continue to measure compensation cost under APB No. 25, and
         comply with the pro forma disclosure requirements.

         The Company has adopted for footnote disclosure purposes SFAS No. 123,
         which requires that companies disclose the cost of stock-based employee
         compensation at the grant date based on the value of the award (the
         fair value method) and disclose this cost over the service period. The
         value of the stock-based award is determined using a pricing model
         whereby compensation cost is the excess of the fair value of the award
         as determined by the model at grant date or other measurement date over
         the amount an employee must pay to acquire the stock.

         Transactions in which goods or services are received from non-employees
         for the issuance of equity securities or stock-based awards are
         accounted for based on the fair value of the consideration received.

         Loss Per Share
         --------------
         SFAS No. 128, "Earnings Per Share," requires presentation of basic loss
         per share ("Basic LPS") and diluted loss per share ("Diluted LPS").

                                      F-11
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Loss Per Share (continued)
         --------------------------
         The computation of basic loss per share is computed by dividing loss
         available to common stockholders by the weighted-average number of
         outstanding common shares during the period. Diluted LPS gives effect
         to all dilutive potential common shares outstanding and all shares held
         in treasury during the period. The computation of diluted LPS does not
         assume conversion, exercise or contingent exercise of securities that
         would have an anti-dilutive effect on losses.

         The shares used in the computation of loss per share were as follows:

                                      December 31,
                                -----------------------
                                   2001         2000
                                ----------   ----------
               Basic            21,099,288   20,707,002
                                ==========   ==========
               Diluted          21,099,288   20,707,002
                                ==========   ==========


         Comprehensive Income
         --------------------
         SFAS No. 130, "Reporting Comprehensive Income," establishes standards
         for the reporting and display of comprehensive income and its
         components in the financial statements. As of December 31, 2001 and
         2000, the Company has no items that represent comprehensive income;
         therefore, has not included a schedule of comprehensive income in the
         financial statements.

         Computer Software Costs
         -----------------------
         The American Institute of Certified Public Accountants' Executive
         Committee issued Statement of Position Number 98-1 (SOP 98-1),
         "Accounting for the Cost of Computer Software Developed or Obtained for
         Internal Use." SOP 98-1 is effective for fiscal years beginning after
         December 15, 1998. The Company has adopted SOP 98-1 as of January 1,
         1999.In the first quarter of 2000 the Financial Accounting Standards
         Board issued EITF 00-2, "Accounting for Web Site Development Costs,"
         effective for fiscal quarters beginning after June 30, 2000. The
         standard establishes criteria for the accounting treatment of web site
         development costs, with respect to whether costs associated with the
         development and operation of web sites are to be capitalized or
         expensed as incurred. As of December 31, 2000, the Company has expensed
         all costs associated with the development and operation of its Websites
         as the Company did not believe that any amounts capitalized would be
         recoverable in future periods.

                                      F-12
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

         Segment Disclosure
         ------------------
         SFAS No. 131, "Disclosure about Segments of an Enterprise and Related
         Information," changes the way public companies report information about
         segments. SFAS No. 131, which is based on the selected segment
         information, requires quarterly and entity-wide disclosures about
         products and services, major customers, and the material countries in
         which the entity holds assets and reports revenues. The Company has
         adopted SFAS No. 131 as of December 31, 1998 and has determined that
         there is only one reportable segment.

         Recent Accounting Pronouncements
         --------------------------------
         On June 29, 2001, SFAS No. 141, "Business Combinations," was approved
         by the Financial Accounting Standards Board ("FASB"). SFAS 141 requires
         that the purchase method of accounting be used for all business
         combinations initiated after June 30, 2001. Goodwill and certain
         intangible assets will remain on the balance sheet and not be
         amortized. On an annual basis, and when there is reason to suspect that
         their values have been diminished or impaired, these assets must be
         tested for impairment, and write-downs may be necessary. The Company is
         required to implement SFAS No. 141 on January 1, 2002 and it has not
         determined the impact, if any, that this statement will have on its
         consolidated financial position or results of operations.

         On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets,"
         was approved by the FASB. SFAS No. 142 changes the accounting for
         goodwill from an amortization method to an impairment-only approach.
         Amortization of goodwill, including goodwill recorded in past business
         combinations, will cease upon adoption of this statement.

         Company is required to implement SFAS No. 142 on January 1, 2002 and it
         has not determined that impact, if any, that this statement will have
         on its consolidated financial position or results of operations

         During August 2001, SFAS No. 143, "Accounting for Asset Retirement
         Obligation," was issued. SFAS No. 143 is effective for fiscal years
         beginning after June 15, 2002, and will require companies to record a
         liability for asset retirement obligations in the period in which they
         are incurred, which typically could be upon completion or shortly
         thereafter. The FASB decided to limit the scope to legal obligation and
         the liability will be recorded at fair value. The effect of adoption of
         this standard on Company's results of operations and financial
         positions is being evaluated.

                                      F-13
<PAGE>
                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

         Recent Accounting Pronouncements (Contined)
         -------------------------------------------
         During August 2001, SFAS No. 144, "Accounting for the Impairment or
         Disposal of Long-Lived Assets," was issued. SFAS No. 144 is effective
         for fiscal years beginning after December 15, 2001. It provides a
         single accounting model for long-lived assets to be disposed of and
         replaces SFAS No. 121 "Accounting for the Impairment of Long-Lived
         Assets and Long-Lived Assets to Be Disposed Of." The effect of adoption
         of this standard on Company's results of operations and financial
         positions is being evaluated.

NOTE 2 - LIQUIDITY AND GOING CONCERN

         The accompanying consolidated financial statements have been prepared
         in conformity with accounting principles generally accepted in the
         United States of America, which contemplate continuation of the Company
         as a going concern. Since its inception, the Company has suffered
         recurring losses from operations. For the year ended December 31, 2001,
         the Company incurred a net loss of $968,881, has working capital
         deficiency of $2,499,244 and a stockholder's deficiency of $2,625,126.
         Also, subsequent to December 31, 2001, the Company became a minority
         owner of its subsidiary HP. (See note 21). These factors raise
         substantial doubt about the Company's ability to continue as a going
         concern. Management is attempting to raise additional capital to meet
         future financial obligations, but may not be able to do so. Should the
         Company not be able to raise additional capital, it may have to
         severely curtail operations. The financial statements do not include
         any adjustments that may be necessary if the Company is unable to
         continue as a going concern.

NOTE 3 - RESTRICTED CASH

         The Company's subsidiary, AOSE has restricted cash totaling $66,643.
         Subsequent to December 31, 2001, an irrevocable Letter of Credit was
         opened totaling $66,643 expiring December 31, 2002 which was used as a
         security deposit on the subsidiary's lease dated December 2001. During
         the second year of the lease, the security deposit will be reduced to
         $33,321.

NOTE 4 - RELATED PARTY TRANSACTIONS

         The Company has related party transactions with officers, directors and
         other related parties as follows:

         Due to Related Party - Vitafort
         -------------------------------
         Vitafort had the following related party transactions with certain
         officers, directors and consultants shareholders as follows:

                                               December 31
                                         ------------------------
                                            2001          2000
                                         ----------    ----------
         a)     Mark Beychok             $   88,368    $        -
         b)     Mel Beychok                     200             -
         c)     Valerie Broadbent            15,432             -
         d)     John Coppolino               41,500             -
                                         ----------    ----------
                                         $  145,500    $        -
                                         ==========    ==========

                                      F-14
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)

         Due to Related Party - Vitafort (continued)
         -------------------------------------------

         a)   Mark Beychok, the former Chairman of the Board of Vitafort, is due
              a total of:

                    1)    $57,368 from Vitafort for unpaid salary and severance
                          pay and $24,000 as of December 31, 2001 on his
                          consulting agreement dated October 1, 2001; and
                    2)    Advances to the Company of $7,000 for overhead and
                          operating expenses.

         b)   Mel Beychok, the father of the former Chairman of the Board of
              Vitafort, loaned Vitafort $200 for overhead and operating expenses
              during the year ended December 31, 2001.

         c)   Valerie  Broadbent, a director and officer of Vitafort, as of
              December 31, 2001, was owed $12,000 on her consulting agreement
              dated October 1, 2001. In addition Ms. Broadbent is owed $3,432 in
              unpaid salary as of December 31, 2001.

         Due to Related Party - HP
         -------------------------
         HP had the following related party transactions with certain officers,
         directors, consultants, shareholders and employees as follows:

                                                December 31
                                         ------------------------
                                            2001          2000
                                         ----------    ----------
         a)     Mark Beychok             $  280,802    $        -
         b)     Mel Beychok                  22,021             -
         c)     Valerie Broadbent            72,193             -
         d)     Linda Dellavechia            28,000             -
         e)     Nikolas Konstant             12,500             -
                                         ----------    ----------
                                         $  415,516    $        -
                                         ==========    ==========

         a)   Mark Beychok, the former Chairman of the Board of HP, is due a
              total of $280,802 from HP as of December 31, 2001. This balance is
              comprised of the following:

                    1)   advances to the Company totaling $58,542 for overhead
                         and operating expenses;

                                      F-15
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)


         Due to Related Party - HP (continued)
         -------------------------------------

                    2)   On September 5, 2001, HP entered into a promissory note
                         for $37,995.35, plus interest accruing at 10% per annum
                         for prior advances made to HP. The Board of Directors
                         has authorized the promissory note to be updated from
                         time to time to account for any additional amounts
                         loaned to HP. At December 31, 2001, $1,265 of interest
                         has been accrued on the note.

                    3)   unpaid consulting fees on Mr. Beychok's Consulting
                         Agreement with HP dated October 1, 2000, which totaled
                         $183,000 and $46,250 for the years ending December 31,
                         2001 and 2000, respectively.

         b)   Mel Beychok, the father of the former Chairman of the Board of HP,
              loaned HP $22,021 for overhead and operating expenses during the
              year ended December 31, 2001. On September 5, 2001, HP entered
              into a promissory note for $21,310.61, plus interest accruing at
              10% per annum. At December 31, 2001, $710 of interest has been
              accrued on the note.

         c)   Valerie Broadbent, a director and officer of HP, as of December
              31, 2001, was owed $68,000 on her Employment Agreement amended
              January 4, 2001. In addition Ms. Broadbent is owed $4,193 in
              expenses not reimbursed as of December 31, 2001.

         d)   Linda Dellavechia, a consultant of HP, was owed $28,000 as of
              December 31, 2001, relating to unpaid consulting fees. Subsequent
              to December 31, 2001, Ms. Dellavechia became a shareholder in HP.

         e)   On November 30, 2001, HP entered into an Employment Agreement with
              Nikolas Konstant. The term of the Agreement is for two years with
              total compensation of $300,000 payable with up to 20,000,000
              shares of HP's common stock. At December 31, 2001, no shares had
              been issued. HP has accrued one month of compensation expense in
              the amount of $12,500.

                                      F-16
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 4 - RELATED PARTY TRANSACTIONS (Continued)

         Related Party Stock Issuances
         -----------------------------
         During the years ending December 31, 2001 and 2000, various issuances
         of HP's common stock, options and warrants have been made to several
         related parties for services performed. (See notes 11 and 12).


NOTE 5 - PROPERTY AND EQUIPMENT

         Property and equipment is summarized as follows:

                                                      December 31,
                                                ------------------------
                                                   2001          2000
                                                ----------    ----------
         Manufacturing equipment                $  106,019    $  106,019
         Furniture and office equipment            109,654       109,654
         Computer Equipment                        322,225       322,225
                                                ----------    ----------
                                                   537,898       537,898

         Less: Accumulated Depreciation           (438,905)     (370,659)
                                                ----------    ----------
         Property and Equipment, net            $   98,993    $  167,239
                                                ==========    ==========

         Depreciation expense for the years ended December 31, 2001 and 2000
         was $68,246 and $65,225, respectively.

NOTE 6 - NOTES PAYABLE

                                                       December 31
                                                ------------------------
                                                   2001          2000
                                                ----------    ----------
         a)     Inventory financing             $  199,362    $  199,362
         b)     Promissory notes                   429,857             -
         c)     Vendor note                         43,638        47,513
         d)     Insurance note                           -        13,818
                                                ----------    ----------
                                                $  672,857    $  260,693
                                                ==========    ==========

         a)   Throughout 1998, the Company entered into purchase order financing
              agreements with accredited investors, which provided the Company
              with $995,000 to purchase inventory. These advances bear interest
              at 3% per month and are due as the related receivables are
              collected. In addition, several lenders received options to
              purchase 410,000 shares of the Company's common stock at $1.00 per
              share, which was fair market value at the time. The exercise price
              was later reduced to $0.10 and $0.085 reflecting a subsequent
              decline in the fair market value of the Company's common stock.
              The Company has pledged its inventory as collateral for these
              advances. During 1999, the Company repaid $320,000 of these
              advances in cash and repaid $250,000 of the advances plus accrued
              interest thereon with the issuance of 500,000 shares of the
              Company's common stock, having a total value of $131,750. The
              difference between the fair market value of the Company's common
              stock issued and the carrying value of the advances and accrued
              interest repaid resulted in an extraordinary gain to the Company
              of $143,250. At December 31, 2001 and 2000, $199,362 and $199,362,
              respectively, of these advances were outstanding.

                                      F-17
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 6 - NOTES PAYABLE (Continued)

         b)   On September 1, 2001, HP entered into three note and warrant
              purchase agreements for the purchase of HP's 8% promissory notes
              due on March 31, 2002. During November 2001, HP received proceeds
              on these notes totaling $429,857 and the due date was changed to
              May 31, 2002. These notes included warrants to purchase 415,000
              shares of HP's common stock at an exercise price of $.01 per
              share. The placement agent was paid a fee of $42,986 on this
              transaction. In addition, the placement agent received a warrant
              to purchase 152,500 shares of HP's common stock at an exercise
              price of $.01 per share. (See note 11)

         c)   As of December 31, 2001 and 2000, HP has a note in the amount of
              $1,125 and $737 owing to a vendor of HP, and Vitafort has notes to
              vendors in the amount of $41,776.

         d)   As of December 31, 2000, HP had a note totaling $13,818 which
              represented the current portion of insurance costs being financed
              by a financial institution. The note had monthly payments of
              $6,347, bore interest at 8.92%, and matured in February 2001.

NOTE 7 - CONVERTIBLE NOTES PAYABLE

              On December 31, 1999, 150,000 shares of Hollywood Partners.com
              were issued to the holders of the two convertible notes in payment
              of the principal amount of $600,000. These shares are restricted
              pursuant to Rule 144 and bear a legend. When the shares are sold
              or replaced by other free-trading unrestricted common stock of
              Hollywood Partners.com and sold, the amount of the proceeds, less
              normal brokerage fees (the "Net Proceeds"), will be disclosed to
              the Company. If the net proceeds are less than the $300,000, then
              the Company agrees to make up the shortfall by paying cash or
              issuing additional free-trading common stock. If the net proceeds
              realized are greater than $600,000, then the holders are entitled
              to retain all such net proceeds. As of December 31, 2001, neither
              party has sold the shares.

              In May 2001, HP issued a Convertible Note to an investor for
              $35,000, bearing interest at 10% per annum, due 180 days after
              receipt of funds. The Holder of the Note has the option to convert
              the Note into shares of common stock of HP at any time at or after
              the close of business on the maturity date at 85% of the 20-day
              average closing bid for HP's common stock for the 20 days
              immediately preceding the conversion date, with a floor of $.15
              per share. In December 2001, the Note was converted and the Holder
              was issued 233,333 shares of HP's common stock.

              In August 2001, HP issued a Convertible Note to an investor for
              $50,000, bearing interest at 7% per annum, due 180 days after
              receipt of funds. The Holder of the Note has the option to convert
              it into shares of Series C Preferred Stock of HP at any time at or
              after the close of business on the maturity date at 85% of the
              30-day average closing bid for HP's common stock for the 20 days
              immediately preceding the conversion date, with a floor of

                                      F-18
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 7 - CONVERTIBLE NOTES PAYABLE (Continued)

              $.25 per share. As additional consideration for entering into this
              Note, Holder received fifty thousand (50,000) shares of HP's
              common stock. (See note 12). As of December 31, 2001, the Note has
              not been converted.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

         Lease agreements
         ----------------

         a)   As of August 1, 1999, HP entered into a two-year lease agreement
              for its office premises. HP was obligated for monthly rent of
              $8,800 through May 31, 2000 and $8,950 per month for the period
              June 1, 2000 through July 31, 2001. The landlord has a money
              judgment for approximately $27,000 on the lease. HP still owes
              approximately $42,000 on this lease which is included in accounts
              payable. HP moved into temporary facilities for the period July 1
              through December 31, 2001 and was obligated for monthly rent of
              $4,000. HP is currently renting an executive office suite at a
              monthly rent of $100.

         b)   During December 2001, a subsidiary of HP entered into a new lease
              for its office premises which expires on February 27, 2007. For a
              security deposit, the landlord was issued an irrevocable letter of
              credit for $66,643 subsequent to year end which will be reduced to
              $33,321 after one year. (See note 3.)

         c)   HP leases its computer equipment under several capital leases.
              Fixed assets under capital leases were $46,684 and $ 46,684, with
              related accumulated depreciation of $28,352 and $12,776, at
              December 31, 2001 and 2000, respectively. Depreciation expense
              related to such fixed assets is $15,576 and $12,774 as of December
              31, 2001 and 2000, respectively.

         The future minimum annual aggregate rental payments required under
         these leases that have terms in excess of one year are as follows:

                                                        Operating      Capital
         Years ending December 31,                        Leases        Leases
                                                          ------        ------
         2002                                           $ 105,518     $  17,660
         2003                                             137,729             -
         2004                                             120,135             -
         2005                                             148,967             -
         2006                                             154,927             -
         Thereafter                                        25,988             -
                                                        ---------     ---------
         Total Minimum Lease Payments                   $ 693,264     $  17,660
                                                        =========
         Less:  Amounts Representing Interest                            (1,600)
                                                                      ---------
         Present Value of Future Minimum Lease Payments               $  16,060
                                                                      =========

                                      F-19
<PAGE>
                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

         Rent expense was $97,860 and $85,610 for the years ended December 31,
         2001 and 2000, respectively under these office leases.

         On December 31, 1999, 150,000 shares of Hollywood Partners.com were
         issued to the holders of the two convertible notes in payment of the
         principal amount of $600,000. These shares are restricted pursuant to
         Rule 144 and bear a legend. When the shares are sold or replaced by
         other free-trading unrestricted common stock of Hollywood Partners.com
         and sold, the amount of the proceeds, less normal brokerage fees (the
         "Net Proceeds"), will be disclosed to the Company. If the net proceeds
         are less than the $300,000, then the Company agrees to make up the
         shortfall by paying cash or issuing additional free-trading common
         stock. If the net proceeds realized are greater than $600,000, then the
         holders are entitled to retain all such net proceeds. As of December
         31, 2001, neither party has sold the shares.

         The Company licensed certain food products. The Company granted all of
         these products to Vitafort as Master Distributor in exchange for a
         royalty based upon net sales of these products. As Master distributor,
         Vitafort was responsible for all manufacturing and distribution
         expenses, including the building and maintaining of inventory, billings
         and collections and working capital requirements. The Company still
         remains responsible to the Licensor for certain minimum payments under
         the licenses held and for other contractual obligations.

         LITIGATION
         ----------

         The Company has filed suit against the manufacturer of the peanut
         filling for Peanut Squeeze, Haarmann & Reimer. The Company is seeking
         damages for the manufacturer's inability to meet product
         specifications. As a result, the Company incurred significant damages
         including lost sales and shelf space, lost promotional costs and
         expenses associated with introducing and marketing Peanut Squeeze, and
         damage to the Company's distribution network of brokers and
         distributors.

         Employment contracts
         --------------------

         On October 1, 2000, HP entered into an Employment Agreement with the
         then-President through September 30, 2003, which provided for an annual
         salary of $150,000 and monthly car allowance of $1,500, with a two-year
         renewable option at the election of the then-President. The
         then-President resigned effective September 2001.

         On October 1, 2000, HP entered into an Employment Agreement with the
         Corporate Secretary / Chief Administrative Officer (CAO) through
         September 30, 2003, which provides for an annual salary of $72,000,
         with a two-year renewable option at the election of the CAO. Effective
         January 1, 2001, the CAO's annual salary is $84,000. In September 2001,
         the Corporate Secretary / CAO was appointed as Director and President

                                      F-20
<PAGE>
                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

         of HP. The terms of the original Employment Agreement remain unchanged.
         HP is in arrears $68,000 on the Employment Agreement.

         On December 1, 2001, HP entered into an Employment Agreement with the
         Chief Executive Officer through November 30, 2003, which provides for a
         lump sum salary of $300,000 payable in the form of 20,000,000 shares of
         HP's common stock.

         Consulting agreements
         ---------------------
         On October 1, 2001, the Company entered into a Consulting Agreement
         with the former Chairman of the Board with a term ending September 30,
         2003, which provides for monthly compensation of $8,000. As of December
         31, 2001, the Company is in arrears $24,000 on the Consulting
         Agreement.

         On October 1, 2001, the Company entered into a Consulting Agreement
         with the President / Corporate Secretary / Chief Financial Officer with
         a term ending September 30, 2003, which provides for monthly
         compensation of $4,000. As of December 31, 2001, the Company is in
         arrears $12,000 on the Consulting Agreement.

         On October 1, 2000, HP entered into a Consulting Agreement with the
         former Chairman of the Board with a term ending September 30, 2003,
         which provides for an annual fee of $185,000 and monthly car allowance
         of $1,750. As of December 31, 2001, HP is in arrears $176,000 and
         $46,250 for the years ended 2001 and 2000, respectively, on the
         Consulting Agreement.

         On December 14, 2001, HP entered into a Consulting Agreement with a
         term ending January 1, 2003, which provides for 4,500,000 shares of
         HP's common stock at $.015 per share.

         On December 15, 2001, HP entered into a Consulting Agreement with a
         term ending January 1, 2003, which provides for 400,000 shares of HP's
         common stock at $.015 per share.

         License agreement
         -----------------
         The license agreement HP had with eMap USA for the Gravity Games Bar
         was terminated in 2001. HP had granted these products to Vitafort as
         Master Distributor in exchange for a royalty based upon net sales of
         these products. As Master distributor, Vitafort was responsible for all
         manufacturing and distribution expenses, including the building and
         maintaining of inventory, billings and collections and working capital
         requirements. HP remains responsible to the Licensor for certain
         minimum payments under the license held and for other contractual
         obligations. At December 31, 2001, Vitafort has accrued $107,040 on the
         license.

         Agreement with BambooBiz
         ------------------------
         In January 2001, HP entered into a letter of agreement to acquire
         BambooBiz, LLC, a direct marketing company. In March 2001, BambooBiz
         asked for assistance from the directors and officers of HP to help in
         raising capital. HP responded by assisting in re-writing the business

                                      F-21
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

         plan and by contacting and sending business plan packages to over 75
         accredited investors to assist in capital formation. HP had been
         assured that the deal had consummated between Hollywood Partners and
         BambooBiz. In March 2001, HP received a letter from the president of
         BambooBiz, suggesting a massive change in the terms of the deal
         previously agreed to and publicly announced. At this time, HP is
         exploring its options.

         Agreement with Pipeline Technologies, Inc.
         ------------------------------------------
         HP also entered into a letter agreement with Pipeline Technologies,
         Inc., ("Pipeline") a software technology company, in late January 2001.
         Also in March 2001, Pipeline notified HP that it would finalize closing
         documents concurrent with BambooBiz executing its closing documents. At
         this time, HP is continuing to explore its options.

         Agreement with Giants Entertainment and Very Mean Men, Inc.
         -----------------------------------------------------------
         In March 2001, HP entered into an agreement with David Dadon ("Dadon")
         and his companies, Giants Entertainment, Inc. ("Giants") and Very Mean
         Men, Inc. ("VMM"), the owners of the feature film entitled, "Very Mean
         Men," a Baio/White production of a Tony Vitale film, starring Matthew
         Modine, Ben Gazzara, Charles Durning, Burt Young and Scott Baio, with
         Louise Fletcher and Martin Landau (the "Film"). In March 2001, HP
         entered into an agreement to acquire the Film, and HP announced its
         agreement. As consideration for HP acquiring 100% of all issued and
         outstanding shares of the entity that owned the Film, HP was to issue
         convertible preferred stock of HP. Dadon also agreed to invest $75,000
         in short-term equity financing in HP. The Board of Directors felt that
         acquiring the Film was in the best interests of HP's shareholders.
         Management also felt the acquisition of the Film would allow HP to
         explore additional entertainment opportunities. However, irreconcilable
         differences arose between the parties regarding the transaction. As a
         result, during the second quarter a Settlement Agreement was reached
         and the transaction was terminated. As part of the Settlement
         Agreement, HP is obligated to pay Dadon the sum of $35,000 which
         remains outstanding.

         Agreement with Seven Arts Pictures
         ----------------------------------
         In June 2001, HP announced that it had signed a Letter of Intent
         ("LOI") to merge with film producer and production executive Peter
         Hoffman's Seven Arts Pictures, with Mr. Hoffman to become CEO of HP
         upon the completion of the merger. Pursuant to its own terms, the LOI
         expired on August 15, 2001. Although Mr. Hoffman remained in
         discussions subsequent to the termination date, the Board of Directors
         found Mr. Hoffman's terms to be fundamentally and materially different
         than originally contemplated and discussed. In September 2001, all
         discussions between the parties regarding the LOI ceased and the
         transaction contemplated by the LOI no longer is being pursued.

         Hall of Fame Pro
         ----------------
         During the year ended December 31, 2000, a subsidiary of HP was formed
         and was called Hall of Fame Pro, Inc. ("HOFP"). HOFP was capitalized
         with 400,000 shares of Hollywood Partners stock. HOFP was to be a
         sports marketing company formed with the support of the Hall of Fame

                                      F-22
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 8 - COMMITMENTS AND CONTINGENCIES (Continued)

         Players Association ("HOFPA") to exploit the images and likenesses of
         Pro Football Hall of Fame legends to corporate sponsors. The strategy
         was to create revenue for both the Hall of Fame members and HP through
         golf tournaments, licensing, original content syndication, event
         sponsorships, sports memorabilia, and corporate sponsorship.

         HP was notified in January 2001 that the HOFPA did not want any funds
         that may be raised out of a previous offering memorandum to be released
         from escrow without the approval of HOFPA. In addition, the HOFPA
         requested various non-public records. HP disagreed with the requests of
         the HOFPA. A series of adversarial letters were then sent by the
         HOFPA's legal counsel.

         These letters and the resulting disagreement caused HOFP to suspend its
         capital formation efforts and virtually all of its operations. A
         director resigned from the board of HOFP in January 2001. The president
         of HOFP resigned in March 2001. Efforts to resolve the disagreement
         between the HOFPA and HOFP took place during most of the first quarter
         of 2001. No definitive understandings were reached. HP received a
         letter from HOFPA's counsel of HOFPA in March 2001 notifying HOFP and
         Hollywood Partners that the HOFPA Executive Committee has no intention
         of moving forward with HP. In addition, the letter makes numerous
         allegations regarding the relationship between the parties. During the
         second quarter of 2001, a settlement proposal was received from counsel
         for HOFPA. As of December 31, 2001, the matter still has not been
         resolved.

         As a result of HOFP's cessation of business, the ex-president of HOFP
         has filed a Labor Commission claim against HOFP and other companies for
         unpaid wages. HP is currently investigating the claim.

         Contingencies
         -------------
         HP is a party to legal proceedings (which generally relate to disputes
         between the Company and its suppliers or customers regarding payment
         for products sold or supplied) that are typical for a company of its
         size and scope and financial condition, and none of these proceedings
         are believed to be material to its financial condition or results of
         operations and HP has accrued $50,000 for these proceedings.

         The landlord at HP's former headquarter offices at 1800 Avenue of the
         Stars, Los Angeles, California, Duesenberg Investment Company, has a
         money judgment for approximately $27,000 for outstanding amounts still
         owed for the lease on the premises. The total amount owing as of
         December 31, 2001, is approximately $42,000 which HP has accrued in
         accounts payable and accrued expenses.

                                      F-23
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000


NOTE 9 - INCOME TAXES

         The components of the provision for income taxes are as follows:

                                                         December 31,
                                                  ------------------------
                                                     2001          2000
                                                  ----------    ----------
         Current Tax Expense
              U.S. Federal                        $        -    $        -
              State and Local                              -             -
                                                  ----------    ----------
         Total Current                                     -             -
                                                  ----------    ----------
         Deferred Tax Expense
              U.S. Federal                                 -             -
              State and Local                              -             -
                                                  ----------    ----------
         Total Deferred                                    -             -
                                                  ----------    ----------
         Total Tax Provision (Benefit) from
            Continuing Operations                 $        -    $        -
                                                  ==========    ==========


         The reconciliation of the effective income tax rate to the Federal
         statutory rate is as follows for the years ended December 31, 2001 and
         2000:

         Federal Income Tax Rate                       (34.0)%
         Effect of Valuation Allowance                  34.0%
                                                  -----------
         Effective Income Tax Rate                       0.0%
                                                  ===========

         At December 31, 2001 and 2000, the Company had net carryforward losses
         of approximately $32,531,300 and $29,509,000, respectively. Due to the
         current uncertainty of realizing the benefit of the tax carryforwards,
         a valuation allowance equal to the tax benefit for deferred taxes has
         been established. The full realization of the tax benefit associated
         with the carryforwards depends predominantly upon the Company's ability
         to generate taxable income during the carryforward period.

         Deferred tax assets and liabilities reflect the net tax effect of
         temporary differences between the carrying amount of assets and
         liabilities for financial reporting purposes and amounts used for
         income tax purposes. Significant components of the Company's deferred
         tax assets and liabilities are as follows:

                                                         December 31,
                                                 -------------------------
                                                     2001          2000
                                                 -----------   -----------
         Deferred Tax Assets
           Loss Carryforwards                    $11,060,000   $10,855,000
           Less:  Valuation Allowance                      -             _
                                                 -----------   -----------
         Net Deferred Tax Assets                 $         -   $         -
                                                 ===========   ===========

                                      F-24
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 9 - INCOME TAXES (Continued)

         Net operating loss carryforwards expire starting in 2007 through 2020.
         Per year availability is subject to change of ownership limitations
         under Internal Revenue Code Section 382.

         Due to restrictions imposed by the Internal Revenue Code regarding
         substantial changes in ownership of companies with loss carryforwards,
         the utilization of the above-mentioned net operating losses may be
         limited as a result of changes in stock ownership. The annual
         utilization of these losses is limited to an amount equal to the
         estimated fair value (for income tax purposes) of the Company at the
         point of stock ownership change, multiplied by the long-term tax-exempt
         rate then in effect. The annual limitation has not been quantified at
         this time.

NOTE 10 - MINORITY INTEREST

         Hollywood Partners.com, Inc.
         ----------------------------
         During the year ended December 31, 2001, approximately $310,000 was
         contributed by minority interest holders of HP. As of December 31,
         2001, losses of $310,000 were allocated to minority interest and
         minority interest totaled $0.

         AOSE Series A Preferred Stock
         -----------------------------
         In November and December, 2001, HP sold 225 shares of AOSE's
         convertible Series A Preferred Stock, with liquidation preference of
         $1,000 per share to three investors/consultants for $225,000. The
         cumulative preferred shares have a 4% cumulative dividend and are
         convertible into common shares of HP equal to a liquidation preference
         per share of $1,000 plus any outstanding but unpaid dividends, at the
         time of conversion, which may occur at any time after 270 days after
         the purchase by buyer. HP's shares in AOSE are pledged to the preferred
         shareholders in AOSE and are held in escrow until such time as the AOSE
         preferred shareholders convert into HP's common stock or are redeemed.
         The Preferred Stock is redeemable at the election of HP, at any time
         beginning 90 days after purchase by Buyer. The redemption price is
         equal to the liquidation preference per share, plus 4.0%, plus accrued
         but unpaid dividends, if any. As of December 31, 2001, minority
         interest totaled $225,750 which includes $750 of accrued interest.

                                      F-25
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 11 - CONVERTIBLE PREFERRED STOCK

         Convertible Preferred Stock
         ---------------------------
         Each share of Series B 10% cumulative convertible preferred stock is
         convertible into 1.667 shares of common stock, and cumulative
         convertible dividends of 10% per annum are payable annually commencing
         October 1992. The Series B 10% cumulative preferred stock has a
         liquidation preference of $50 per share plus all accrued and unpaid
         dividends. It is subject to optional redemption by the Company at any
         time at $50 per share plus accrued and unpaid dividends. Cumulative
         unpaid dividends amounted to $45,850 and $42,500 at December 31, 2000
         and 1999, respectively.

         Each share of Series C convertible preferred stock is convertible into
         100 shares of common stock and 100 warrants. Series C convertible
         preferred stock does not carry any dividend rights. The warrants
         expired in June 1994. Additionally, the Series C Convertible Stock has
         a dilutive conversion factor. The Series C convertible preferred stock
         has a liquidation preference of $1,000 per share after Series B
         cumulative convertible preferred stock, and to holders of common stock.

         The shares of Series B and Series C preferred stock are not currently
         registered under the Securities Exchange Act of 1934.

         HP Series A Preferred
         ---------------------
         In December 1999, HP sold 600 shares of convertible preferred stock to
         Triple Tree, an affiliate of Terra Listed, Ltd., a related party, for
         $300,000. The convertible preferred shares have a 7% cumulative
         dividend and are convertible into common shares at $4.00 per share for
         one year after issuance at the holder's discretion or at HP's
         discretion if HP's common stock is trading at $6.00 per share for five
         consecutive days. HP has accrued amounts due for dividends of $45,169
         and $21,000 at December 31, 2001 and 2000, respectively.


NOTE 12 - COMMON STOCK

         Common stock issued for cash - HP
         ---------------------------------
         During the year ending December 31, 2000, the Company sold 1,275,000
         shares of stock at prices ranging from $.25 to $.40 per share.

         Common stock issued for exercise of options and warrants
         --------------------------------------------------------
         During the year ending December 31, 2000, the holders of 2,212,000
         stock options and warrants exercised these options and warrants at
         prices ranging from $.02 to $.25 per share.

         Common stock issued for services
         --------------------------------
         During the year ending December 31, 2000, the Company issued 1,250,000
         shares of stock as $2.74 per share, the fair market value at the dates
         of issue.

                                      F-26
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 - COMMON STOCK (Continued)

         Common stock issued for cash - HP
         ---------------------------------
         During the year ending December 31, 2000, HP issued 520,000 shares of
         common stock to various investors at a price ranging from $0.50 to 1.37
         and received in return approximately $320,000.

         Common stock issued for services - HP
         -------------------------------------
         During February 2001, HP issued 20,000 common shares to a consultant in
         consideration for services performed. The value of the services is
         $27,400.

         During June 2001, HP issued 50,000 common shares to a consultant in
         consideration for services performed. The value of the services is
         $12,500.

         During July 2001, HP issued 160,000 common shares to various
         consultants in consideration for services performed. The value of the
         services is $35,200.

         In October 2001, the Holder of a Convertible Promissory Note was issued
         50,000 shares in consideration for executing a Convertible Promissory
         Note for $50,000. These shares were recorded at their fair market value
         of $4,500.

         During January 2000, HP issued 25,000 common shares to various
         consultants in consideration for past and future services.

         During January 2000, HP issued 20,000 and 33,000 common shares
         respectively, to four strategic partners in consideration for past and
         future services.

         HP also issued 90,000 shares for consulting services rendered at $1.37
         per share.

         On January 13, 2000, HP issued 200,000 shares for services rendered to
         a controlling group of the pre-reverse merge entity, Guideline Capital,
         as a condition precedent to the reverse merger which occurred in August
         1999, and of which the related expense was incurred in August 1999.
         These shares were recorded at par value.

         Common stock issued for debt - HP
         ---------------------------------
         In December 2001, a Convertible Promissory Note was converted and the
         Holder was issued 233,333 shares at the conversion price of $.15 per
         share of HP's common stock for $35,000.

         In August 2001, in consideration for entering into a convertible note,
         the holder received 50,000 shares of common stock valued at $.09 per
         share.

         Common stock issued for exercise of warrants - HP During February 2001,
         a holder exercised 200,000 warrants at an exercise price of $1.00 per
         share.

                                      F-27
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 - COMMON STOCK (Continued)

         Common stock issued for cashless exercise of options / warrants - HP
         --------------------------------------------------------------------
         During February 2001, directors and officers of HP exercised 500,000
         cashless options granted at $1.07 per share. HP issued 291,017 shares
         of HP's common stock based upon the conversion formula for the exercise
         of these options.

         During March 2001, an investor of HP exercised 100,000 cashless
         warrants granted at $1.37 per share. HP issued 50,302 shares of HP's
         common stock based upon the conversion formula for the exercise of
         these warrants.

         Stock options issued for services - Vitafort
         --------------------------------------------
         During January 2001, the Company granted options for 10,000,000 shares
         of the Company's common stock at an exercise price of $.02 per share to
         consultants of the Company. Based upon the fair value of stock on the
         date of issuance, the Company recorded $100,000 of consulting expense.

         During January 2001, the Company granted options for 500,000 shares of
         the Company's common stock at an exercise price of $.02 per share to a
         consultant of the Company. Based upon the fair value of stock on the
         date of issuance, the Company recorded $5,000 of consulting expense.

         Stock options issued for services - HP
         --------------------------------------
         During January 2001, HP granted options for 3,150,000 shares of HP's
         common stock at an exercise price of $.50 per share to directors and
         officers. Following the resignation of three directors, 2,650,000 of
         the options have lapsed and subsequently are cancelled.

         During October 2001, HP granted options for 600,000 shares of HP's
         common stock at an exercise price of $.05 per share to two directors.

         During October 2001, HP granted options for 1,650,000 shares of HP's
         common stock at an exercise price of $.05 per share to a consultant.

         During January 2000, HP added two persons to its Advisory Board who
         have special expertise, knowledge and contacts that are valuable for
         HP. HP offered each a package granting 25,000 stock options to purchase
         common shares at $1.37 per share vesting immediately upon grant. These
         options expire three years from date of grant. Based upon the fair
         market value of the common stock on the date of issuance, HP recorded
         compensation expense of $2,300 during the first quarter of 2000. In
         February 2000, HP added ten persons to its Advisory Board who were
         offered each a package granting 25,000 stock options to purchase common
         shares at $1.37 per share vesting immediately upon grant. These options
         expire three years from date of grant. Based upon the fair market value
         of the common stock on the date of issuance, HP recorded consulting
         expense of $13,550 during the first quarter of 2000.

                                      F-28
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 - COMMON STOCK (Continued)

         During the fourth quarter of 2000, HP added one person to its Advisory
         Board and granted to him 25,000 stock options to purchase common shares
         at $1.09. As the Advisory Board members did not provide services to HP,
         no consulting expense was recorded as of December 31, 2000.

         Warrants issued for services - HP
         ---------------------------------
         During June 2001, HP granted warrants for 100,000 shares of HP's common
         stock at an exercise price of $.25 per share to two consultants. No
         compensation expense was recorded, as the exercise price was greater
         than the share price at date of grant.

         During November 2001, HP granted warrants for 415,000 shares of HP's
         common stock at an exercise price of $.01 per share to various
         investors. HP recorded $12,450 of compensation expense for these
         warrants.

         During November 2001, HP granted warrants for 152,500 shares of HP's
         common stock at an exercise price of $.01 per share for services
         rendered. HP recorded $4,575 of compensation expense for these
         warrants.

         During January 2000, HP issued 70,000 warrants to purchase common
         shares to various consultants in consideration for past and future
         services. The warrants were granted at an exercise price of $1.37 and
         expire three years from grant. 40,000 of the warrants were vested upon
         grant and 30,000 of the warrants will vest at discretion of the Board
         of Directors.

         During January 2000, HP issued 800,000 warrants and 100,000 warrants
         respectively, to four strategic partners in consideration for past and
         future services. The stock warrants were granted at an exercise price
         of $1.37, were fully vested at time of grant, and expire three years
         from grant.

         During 2000, HP added two persons to its Advisory Board who were each
         offered a package granting 25,000 warrants to purchase common shares at
         $3.125 per share, vesting immediately upon grant. These options expire
         three years from grant.

         During 2000, HP issued 80,000 warrants to purchase common shares to
         various consultants in consideration for past and future services.
         60,000 of the warrants were granted at an exercise price of $1.37,
         vested upon issuance and expire three years from grant. 20,000 of the
         warrants were granted at an exercise price of $5.00, vested immediately
         and expire three years from grant.

         Also, HP granted 20,000 warrants at an exercise price of $1.00 to a
         strategic partner to purchase common shares. During 2000, HP issued
         150,000 warrants to Mediacom, Inc. to purchase common shares at $3.125,
         vesting immediately with a three year term for consulting services. The
         value of the warrants were recorded as a charge to consulting expense
         of $328,500.

                                      F-29
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 12 - COMMON STOCK (Continued)

         Based on the fair market value of the common stock on the date of
         issuance and the fair value of the services performed, the Company
         recorded total expense for the above transactions of approximately
         $617,000, including the Mediacom, Inc. consulting expense of $328,500
         as noted above, for stock, options, and warrants issued for services
         rendered as of December 31, 2000.

NOTE 13 - STOCK OPTION PLAN

         Vitafort
         --------
         The 1989 Stock Option Plan, as amended (the "Plan") reserved 50,000
         shares of common stock to grant either nonqualified or incentive stock
         options. All directors, officers, key employees and consultants to the
         Company or its subsidiaries are eligible under the terms of the Plan.
         Such options may not be granted at less than 100% of the fair market
         value at the date of grant (110% for an owner of 10% or more of the
         outstanding stock). Upon termination of service, the options, which an
         individual was entitled to exercise at the date of termination may be
         exercised at any time within six months of such termination.

         If an employee is terminated with cause, the options are canceled upon
         termination. As of December 31, 2000, no options are outstanding under
         this plan.

         In 1995, the Company adopted the 1995 Stock Option Plan (the "1995
         Plan") pursuant to which 2,000,000 shares of common stock (as adjusted
         for the reverse stock split effected in 1996) were reserved for
         issuance upon the exercise of options. The 1995 Plan is similar to the
         1989 Plan in many respects and in the discussion below, each is
         referred to as a "Plan" and they are collectively referred to as the
         "Plans."

         The Company has also granted stock options outside the Plans to other
         individuals, such as employees and consultants, in consideration for
         services performed. The options were granted at fair market value and
         at various terms and vesting periods. The following table on the next
         page summarizes all option activity for the years ended December 31,
         2001 and 2000:

                                      F-30
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 13 - STOCK OPTION PLAN (Continued)

                                  Number of Common Stock Options       Weighted
                                  1995 Stock         Other Stock       Average
                                           Option Plan                 Options
                                           -----------                 --------
                                     Price
                                     -----
         Outstanding as of
           December 31, 1998       1,231,708           8,073,040        $  .66

         Granted                           -           8,411,000           .27
         Exercised                   422,500          (3,698,687)          .51
         Canceled                   (307,033)         (1,254,000)          .51
                                 -----------         -----------        ------

         Outstanding as of
           December 31, 1999         501,875          11,531,353        $  .50
                                 -----------         -----------        ------

         Granted                           -                   -        $    -
         Exercised                         -          (2,212,000)          .18
         Canceled                   (202,500)         (2,496,769)          .86
                                 -----------         -----------        ------

         Outstanding as of
           December 31, 2000         299,375           6,822,584        $  .15
                                 ===========         ===========        ======

         Exercisable as of
           December 31, 2000       1,231,708           6,822,584        $  .15
                                 ===========         ===========        ======

         Granted                           -          10,500,000        $    -
         Exercised                         -                   -
         Canceled                   (168,750)         (1,818,750)          .15
                                 -----------         -----------        ------

         Outstanding as of
           December 31, 2001         130,625          15,503,834        $  .15
                                 ===========         ===========        ======

         Exercisable as of
           December 31, 2001         130,625          15,503,834        $  .15
                                 ===========         ===========        ======


         SFAS 123 requires the Company to provide pro forma information
         regarding net loss and loss per share as if compensation cost for the
         employee options granted had been determined in accordance with the
         fair value based method prescribed in SFAS 123. The Company estimates
         the fair value of each stock option, using the Black-Scholes method, at
         the weighted-average assumption used for grants in fiscal 2000 and
         1999: dividend yield of zero percent; expected volatility of 188% and
         188 %, respectively; risk-free interest rate of 8 % and 8%,
         respectively; and an expected life of three to five years.

                                      F-31
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 13 - STOCK OPTION PLAN (Continued)

         The weighted average fair value of options granted during 1999 was
         $.25. There were no options granted during 2000.

         Under the accounting provisions of SFAS 123, the Company's net loss and
         loss per share for 2001 and 2000 would have been increased to the pro
         forma amounts indicated below:

         Net loss                                2001            2000
         --------                            -----------     -----------
         As reported                         $  (883,580)    $(4,775,760)
         Pro forma                           $  (883,580)    $(4,775,760)

         Basic loss per share
         --------------------
         As reported                         $      (.04)    $      (.29)
         Pro forma                           $      (.04)    $      (.29)

     Due to the fact that the Company's stock option programs vest over many
years and additional awards may be made each year, the above pro forma numbers
are not indicative of the financial impact had the disclosure provisions of SFAS
123 been applicable to all years of previous grants. The numbers above do not
include the effect of options granted prior to 1995 that vest in the years
presented.

     The following table summarizes information about stock options outstanding
at December 31, 2001:
<TABLE><CAPTION>
                                      Options Outstanding                            Options Exercisable
                                           Weighted                                  -------------------
                          Number            Average                               Number          Weighted
       Range of        Outstanding         Remaining        Weighted Average    Exercisable       Average
 Exercisable Prices    At 12/31/01     Contractual Life      Exercise Price     at 12/31/01    Exercise Price
-------------------- --------------- --------------------- ------------------ --------------- ----------------
  <S>                  <C>                  <C>                <C>              <C>             <C>
   $0.020 - $0.75       6,113,563            1.61               $ 0.06           4,440,084          $0.05
-------------------- --------------- --------------------- ------------------ --------------- ----------------
   $0.875 - $2.80         709,021             .12                  .89             554,000            .89
-------------------- --------------- --------------------- ------------------ --------------- ----------------
       $0.02           10,500,000            8.30                  .02          10,500,000            .02
-------------------- --------------- --------------------- ------------------ --------------- ----------------
      Totals           17,322,584           10.03               $ 0.07          15,444,084          $0.__
==================== =============== ===================== ================== =============== ================
</TABLE>
                                      F-32
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 13 - STOCK OPTION PLAN (Continued)

                     Hollywood Partners.com

         In September 1999, HP adopted a Stock Option Plan (the "Plan")
         initially reserving an aggregate of 3,000,000 shares of HP's common
         stock (the "Available Shares") for issuance pursuant to the exercise of
         stock options ("Options") which may be granted to employees and
         consultants to HP.

         The Plan provides for the granting at the discretion of the Board of
         Directors of both qualified incentive stock options and non-qualified
         stock options. Consultants may receive only non-qualified stock
         options. The maximum term of the stock options are three to five years
         and generally vest proportionately throughout the term of the option.

         HP's option activity for the years ended December 31, 2001 and 2000 is
         as follows:

                                                        2001          2000
                                                     ----------    ----------
         Options outstanding-beginning of the year    1,580,000     1,575,000
         Granted during the year                      5,400,000       556,000
         Exercised during the year                     (510,000)     (120,000)
         Canceled during the year                     3,060,000)     (431,000)
                                                     ----------    ----------
         Options outstanding- December 31, 2000
           and 2001                                   3,410,000     1,580,000
                                                     ==========    ==========

         Options exercisable at December 31, 2000
           and 2001                                   3,010,000     1,338,480

         Weighted average exercise price                   $.36         $1.15

         Weighted average remaining life              3.0 month    9.6 months

         All stock options issued to employees have an exercise price not less
         than the fair market value of HP's common stock on the date of grant.
         In accordance with accounting for such options utilizing the intrinsic
         value method, there is no related compensation expense recorded in HP's
         financial statements for the years ended December 31, 2001 and 2000. If
         compensation cost for stock-based compensation was recorded based on
         the fair value of the options at the grant dates consistent with the
         method of SFAS 123, HP's net loss and loss per share for the years
         ended December 31, 2001 and 2000 would have been reduced to the
         proforma amounts presented below:

                                      F-33
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 13 - STOCK OPTION PLAN (Continued)

                                        2001            2000
         Net loss:                  ------------    ------------
           As reported                 ($974,881)    ($2,873,421)
           Proforma                  ($1,173,337)    ($3,060,671)

         Net loss per share:
           As reported                    ($0.09)         ($0.35)
           Proforma                       ($0.13)         ($0.37)

         The fair value of option grants is estimated as of the date of grant
         utilizing the Black-Scholes option-pricing model with the following
         weighted average assumptions for grants in 2001: expected life of 10
         years, expected volatility of 231.9%, risk-free interest rate of 3.0%,
         and a 0% dividend yield. The weighted average fair value at the date of
         grant for options granted during 2001 was $.11.

         The fair value of option grants is estimated as of the date of grant
         utilizing the Black-Scholes option-pricing model with the following
         weighted average assumptions for grants in 2000: expected life of 5
         years, expected volatility of 0%, risk-free interest rate of 6.0%, and
         a 0% dividend yield. The weighted average fair value at the date of
         grant for options granted during 2000 was $0.

NOTE 14 - TREASURY STOCK

         Treasury stock as of December 31, 2001 and 2000 consists of 400,000
         shares of HP's common stock issued to HOFP as consideration for HP's
         85% ownership interest. The additional paid-in capital was eliminated
         during consolidation.

NOTE 15 - MAJOR CUSTOMERS

         The Company derived the following revenue from major customers, each of
         which provided 10% or more of total revenues during the year ended
         December 31, 2001 and 2000:

                                        2001            2000
                                    ------------    ------------
         Food Lion                  $          -    $    112,000
         Smart and Final                       -         104,000
                                    ------------    ------------
                    Total           $          -    $    216,000
                                    ============    ============

                                      F-34
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 16 - PRIOR PERIOD ADJUSTMENT

         During the year ended December 31, 2000, HP recorded 1,441,650 shares
         of its common stock as being issued and outstanding. These shares were
         never issued and HP has decreased additional paid-in capital and
         accumulated deficit by $41,240 and $42,282, respectively. Also, 125,000
         shares of the Company's common stock were issued for services and only
         12,500 were recorded.


NOTE 17 - LOSS ON SALE OF MARKETABLE SECURITIES

         HP owned 2,050 shares of Triple Tree Trust AG, a publicly traded Swiss
         corporation (TTT-SW), an affiliate of a related party at December 31,
         1999. The marketable securities carrying amount and fair market value
         was $514,150 at December 31, 1999. HP sold these shares in during the
         year ended December 31, 2000 at a loss of $160,995 which is reflected
         in the consolidated statements of operations. No securities were sold
         during 2001.

NOTE 18 - FINANCING AGREEMENTS

         Effective December 30, 1998, the Company completed the closing under a
         series of agreements including a Common Stock Purchase Agreement (the
         "CSPA"), dated as of December 30, 1998, by and among the Company; Terra
         Healthy Living, Ltd., a B.V.I. corporation ("Terra"); Sovereign
         Partners Limited Partnership, a Connecticut limited partnership
         ("Sov"); and Dominion Capital Fund, Ltd., a Bahamian corporation
         ("Dom"). Pursuant to the CSPA and the related documents:

         Terra acquired 2,712,843 shares of the Company's common stock from Sov
         and Dom for $235,000. Such shares were issued by the Company upon the
         conversion by Sov and Dom of an aggregate of 235 shares of the
         Company's 1997 Series A Convertible Preferred Stock ("Series A
         Preferred").

         The Company borrowed $2,065,000 from Terra pursuant to a promissory
         note with warrant and registration rights (the "Terra Note"). The Terra
         Note is a five-year note bearing interest at 6% per annum. Interest on
         the Terra Note is payable annually. The Terra Note provides for the
         issuance to Terra of a five year warrant (the "Terra Warrant") for the
         purchase of 500,000 shares of the Company's common stock at $.25 per
         share. The Terra Note further provides that the first year's interest
         on the Terra Note shall be applied to the partial exercise of the Terra
         Warrant.

         The Company applied the $2,065,000 proceeds of the Terra Note to redeem
         all 1,351 remaining shares of Series A Preferred held by Sov and Dom,
         as well as a convertible debenture in the amount of $548,352 held by
         Dom.

                                      F-35
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 18 -  FINANCING AGREEMENTS (Continued)

         The aggregate of $2,300,00 paid by Terra in connection with its
         purchase of the 2,712,843 shares of the Company's common stock from Sov
         and Dom and in connection with the Terra Note was satisfied through the
         delivery to Sov and Dom of marketable securities having a value of
         $2,300,000. Under the CSPA, Terra made certain assurances to Sov and
         Dom and assumed certain obligations to assure that Sov and Dom would
         realize $2,300,000 on the sale of the marketable securities.

         The Company borrowed $300,000 from each of Sov and Dom pursuant to a
         non-negotiable nine-month promissory note bearing interest at 8% per
         annum (the "Sov Note" and the "Dom Note"). These notes provide for
         their repayment, at the option of the Company, in registered common
         stock of the Company, which shall be valued at the then market for such
         stock. The Sov Note and the Dom Note provide for the issuance to each
         of Sov and Dom of 60,000 warrants which expire on December 31, 2003,
         half of which are exercisable at $.40 and half of which are exercisable
         at $.25. If the Company repays the Sov Note or the Dom Note with common
         stock, as provided in such notes, then the exercise price of the $.25
         warrant is reduced to $.01.

         The CSPA granted the Company the right to redeem up to 2,000,000 of the
         shares of its common stock acquired by Terra through June 30, 2000,
         based upon a formula related to the market price of the common stock at
         the time of the redemption.

         In addition, the Company issued 571,232 shares of its common stock to
         Sov in connection with Sov's prior conversion of 40 shares of Series A
         Preferred Stock.

NOTE 19 - EXTRAORDINARY ITEM AND GAIN ON EXCHANGE OF SUBSIDIARY STOCK

         As of December 31, 2000, the Company recorded an extraordinary gain of
         $213,291 as a result of the forgiveness of amounts due to vendors. The
         Company also recorded a $400,000 gain on the exchange of subsidiary
         stock as of December 31, 2000 as a result of an exchange of HP stock in
         settlement of notes payable. See Note 20 for effect on ownership of HP
         stock.

NOTE 20 - INVESTMENT IN SUBSIDIARY

         At December 31, 2001 and 2000, the Company owned 4,547,629 shares of
         Hollywood Partners.com (the parent of HP) which represented 45.7% and
         51.1% of the outstanding shares of Hollywood Partners.com. The Company
         continues to consolidate Hollywood Partners.com, as it maintains
         controlling interest in the management of Hollywood Partners.com.

                                      F-36
<PAGE>

                       VITAFORT INTERNATIONAL CORPORATION
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 21 - SUBSEQUENT EVENTS

         In January 2002, the Company entered into an Employment Agreement with
         the chief executive officer with a term through December 31, 2003,
         which provides for a lump sum compensation payable in the form of
         20,000,000 shares of the Company's common stock.

         On January 2, 2002, HP entered into a Consulting Agreement with a term
         ending January 1, 2003, which provides for 1,000,000 shares of HP's
         common stock at $.015 per share.

         On January 15, 2002, HP entered into a Consulting Agreement with a term
         ending January 14, 2003, which provides for 400,000 shares of HP's
         common stock at $.01 per share.

         On February 5, 2002, HP entered into a Consulting Agreement with a term
         ending January 31, 2003, which provides for 10,200,000 shares of HP's
         common stock at $.01 per share.

         On February 5, 2002, HP entered into a Consulting Agreement with a term
         ending January 31, 2003, which provides for 2,400,000 shares of HP's
         common stock at $.01 per share.

         Throughout the first quarter of 2002, HP has been reviewing numerous
         entertainment projects and is in discussions relating to several
         strategic alliances and strategic mergers and/or acquisitions of
         companies.

         During January 2002, HP raised $25,000 of additional capital through
         the issuance of 25 shares of Series A Preferred Stock in AOSE that is
         convertible into common shares of HP at a liquidation preference of
         $1,000 per share, plus any outstanding but unpaid dividends.

         In February 2002, HP issued 16,000,000 shares to the chief executive
         officer as part of his compensation pursuant to the terms of his
         employment agreement with HP.

                                      F-37