# SECURITIES AND
EXCHANGE COMMISSION

# Washington, D.C. 20549

# FORM 10QSB

| | [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                    OF 1934 For the quarterly period ended September 30, 2003
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

| | [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
         For the transition period from _________ to ____________
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

Commission File No. 000-27233

LIVESTAR ENTERTAINMENT
GROUP, INC.
(Exact name of Registrant as specified in its charter)

|NEVADA               
(State or other jurisdiction of
incorporation or organization) | 98-0204736  
                
               
    (I.R.S. Employer
                
           
        Identification Number)
|------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------

62 W. 8th Avenue,
4th FloorVancouver, British
Columbia, Canada V5Y 1M7 (Address of principal executive offices) (Zip Code)

Issuers
telephone number, including area code: (604) 682-6541

Check whether the issuer

| | (1) | filed all reports required to be filed by Section 13 or 15(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
          ( ).
| | --- | ----------------------------------------------------------------------------------------------

State the number of shares
outstanding of each of the issuers classes of common equity, as of the last
practicable date.

|Class       $0.0001 par value Common Stock | Outstanding as of September 30, 2003        193,769,867
|------------------------------------------ | -------------------------------------------------------

1

# PART 1 
FINANCIAL INFORMATION

# Item 1. Financial Statements

The accompanying unaudited financial
statements have been prepared in accordance with the instructions to Form 10-QSB and Item
310 (b) of Regulation S-B, and, therefore, do not include all information and footnotes
necessary for a complete presentation of financial position, results of operations, cash
flows, and stockholders equity in conformity with generally accepted accounting
principles. In the opinion of management, all adjustments considered necessary for a fair
presentation of the results of operations and financial position have been included and
all such adjustments are of a normal recurring nature. Operating results for the nine
months ended September 30, 2003 are not necessarily indicative of the results that can be
expected for the year ending December 31, 2003.

2

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# CONSOLIDATED FINANCIAL
STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in
U.S. Dollars)

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# CONSOLIDATED BALANCE
SHEET(Unaudited)(Stated in U.S.
Dollars)

|                                                          | SEPTEMBER 30
2003 | DECEMBER 31
2002
|--------------------------------------------------------- | ----------------- | ----------------
|ASSETS                                                    |                   |                 
|Current                                                   |                   |                 
|Cash                                                      |                   |                 
|Goods and Services Tax recoverable                        |                   |                 
|Prepaid expense                                           |                   |                 
|Notes receivable                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|Capital Assets                                            |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|LIABILITIES                                               |                   |                 
|Current                                                   |                   |                 
|Accounts payable                                          |                   |                 
|Loans and advances payable                                |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|STOCKHOLDERS' DEFICIENCY                                  |                   |                 
|Share Capital                                             |                   |                 
|Authorized:                                               |                   |                 
|250,000,000 common shares, par value $0.0001 per share    |                   |                 
|200,000,000 preferred shares, par value $0.0001 per share |                   |                 
|Issued and outstanding:                                   |                   |                 
|188,519,867 common shares at September 30, 2003 and       |                   |                 
|45,654,790 common shares at December 31, 2002             |                   |                 
|Add:  Share subscriptions received:                       |                   |                 
|1,916,667 common shares at September 30, 2003 and         |                   |                 
|36,250 common shares at December 31, 2002                 |                   |                 
|Additional paid-in capital                                |                   |                 
|Deficit                                                   |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 
|                                                          |                   |                 

F-1

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# CONSOLIDATED STATEMENT
OF OPERATIONS AND DEFICIT(Unaudited)(Stated in
U.S. Dollars)

|                                | THREE
MONTHS
ENDED
SEPTEMBER 30
2003 | NINE
MONTHS
ENDED
SEPTEMBER 30
2003 | THREE
MONTHS
ENDED
SEPTEMBER 30
2002 | NINE
MONTHS
ENDED
SEPTEMBER 30
2002 | INCEPTION
OCTOBER 12
2000 TO
SEPTEMBER 30
2003
|------------------------------- | ------------------------------------ | ----------------------------------- | ------------------------------------ | ----------------------------------- | ----------------------------------------------
|Revenue                         |                                      |                                     | $                                    | --                                  |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Expenses                        |                                      |                                    
|Administrative services         |                                      |                                    
|                                |                                      |                                     |                                      | 1,139                               |                                               
|Amortization                    |                                      |                                     |                                      | 578                                 |                                               
|Business development            |                                      |                                    
|                                |                                      |                                     |                                      | 208,000                             |                                               
|Consulting                      |                                      |                                     |                                      | 50,008                              |                                               
|Equipment leases                |                                      |                                     |                                      | --                                  |                                               
|Investor relations              |                                      |                                     |                                      | 2,815                               |                                               
|Marketing                       |                                      |                                     |                                      | --                                  |                                               
|Media design                    |                                      |                                     |                                      | 1,153                               |                                               
|Office, rent and sundry         |                                      |                                    
|                                |                                      |                                     |                                      | 9,419                               |                                               
|Professional fees               |                                      |                                     |                                      | 119,391                             |                                               
|Software development            |                                      |                                     |                                      | --                                  |                                               
|Travel                          |                                      |                                     |                                      | 1,575                               |                                               
|Wages and benefits              |                                      |                                     |                                      | 1,755                               |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|                                |                                      |                                     |                                      | 395,833                             |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Loss Before The Following       |                                      |                                    
|                                |                                      |                                     |                                      | 395,833                             |                                               
|Write Down Of Investment        |                                      |                                    
|                                |                                      |                                     |                                      | --                                  |                                               
|Forgiveness Of Debt             |                                      |                                     |                                      | (32,400                             | )                                             
|Minority Interest In Loss Of    |                                      |                                    
|Subsidiary                      |                                      |                                     |                                      | --                                  |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Loss From Continuing Operations |                                      |                                    
|                                |                                      |                                     |                                      | 363,433                             |                                               
|Gain On Disposal Of Subsidiary  |                                      |                                    
|                                |                                      |                                     |                                      | --                                  |                                               
|Discontinued Operations         |                                      |                                    
|                                |                                      |                                     |                                      | --                                  |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Net Loss For The Period         |                                      |                                     | $                                    | 363,433                             |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Net Loss Per Share              |                                      |                                     | $                                    | 0.01                                |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Weighted Average Number Of      |                                      |                                    
|Common Shares Outstanding       |                                      |                                     |                                      | 137,445,446                         |                                               
|                                |                                      |                                     |                                      |                                     |                                               

F-2

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# CONSOLIDATED STATEMENT OF
CASH FLOWS(Unaudited)(Stated in U.S.
Dollars)

|                                     | THREE
MONTHS
ENDED
SEPTEMBER 30
2003 | NINE
MONTHS
ENDED
SEPTEMBER 30
2003 | THREE
MONTHS
ENDED
SEPTEMBER 30
2002 | NINE
MONTHS
ENDED
SEPTEMBER 30
2002 | INCEPTION
OCTOBER 17
2000 TO
SEPTEMBER 30
2003
|------------------------------------ | ------------------------------------ | ----------------------------------- | ------------------------------------ | ----------------------------------- | ----------------------------------------------
|Cash Flows From Operating Activities |                                      |                                     |                                      |                                     |                                               
|Loss from continuing operations      |                                      |                                    
|                                     |                                      |                                     | $                                    | (363,433                            | )                                             
|Adjustments To Reconcile Net Loss    |                                      |                                    
|To Net Cash Used By Operating        |                                      |                                    
|Activities                           |                                      |                                    
|Amortization                         |                                      |                                     |                                      | 578                                 |                                               
|Issue of common stock for            |                                      |                                    
|expenses                             |                                      |                                     |                                      | 302,000                             |                                               
|Write down of investment             |                                      |                                     |                                      | --                                  |                                               
|Minority interest in loss of         |                                      |                                    
|subsidiary                           |                                      |                                     |                                      | --                                  |                                               
|Goods and Services Tax               |                                      |                                    
|recoverable                          |                                      |                                     |                                      | 1,922                               |                                               
|Accounts receivable                  |                                      |                                     |                                      | --                                  |                                               
|Prepaid expense                      |                                      |                                     |                                      | 34,077                              |                                               
|Notes receivable                     |                                      |                                     |                                      | --                                  |                                               
|Accounts payable                     |                                      |                                     |                                      | 649                                 |                                               
|Loans and advances payable           |                                      |                                    
|                                     |                                      |                                     |                                      | 7,681                               |                                               
|                                     |                                      |                                     |                                      |                                     |                                               
|                                     |                                      |                                     |                                      | (16,526                             | )                                             
|                                     |                                      |                                     |                                      |                                     |                                               
|Cash Flows From Investing Activities |                                      |                                    
|Net asset deficiency of legal        |                                      |                                    
|parent at date of reverse            |                                      |                                    
|take-over transaction                |                                      |                                    
|                                     |                                      |                                     |                                      | --                                  |                                               
|Purchase of capital assets           |                                      |                                     |                                      | --                                  |                                               
|                                     |                                      |                                     |                                      |                                     |                                               
|                                     |                                      |                                     |                                      | --                                  |                                               
|                                     |                                      |                                     |                                      |                                     |                                               
|Cash Flows From Financing Activities |                                      |                                    
|Shares issued for cash               |                                      |                                     |                                      | 92,310                              |                                               
|Share subscriptions received         |                                      |                                    
|                                     |                                      |                                     |                                      | 7,000                               |                                               
|                                     |                                      |                                     |                                      |                                     |                                               
|                                     |                                      |                                     |                                      | 99,310                              |                                               
|                                     |                                      |                                     |                                      |                                     |                                               

F-3

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# CONSOLIDATED STATEMENT
OF CASH FLOWS (Continued)(Unaudited)(Stated in
U.S. Dollars)

|                                | THREE
MONTHS
ENDED
SEPTEMBER 30
2003 | NINE
MONTHS
ENDED
SEPTEMBER 30
2003 | THREE
MONTHS
ENDED
SEPTEMBER 30
2002 | NINE
MONTHS
ENDED
SEPTEMBER 30
2002 | INCEPTION
OCTOBER 17
2000 TO
SEPTEMBER 30
2003
|------------------------------- | ------------------------------------ | ----------------------------------- | ------------------------------------ | ----------------------------------- | ----------------------------------------------
|Increase In Cash                |                                      |                                     | $                                    | 82,784                              |                                               
|Net Cash From Discontinued      |                                      |                                    
|Operations                      |                                      |                                     |                                      | --                                  |                                               
|Cash Acquired On Acquisition Of |                                      |                                    
|Subsidiary                      |                                      |                                     |                                      | --                                  |                                               
|Cash, Beginning Of Period       |                                      |                                     |                                      | 64                                  |                                               
|                                |                                      |                                     |                                      |                                     |                                               
|Cash, End Of Period             |                                      |                                     | $                                    | 82,848                              |                                               
|                                |                                      |                                     |                                      |                                     |                                               

Supplemental Disclosure Of Cash Flow
Information

During the nine months ended
September 30, 2003, the Company issued 3,672,560 common shares on conversion of $13,541
of loans payable, and 26,887,517 common shares to settle $85,153 in accounts payable.

F-4

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# CONSOLIDATED STATEMENT
OF STOCKHOLDERS DEFICIENCY

# SEPTEMBER 30, 2003(Unaudited)(Stated in
U.S. Dollars)

|                                          | SHARES | AMOUNT | ADDITIONAL
PAID-IN
CAPITAL | DEFICIT    | TOTAL
|----------------------------------------- | ------ | ------ | -------------------------- | ---------- | -----
|Shares issued for cash and services       |        |        |                            | 4,200,000  |      
|Adjustment to number of shares issued and |        |       
|outstanding as a result of the            |        |       
|acquisition of RAHX, Inc.                 |        |       
|RAHX, Inc.                                |        |        |                            | (4,200,000 | )    
|RRUN Ventures Inc.                        |        |        |                            | 5,708,780  |      
|Adjustment to stated value of             |        |       
|stockholders' equity to reflect minority  |        |       
|interest in the net assets of RAHX, Inc.  |        |       
|at the acquisition date                   |        |       
|                                          |        |        |                            | --         |      
|Net asset deficiency of legal parent at   |        |       
|date of reverse take-over transaction     |        |       
|                                          |        |        |                            | --         |      
|Shares issued to acquire investment in    |        |       
|Kaph Data Engineering Inc.                |        |        |                            | 400,000    |      
|Loss for the period                       |        |        |                            | --         |      
|                                          |        |        |                            |            |      
|Balance, December 31, 2000                |        |        |                            | 6,108,780  |      
|Adjustment to number of shares issued and |        |       
|outstanding as a result of the            |        |       
|acquisition of RRUN Ventures, Inc.        |        |       
|RRUN Ventures, Inc.                       |        |        |                            | (6,108,780 | )    
|RRUN Ventures Network Inc.                |        |        |                            | 288,420    |      
|Fair value of shares issued in connection |        |       
|with the acquisition of RRUN Ventures,    |        |       
|Inc                                       |        |        |                            | 305,439    |      
|                                          |        |        |                            |            |      
|                                          |        |        |                            | 593,859    |      
|Increase in issued shares due to 20 for 1 |        |       
|stock split                               |        |        |                            | 11,283,321 |      
|Shares issued for debt                    |        |        |                            | 1,867,544  |      
|Shares issued for cash                    |        |        |                            | 670,000    |      
|Shares issued for services                |        |        |                            | 200,000    |      
|Loss for the year                         |        |        |                            | --         |      
|                                          |        |        |                            |            |      
|Balance, December 31, 2001                |        |        |                            | 14,614,724 |      

F-5

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# CONSOLIDATED
STATEMENT OF STOCKHOLDERS DEFICIENCY (Continued)

# SEPTEMBER 30, 2003(Unaudited)(Stated in
U.S. Dollars)

|                                            | SHARES | AMOUNT | ADDITIONAL
PAID-IN
CAPITAL | DEFICIT     | TOTAL
|------------------------------------------- | ------ | ------ | -------------------------- | ----------- | -----
|Balance, December 31, 2001                  |        |        |                            | 14,614,724  |      
|Shares issued for debt                      |        |        |                            | 11,163,816  |      
|Shares issued for services                  |        |        |                            | 13,845,000  |      
|Shares issued for cash and notes receivable |        |       
|                                            |        |        |                            | 7,861,250   |      
|Shares cancelled                            |        |        |                            | (1,830,000  | )    
|Forgiveness of shareholder debt             |        |        |                            | --          |      
|Loss for the year                           |        |        |                            | --          |      
|                                            |        |        |                            |             |      
|Balance, December 31, 2002                  |        |        |                            | 45,654,790  |      
|Shares issued for debt                      |        |        |                            | 30,560,077  |      
|Shares issued for services                  |        |        |                            | 92,620,000  |      
|Shares issued for cash                      |        |        |                            | 16,685,000  |      
|Loss for the period                         |        |        |                            | --          |      
|                                            |        |        |                            |             |      
|Balance, September 30, 2003                 |        |        |                            | 185,519,867 |      
|                                            |        |        |                            |             |      

F-6

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage Company)

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in
U.S. Dollars)

# 1. BASIS OF PRESENTATION

| | The
unaudited consolidated financial statements as of September 30, 2003 included herein have
been prepared without audit pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with United States of America generally
accepted accounting principles have been condensed or omitted pursuant to such rules and
regulations. In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. It is suggested
that these consolidated financial statements be read in conjunction with the December 31,
2002 audited consolidated financial statements and notes thereto.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 2. NATURE OF OPERATIONS

a)    Organization

| | The
Company was incorporated in the State of Nevada, U.S.A., on October 12, 2000. On June 23,
2003, the Company changed its name from RRUN Ventures Network Inc. to Livestar
Entertainment Group Inc.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

b)     Development Stage
Activities

| | The
Company was organized as a holding company to develop or acquire innovative ventures with
an emphasis on serving the lifestyle needs of the 18  34 year Digital Generation
through the production and marketing of lifestyle products and services. The Companys
initial venture is RAHX, a business concept previously focused on delivering, for its
customers, a consolidated Entertainment Experience Network comprised of many services
ranging from digital media peer to peer file exchange to live entertainment and online
video games. At this time, the Companys focus is the developing of a live
entertainment business, specifically nightclubs and live events.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-7

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in U.S.
Dollars)

2.    
          NATURE OF OPERATIONS (Continued)

c)    
Going Concern

| | Since
inception, the Company has suffered recurring losses, net cash outflows from operations
and, at September 30, 2003, has a working capital deficiency of $1,963,382. The Company
expects to continue to incur substantial losses to complete the development and testing
of its technology. Since its inception, the Company has funded operations through common
stock issuances and related party loans in order to meet its strategic objectives.
Management believes that sufficient funding will be available to meet its business
objectives, including anticipated cash needs for working capital, and is currently
evaluating several financing options. However, there can be no assurance that the Company
will be able to obtain sufficient funds to continue the development of and, if
successful, to commence the sale of its products under development. As a result of the
foregoing, there exists substantial doubt about the Companys ability to continue as
a going concern. These consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 3. SIGNIFICANT
ACCOUNTING POLICIES

| | The
consolidated financial statements of the Company have been prepared in accordance with
generally accepted accounting principles in the United States of America. Because a
precise determination of many assets and liabilities is dependent upon future events, the
preparation of consolidated financial statements for a period necessarily involves the use
of estimates which have been made using careful judgement.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The
consolidated financial statements have, in managements opinion, been properly
prepared within reasonable limits of materiality and within the framework of the
significant accounting policies summarized below:
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

a)    
          Consolidation

| | These consolidated  financial statements include the accounts of the Company, its 100% owned subsidiaries,  RRUN Labs Inc. and
         RVNI Management Ltd., and its 67% owned subsidiary, RAHX, Inc.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-8

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in U.S.
Dollars)

3.    
          SIGNIFICANT ACCOUNTING POLICIES(Continued)

b)     Development Stage
Company

| | The
Company is a development stage company as defined in the Statements of Financial
Accounting Standards No. 7. The Company is devoting substantially all of its present
efforts to establish a new business and none of its planned principal operations have
commenced. All losses accumulated since inception have been considered as part of the
Companys development stage activities.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

c)    
          Investments

| | Investments
in companies owned less than 20% are recorded at the lower of cost or fair market value.
| | ----------------------------------------------------------------------------------------------------

d)     Software Development
Costs

| | The
costs to develop new software products and enhancements to existing software products will
be expensed as incurred until technological feasibility has been established. Once
technological feasibility has been established, any additional costs will be capitalized.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

e)    
          Income Taxes

| | The
Company has adopted Statement of Financial Accounting Standards No. 109 
Accounting for Income Taxes (SFAS 109). This standard requires the use of an
asset and liability approach for financial accounting and reporting on income taxes. If it
is more likely than not that some portion or all if a deferred tax asset will not be
realized, a valuation allowance is recognized.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

f)    
          Amortization

| | Capital
assets are being amortized on the declining balance basis at the following rates:
| | -----------------------------------------------------------------------------------------

|Computer equipment
Computer software
Office furniture and equipment | 30%
100%
 20%
|------------------------------------------------------------------- | -------------

F-9

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in U.S.
Dollars)

3.    
          SIGNIFICANT ACCOUNTING POLICIES(Continued)

g)     Stock
Based Compensation

| | The
Company accounts for stock based employee compensation arrangements in accordance with the
provisions of Accounting Principles Board Opinion No. 25  Accounting for Stock
Issued to Employees (APB No. 25) and complies with the disclosure provisions of
Statement of Financial Accounting Standards No. 123  Accounting for Stock
Based Compensation (SFAS No. 123). Under APB No. 25, compensation expense is
recognized based on the difference, if any, on the date of grant between the estimated
fair value of the Companys stock and the amount an employee must pay to acquire the
stock. Compensation expense is recognized immediately for past services and rateably for
future services over the option vesting period.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

h)
Financial Instruments

| | The
Companys financial instruments consist of cash, GST recoverable and accounts
payable.
| | ------------------------------------------------------------------------------------------

| | Unless
otherwise noted, it is managements opinion that this Company is not exposed to
significant interest or credit risks arising from these financial instruments. The fair
value of these financial instruments approximate their carrying values, unless otherwise
noted.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

i)
Net Loss Per Share

| | In
February 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, Earnings Per Share (SFAS 128). Under
SFAS 128, basic and diluted earnings per share are to be presented. Basic earnings per
share is computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding in the period. Diluted earnings per share
takes into consideration common shares outstanding (computed under basic earnings per
share) and potentially dilutive common shares.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

# 4. SUBSEQUENT EVENTS

| | a) | Subsequent to September 30, 2003, the Company granted 21,000,000 stock options
                    to employees pursuant to the provisions of various employee incentive stock
                    award agreements.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-10

# LIVESTAR ENTERTAINMENT
GROUP INC.(Formerly RRUN
Ventures Network Inc.)(A Development Stage
Company)

# NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS

# SEPTEMBER 30, 2003(Unaudited)(Stated in U.S.
Dollars)

4.    
          SUBSEQUENT EVENTS (Continued)

| | b) | Subsequent to September 30, 2003, the Company issued 21,000,000 common shares
                    with a fair value of $162,232 on the exercise of shares issued pursuant to the
                    provisions of various employee incentive stock award agreements, 1,000,000
                    common shares with a fair value of $10,000 on the settlement of debt, 1,177,846
                    common shares with fair value of $3,892 on conversion of loans, and 1,916,667
                    common shares with a fair value of $7,000 for cash, of which proceeds of $7,000
                    had been received at September 30, 2003.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | c) | Subsequent to September 30, 2003, the Company entered into an Amended and
                    Restated Agreement and Plan of Acquisition to acquire all the issued and
                    outstanding shares, and the minimum of US$200,000 of certain shareholder loans,
                    of The Sequel Nightclub (Sequel) in Toronto, Canada. Consideration
                    for the acquisition will consist of nominal consideration of $10, an advance to
                    Sequel of US$35,609, and the issuance of 1,000,000 shares of preferred stock to
                    the sole shareholder of Sequel.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-11

# Item 2.
Managements Discussion and Analysis or Plan of Operations

Forward Looking
Statements

Except
for the historical information and discussions contained herein, statements contained in
this Form 10-QSB may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements involve a number of
risks, uncertainties and other factors that could cause actual results to differ
materially, including any projections of earnings, revenues, or other financial items;
any statements of the plans, strategies, and objectives of management for future
operation; any statements concerning proposed new products, services, or developments,
any statements regarding future economic conditions or performance, statements of belief,
statements of assumptions underlying any of the foregoing and other risks, uncertainties
and factors discussed elsewhere in this Form 10-QSB or in the Companys other
filings with the Securities and Exchange Commission.

RESULTS
OF OPERATIONS

For
The Nine Month Period Ended September 30, 2003

For
the nine-month period ended September 30, 2003, the Company earned revenues of $502. The
revenues were related to the production of a live event for one client.

During
the nine month period ended September 30, 2003, the Company incurred operational expenses
of $747,971. These operating expenses included: consulting fees of $150,547, business
development expenses $357,645, and professional fees of $151,417 for the nine month period
ending September 30, 2003. The company continues to incur significant consulting and
business development costs in its effort to realize its business strategy and its business
plan.

During
the nine month period ended September 30, 2003, the Company incurred a net loss from
operations of $715,069.

For
The Three Month Period Ended September 30, 2003 Compared to the Three Month Period Ended
September 30, 2002

For
the three month period ended September 30, 2003, the Company earned revenues of $0, as
compared to revenues of $0 for the same period ended September 30, 2002.

For
the three month period ended September 30, 2003, the Company incurred operational expenses
of $395,833, as compared to $363,191 during the same period in 2002. These operating
expenses included: consulting fees of $50,008 and $108,000, business development expenses
$208,000, and $ 81,975; and professional fees of $119,391, and $30,494 , for the three
month period ending September 30, 2003, and 2002, respectively.

The
Company incurred a net loss from operations of $363,433 for the fiscal quarter ended
September 30, 2003, as compared to $356,529 for the same period in 2002.

3

# Liquidity and Financial
Condition As Of September 30, 2003

We
had cash-on hand of totaling $95,598 as of September 30, 2003.

As reported
in the Companys Annual Report for the period ended December 31, 2002 the
Company has shifted its strategy from being focused solely on technology oriented to
one of focused on live entertainment, particularly entertainment establishments (i.e.
nightclubs and lounges) and live events (i.e. concerts and special events).

Our
business strategy is currently aimed at focusing our immediate efforts on building a
network of licensed entertainment establishments, as the base for our urban lifestyle
businesses. These establishments will still utilize a branding approach so that we can
sell other urban lifestyle products and services and eventually employ a comprehensive
internet strategy.

Subsequent to the three month period
ending September 30, 2003 the Company has acquired its first establishment. Our immediate
aim is to use this first establishment as a flagship for the network and demonstrate our
unique and proprietary entertainment concepts for use in our other establishments. We
intend that the later establishments will be developed in new and existing locations in
major cities throughout the United States and Canada.

In order to finance working capital
for the first acquisition, capital for future acquisitions, and our phases of
implementation we plan to raise investment capital through different types of securities
offerings. We plan to fund new establishment locations, and possibly future acquisitions,
through direct investments into the individual establishments and providing the investors
with cash dividends from their direct investments and possibly some capital stock in the
Company to the investors. This is hoped to reduce the potential dilution to our existing
shareholders. We possibly plan to raise investment capital by sale of stock in our
subsidiaries, or other planned subsidiaries, which again is hoped to reduce dilution to
our existing shareholders. We plan to invite direct investments into the Company to
provide funds for general corporate purposes. We believe that this plan will enable us to
achieve our development goals with acceptable dilution to our existing shareholders.

We believe that the acquisition we
have recently completed will require a minimum of $300,000 for working capital and general
corporate purposes, depending on development planning that is being considered by
management over the next two quarters. In the upcoming two quarters, we plan to make one
or two additional acquisitions. We believe that the cost of a second and third acquisition
or development project will be approximately a minimum of $1,000,000 each and that
approximately another $500,000 minimum each will be required for the legal, accounting,
administrative, working capital and general corporate purposes. Thus, we anticipate
needing a minimum of $3,000,000 of investment capital during the next six months.

4

After the next one or two
acquisitions, we intend to develop other entertainment establishments from initial
buildout rather than from acquisitions. Our plan is to open no less than two or three
additional entertainment establishments by the end of 2004 and we anticipate that
additional funding (approximately $1,000,000) will be required to accomplish this.
Management anticipates that funding requirements for this plan will be less than the
overall cost of opening these nightclubs, since the revenues from the first two or three
nightclubs may generate enough cash flow to reduce the level of external capital required.
We have developed comprehensive business and financial plans that result in our
development of a network of entertainment establishments that should operate on a cash
positive basis and without incurring substantial dilution to stockholders such that the
Company can possibly increase its overall valuation substantially. The Company believes it
will require approximately $1,000,000 to launch its live events business unit, including
the cost of acquisitions and their subsequent integration and for the venture development
of other potential lines of business for the balance of 2003 and 2004. The total
additional working capital financing described in this section is in addition to the
$3,000,000 described in the preceding paragraph and is planned to also include the
development of other synergistic business units such as, including but not limited to,
membership services, brand licensing and merchandising.

Management plans on initiating a
series of securities offerings to raise the investment capital needed to meet our
acquisition plans. Although we will make efforts to minimize dilution to current
shareholders, we may not be able to avoid dilution due to many factors, including but not
limited to, the closing of financing at lower than the desired market price of the
Companys common stock.

LIVESTAR hopes to secure the
financing to satisfy the capital needs for each phase of its implementation plan through
the execution of various funding methods, primarily private placement investments or debt
financing. LIVESTAR hopes to achieve this by securing relationships with accredited
individual investors, investment bankers, venture capitalists, and/or finance advisors
that have the experience and relationships to aid LIVESTAR with its capital raising
efforts. The source of the private placement or debt financing may be comprised of a mix
of principal shareholders, private investors and venture capital companies.

If needed capital investment for our
acquisitions or developments is not available, in whole or in part, we intend to delay the
implementation plan regarding our acquisition or development plans until sufficient
investment capital becomes available. We cannot give any assurances that we will raise
sufficient investment capital to meet the business plan. In addition to delays to the
implementation plan regarding our acquisition or development plans due to insufficiency of
investment capital, we may suffer other consequences, including but not limited to the
following; We may have to suspend or discontinue operations of one or more of our business
units or we may have to suspend or discontinue operations of the Company if we become
insolvent as a result.

5

Until
acquisitions (current and future) and new development establishments begin to produce
significant revenues and subsequent positive cash flow, we will be reliant on capital
received from private placements, loans, and the exercise of options and warrants. Due to
the depressed market for our securities, we may not be able avoid significant dilution to
current shareholders. In addition, we expect to continue to retain certain management,
staff and consultants, such as legal counsel, and may need to compensate these individuals
through the issuance of our common stock as compensation. These stock based compensations
may result in significant dilution to current shareholders due to the depressed market for
our securities. We also continue to reduce or prevent collection of outstanding vendor
debts and accounts with creditors, such as suppliers and consultants, which could result
in litigation against the Company. There can be no guarantee that all of these
negotiations will be successful and the outcome of these negotiations may include
settlements in cash and/or issuance of common stock. These stock based settlements may
result in significant dilution to current shareholders due to the depressed market for our
securities. We plan on continuing to meet certain of our expenses through the issuance of
our shares of common stock, which may cause additional and significant dilution to
existing shareholders due to the depressed market for our securities.

In
the case of the Sequel, our first acquisition, some day to day business operations of the
corporation may be covered by the cash flow of the Sequel. The possibility of positive
cash flow to the Company from current (the Sequel) and future acquisitions may contribute
positively to LIVESTARs liquidity position.

# PART II  OTHER
INFORMATION

# Item 1. Legal Proceedings

On July 30, 2003, PR Newswire
Association, Inc . (Plaintiff) filed suit, pursuant to Docket No. DC15242-03,
in the Superior Court of New Jersey against the Company. The suit alleges non-payment of
$6,005 for News dissemination services sold to the Company by the Plaintiff. Damages
sought include the above stated alleged non-payment plus interest, legal and court costs.

The
Company believes that, as it commences revenue-producing operations and as it raises
capital, we will have the resources to reduce or prevent collection litigation by
creditors or others.

# Item 2. Changes in
Securities

# Recent Sales of
Unregistered Securities

During July 2003, the Company issued
2,000,000 shares of its previously authorized, but unissued common stock. The shares were
issued in settlement of a loan as directed by a debtholder. The transaction was valued at
$0.0025 per share for a total consideration of $5,000. The transaction was an isolated
transaction with the debtholder who has a close affiliation with us and was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) of the Act because
of not being part of a public offering. The offering was for a limited purpose and did not
use the machinery of public distribution

6

During August 2003, the Company
issued 1,524,944 shares of its previously authorized, but unissued common stock. The
shares were issued in settlement of a loan as directed by a debtholder. The transaction
was valued at $0.0025 per share for a total consideration of $3,812. The transaction was
an isolated transaction with the debt holder who has a close affiliation with us and was
exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) of the
Act because of not being part of a public offering. The offering was for a limited purpose
and did not use the machinery of public distribution

During August 2003, the Company
issued 666,667 shares of its previously authorized, but unissued common stock. The shares
were issued to one unrelated individual in exchange for cash. The transaction was valued
at $0.003 per share for a total consideration of $2,000. The transaction was an isolated
transaction with an individual having a close affiliation with us and was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2) of the Act because
of not being part of a public offering. The offering was for a limited purpose and did not
use the machinery of public distribution.

During August 2003, the Company
issued 1,250,000 shares of its previously authorized, but unissued common stock. The
shares were issued to one unrelated individual in exchange for cash. The transaction was
valued at $0.004 per share for a total consideration of $5,000. The transaction was an
isolated transaction with a individual having a close affiliation with us and was exempt
from registration under the Securities Act of 1933 pursuant to Section 4(2) of the Act
because of not being part of a public offering. The offering was for a limited purpose and
did not use the machinery of public distribution.

# Item 3. Defaults upon
Senior Securities

None

# Item 4. Submission of Matters
to a Vote of Security Holders

None

# Item 5. Other Information

# Item 6. Exhibits and
Reports on Form 8-K.

# (a) Exhibits

| | 31.1 | Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------

| | 31.2 | Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
| | ---- | ------------------------------------------------------------------------------------------------------------------------------

7

# (b) Reports on Form 8-K

On
August 11, 2003, the Company filed a current report on Form 8-K discussing under Item 5, a
definitive agreement pursuant to which the Company may acquire The Sequel Nightclub and on
September 29, 2003 the Company amended this form 8-K giving effect to an addendum to the
definitive agreement pursuant to which the Company is extending the Closing date of its
plans to acquire The Sequel Nightclub

On
August 26, 2003, the Company filed a current report on Form 8-K discussing under Item 5, a
Memorandum of Understanding pursuant to which the Company has entered discussions and
negotiations regarding a possible takeover of the Company.

# SIGNATURES

In
accordance with the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorised.

# LIVESTAR Entertainment
Group, Inc.

Date: November 19, 2003

| | By:
   
   
By: | ___________________________________Ray Hawkins, President and Chief
     Executive Officer
                                            
___________________________________Edwin Kwong, Principal Accounting Officer
     and Chief Financial Officer
| | --------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

8