Document:

SECURITY AGREEMENT

      SECURITY AGREEMENT dated as of March 5, 2002 (this "Agreement") by and
among VOLT TELECOMMUNICATIONS GROUP, INC., a Delaware corporation, VOLT DELTA
RESOURCES, INC., a Nevada corporation, VOLT DELTA RESOURCES, INC., a Delaware
corporation, DATANATIONAL, INC., a Delaware corporation, DATANATIONAL OF
GEORGIA, INC., a Georgia corporation, each Person other than the Collateral
Agent (defined below) who from time to time becomes a party hereto
(collectively, hereinafter, the "Grantors" and individually each a "Grantor"),
and JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a New York
banking corporation, as collateral agent for the benefit of the Lenders, the
Issuing Bank, the Administrative Agent and the Syndication Agent (in such
capacity, together with its successors in such capacity, the "Collateral
Agent"). Capitalized terms used above or below in this Agreement, and not
otherwise defined herein, are used with the meanings ascribed to them under the
Credit Agreement (as defined below).

                              W I T N E S S E T H:

      WHEREAS, the Grantors are parties (as "Guarantors") to a Credit Agreement
dated as of September 11, 2001 (as amended by the First Amendment to Credit
Agreement and a Second Amendment dated as of the date hereof (the "Second
Amendment"), and as joined in by certain of the Grantors pursuant to the Second
Amendment, and as the same may from time to time be further amended, extended,
supplemented, restated, joined in, or otherwise modified or replaced, the
"Credit Agreement") among the Grantors, the other "Guarantors" named therein,
Volt Information Sciences, Inc., Gatton Volt Consulting Group Limited, the
Administrative Agent, the Syndication Agent and the Lenders; and

      WHEREAS, pursuant to the Credit Agreement, each Grantor is required to
grant, and each Grantor has agreed to grant, assign and pledge to the Collateral
Agent, for the benefit of the Lenders, the Issuing Bank, the Administrative
Agent, the Collateral Agent and the Syndication Agent (the "Lender Group"), a
continuing first and prior security interest in and to all of the Collateral (as
defined below) to secure all of the Obligations (as defined below) of such
Grantor.

      NOW, THEREFORE, each Grantor, intending to be bound hereby, in
consideration of the premises hereof, and having induced (i) the Administrative
Agent and the Required Lenders party thereto to enter into the First Amendment
to Credit Agreement, and (ii) the Lenders to continue to make Loans and issue
Letters of Credit in accordance with the Credit Agreement (among other things,
by agreeing to enter into this Agreement), and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
each Grantor, hereby agrees with the Collateral Agent, for the benefit of the
Lender Group, as follows:

      1. Grant of Security Interest. Each Grantor, to secure its respective
Obligations, hereby assigns, pledges and grants to the Collateral Agent for the
benefit of the Lender Group a continuing first and prior security interest in
and to all of the Grantor's rights, title and interests in and to all of the
following property, rights and interests in property of such Grantor, whether
now owned or existing or hereafter acquired or arising and regardless of where
located and all

                                 Exhibit 4.01(c)                               1

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products, proceeds, supporting obligations, substitutions, accessions and
replacements thereof (all of the same, with respect to any Grantor, being herein
referred to as the "Collateral"):

            With respect to any Grantor, all present and future accounts
receivable, including, without limitation, all rights of the Grantor to receive
any payment for goods sold or leased or for services rendered, whether or not
they have been earned by performance (collectively, the "Accounts"); in each
case whether constituting an "account", "payment intangible", other "general
intangible", or "instrument" under (and as defined in) the New York Uniform
Commercial Code (the "UCC"); all to the extent that the account debtor under any
Account is a Person that is or was at the time the Account was created (x)
organized or existing under the laws of the United States or any state or
territory thereof or (y) doing business in the United States or any of its
territories.

      2. Security for Obligations. The foregoing grant of a security interest in
and to the Collateral secures the full and prompt payment and performance when
due of (a) all obligations and liabilities of the respective Grantor to the
Administrative Agent, the Collateral Agent, the Syndication Agent, the Issuing
Bank and/or any Lender now or hereafter existing under, arising under or related
to this Agreement, including, but not limited to, any amounts advanced or
incurred by the Collateral Agent in maintaining or preserving any Collateral or
otherwise in connection with this Agreement, and (b) all obligations and
liabilities, owing to any member of the Lender Group from or by the respective
Grantor, of any kind or nature whatsoever, present or future, however created,
incurred, acquired or owing, whether for principal, interest, fees,
indemnification, expenses (including, without limitation, any attorneys' fees
incurred in connection with administering or enforcing any of the Credit
Documents), or otherwise (including, without limitation, any interest on any of
the other foregoing items accrued after the commencement of any bankruptcy or
similar proceeding by or against any Grantor), whether or not evidenced by any
note, guaranty or other instrument; provided that the same arises under or
relates to the Credit Agreement, the Guaranty of Payment or any of the other
Credit Documents to which such Grantor is a party or by which it is bound (all
such obligations and liabilities of each Grantor described above in this
paragraph 2 being herein collectively referred to as the "Obligations").

      3. Grantors Remains Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under any contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Collateral Agent of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under any contracts and agreements included in the Collateral, and
(c) neither the Collateral Agent nor any Lender (nor any other member of the
Lender Group) shall have any obligation or liability under any contracts and
agreements included in the Collateral by reason of this Agreement, nor shall any
of them be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.

      4. Further Assurances. (a) Each Grantor hereby agrees that from time to
time, at the expense of such Grantor, such Grantor will promptly execute and
deliver all further instruments and documents, and take all further action, that
the Collateral Agent may reasonably request, in

                                 Exhibit 4.01(c)                               2
<PAGE>

order to create, evidence, perfect or preserve any security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will: (i) at the
written request of the Collateral Agent upon the occurrence and continuation of
an Event of Default, mark conspicuously each of its documents and other records
pertaining to the Collateral, with a legend, in form and substance satisfactory
to the Collateral Agent, indicating that such Collateral is subject to the
security interest granted hereby; and (ii) at the written request of the
Collateral Agent, if any Account shall be evidenced by a promissory note or
other instrument, deliver and pledge to the Collateral Agent, such note or
instrument duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to the Collateral
Agent.

            (b) Each Grantor hereby authorizes the Collateral Agent to file one
or more financing or continuation statements, and amendments thereto (including,
without limitation, any filings with any office or agency of the United States
or any state or territory thereof or in any other appropriate jurisdiction)
relative to all or any part of the Collateral without the signature of such
Grantor, where permitted by law. Each Grantor hereby agrees that a carbon,
photographic, photostatic or other reproduction of this Agreement or of a
financing statement is sufficient as a financing statement where permitted by
law. Each Grantor hereby agrees to execute any such statement or amendment
where, in accordance with applicable law, such signature may be necessary or
appropriate in connection with any such filing.

            (c) Each Grantor will furnish to the Collateral Agent (i) not later
than twelve (12) days after the end of each calendar month, a summary aging
report of all Accounts and a specific listing with respect to each Grantor's ten
(10) largest account debtors, and (ii) such other reports and schedules, as the
Collateral Agent may reasonably request, in connection with any or all of the
Collateral, all in detail, form and substance satisfactory to the Collateral
Agent. Upon the occurrence and during the continuance of an Event of Default,
the Collateral Agent shall be entitled to obtain any information, however
detailed, which it may request with regard to the Collateral, and to take any
steps necessary to monitor and verify all agings and other matters with respect
thereto. Each Grantor will permit the Collateral Agent, by any of its officers,
employees and/or designated agents, at any time or times during such Grantor's
usual business hours (upon reasonable prior notice, which will be deemed to be
one (1) Business Day if Event of Default has occurred and is continuing), to
inspect, investigate and/or conduct audits with respect to the Collateral, at
such Grantor's sole expense.

      5. Representations and Warranties: General. In addition to the
representations and warranties made in the Second Amendment and the Restated
Guaranty (as defined in the Second Amendment), each Grantor hereby represents
and warrants, as follows:

            (a) Such Grantor is duly incorporated or otherwise organized, and
existing, under the laws of the state set forth in Schedule A attached hereto.
The principal place of business and chief executive office of such Grantor is
located at the address identified as such on Schedule A attached hereto and all
records concerning the Collateral are located at the addresses specified in said
Schedule A. The exact legal name of each Grantor is as set forth on the
signature page to this Agreement, unless otherwise noted on said Schedule A.

                                 Exhibit 4.01(c)                               3
<PAGE>

            (b) Such Grantor has good, indefeasible and merchantable title to
the Collateral. Such Grantor owns the Collateral free and clear of any lien,
security interest, charge or encumbrance, except for the (i) security interests
in favor of the Collateral Agent created by this Agreement, and (ii) other
encumbrances permitted under the Credit Agreement. Except (i) as are being
terminated on or prior to the date hereof, and (ii) such as may have been filed
in favor of the Collateral Agent, no effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording or filing office in the United States.

            (c) This Agreement, together with actions heretofore taken and the
proper filing of the UCC financing statements pertaining to the Collateral,
creates a valid and perfected first priority security interest in all Collateral
of such Grantor located in or arising from the United States or any state or
territory thereof, securing the payment of the Obligations of such Grantor, and
all filings and other actions necessary to create, evidence, perfect and
preserve such security interest (save for the timely filing of UCC-1 financing
statements and all continuation statements or other statements required by
applicable law) have been duly taken.

            (d) Except as set forth on Schedule B attached hereto and made a
part hereof, during the five (5) years immediately preceding the date of this
Agreement, such Grantor has had no other company names or fictitious names or
been known under or used any other company or fictitious names.

            (e) Neither the execution or delivery of this Agreement, nor the
consummation of the granting and perfection of the security interests
contemplated hereby, nor the compliance with or performance of the terms and
conditions of this Agreement by such Grantor is prevented by, limited by,
conflicts with or will result in the breach or violation of or a default under
the terms, conditions or provisions of (i) the by-laws or any other
organizational document with respect to such Grantor or other agreement among
the shareholders of such Grantor, (ii) any mortgage, security agreement,
indenture, evidence of indebtedness, loan or financing agreement, trust
agreement, license agreement or any other agreement or instrument to which such
Grantor is a party or by which it is bound, or (iii) any provision of law, any
order of any court or administrative agency or any rule or regulation applicable
to such Grantor.

      6. Representations and Warranties: Accounts. As of the time when any
Account of any particular Grantor arises, such Grantor shall be deemed to have
represented and warranted with respect to such Account that:

            (a) it will not be evidenced by a judgment and will represent a bona
fide transaction contemplated in accordance with the terms and provisions
contained in any agreements evidencing or relating to such Collateral; and

            (b) it will not have been transferred or assigned to any Person
(other than the Domestic Borrower or one of its Subsidiaries, in advance of a
transfer to a Grantor for pledge hereunder), or pledged to any Person other than
the Collateral Agent.

                                 Exhibit 4.01(c)                               4
<PAGE>

      7. Intentionally omitted.

      8. Covenants: General. Without limiting the agreements and covenants
contained in the Credit Agreement or in any other Credit Document to which such
Grantor is a party, each Grantor hereby covenants and agrees with the Collateral
Agent that:

            (a) Unless all steps have been taken which will at all times (after
the change in question) preserve the Collateral Agent's first priority projected
security interest in all Collateral being provided by such Grantor, it shall not
(i) change the state in which such Grantor is incorporated or organized, or (ii)
change such Grantor's name (Schedule A hereto shall be deemed to have been
amended automatically upon a change effected in compliance with the foregoing
sentence.)

            (b) It shall preserve and maintain the security interest created by
this Agreement and will protect and defend its title to the Collateral so that
the security interest so granted shall be and remain a continuing first and
prior perfected security interest in the Collateral. Such Grantor will not
create, assume or suffer to exist any security interest or other lien or
encumbrance in the Collateral, except for the security interest created by this
Agreement or as otherwise permitted under the Credit Agreement.

            (c) Such Grantor shall maintain books and records pertaining to the
Collateral in accordance with GAAP and in such detail, form and scope as the
Collateral Agent may reasonably require.

            (d) Such Grantor shall execute such other documents as may be
reasonably requested by the Collateral Agent in order to effectuate the security
interests granted herein.

      9. Covenants Regarding Collateral. Each Grantor shall comply with the
following covenants regarding Collateral:

            (a) Such Grantor shall keep its principal place of business and
chief executive office and the office where it keeps its records concerning the
Collateral, and the offices where it keeps all originals of all documents
evidencing or relating to any or all Collateral, at the location therefor
specified in Section 5(a) hereof or, upon the Collateral Agent's actual receipt
of at least thirty (30) days' prior written notice to the Collateral Agent, at
other locations in the United States, which notice (once received) will be
deemed to automatically update Schedule A hereto, and Section 5(a) hereof.

            (b) Except as otherwise provided in this Section 9(b), such Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to such Grantor under its Accounts. In connection with such collections, such
Grantor may take (and, at the Collateral Agent's direction, shall take) such
action as such Grantor or the Collateral Agent may deem necessary or advisable
to enforce collection of the Accounts; provided, however, that upon the
occurrence and at any time thereafter during the continuation of an Event of
Default, the Collateral Agent shall have the right to enforce such Grantor's
rights against any account debtors or other obligors relating to the Collateral
including, but not limited to, the right to notify the

                                 Exhibit 4.01(c)                               5
<PAGE>

account debtors or obligors under any Collateral of the security interest in the
Collateral granted to the Collateral Agent and to direct such account debtors or
obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Collateral Agent. In such event, upon notice to such
Grantor, and at the sole expense of such Grantor, the Collateral Agent may
enforce collection of any such Collateral, and adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from the
Collateral Agent referred to in the preceding sentence: (i) all amounts and
proceeds (including instruments) received by such Grantor in respect of any
Collateral shall be received in trust for the benefit of the Collateral Agent,
shall be segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any necessary
endorsement); and (ii) such Grantor shall not adjust, settle or compromise the
amount or payment of any Account, or release wholly or partly any account debtor
or obligor thereof, or allow any credit or discount thereon.

      10. Intentionally omitted.

      11. Intentionally omitted.

      12. Transfers and Other Liens. No Grantor may, unless the Collateral Agent
shall have provided its prior written consent thereto, which consent shall be
given or withheld in the Collateral Agent's sole discretion:

            (a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as expressly permitted under the Credit
Agreement; or

            (b) create or suffer to exist any Lien, security interest or other
charge or encumbrance upon or with respect to any of the Collateral, other than
the security interest in favor of the Collateral Agent pursuant to this
Agreement and any other encumbrance permitted under the Credit Agreement.

      13. Administrative Agent Appointed Attorney-in-Fact. Upon the occurrence
and during the continuation of an Event of Default, each Grantor hereby
irrevocably appoints the Collateral Agent (and any officer or agent of the
Collateral Agent with full power of substitution and revocation) as such
Grantor's attorney-in-fact (coupled with an interest), with full authority in
the place and stead of such Grantor and in the name of such Grantor or
otherwise, from time to time in the Collateral Agent's discretion, to take any
action and to execute any instrument which the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation:

            (a) to ask, demand, collect, sue for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;

            (b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a) above;

                                 Exhibit 4.01(c)                               6

<PAGE>

            (c) to file any claims or take any action or institute any
proceedings which the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral; and

            (d) to discharge any lien or encumbrance on or against the
Collateral or bond the same.

      14. Collateral Agent May Perform Agreements. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, after five
day's notice to such Grantor (unless the Collateral Agent deems it necessary to
take more immediate action), itself perform, or cause performance of, such
agreements, and the reasonable out-of-pocket expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor under Section
18(b) hereof (including, without limitation, the reasonable fees and
disbursements of counsel); provided, however, that any such action by the
Collateral Agent shall not be deemed to be a waiver of any Event of Default or
Default, which may have resulted from such Grantor's failure to perform any such
agreement.

      15. Collateral Agent's Duties. The powers conferred on the Collateral
Agent hereunder are solely to protect its interest (and the interests of the
other members of the Lender Group) in the Collateral (granted by each Grantor)
and shall not impose any duty upon the Collateral Agent or other member of the
Lender Group to exercise any such powers, or any liability upon the Collateral
Agent or any other member of the Lender Group upon the exercise of any such
powers. Except for the safe custody of any Collateral in their possession and
the accounting for moneys actually received by any of them pursuant to the
Collateral Agent's exercise of remedies hereunder, the Collateral Agent and the
other members of the Lender Group shall have no duty as to any Collateral or as
to the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. The Collateral Agent and the
other members of the Lender Group shall be deemed to have exercised reasonable
care in the custody and preservation of the Collateral in their possession if
the Collateral is accorded treatment substantially equal to that which the
Collateral Agent or any other such Person respectively accords its own property.

      16. Remedies Upon Default. If any Event of Default shall have occurred and
be continuing:

            (a) The Collateral Agent may exercise in respect of any Collateral
(granted by any or all of the Grantors), in addition to other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party under the UCC and/or any other applicable law and/or
in equity and also may do any or all of the following, whether separately,
successively, or simultaneously, all to the extent permitted under the UCC, any
other applicable law and/or the Credit Agreement:

                  (i) In the name of the Collateral Agent, or in the name of any
Grantor, or otherwise, enforce each Grantor's rights against any account debtor
or other obligor, and may demand, sue for, collect or receive any money or
property at any time payable or receivable on

                                 Exhibit 4.01(c)                               7
<PAGE>

account of or in exchange for, or make any compromise or settlement deemed
desirable with respect to, any of the Collateral, but the Collateral Agent shall
be under no obligation so to do, and the Collateral Agent, may extend the time
of payment, arrange for payment in installments, or otherwise modify the terms
of, or release, any of the Collateral without thereby incurring responsibility
to, or discharging or otherwise affecting any liability of, any Grantor.

                  (ii) Subject to applicable law and the terms of any lease
agreement that may apply, enter upon any premises where any Collateral may be,
and take possession thereof, and maintain such possession on the applicable
Grantor's premises, or demand and receive such possession from any Person who
has possession thereof, or remove the Collateral or any part thereof, to such
other places as the Collateral Agent may desire, without any obligation to pay
such Grantor for any use and occupancy of such premises.

                  (iii) Require any Grantor to, and each Grantor hereby agrees
that it will at its expense and upon request of the Collateral Agent forthwith,
assemble all or part of the Collateral as directed by the Collateral Agent and
make it available to the Collateral Agent at a place to be designated by the
Collateral Agent which is reasonably convenient to both parties.

                  (iv) Without notice except as specified below and with or
without taking the possession thereof, sell, assign, grant an option or options
to purchase or otherwise dispose of the Collateral or any part thereof in one or
more parcels at public or private sale, at any location chosen by the Collateral
Agent, for cash, on credit or for future delivery, and at such price or prices
and upon such other terms as the Collateral Agent may deem commercially
reasonable. Each Grantor hereby agrees that, to the extent notice of sale shall
be required by law, at least seven (7) Business Days' notice to such Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification, but notice given in any
other reasonable manner or at any other reasonable time shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. Each
Grantor hereby agrees that the Collateral Agent shall have no obligation to
preserve rights in the Collateral against prior parties or to marshal any
Collateral for the benefit of any Person.

                  (v) Whether or not any Obligations shall have matured or shall
have been accelerated pursuant to the Credit Agreement or otherwise, the
Collateral Agent may in addition to any other rights it may have under this
Agreement or otherwise, appoint by instrument in writing a receiver or receiver
and manager (both of which are herein called a "Receiver") of all or any part of
the Collateral or may institute proceedings in any court of competent
jurisdiction for the appointment of such a Receiver. Any such Receiver is hereby
given and shall have the same powers and rights as the Collateral Agent has
under this Agreement, at law or in equity. In exercising any such powers, any
such Receiver shall act as, and for all purposes shall be deemed to be, the
agent of the applicable Grantor and neither the Collateral Agent nor any other
member of the Lender Group shall be responsible for any act or omission of any
such Receiver absent the willful misconduct of the Collateral Agent or the

                                 Exhibit 4.01(c)                               8
<PAGE>

Receiver. The Collateral Agent may appoint one or more Receivers hereunder and
may remove any such Receiver or Receivers and appoint another or other in his or
their stead from time to time. Any Receiver so appointed may be an officer or
employee of the Collateral Agent or any Lender. Each Grantor agrees that any
Receiver appointed by the Collateral Agent need not be appointed by, nor is his
appointment required to be ratified by, nor his actions in any way supervised
by, a court.

                  (vi) Apply, without notice, any cash or cash items
constituting Collateral in the possession of the Collateral Agent or any other
member of the Lender Group, in a manner consistent with the Credit Agreement, to
payment of any of the Obligations. Each Grantor hereby waives, to the extent
permitted by applicable law, all rights of such Grantor to prior notice and
hearing under any applicable statute or constitution (in the case of such notice
only, to the extent that such statute or constitution gives rights as to notice
that are greater than are provided for herein or provides for any notice period
when none is otherwise provided for herein).

            (b) All cash proceeds received by the Collateral Agent under
foregoing subsection (a), in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral granted by any or all of the
Grantors may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as Collateral for, and/or may then or at any time thereafter be
applied (after payment of any amounts payable to the Collateral Agent or any
other member of the Lender Group pursuant to Section 18 hereof) in whole or in
part by the Collateral Agent against all or any part of the Obligations, in such
order as the Collateral Agent shall elect consistent with any requirements in
the Credit Agreement. Any surplus of such cash or cash proceeds held by the
Collateral Agent and remaining after payment in full of all the Obligations
shall be paid over to the applicable Grantor or Grantors or to whomsoever may be
lawfully entitled to receive such surplus.

      17. Collateral Agent to Act on Behalf of the Lenders. The Lenders (as well
as the Issuing Bank, the Administrative Agent and the Syndication Agent) agree,
by their acceptance of the benefits hereof, that this Agreement may be enforced
on their behalf only by the actions of the Collateral Agent, acting upon the
instructions of the Required Lenders, and that none of the Lenders (nor any
other member of the Lender Group) shall have any right to seek to enforce this
Agreement or to realize upon the security granted hereby, it being understood
and agreed that such rights and remedies may be exercised by the Collateral
Agent, for the benefit of the Lender Group, upon the terms of this Agreement.

      18. Indemnity and Expenses. (a) Each Grantor agrees to defend, protect,
indemnify and hold harmless the Collateral Agent, each Lender, the Issuing Bank,
the Administrative Agent and the Syndication Agent and each employee, officer,
director, agent, professional person, successor and assignee of each of them and
each of their respective Affiliates and subsidiaries (all of the foregoing
collectively referred to herein as the "Indemnitees") from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgment,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable out-of-pocket fees and
disbursements of counsel for the Collateral Agent and the other Indemnitees,
incurred in connection with any action or proceeding between any Grantor

                                 Exhibit 4.01(c)                               9
<PAGE>

and any Indemnitee or between any Indemnitee and any third party or otherwise,
with respect to any investigative, administrative or judicial proceeding,
whether or not such Indemnitee shall be designated a party thereto), imposed on,
incurred by, or asserted against such Indemnitee (whether direct, indirect,
economic, special, punitive, treble or consequential and whether based on any
federal, state, local or foreign laws or other statutory regulations, including,
without limitation, Environmental Laws, securities and commercial laws and
regulations, under common law or equitable principles) in any manner relating to
or arising out of this Agreement, the Collateral or any of the Obligations of
such Grantor, or any act, event or transaction related or attendant thereto or
contemplated hereby, or any action or inaction by any Indemnitee hereunder or in
connection therewith, including, in each such case, any allegation of any such
matters, whether meritorious or not (collectively, the "Indemnified Matters");
provided, however, that no Grantor shall have any obligation to any Indemnitee
hereunder with respect to Indemnified Matters resulting from the gross
negligence or willful misconduct of such Indemnitee. The covenants of each
Grantor contained in this Section 18(a) shall survive the payment in full of all
amounts due and payable under this Agreement, the Credit Agreement, the Guaranty
of Payment and the other Credit Documents, and the full satisfaction of all
other Obligations, and are in addition to, and cumulative with respect to, all
other indemnities contained in the Credit Agreement, the Guaranty of Payment or
any of the other Credit Documents.

            (b) Each Grantor will, upon demand, pay to the Collateral Agent the
amount of any and all expenses, including the reasonable out-of-pocket fees and
disbursements of the Collateral Agent's and of any experts and agents
(including, without limitation, any Affiliates of the Collateral Agent), which
the Collateral Agent and each Lender may incur in good faith in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any of
the Collateral, including, without limitation, any and all amounts paid by or on
behalf of the Collateral Agent in respect of returned and uncollected checks and
drafts pursuant to Section 9(b) hereof, (iii) all out-of-pocket costs and
expenses in connection with the audits, inspections and investigations conducted
by the Collateral Agent pursuant to Section 4(c) hereof, (iv) the exercise or
enforcement of any of the rights of the Collateral Agent hereunder, including,
without limitation, any and all audits with respect to the Collateral conducted
by or on behalf of the Collateral Agent or any Lender pursuant to Section 4(c)
hereof, or (v) the failure by such Grantor to perform or observe any of the
provisions hereof; provided, however that such Grantor shall not have any
obligation to the Collateral Agent to pay such costs or expenses if such costs
or expenses were incurred directly due to the Collateral Agent's or any such
other Person's gross negligence or willful misconduct.

      19. Security Interests Absolute. All rights of the Collateral Agent and
the security interests granted hereunder, and all obligations of each Grantor
hereunder, shall be absolute and unconditional, irrespective of:

            (a) any lack of validity or enforceability of the Credit Agreement,
the Guaranty of Payment, any other Credit Document, or any other agreement,
document or instrument relating thereto;

                                 Exhibit 4.01(c)                              10
<PAGE>

            (b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations or any other amendment or waiver
of, or any consent to any departure from, the Credit Agreement, the Guaranty of
Payment or any other Credit Document;

            (c) any exchange, release or non-perfection of any portion of the
Collateral or any other collateral held by the Collateral Agent or any release
or amendment or waiver of, or consent to any departure from, any guaranty for
all or any of the Obligations; and

            (d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, such Grantor in respect of the
Obligations or otherwise with respect to this Agreement.

      20. Survival of Representations and Warranties. Each Grantor hereby
covenants, warrants and represents to the Collateral Agent and each other member
of the Lender Group that all representations and warranties of such Grantor
contained in this Agreement, the Guaranty of Payment, and/or in any other Credit
Document are true and correct at the time of such Grantor's execution of this
Agreement, shall survive the execution, delivery and acceptance hereof and
thereof, as applicable, by the parties hereto and thereto, and shall continue in
effect until: (i) Obligations have been indefeasibly paid and satisfied in full
and the Commitments have been terminated, or (ii) until the earlier termination
of the security interests granted hereby.

      21. Waiver by the Collateral Agent. The Collateral Agent's failure, at any
time or times, to require strict performance by any Grantor of any provision of
this Agreement shall not waive, affect or diminish any right of the Collateral
Agent thereafter to demand strict compliance and performance therewith. Any
suspension or waiver by the Collateral Agent of an Event of Default or a Default
shall not suspend, waive or affect any other Event of Default, a Default,
whether the same is prior or subsequent thereto and whether of the same or of a
different type. None of the undertakings, agreements, warranties, covenants and
representations of any Grantor contained in this Agreement and no Event of
Default or Default shall be deemed to have been suspended or waived by the
Collateral Agent, unless such suspension or waiver is by an instrument in
writing signed by an officer of the Collateral Agent and directed to one or more
of the Grantors specifying such suspension or waiver.

      22. Severability. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

      23. Provisions Reasonable. Each Grantor hereby expressly acknowledges and
agrees that the provisions of this Agreement and, in particular, those
respecting remedies and powers of the Collateral Agent against such Grantor, its
business and the Collateral upon the occurrence of any Event of Default, are
commercially reasonable and not manifestly unreasonable.

      24. Intentionally Omitted.

                                 Exhibit 4.01(c)                              11
<PAGE>

      25. Addresses for Notices. Each notice to, and each demand upon, any
Grantor by the Collateral Agent relating to this Agreement and each notice to,
and each demand upon, the Collateral Agent by any Grantor relating to this
Agreement and any notice to the Collateral Agent of the bankruptcy, insolvency
or consummation of any other similar proceeding of any Grantor, shall
specifically refer to this Agreement, and shall be in writing (including
facsimiles) and shall be given and deemed to have been given in accordance with
Section 9.01 of the Credit Agreement.

      26. Continuing Security Interest; Assignments. This Agreement shall create
a continuing security interest in the Collateral granted by each of the Grantors
and shall (i) remain in full force and effect until the Obligations are
indefeasibly paid and satisfied in full and the Commitments are terminated, (ii)
be binding upon each Grantor, its respective successors and assigns, and all
other Persons who become bound as a debtor to this Agreement and (iii) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the members of the Lender Group and their respective successors,
transferees and assigns. Each Grantor's successors and assigns shall include,
without limitation, a receiver, trustee or debtor-in-possession thereof or
therefor. When the Obligations have been indefeasibly paid and satisfied in full
and are no longer outstanding, the security interests granted hereby shall
terminate and all rights to the Collateral granted by each of the Grantors shall
revert to the Grantors. Upon any such termination, the Collateral Agent will, at
the Grantors' expense, execute and deliver to the Grantors such documents as the
Grantors shall reasonably request to evidence such termination.

      27. Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive, internal laws of the State of New York, without
regard to its principles of conflicts of law other than ss.5-1401 of the New
York General Obligations Law.

      28. CONSENT TO JURISDICTION AND SERVICE OF PROCESS: WAIVER OF JURY TRIAL.
THE GRANTORS AND THE COLLATERAL AGENT AGREE THAT SECTIONS 9.09 AND 9.10 OF THE
CREDIT AGREEMENT SHALL APPLY, MUTATIS MUTANDIS, WITH RESPECT TO ANY LITIGATION
BASED ON OR ARISING UNDER THIS AGREEMENT, AND SUCH SECTIONS ARE INCORPORATED BY
REFERENCE HEREIN.

      29. Modification of Agreement. This Agreement may not be modified,
amended, discharged or waived, in whole or in part, except by a writing signed
by each of the parties hereto, and any such amendment, modification, discharge
or waiver shall only be effective in the specific instance where it is made. No
statement, promise or representation as to the enforceability, validity or
intent of the Collateral Agent to enforce this Agreement or any of its terms,
has been made by the Collateral Agent or any Person acting or purporting to act
on its behalf, and each of the Grantors expressly acknowledges that it has not
relied on any such statement, promise or representation in entering into or
executing this Agreement. The Collateral Agent shall not be required to enter
into or to make or give any consent, amendment, modification, discharge or
waiver under this Agreement unless it has received the consent of the Required
Lenders, or of all the Lenders where the Collateral Agent has reasonably
determined

                                 Exhibit 4.01(c)                              12
<PAGE>

that the matter in question would require unanimity under customary practices
for syndicated financings of this type.

      30. Conflicts. Notwithstanding anything in this Agreement to the contrary,
in the event of an actual conflict between this Agreement, on the one hand, and
the Credit Agreement or the Guaranty of Payment, on the other, the provisions of
the Credit Agreement or the Guaranty of Payment shall govern to the extent of
such conflict.

      31. Limitation of Liability. No claim may be made by any Grantor or any
other Person against any Indemnitee for any special, indirect, consequential,
punitive or treble damages in respect of any claim for breach of contract or any
other theory of liability arising out of or related to the transactions
contemplated by this Agreement, the Guaranty of Payment, the Credit Agreement or
any other Credit Documents, or any act, omission or event occurring in
connection herewith or therewith; and each Grantor hereby waives, releases and
agrees not to sue upon any claim for any and all special, indirect,
consequential, punitive or treble damages, whether or not accrued and whether or
not known or suspected to exist in its favor.

      32. Headings; Construction. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine, and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise: (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time joined in, amended, supplemented or otherwise modified (except
where such joinder, amendment, supplement or modification is not permitted
hereunder without the Collateral Agent's consent and such consent has not been
obtained); (b) any reference herein to any Person shall be construed to include
such Person's heirs, administrators, executors, successors and assigns; (c)
unless otherwise stated, the words "herein", "hereof" and "hereunder", and words
of similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof; and (d) unless otherwise stated, all
references herein to Sections, Exhibits and Schedules shall be construed to
refer to Sections of, and Exhibits and Schedules to, this Agreement.

                                 Exhibit 4.01(c)                              13
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers there into duly
authorized as of the date first above written.

VOLT TELECOMMUNICATIONS GROUP, INC.           VOLT DELTA RESOURCES, INC.,
a Delaware corporation                        a Nevada corporation

By:                                           By:
   -----------------------------------           -------------------------------
   Name:                                         Name:
   Title:                                        Title:

VOLT DELTA RESOURCES, INC.,                   DATANATIONAL, INC.,
a Delaware corporation                        a Delaware corporation

By:                                           By:
   -----------------------------------           -------------------------------
   Name:                                         Name:
   Title:                                        Title:

DATANATIONAL OF GEORGIA, INC.,
a Georgia corporation

By:
   -----------------------------------
   Name:
   Title:

AGREED

JPMORGAN CHASE BANK
(formerly known as The Chase Manhattan Bank),
as Collateral Agent

By:
   -----------------------------------
   Name:
   Title:

                                 Exhibit 4.01(c)                              14
<PAGE>

                                   SCHEDULE A

                              ADDRESSES OF GRANTORS

<TABLE>
<CAPTION>
                                              CHIEF EXECUTIVE               PRINCIPAL PLACE                       LOCATION
                 GRANTOR                          OFFICE                      OF BUSINESS                        OF RECORDS
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                           <C>                             <C>
       Volt Delta Resources, Inc.,         560 Lexington Avenue          560 Lexington Avenue              560 Lexington Avenue
           a Nevada corporation             New York, NY 10022                14th Floor                        14th Floor
                                                                          New York, NY 10022                New York, NY 10022
------------------------------------------------------------------------------------------------------------------------------------
       Volt Delta Resources, Inc.,         560 Lexington Avenue          560 Lexington Avenue              560 Lexington Avenue
          a Delaware corporation            New York, NY 10022                14th Floor                        14th Floor
                                                                          New York, NY 10022                New York, NY 10022
------------------------------------------------------------------------------------------------------------------------------------
           Data National, Inc.,            560 Lexington Avenue          3800 Concorde Parkway             3800 Concorde Parkway
          a Delaware corporation            New York, NY 10022                 Suite 500                         Suite 500
                                                                          Chantilly, VA 20151               Chantilly, VA 20151
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Exhibit 4.01(c)                              15
<PAGE>

<TABLE>
<CAPTION>
                                              CHIEF EXECUTIVE               PRINCIPAL PLACE                       LOCATION
                 GRANTOR                          OFFICE                      OF BUSINESS                        OF RECORDS
------------------------------------------------------------------------------------------------------------------------------------
<S>                                        <C>                           <C>                             <C>
       DataNational of Georgia, Inc.,      560 Lexington Avenue          3800 Concorde Parkway             3800 Concorde Parkway
          a Georgia corporation             New York, NY 10022                 Suite 500                         Suite 500
                                                                          Chantilly, VA 20151               Chantilly, VA 20151
------------------------------------------------------------------------------------------------------------------------------------
   Volt Telecommunications Group, Inc.,     560 Lexington Avenue         (1) 6801 Lake Worth Road          Volt Accounting Center
          a Delaware corporation             New York, NY 10022                Suite 314                 2421 North Glassell Street
                                                                           Lake Worth, FL 33467              Orange, CA 92865

                                                                         (2) 415 North Smith Avenue
                                                                             Corona, CA 92879
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Exhibit 4.01(c)                              16
<PAGE>

                                   SCHEDULE B

                                FICTITIOUS NAMES

<TABLE>
<CAPTION>
                           GRANTOR                                                        NAMES
------------------------------------------------------------------------------------------------------------------
<S>                                                                           <C>

                 Volt Delta Resources, Inc.,                                             MAINTECH
                    a Nevada corporation                                      VOLT DELTA RESOURCES (NEVADA)

------------------------------------------------------------------------------------------------------------------

                 Volt Delta Resources, Inc.,
                   a Delaware corporation                                                MAINTECH

------------------------------------------------------------------------------------------------------------------

                     DataNational, Inc.,
                   a Delaware corporation                                         COMMUNITY PHONE BOOKS

------------------------------------------------------------------------------------------------------------------

    DataNational of Georgia, Inc., a Georgia corporation                          COMMUNITY PHONE BOOKS

------------------------------------------------------------------------------------------------------------------

            Volt Telecommunications Group, Inc.,
                   a Delaware corporation                                               VOLTELCON

------------------------------------------------------------------------------------------------------------------
</TABLE>

                                 Exhibit 4.01(c)                              17Exhibit 10.1

                                      ETP

                   ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.

                     (Incorporated in the State of Delaware)

                                  ------------

                                 EXCHANGE OFFER

                                  ------------

                     Up to 10,553,603 Shares of Common Stock

          in exchange for all outstanding Securitized Equipment Leases

    ($816,000 principal amount outstanding plus accrued interest to October 15,
                                      2001)

                                  ------------

                               THE EXCHANGE OFFER

            WILL EXPIRE AT 5:00 P.M., CENTRAL DAYLIGHT SAVINGS TIME,

                      ON OCTOBER 22, 2001, UNLESS EXTENDED

                                  ------------

     Entertainment Technologies & Programs, Inc., a Delaware corporation ("ETPI"
or  the  "Company"), hereby offers, upon the terms and subject to the conditions
set  forth in this Exchange Offer and the accompanying Letter of Transmittal, to
exchange  $844,288  of  securitized  equipment  lease obligations, consisting of
$816,000  aggregate  principal  amount  and  $28,288 of accrued interest through
October  15,  2001  (the  "Securitized  Equipment Leases"), for up to 10,553,603
shares  of  our  common  stock  based  on  a price per share equal to 75% of the
average  of  the  closing  prices  of  our  common  stock  for the 60-day period
beginning  September 17, 2001 and ending November 15, 2001; provided however, in
no  event  will  the Exchange Price be less than $0.08 per share or greater than
$0.12  per  share  (the  "Exchange  Price").  Our  common stock is traded on the
Over-The-Counter Electronic Bulletin Board under the symbol "ETPI." On September
25,  2001,  the  last  reported  sale  price  for  our  common  stock  on  the
Over-The-Counter  Electronic  Bulletin  Board  was  $0.09  per share. As soon as
practicable  after  the  closing  of  this  Exchange  Offer,  we  will  file  a
registration  statement  under the Securities Act of 1933 (the "Securities Act")
relating to the shares of common stock to be received in this Exchange Offer and
the resale thereof (the "Registration Statement") and will endeavor to keep such
registration  statement  effective  for  as long as necessary for the Holders to
sell  their shares of common stock received pursuant to this Exchange Offer. The
Company  will provide to each holder of one or more of the Securitized Equipment
Leases  (the  "Holder")  copies  of  the  prospectus,  notify each Holder when a
Registration  Statement  for  the  common  stock  has  become effective and take
certain  other actions as are required to permit the resale of the common stock.
A  Holder  that  sells  its  common  stock  pursuant to a Registration Statement
generally  will  be  required  to  be  named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers and will be subject
to  certain  of  the  civil  liability  provisions  under  the Securities Act in
connection  with  such  sales.

     Subject to certain conditions, the Company will accept for exchange any and
all  Securitized  Equipment  Leases  that  are  validly  tendered  on  or  prior

<PAGE>
to  5:00  p.m.,  Central Daylight Savings Time ("CDT"), on the date the Exchange
Offer  expires,  which  will  be  October  22, 2001 unless the Exchange Offer is
extended  (the  "Expiration  Date").  In  the  event  that the Exchange Offer is
extended, it will remain in effect for a maximum of 30 additional business days,
including  all  extensions.  Tenders  of  Securitized  Equipment  Leases  may be
withdrawn  at  any  time  prior  to 5:00 p.m. CDT on the Expiration Date, unless
previously accepted for exchange. The Exchange Offer is not conditioned upon any
minimum  principal  amount  of  Securitized  Equipment Leases being tendered for
exchange.  However, the Exchange Offer is subject to certain conditions that may
be  waived  by  the  Company.  The Company has agreed to pay the expenses of the
Exchange  Offer.

     The Company believes that none of the registered holders of the Securitized
Equipment  Leases is an affiliate (as such term is defined in Rule 405 under the
Securities  Act)  of  the Company. Holders of Securitized Equipment Leases whose
Securitized Equipment Leases are not tendered and accepted in the Exchange Offer
will  continue to hold such Securitized Equipment Leases and will continue to be
entitled  to  all  the  rights  that  existed  prior  to  the  Exchange  Offer.

     The  Company will not receive any proceeds from, and has agreed to bear all
expenses  of  the  Exchange Offer. No dealer-manager is being used in connection
with  the  Exchange  Offer.  However,  the  Company  may  pay to certain parties
consulting  fees payable in shares of restricted common stock of the Company for
their  assistance  in  distributing  information  describing  the  exchange  of
Securitized  Equipment  Leases  into  shares  of  common  stock.

     SEE "RISK FACTORS" BEGINNING ON PAGE 7 TO READ ABOUT CERTAIN RISKS THAT YOU
SHOULD  CONSIDER  BEFORE  BUYING  SHARES  OF  OUR  COMMON  STOCK.

     THE  EXCHANGE  OFFER  IS  NOT  BEING  MADE  TO, NOR WILL THE COMPANY ACCEPT
SURRENDERS  FOR  EXCHANGE  FROM,  HOLDERS OF SECURITIZED EQUIPMENT LEASES IN ANY
JURISDICTION  IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE
IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. NEITHER
THE  DELIVERY OF THIS EXCHANGE OFFER NOR ANY EXCHANGE MADE PURSUANT HERETO SHALL
UNDER  ANY  CIRCUMSTANCES  IMPLY THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF
THE  COMPANY  OR THAT THE INFORMATION SET FORTH HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT  TO  THE  DATE  HEREOF.

     THESE  SECURITIES  HAVE  NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND  EXCHANGE  COMMISSION (THE "COMMISSION") OR ANY STATE SECURITIES COMMISSION.
NOR  HAS  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR  ANY  STATE  SECURITIES
COMMISSION  PASSED  UPON  THE  ACCURACY  OR ADEQUACY OF THIS EXCHANGE OFFER. ANY
REPRESENTATION  TO  THE  CONTRARY  IS  A  CRIMINAL  OFFENSE.

     WE  HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE ANY
INFORMATION  OR  TO  MAKE  ANY  REPRESENTATIONS  IN  CONNECTION  WITH  THE OFFER
CONTAINED  HEREIN  OTHER  THAN  THOSE  CONTAINED IN THIS EXCHANGE OFFER, AND, IF
GIVEN  OR  MADE,  SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING  BEEN  AUTHORIZED BY US. THIS EXCHANGE OFFER DOES NOT CONSTITUTE AN OFFER
TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THOSE TO
WHICH  IT  RELATES, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION
OF  AN  OFFER  TO  BUY, TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION  IS  NOT  AUTHORIZED,  OR  IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION  IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO  MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS EXCHANGE OFFER
NOR  ANY  SALE  MADE  HEREUNDER  SHALL,  UNDER  ANY  CIRCUMSTANCES,  CREATE  ANY
IMPLICATION  THAT  THERE  HAS BEEN NO CHANGE IN THE AFFAIRS OF OUR COMPANY SINCE
THE  DATE  HEREOF NOR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME  SUBSEQUENT  TO  THE  DATE  HEREOF.

              The date of this Exchange Offer is September 26, 2001

                                       ii
<PAGE>
                            FOR ALL HOLDERS OF LEASES
                            -------------------------

     THE  SECURITIES  DESCRIBED  HEREIN  HAVE  NOT  BEEN  REGISTERED  UNDER  THE
SECURITIES  ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND ARE
BEING  OFFERED  AND  SOLD  IN  RELIANCE  ON  EXEMPTIONS  FROM  THE  REGISTRATION
REQUIREMENTS  OF  THE  ACT AND APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION,
ANY  STATE  SECURITIES  COMMISSION OR OTHER REGULATORY AUTHORITY, OR HAVE ANY OF
THE  FOREGOING  AUTHORITIES  PASSED  UPON OR ENDORSED THE MERITS OF THE OFFERING
DESCRIBED  HEREIN  OR  THE  ACCURACY  OR  ADEQUACY  OF  THIS  MEMORANDUM.  ANY
REPRESENTATION  TO  THE  CONTRARY  IS  UNLAWFUL.

     THE  SECURITIES  DESCRIBED  HEREIN  ARE  SUBJECT  TO  RESTRICTIONS  ON
TRANSFERABILITY  AND  RESALE  AND  MAY  NOT  BE  TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES  LAWS,  PURSUANT  TO  REGISTRATION OR EXEMPTION THEREFROM.  INVESTORS
SHOULD  BE  AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT  FOR  AN  INDEFINITE  PERIOD  OF  TIME.

                              FOR ARIZONA RESIDENTS
                              ---------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY HOLDERS OF THE ISSUER IN ARIZONA IN RELIANCE ON THE EXEMPTION CONTAINED
IN SECTION 44-1844 OF THE SECURITIES ACT OF ARIZONA AND SECTION R14-4-101 OF THE
RULES  AND  REGULATIONS  ADOPTED  BY  THE  ARIZONA  CORPORATION  COMMISSION.

                             FOR LOUISIANA RESIDENTS
                             -----------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY  HOLDERS  OF  THE  ISSUER  IN  LOUISIANA  IN  RELIANCE ON THE EXEMPTION
CONTAINED  IN  SECTION  51:709(8)  OF  THE  LOUISIANA  CORPORATION  LAWS.

                          FOR NORTH CAROLINA RESIDENTS
                          ----------------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY  HOLDERS  OF  THE ISSUER IN NORTH CAROLINA IN RELIANCE ON THE EXEMPTION
CONTAINED  IN  SECTION  78A-17(11)  OF  THE  NORTH  CAROLINA  GENERAL  STATUTES.

                           FOR PENNSYLVANIA RESIDENTS
                           --------------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY  HOLDERS  OF  THE  ISSUER  IN PENNSYLVANIA IN RELIANCE ON THE EXEMPTION
CONTAINED  IN  SECTION  203(70  P.S.  1-203)L  OF  THE  PENNSYLVANIA  BUSINESS
CORPORATION  LAW.

                          FOR SOUTH CAROLINA RESIDENTS
                          ----------------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY  HOLDERS  OF  THE ISSUER IN SOUTH CAROLINA IN RELIANCE ON THE EXEMPTION
CONTAINED  IN  SECTION  35-1-320(11)  OF THE SOUTH CAROLINA BUSINESS CORPORATION
ACT.

                                      iii
<PAGE>
                               FOR TEXAS RESIDENTS
                               -------------------

     THE  OFFERING  AND  SALE OF SECURITIES DESCRIBED HEREIN IS MADE TO EXISTING
SECURITY  HOLDERS  OF THE ISSUER IN TEXAS IN RELIANCE ON THE EXEMPTION CONTAINED
IN  SECTION 5.E OF THE TEXAS SECURITIES ACT AND SECTION 109.1 OF THE REGULATIONS
OF  THE  STATE  SECURITIES  BOARD.

                                       iv
<PAGE>
<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

<S>                                                                         <C>
SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   1
SUMMARY FINANCIAL AND OPERATING DATA . . . . . . . . . . . . . . . . . . . .   6
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  16
MARKET FOR OUR COMMON EQUITY . . . . . . . . . . . . . . . . . . . . . . . .  16
DIVIDEND POLICY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA. . . . . . . .  17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  18
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  31
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT . . . . . . .  33
DESCRIPTION OF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . .  33
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  34
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  35
CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR
THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999. . . . . . . . . . . . . . . . .  F-1
UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE THREE MONTHS
AND NINE MONTHS ENDED JUNE 30, 2001 AND 2000 . . . . . . . . . . . . . . . . F-18
</TABLE>

                                        v
<PAGE>
                                     SUMMARY

     The  following  summary is qualified in its entirety by, and should be read
in  conjunction  with,  the more detailed information and consolidated financial
statements,  including  the  notes thereto, appearing elsewhere in this Exchange
Offer.  As  used  in this Exchange Offer, unless the context otherwise requires,
references  to  the  "Company"  or  "ETPI"  mean,  collectively,  Entertainment
Technologies  & Programs, Inc. and its consolidated subsidiaries.  References to
any historical fiscal year refer to the 12 months ending on September 30 of such
year.  This  Exchange  Offer  contains  forward-looking  statements that involve
risks and uncertainties, including, without limitation, statements regarding the
Company's  planned  promotional  activity,  expected  operating  results and the
availability  of  funds.  The  Company's  actual results could differ materially
from  the results anticipated in those forward-looking statements as a result of
numerous  factors,  including those set forth under "Risk Factors" and elsewhere
in  this  Exchange  Offer.

                               THE EXCHANGE OFFER

     Between  February  2000  and  March  2001,  we  entered  into  a  number of
Securitized  Equipment  Lease  agreements  with  various  parties  aggregating
$816,000.  These  Securitized  Equipment  Leases  are  for  laser  tag  systems,
audio-visual  systems  and  other  equipment  used in the ordinary course of our
business.  The Exchange Offer relates to the exchange of $844,288 of Securitized
Equipment  Lease  obligations, consisting of $816,000 aggregate principal amount
of  Securitized Equipment Leases and $28,288 of accrued interest through October
15, 2001, for up to 10,553,603 shares of our restricted common stock based on an
Exchange  Price  equal to 75% of the average of the closing prices of our common
stock for the 60-day period beginning September 17, 2001 and ending November 15,
2001;  provided  however, in no event will the Exchange Price by less than $0.08
per  share  or  greater  than $0.12 per share.  As soon as practicable after the
closing  of this Exchange Offer, we will file a registration statement under the
Securities  Act relating to the shares of restricted common stock to be received
in  the  Exchange  Offer  and  the resale thereof and will endeavor to keep such
Registration  Statement  effective  for  as long as necessary for the Holders to
sell their shares of common stock received pursuant to this Exchange Offer.  The
Company will provide to each Holder copies of the prospectus, notify each Holder
when a Registration Statement for the common stock has become effective and take
certain  other actions as are required to permit the resale of the common stock.
A  Holder  that  sells  its  common  stock  pursuant to a Registration Statement
generally  will  be  required  to  be  named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers and will be subject
to  certain  of  the  civil  liability  provisions  under  the Securities Act in
connection  with  such  sales.

                                   THE COMPANY

     Entertainment  Technologies  &  Programs, Inc., is a 23-year-old vertically
integrated  entertainment  and  amusement  game  company.  We  are strategically
positioned  as  the  provider of a comprehensive array of entertainment products
and  services  to  both the military and the civilian markets.  We are primarily
engaged  in  the  design  and  construction  of nightclub facilities in military
venues  and the provision of entertainment services within these facilities, the
retail  sale  of  professional sound and lighting equipment through catalogs and
the  internet,  the  installation and operation of amusement game equipment, and
the  promotion  and  production  of  live  performances.

     We  operate approximately 110 entertainment systems within nightclub venues
on  40 U.S. military bases located in the United Sates, Europe and Asia.  We are
the  only supplier of entertainment services on U.S. military bases worldwide to
have  been  awarded AFNAF (Armed Forces Non Appropriated Fund) contracts and the
first  service  company  ever  to be awarded such AFNAF status.  AFNAF contracts
allow  us  to  obtain business from the various branches of the military without
entering into competitive bids, a process typically required of most independent
government  contractors  and  service  providers.  Through  our  renewable AFNAF
contracts  and  many  years  of reliable and quality services, we have developed
very  strong relationships with base commanders and venue coordinators, and have
become  the  leading  independent entertainment provider to U.S. military bases.
In  addition to military markets, we have the opportunity to exploit our success
through  expansion  into  commercial  markets,  both  domestically  and
internationally,  utilizing  our  valuable  experience  and developed expertise.

     We provide our services through three wholly-owned subsidiaries as follows:

     1.   NiteLife  Military Entertainment, Inc. The development, management and
          operation of entertainment systems within nightclubs, located on U. S.
          military  bases  throughout  the  world,  and the designing, planning,
          promotion, and production of live performances and other entertainment
          bookings  in  both  the  military  and  the  civilian  markets.

                                        1
<PAGE>
     2.   Performance  Sound  &  Light, Inc. The design, installation and retail
          sale  of  professional sound and lighting equipment through mail order
          catalogs,  the internet and direct sales targeting the military market
          through  AFNAF  purchase  agreements  and  civilian  consumer markets.

     3.   Hero's  Family Fun Entertainment, Inc. The ownership, installation and
          operation  of  amusement  equipment  in  company-owned  and  operated
          facilities  and  the  design  and  construction  of such entertainment
          facilities.

     Our  principal  executive  offices  are located at 17300 Saturn Lane; Suite
111,  Houston,  Texas  77058,  and  our telephone number is (281) 486-6115.  Our
facsimile  number  is  (281)  486-6155.

                               RECENT DEVELOPMENTS

     Effective  August  16,  2001,  Gobind  Sahney resigned as a director of the
Company.  On  September  21,  2001,  and  as a result of the financing described
below,  the  Company's  Board  of  Directors elected Mr. George C. Woods and Mr.
Gabriel  Albert  Martin as directors of the Company.  Mr. Woods is currently the
President  and  Chief  Financial  Officer  of  the Company and has been with the
Company  since June 2000. Mr. Woods has considerable experience in consolidation
transactions, capital formation, IPO's and mergers and acquisitions.  Mr. Martin
currently,  serves  as President and Director of Gabriel's Inc., which owned and
operated the world-renowned Swiss Chalet Restaurant, among many other restaurant
establishments, and currently owns several rental properties, develops raw land,
and  has  several  interests in oil and gas properties, among other investments.
In addition, Mr. Martin has served as a member of the board of director of Magna
Flux,  Inc.,  as well as a member of the board of director of InterFirst Bank in
Houston,  Texas.

     On  September  5,  2001,  the  Company  borrowed  $200,00  through  a  12%
Convertible  Promissory  Note  due  September  5,  2003.  The  12%  Convertible
Promissory  Note is convertible at any time at the option of the holder at $0.07
per  share  of  common stock.  It is convertible at the option of the Company at
any  time  after  the  closing  bid  price of our common stock has been $0.30 or
greater for 20 or more consecutive trading days.  The 12% Convertible Promissory
Note  is  redeemable  at  any time at various redemption prices during its term.

                             TERMS OF EXCHANGE OFFER

The  Exchange Offer . . . . . Up  to  10,553,603 shares of our common stock will
                              be issued in exchange for up to $816,000 aggregate
                              principal  amount  of Securitized Equipment Leases
                              and  $28,288  of  accrued interest through October
                              15,  2001  that has been validly tendered pursuant
                              to  the  Exchange  Offer.  As  of the date hereof,
                              $816,000  in  aggregate  principal  amount  of
                              Securitized  Equipment Leases are outstanding. The
                              Company  will issue the restricted common stock to
                              tendering  holders of Securitized Equipment Leases
                              on  or  promptly  after  the  Expiration  Date.

Resale  of the Common Stock . As  soon  as practicable after the closing of this
                              Exchange  Offer,  we  will  file  a  registration
                              statement  under  the  Securities Act of 1933 (the
                              "Securities  Act")  relating  to  the  shares  of
                              restricted  common  stock  to  be  received in the
                              Exchange  Offer  and  the  resale thereof and will
                              endeavor  to  keep  such  Registration  Statement
                              effective for as long as necessary for the Holders
                              to  sell  their  shares  of  common stock received
                              pursuant  to this Exchange Offer. The Company will
                              provide  to  each Holder copies of the prospectus,
                              notify  each  Holder when a Registration Statement
                              for the common stock has become effective and take
                              certain  other  actions  as are required to permit
                              the  resale  of  the  common  stock.

Expiration  Date . . . . . .  The  Exchange  Offer will expire at 5:00 p.m. CDT,
                              on  October 22, 2001, unless the Exchange Offer is
                              extended, in which case

                                        2
<PAGE>
                              the  term  "Expiration Date" means the latest date
                              and  time to which the Exchange Offer is extended.
                              The  Company  will accept for exchange any and all
                              Securitized  Equipment  Leases  that  are properly
                              tendered  in the Exchange Offer prior to 5:00 p.m.
                              CDT,  on  the  Expiration  Date.  If  any tendered
                              Securitized  Equipment Leases are not accepted for
                              exchange  because  of  an  invalid  tender  or the
                              occurrence  of  certain  other  events  set  forth
                              herein,  such  unaccepted  Securitized  Equipment
                              Leases  will  be returned, without expense, to the
                              tendering  Holder  thereof  as  promptly  as
                              practicable  after  the  Expiration  Date.

Accrued Interest
on the Securitized
Equipment Leases. . . . . . . All accrued and unpaid interest on the Securitized
                              Equipment Leases that are properly tendered in the
                              Exchange  Offer  will  be paid through October 15,
                              2001. Interest on each Securitized Equipment Lease
                              accepted  for  exchange will cease to accrue after
                              October  15,  2001.  Securitized  equipment leases
                              that  are  properly tendered in the Exchange Offer
                              will  be  cancelled  immediately  thereafter.

Termination of the
Exchange Offer. . . . . . . . The Company may terminate the Exchange Offer if it
                              determines  that  its  ability to proceed with the
                              Exchange Offer could be materially impaired due to
                              any  injunction,  order  or decree by any court or
                              governmental agency, any new law, statute, rule or
                              regulation  or  any interpretation of the staff of
                              the  Commission of any existing law, statute, rule
                              or  regulation,  or  the  failure  to  obtain  any
                              necessary  approvals  of  governmental agencies or
                              Holders  of  the Securitized Equipment Leases. The
                              Company  does  not  expect  any  of  the foregoing
                              conditions  to  occur,  although  there  can be no
                              assurance  that  such  conditions  will not occur.

Procedures for
tendering Securitized
Equipment Leases. . . . . . . Each  Holder  of  Securitized  Equipment  Leases
                              wishing  to  accept  the  Exchange  Offer  must
                              complete, sign and date the Letter of Transmittal,
                              or  a  copy  thereof,  in  accordance  with  the
                              instructions  contained  herein  and  therein, and
                              mail  by certified mail, Federal Express or United
                              Parcel Service such Letter of Transmittal, or such
                              copy, and any other required documentation, to the
                              Company  at  the  address  set  forth  herein  and
                              therein.  Pursuant  to  the  Exchange  Offer,  the
                              Company  is  required  to  file  a  registration
                              statement  for  an  offering  to  be  made  on  a
                              continuous  basis  pursuant  to Rule 415 under the
                              Securities  Act  in respect of the Common Stock of
                              any  Holder  that  receives  Common  Stock  in the
                              Exchange  Offer.

Withdrawal Rights . . . . . . Tenders  of  Securitized Equipment Leases pursuant
                              to the Exchange Offer may be withdrawn at any time
                              prior  to  the  Expiration  Date.

Acceptance of Securitized
Equipment Leases
And Delivery of
Common  Stock . . . . . . . . Subject to certain conditions (as summarized above
                              in  "Termination  of  the  Exchange  Offer"),  the
                              Company  will,  unless  such Securitized Equipment
                              Leases  are  withdrawn  in  accordance  with  the
                              withdrawal rights specified in "Withdrawal Rights"
                              above, accept for exchange any and all Securitized

                                        3
<PAGE>
                              Equipment  Leases  which  are properly tendered in
                              the  Exchange  Offer  prior  to 5:00 p.m., Houston
                              time,  on  the  Expiration  Date.

Fees. . . . . . . . . . . . . We  may  pay  to  certain  parties fees payable in
                              shares  of  restricted common stock of the Company
                              for  their  assistance in distributing information
                              describing  the  Exchange  Offer.

Consequences of
Failure to Exchange . . . . . Securitized Equipment Leases that are not tendered
                              or  that are not properly tendered will, following
                              the  completion of the Exchange Offer, continue to
                              retain all of the rights that existed prior to the
                              Exchange Offer. HOWEVER, THE COMPANY DOES NOT HAVE
                              THE  ABILITY  TO  CONTINUE TO PAY INTEREST ON SUCH
                              SECURITIZED  EQUIPMENT  LEASES.  IN  ADDITION, THE
                              COMPANY IS UNABLE TO RAISE SUFFICIENT CASH THROUGH
                              OPERATIONS,  BORROWINGS OR ISSUANCES OF ITS COMMON
                              STOCK  TO  REPURCHASE  THE  SECURITIZED  EQUIPMENT
                              LEASES  OR  MEET ANY OTHER OBLIGATIONS THEREUNDER.

Company Information . . . . . The  address  of  the  Company  is:  Entertainment
                              Technologies  & Programs, Inc.; 17300 Saturn Lane;
                              Suite  111;  Houston,  Texas  77058;  Attention:
                              Exchange  Offer.  For  information with respect to
                              the  Exchange  Offer, the telephone number for the
                              Company is (281) 486-6115 and the facsimile number
                              for  the  Company  is  (281)  486-6155.

                                        4
<PAGE>
                         DESCRIPTION OF THE COMMON STOCK

Securities  Offered . . . . . Up  to  10,553,603  shares  of  restricted  common
                              stock,  which,  upon  the  consummation  of  this
                              Exchange  Offer,  the  Company  will  immediately
                              endeavor  to  register  such  restricted stock for
                              resale.

Use  of  Proceeds . . . . . . We will not receive any proceeds from the issuance
                              of  the  common  stock  pursuant  to this Exchange
                              Offer.  In  consideration  for  issuing the common
                              stock  as  contemplated herein, we will receive in
                              exchange  the  Securitized  Equipment  Leases. The
                              Securitized  Equipment  Leases  surrendered  in
                              exchange  for  the  common stock will be canceled.
                              Accordingly,  issuance  of  the  common stock will
                              decrease  the capital lease and associated accrued
                              interest  obligations  of  the  Company.

Over-The-Counter
Electronic Bulletin
Board  Symbol . . . . . . . . ETPI

Risk  Factors . . . . . . . . Prospective  investors  should  carefully consider
                              all  the  information  set  forth in this Exchange
                              Offer  and,  in  particular,  should  evaluate the
                              specific  factors  set  forth under "Risk Factors"
                              before  purchasing  any  of  the  Shares.

                                        5
<PAGE>
                      SUMMARY FINANCIAL AND OPERATING DATA

     The information presented below, except nightclub data, for, and at the end
of,  each  of the years in the two-year period ended September 30, 1999 and 2000
is  derived  from the consolidated financial statements, which have been audited
by  Ham,  Langston  &  Brezina,  L.L.P.,  independent auditors.  The information
presented below, except nightclub data, for, and at the end of, each of the nine
month  periods  ended  June  30,  2000 and 2001 is derived from the consolidated
financial  statements,  which  have  been  reviewed  by Ham, Langston & Brezina,
L.L.P.,  independent  auditors.

     The  information  presented  below  should  be  read  in  conjunction  with
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations," the Consolidated Financial Statements at June 30, 2000 and June 30,
2001 and for each of the years in the three year period ended September 30, 1999
and  2000  and  the  related  notes  and Independent Auditors' Report, which are
included  elsewhere  in  this  Exchange  Offer.

<TABLE>
<CAPTION>
                                         FOR THE TWELVE MONTHS ENDED    FOR THE NINE MONTHS ENDED
                                              SEPTEMBER 30,                      JUNE 30,
                                      -------------------------------  ---------------------------
                                           1999            2000             2000          2001
                                      --------------  ---------------  --------------  -----------
<S>                                   <C>             <C>              <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . . .  $   5,153,961   $    4,817,594   $   3,747,750   $2,535,312
Gross margin . . . . . . . . . . . .      2,268,376        2,363,308       1,716,615    1,272,490
General & administrative expenses. .      3,018,379        3,067,203       1,354,892    1,212,144
Net income (loss). . . . . . . . . .     (3,830,948)      (2,226,489)       (772,656)    (428,000)
Net income (loss) per share. . . . .          (0.12)           (0.06)          (0.02)       (0.01)

OTHER DATA:
EBITDA(1). . . . . . . . . . . . . .  $    (750,003)        (703,895)  $     361,723       60,346
Capital expenditures . . . . . . . .        861,142          324,077         254,952      357,374

STORE DATA:
Military bases serviced. . . . . . .             42               42              41           41
NiteLife venues on bases . . . . . .            106              107             106          106

                                            FOR THE NINE MONTHS
                                            ENDED JUNE 30, 2001
                                      -------------------------------
                                          ACTUAL       AS ADJUSTED(2)
                                      --------------  ---------------
BALANCE SHEET DATA (AT PERIOD END):
Working capital. . . . . . . . . . .  $  (2,555,780)  $   (2,184,755)
Total assets . . . . . . . . . . . .      2,800,311        2,800,311
Current liabilities (3). . . . . . .      3,315,723        2,944,698
Long-term liabilities. . . . . . . .        444,975               --
Shareholders' equity (deficit) . . .       (960,387)        (144,387)
<FN>

----------------
(1)  Earnings  before interest income, interest expense, (gain) loss on property
     transactions,  discontinued  operations, extraordinary items, depreciation,
     amortization  and  income  taxes.

(2)  Assumes  that  the  Holders exchange $816,000 aggregate principal amount of
     Securitized  Equipment  Leases  and  $28,288  of  accrued  interest through
     October  15,  2001  for  10,553,603  shares of Common Stock of the Company.

(3)  Of the $816,000 aggregate principal amount of Securitized Equipment Leases,
     $371,025  is  current  liabilities  and  $444,975 is long term liabilities.
</TABLE>

                                        6
<PAGE>
                                  RISK FACTORS

YOU  SHOULD  CAREFULLY  CONSIDER  THE FOLLOWING FACTORS AND OTHER INFORMATION IN
THIS  DOCUMENT  BEFORE YOU DECIDE WHETHER TO EXCHANGE YOUR SECURITIZED EQUIPMENT
LEASE  FOR OUR COMMON STOCK.  THE RISKS SET FORTH BELOW ARE IN ADDITION TO RISKS
THAT  APPLY  TO  MOST  BUSINESSES,  INCLUDING RISKS OF COMPETITION, INABILITY TO
COLLECT  RECEIVABLES  AND  RELIANCE  ON  OUR  KEY  EMPLOYEES.

WE  HAVE  A  RECENT  HISTORY  OF  INCURRING  NET  LOSSES.

     The Company has recently experienced substantial net losses.  For the years
ending  September  30,  1999  and  2000,  the  Company  incurred  net  losses of
$3,830,948  and $2,226,489, respectively.  For the nine month period ending June
30,  2000  and  2001,  the Company incurred net losses of $772,656 and $428,000,
respectively.  Although  the  Company  has  implemented  a  restructuring  and
turnaround  strategy  and  expects  to  eliminate net losses in the near future,
there  can  be no assurance that management will be successful in this endeavor.
Furthermore,  there  can be no guarantee as to the Company's ability to continue
to  pay  interest  on  its  Securitized  Equipment  Leases or the ability of the
Company  to  meet  any other obligations under the Securitized Equipment Leases.
In  addition,  there  can  be  no guarantee as to the Company's ability to raise
sufficient  cash through operations, borrowings or issuances of its common stock
to  repurchase  the  Securitized  Equipment Leases or meet any other obligations
thereunder.

THE  LOSS  OF  AFNAF  CONTRACTS  COULD  HAVE  A  NEGATIVE  IMPACT ON OPERATIONS.

     The  Company's  dealings  with  the  U.  S.  government,  specifically  the
Department  of  Defense  ("DOD")  and  the various branches of the military, are
contracted  through  the  Air  Force  Non  Appropriated  Fund  Purchasing Office
("AFNAFPO").  This  type  of  contract  allows  the Company to contract with the
service  branches  of the military without going through the competitive bidding
process  each  time.  The  Company  has been awarded two AFNAF contracts.  These
contracts  are  typically renewed annually.  There can be no assurances that the
DOD  will  renew  these  contracts.  Should  such  contracts not be renewed, the
Company  will  be required to bid competitively for each contract it enters into
with  each  military  base  individually.  However,  the  Company received AFNAF
numbers  in  each of 1993 and 1995, and has renewed each number annually without
issue.  The  Company currently has no known issues with AFNAFPO and has recently
renewed  both  AFNAF  numbers.

WE  COMPETE  AGAINST  A  WIDE  VARIETY  OF  ENTERTAINMENT  CHOICES.

     We  compete  against  a wide variety of concepts vying for leisure time and
entertainment  spending.  These competing concepts encompass a broad spectrum of
entertainment  opportunities,  including  family  entertainment  centers, theme,
water  and  amusement  parks,  sports  attractions;  movie theaters, nightclubs,
concert events, and other in-home and out-of-home entertainment activities.  Our
business is subject to factors that affect the recreation and leisure industries
generally,  such  as  general and local economic conditions, demographic trends,
consumer  tastes, and changes in consumer spending habits, over which we have no
control.

     Due  to our unique status resulting from our AFNAF contracts, we believe we
possess  a  competitive  advantage  when  providing  entertainment  services and
products  to  the  military  markets  since  we  do  not  have  to  bid on those
opportunities.  However,  the  downsizing  of  the  military, which began in the
1990's,  will continue to reduce the total number of military installations that
remain open and possibly limit the future growth of NiteLife.  Substantially all
of  the  business  conducted  through  our  NiteLife and PS&L subsidiaries comes
through  the  use  of  our  AFNAF  contracts.

     Hero's  competes  in  the  pay-for-play  children's  entertainment  center
industry  by  targeting  its  activities and programming to children ages two to
sixteen.  The  principal  competitive  factors  of a family entertainment center
include location, price, the uniqueness and perceived quality of the attractions
and  amusement  games,  the  atmosphere  and cleanliness of the facility and the
quality of its food and entertainment.  This industry is affected by general and
local economic conditions, demographic trends and consumer tastes over which the
Company  has  no  control.  Consumer tastes, in particular, are subject to rapid
changes which could result in the Company's activities falling out of favor with
its  target  customers,  requiring  it  to  invest  in  new equipment for family
entertainment  centers.  The  Company's  future  revenues  will  depend  to  a
significant  extent  upon  its ability to respond to changes in consumer tastes.
The  performance of individual family entertainment centers may be affected by a
variety of factors such as the location of competing facilities, increased labor
and  employee  benefit  costs and the availability of experienced management and
hourly  employees.

                                        7
<PAGE>
     Competitive  market  conditions, including the emergence of significant new
competitors,  could materially adversely affect the Company's ability to improve
its  results  of  operations.  Such  new  competitors,  and  certain  existing
competitors  have  or may have longer operating histories, substantially greater
name  recognition  and more extensive financial, technical, marketing, sales and
distribution resources.  There can be no assurance that the Company will be able
to  compete  successfully  against  existing  and  future  competitors  or  that
competitive  pressures faced by the Company will not materially adversely affect
its  business,  operating  results  and  financial  condition.

OUR  BUSINESS  IS HIGHLY SENSITIVE TO PUBLIC TASTES AND DEPENDENT ON OUR ABILITY
TO  SECURE  POPULAR  ARTISTS,  LIVE  ENTERTAINMENT  EVENTS  AND  VENUES.

     As  a  participant  in  the  live  entertainment  industry,  our ability to
generate  revenues  is  highly  sensitive  to rapidly changing public tastes and
dependent  on  the availability of popular performers and events.  Since we rely
on  unrelated parties to create and perform live entertainment content, any lack
of  availability of popular musical artists and other performers could limit our
ability  to  generate  revenues.  In  addition,  we  require access to venues to
generate  revenues  from  live  entertainment  events.

LOCAL  CONDITIONS,  DISTURBANCES,  EVENTS  AND  NATURAL  DISASTERS CAN ADVERSELY
IMPACT  TRAFFIC  COUNTS  AT  FAMILY  ENTERTAINMENT  CENTERS.

     Lower  traffic  counts  may  also  be  caused  by other local conditions or
events.  In  addition,  since  our  family  entertainment centers are near major
urban  areas and appeal to teenagers and young adults, there may be disturbances
at  one  or more family entertainment centers which negatively affect our image.
This may result in lower attendance at the affected family entertainment center.
We work with local police authorities on security-related precautions to prevent
these  types  of  occurrences.  We  can  make  no assurance, however, that these
precautions  will  be  able  to  prevent  any  disturbances.

WE  ARE  SENSITIVE  TO  NEGATIVE  PUBLICITY.

     The  Company's  target  market  of  two  to  sixteen  year old children and
families  with  small  children  is  potentially  highly  sensitive  to  adverse
publicity.  There  can  be  no  assurance  that  the Company will not experience
negative  publicity  regarding  one or more of its family entertainment centers.
The  occurrence  of  negative  publicity  regarding one or more of the Company's
locations  could  materially  and  adversely affect the Company's image with its
customers  and  its  results  of  operations.

AN  INCREASE  IN  LABOR  COSTS  COULD  REDUCE  OUR  INCOME  FROM  OPERATIONS.

     We  are  dependent  upon  the  available  labor  pool  of  unskilled  and
semi-skilled  employees.  We  are  also subject to the Fair Labor Standards Act,
which  governs  such  matters  as  minimum  wage,  overtime  and  other  working
conditions.  Numerous  proposals  have  been made on state and federal levels to
increase  minimum  wages.  A  shortage  in  the  labor  pool  or  other  general
inflationary  pressures  or  changes  in  applicable  laws and regulations could
increase  labor  costs, which could have a material adverse effect on our income
from  operations.

OUR  RESULTS  OF  OPERATIONS  MAY  EXPERIENCE FLUCTUATION DUE TO SEASONALITY AND
OTHER  FACTORS.

     The  Company has experienced, and in the future could experience, quarterly
variations  in  revenues  as a result of a variety of factors, many of which are
outside  the  Company's  control,  including the timing and number of new family
entertainment center openings, the timing and number of new or renewed contracts
with  the  military,  the  timing  of capital investments in existing locations,
unfavorable  weather  conditions  and  natural disasters.  The Company typically
experiences  lower  net sales in the first and second quarters than in the third
and  fourth  quarters.  If revenues are below expectations in any given quarter,
the  Company's  operating  results would likely be materially adversely affected
for  that  quarter.

WE  ARE  DEPENDENT  ON  THE  SERVICE  OF  KEY  PERSONNEL.

     Our  success  depends  upon  the  continuing contributions of our executive
officers  and  other  key  operating  personnel, including James D. Butcher, our
Chairman  and  Chief  Executive  Officer, and George C. Woods, our President and
Chief  Financial Officer.  The complete or partial loss of their services or the
services  of  other key personnel could adversely affect our business.  Although
we  have  entered  into employment agreements with Mr. Butcher and Mr. Woods, we
cannot  be  certain that we will be able to retain their services during this or
any  subsequent

                                        8
<PAGE>
period. Mr. Butcher and Mr. Woods are in good health; however, their retirement,
disability  or  death  could  have a significant adverse impact on the Company's
business.

     The  Company's  success  will  also  depend  upon its ability to retain and
attract  additional  skilled  management personnel to its senior management team
and  at  its operational level.  Management anticipates the hiring of additional
personnel  to assist it in implementing its plan of operations.  There can be no
assurance  that  the  Company will be able to attract and train key employees to
implement  its  business  plan.

WE MAY BE UNSUCCESSFUL IN IMPLEMENTING OUR GROWTH STRATEGIES.

     The  Company's  continued  growth  depends, to a significant degree, on its
ability to successfully implement its growth strategies.  Among such strategies,
the  Company  plans  to  continue  to  open  new family entertainment centers in
selected  markets.  The  opening  and  success  of  such  new  Hero's  family
entertainment centers will depend on various factors, including the availability
of suitable sites, the negotiation of acceptable lease terms for such locations,
the ability to meet construction schedules, the ability of the Company to manage
such  expansion  and  hire  and train personnel, as well as general economic and
business conditions.  The ability of the Company to successfully open new family
entertainment centers will also depend upon the availability of sufficient funds
for  such  purpose,  including  funds  from  operations, future debt financings,
future  equity  offerings  or  a combination thereof.  There can be no assurance
that  the  Company  will  be  successful  in  opening  and  operating new family
entertainment  centers on a timely or profitable basis.  The Company's growth is
also  dependent  on  management's  ability  to continually evolve and update the
Company's  concept  to  anticipate  and  respond  to changing customer needs and
competitive  conditions.  There can be no assurance that management will be able
to  successfully  anticipate changes in competitive conditions or customer needs
or  that  the  market  will  accept  the  Company's  concepts.

     In  addition,  we  plan  to  expand the number of bases on which we operate
entertainment systems.  Our ability to successfully expand our NiteLife and PS&L
operations  is  highly  dependent  on our ability to raise sufficient capital to
fund  the  acquisition  and  installation of additional entertainment systems on
such  bases.

WE MAY NOT BE ABLE TO MANAGE OR INTEGRATE FUTURE ACQUISITIONS.

     The acquisition and successful integration of additional live entertainment
and  related  businesses  are  key  elements of our operating strategy.  We have
experienced  significant  difficulties  through  acquisitions  made in the past.
Management  believes  problems arising out of such endeavors have been corrected
and  will  continue  to consider acquisition opportunities that may arise in the
future.  These  acquisitions could place a future strain on our operations.  Our
ability to manage future acquisitions will depend on our ability to successfully
evaluate  new  markets  and  investments,  monitor  operations,  control  costs,
maintain  effective  quality  controls,  expand  our  internal  management  and
technical  and  accounting  systems  and  integrate acquired businesses into our
company.  As  you  evaluate our prospects, you should consider the many risks we
will  encounter  during  the process of integrating those businesses that may be
acquired  in  the  future,  including:

     -    the  distraction  of  management's  attention  from  other  business
          concerns;

     -    our  entry  into markets and geographic areas where we have limited or
          no  experience;

     -    the  potential  loss  of  key  employees  or customers of the acquired
          businesses;  and

     -    the  potential inability to integrate controls, standards, systems and
          personnel.

     Although  our  management  has  significant experience, we may be unable to
effectively  integrate  businesses  we  expect  to acquire in the future without
encountering the difficulties described above.  Failure to effectively integrate
such businesses could have a material adverse effect on our business, prospects,
results  of  operations  or  financial  condition.  In  addition,  the  combined
companies  may  not  benefit  as  expected  from  the  integration.

     To fund future acquisitions, we may need to borrow more money or assume the
debts  of acquired companies, or issue more stock, which may dilute the value of
our  existing  common  stock.  To incur any additional debt, we must comply with
the  restrictions  contained  in  any indebtedness we may have at that time.  If
these  restrictions  are  not  met  and  we do not receive necessary consents or
waivers  of  these  restrictions,  we may be unable to make future acquisitions.

                                        9
<PAGE>
     If  we  do  purchase  additional  businesses,  it may negatively affect our
earnings,  at least in the short term.  We may have to amortize expenses related
to  goodwill and other intangible assets.  Further, we cannot guarantee that any
future  acquisition  will  generate  the  earnings  or  cash flow we expect.  In
connection  with any future acquisitions, unexpected liabilities might arise and
the  planned  benefits  may  not be realized.  Any or all of these actions could
materially  adversely  affect  our  financial  position  and/or  stock  price.

WE  HAVE  EXPOSURE  FOR  CLAIMS  OF  PERSONAL  INJURY.

     As a producer of a public entertainment event, the Company has exposure for
claims  of  personal  injury  suffered  by  visitors to our family entertainment
centers, live venues and other attractions.  To date, we have experienced claims
that  we  have  been  able  to  resolve  through  litigation.

OUR  BUSINESS  IS  SUBJECT  TO  EXTENSIVE  GOVERNMENTAL  REGULATION.

     We  are  subject  to  various federal, state and local laws and regulations
affecting  operations,  including  those relating to the use of video and arcade
games  and  rides,  the  preparation  and  sale  of  food, and those relating to
building  and  zoning  requirements.  We  are also subject to laws governing our
relationship  with  employees,  including  minimum  wage requirements, overtime,
working  and  safety  conditions, and citizenship requirements.  Difficulties or
failures  in  obtaining  required  licenses  or other regulatory approvals could
delay  or  prevent  the  opening  of  a  family  entertainment  center,  and the
suspension  of,  or  inability  to  renew,  a  license or permit could interrupt
operations  at  an  existing  facility.

OUR  FINANCIAL AND OPERATING ACTIVITIES ARE LIMITED BY RESTRICTIONS CONTAINED IN
THE  TERMS  OF  OUR  FINANCINGS.

     As  is  customary  in  similar  agreements,  covenants in our SBA loan will
restrict  our  or  our  subsidiaries'  ability  to,  among  other  things:

     -    sell  or  transfer  assets;

     -    pay  dividends;

     -    make  certain  investments  or  acquisitions;  and

     -    repurchase  or  redeem  capital  stock.

     The  covenants  also  require  us  to comply with certain financial ratios.
These  restrictions  may  interfere  with  our ability to obtain financing or to
engage  in  other  necessary  or  desirable  business  activities.

     If  we  cannot  comply with the requirements in our existing SBA loan, then
the  lenders  may  require  us  to repay immediately all of our outstanding debt
under the SBA loan.  If our debt payments were accelerated, our assets might not
be sufficient to repay fully our debt.  These lenders may also require us to use
all  of  our  available  cash  to  repay  our debt or may prevent us from making
payments  to  other  creditors  on  certain  portions  of  our outstanding debt.

     We  may not be able to obtain a waiver of these provisions or refinance our
debt, if needed.  In such a case, our business, prospects, results of operations
and  financial  condition  would  suffer.

WE MAY BE LIMITED ON USE OF NET OPERATING LOSS AND TAX CREDIT CARRY FORWARDS.

     Federal  income  tax  laws may limit the amount of net operating losses and
certain tax credits that might otherwise be used by the Company to offset future
income  and tax liabilities. There can be no assurance as to the availability of
such  losses  and  credits  for  such  offset.

OUR PRINCIPAL SHAREHOLDERS HAVE EFFECTIVE CONTROL.

     As  of August 31, 2001, the Company's executive officers and directors (and
their  respective  affiliates)  (collectively,  the  "Principal  Shareholders")
beneficially  own  11,543,898  shares of common stock or 21.25% of the shares of
Common  Stock outstanding.  The Principal Shareholders, if voting together, have
effective  voting power to elect a majority of the Company's directors, exercise
control  over the business, policies and affairs of the Company and, in general,
determine the outcome of any corporate transaction or other matters submitted to
the  shareholders  for approval (other than with respect to a decision to file a
petition  on  behalf of the Company under Chapter 11 under the Bankruptcy Code),
such  as  any  proposed  amendment  to  the  certificate of incorporation of the
Company,  the  authorization  of  additional  shares  of  capital stock, and any
merger,  consolidation,  sale  of  all or substantially all of the

                                       10
<PAGE>
assets  of  the  Company,  and could prevent or cause a change of control of the
Company,  all  of  which  may  adversely  affect  the  Company.

WE HAVE NOT AND DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK.

     The  Company has never paid cash dividends on its common stock and does not
intend  to  pay  cash  dividends  on its common stock in the foreseeable future.

YOUR SHARES OF COMMON STOCK WILL HAVE LIMITED TRANSFERABILITY.

     This  offering  of  common  stock is being made in reliance upon exemptions
from  registration under Rule 506 of Regulation D of the Act and exemptions from
registration from state securities laws.  Investors who acquire the common stock
are  acquiring  securities,  which  may  be  sold  only pursuant to an effective
Registration  Statement or pursuant to Rule 144 under the Act and any applicable
state  securities laws exemptions.  The certificates evidencing the common stock
will  bear  a  legend,  which  clearly  sets  forth  this  restriction.

YOU  MAY  SUFFER  ADDITIONAL  DILUTION.

     To the extent that any future financing involves the issuance of our equity
securities  or  instruments  convertible  into  equity  securities,  existing
shareholders will be diluted, perhaps substantially, and future investors may be
granted rights superior to those of existing shareholders.  Our failure to raise
capital  on  acceptable terms when needed will have a material adverse effect on
us.  In  addition,  the  Company  may be obligated to issue additional shares of
common stock to a trust in the future to satisfy any shortfall in proceeds which
may  be experienced from liquidation of the trust's assets.  We have in the past
and  in  the  future  may  enter  into transactions with strategic third parties
pursuant to which we will issue shares of our common stock to such third parties
for  non-cash  consideration.  Any  such  transactions  will  further dilute the
interests  of the existing shareholders.  Also, our granting of additional stock
options  to employees and consultants will further dilute existing shareholders.
Shareholders  will  experience  substantial  dilution in the event that we issue
additional  shares  of  our  common  stock.  In  addition,  the  exercise of the
warrants  and  the  subsequent  public sales of common stock by holders of these
securities  under this Exchange Offer or another registration statement effected
at  their  demand,  under Rule 144 or otherwise, would result in dilution to our
shareholders.

ADDITIONAL SHARES ARE ELIGIBLE FOR FUTURE SALE UNDER RULE 144.

     As  of August 31, 2001, the Company estimates that 25,605,104 shares of the
Company's  common  stock currently outstanding are "restricted securities" which
have  been  outstanding  for  more  than  two  years and can be sold publicly in
compliance  with  Rule  144  adopted  under  the  Securities  Act  of  1933 (the
"Securities  Act").  Holders  of  restricted  securities  must  comply  with the
requirements  of Rule 144 in order to make a public sale of their shares without
violating  the  Securities  Act.  In  general,  under  Rule  144 as currently in
effect,  a  person who has beneficially owned restricted securities for at least
one  year,  and  persons  who  may  be deemed affiliates of the Company who have
beneficially  owned  restricted  securities  for  at  least  two years, would be
entitled  to sell within any three-month period a number of shares that does not
exceed  the  greater of 1% of the then outstanding shares of Common Stock or the
average weekly trading volume in the common stock during the four calendar weeks
preceding  such  sale,  provided  that  the  Company  has filed certain periodic
reports  with  the  Securities and Exchange Commission and the sale is made in a
"broker's  transaction"  or  in  a transaction directly with a "market maker" as
those  terms  are  used in Rule 144.  A person who is not deemed to have been an
affiliate of the Company at any time during the 90 days preceding a sale by such
person, and who has beneficially owned restricted shares for at least two years,
would  be  entitled  to  sell  such  shares under Rule 144 without regard to the
volume  limitations  and  public  information  and  manner  of sale requirements
described  above.  No  predictions  can  be  made as to the effect, if any, that
market  sales  of  such  shares,  or  the availability of such shares for future
market  sales, will have on the market price of our common stock prevailing from
time  to  time.  Sales  of  substantial  amounts  of our common stock (including
shares issued upon the exercise of stock options or warrants), or the perception
that  such  sales  could occur, could materially adversely affect the prevailing
market  price  for our common stock and could impair our future ability to raise
capital  through  an  offering  of  equity  securities.  The  possibility  that
substantial  amounts of common stock may be sold in the public market under Rule
144  may  adversely  effect  the  prevailing  market price for the common stock.

                                       11
<PAGE>
                                 EXCHANGE OFFER

PURPOSE AND EFFECT OF THE EXCHANGE OFFER

     Between  February  2000  and  March  2001,  we  entered  into  a  number of
Securitized  Equipment  Lease  agreements  with  various  parties  for laser tag
systems, audio-visual systems and other equipment used in the ordinary course of
our  business.  As  part  of  our  continuing  restructuring  efforts,  we  are
initiating  and  making  an  Exchange  Offer to Holders of Securitized Equipment
Leases  to  exchange  $844,288  of  Securitized  Equipment  Lease  obligations,
consisting  of  $816,000  aggregate  principal  amount  of Securitized Equipment
Leases  and  $28,288  of  accrued  interest  through October 15, 2001, for up to
10,553,603 shares of our Common Stock based on an Exchange Price equal to 75% of
the  average  of  the  closing  prices of our Common Stock for the 60-day period
beginning  September 17, 2001 and ending November 15, 2001; provided however, in
no  event  will  the Exchange Price by less than $0.08 per share or greater than
$0.12  per  share.  As  soon  as  practicable after the closing of this Exchange
Offer,  we  will  file a Registration Statement under the Securities Act of 1933
(the  "Securities Act") relating to the shares of common stock to be received in
the  Exchange  Offer  and  the  resale  thereof  and  will endeavor to keep such
Registration  Statement  effective  for  as long as necessary for the Holders to
sell their shares of common stock received pursuant to this Exchange Offer.  The
Company will provide to each Holder copies of the prospectus, notify each Holder
when a Registration Statement for the common stock has become effective and take
certain  other actions as are required to permit the resale of the common stock.
A  Holder  that  sells  its  common  stock  pursuant to a Registration Statement
generally  will  be  required  to  be  named as a selling security holder in the
related prospectus and to deliver a prospectus to purchasers and will be subject
to  certain  of  the  civil  liability  provisions  under  the Securities Act in
connection  with  such  sales.

     Following  the completion of the Exchange Offer, Holders of the Securitized
Equipment  Leases  not  tendered  will continue to retain all of the rights that
existed  prior  to  the  Exchange Offer.  HOWEVER, THE COMPANY DOES NOT HAVE THE
ABILITY  TO  CONTINUE  TO PAY INTEREST ON SUCH SECURITIZED EQUIPMENT LEASES.  IN
ADDITION,  THE  COMPANY  IS  UNABLE TO RAISE SUFFICIENT CASH THROUGH OPERATIONS,
BORROWINGS  OR  ISSUANCES  OF  ITS  COMMON  STOCK  TO REPURCHASE THE SECURITIZED
EQUIPMENT  LEASES  OR  MEET  ANY  OTHER  OBLIGATIONS  THEREUNDER.

     This  Exchange Offer, together with the accompanying Letter of Transmittal,
is  being  sent  to all registered Holders of Securitized Equipment Leases as of
September  26,  2001  (the  "Record  Date").  The Company intends to conduct the
Exchange  Offer  in  accordance with the applicable requirements of the Exchange
Act  and  the  rules  and  regulations of the Commission promulgated thereunder.

     The  Company  shall be deemed to have accepted validly tendered Securitized
Equipment  Leases  when,  as and if the Company has given oral or written notice
thereof  to  the  Holder.  If  any tendered Securitized Equipment Leases are not
accepted  for exchange because of an invalid tender or the occurrence of certain
other events set forth herein, such unaccepted Securitized Equipment Leases will
be  returned,  without  expense,  to the tendering Holder thereof as promptly as
practicable  after  the  Expiration  Date.

EXPIRATION  DATE;  EXTENSIONS;  AMENDMENTS

     The  term  "Expiration Date" shall mean 5:00 p.m., Central Daylight Savings
Time,  on  October 22, 2001, unless the Company, in its sole discretion, extends
the  Exchange  Offer,  in  which  case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is extended.  In the event that
the  Exchange  Offer  is  extended, it will remain in effect for a minimum of an
additional  five  business days and a maximum of an additional 30 business days.

     In order to extend the Expiration Date, the Company will notify the Holders
of  any  extension  by  oral  or  written notice and will mail to the registered
Holders  of  Securitized Equipment Leases an announcement thereof, each prior to
5:00 p.m., CDT or Central Standard Time, as applicable, on the next business day
after  the  previously  scheduled  Expiration Date.  Such announcement may state
that the Company is extending the Exchange Offer for a specified period of time.

     The  Company  reserves  the  right,  in  its  sole discretion, (i) to delay
acceptance  of any Securitized Equipment Leases, to extend the Exchange Offer or
to  terminate  the  Exchange Offer and to refuse to accept Securitized Equipment
Leases  not previously accepted, if any of the conditions set forth herein under
"Termination"  shall have occurred and shall not have been waived by the Company
(if  permitted to be waived by the Company), by giving oral or written notice of
such delay, extension or termination to the Holders, and (ii) to amend the terms
of  the  Exchange Offer in any manner.  Any such delay in acceptance, extension,
termination  or amendment will be followed as promptly as

                                       12
<PAGE>
practicable  by oral or written notice thereof. If the Exchange Offer is amended
in  a  manner  determined  by  the  Company to constitute a material change, the
Company  will promptly disclose such amendment in a manner reasonably calculated
to  inform  the  Holders  of  such  amendment.

     Without  limiting the manner in which the Company may choose to make public
announcements of any delay in acceptance, extension, termination or amendment of
the  Exchange  Offer  and  except as required by the Securities Act, the Company
shall  have  no  obligation  to publish, advertise, or otherwise communicate any
such  public  announcement,  other  than  by making a timely release to the news
service  organization  Business  Wire.

ACCRUED INTEREST ON THE SECURITIZED EQUIPMENT LEASES

     All  accrued  and  unpaid interest on the Securitized Equipment Leases that
are  properly  tendered  in  the Exchange Offer will be paid through October 15,
2001.  Interest  on  each Securitized Equipment Lease accepted for exchange will
cease  to  accrue after October 15, 2001.  Securitized equipment leases that are
properly  tendered  in  the  Exchange  Offer  will  be  cancelled  immediately
thereafter.

PROCEDURES  FOR  TENDERING

     Only  a  Holder  of Securitized Equipment Leases may tender its Securitized
Equipment Leases in the Exchange Offer, except as set forth in the following two
paragraphs.  To  tender  in the Exchange Offer, a Holder must complete, sign and
date  the  Exchange  Form  that  is part of the Letter of Transmittal, or a copy
thereof,  have  the  signatures  thereof guaranteed if required by the Letter of
Transmittal,  and  mail  or otherwise deliver such Letter of Transmittal or such
copy,  together with any other required documents, to the Company, prior to 5:00
p.m.  CDT,  on  the  Expiration  Date.  The  tender  by  a Holder of Securitized
Equipment  Leases  will  constitute  an  agreement  between  such Holder and the
Company  in  accordance  with  the terms and subject to the conditions set forth
herein  and  in  the  Letter  of  Transmittal.

     Delivery  of  all  documents must be made to the Company at its address set
forth  herein.  Holders may also request that their respective brokers, dealers,
commercial  banks,  trust  companies  or  nominees  effect  such tender for such
Holders.  The  method of delivery of Securitized Equipment Leases and the Letter
of  Transmittal  and  all  other  required  documents  to  the Company is at the
election  and risk of the Holders.  It is recommended that Holders use certified
mail  or  an overnight delivery service such as Federal Express or United Parcel
Service.  In  all  cases,  sufficient  time  should  be allowed to assure timely
delivery.

     If  the  Letter  of  Transmittal  is  signed  by  a  person  other than the
registered  Holder  listed  therein,  such  Securitized Equipment Leases must be
endorsed  or  accompanied by appropriate bond powers which authorize such person
to  tender  the Securitized Equipment Leases on behalf of the registered Holder,
in either case signed as the name of the registered Holder or Holders appears on
the  Securitized  Equipment  Leases.

     If  the  Letter  of Transmittal or any Securitized Equipment Leases or bond
powers  are  signed  by  trustees,  executors,  administrators,  guardians,
attorneys-in-fact,  officers  of corporations or others acting in a fiduciary or
representative  capacity,  such  persons  should  so  indicate when signing, and
unless  waived  by  the  Company,  evidence satisfactory to the Company of their
authority  to  so  act  must  be  submitted  with  this  Letter  of Transmittal.

     All  questions  as  to  the  validity, form, eligibility (including time of
receipt), acceptance and withdrawal of the tendered Securitized Equipment Leases
will  be  determined  by the Company in its sole discretion, which determination
will  be  final  and binding.  The Company reserves the absolute right to reject
any  and  all  Securitized  Equipment  Leases  not  properly  tendered  or  any
Securitized  Equipment  Leases  the  Company's acceptance of which would, in the
opinion  of counsel for the Company, be unlawful.  The Company also reserves the
absolute  right  to waive any defects, irregularities or conditions of tender as
to particular Securitized Equipment Leases.  The Company's interpretation of the
terms  and  conditions  of the Exchange Offer (including the instructions in the
Letter of Transmittal) will be final and binding on all parties.  Unless waived,
any  defects  or  irregularities  in  connection  with  tenders  of  Securitized
Equipment  Leases must be cured within such time as the Company shall determine.
Although the Company intends to notify Holders of defects or irregularities with
respect  to tenders of Securitized Equipment Leases, neither the Company nor any
other  person  shall  be  under  any  duty  to  give  notification of defects or
irregularities with respect to tenders of Securitized Equipment Leases nor shall
any  of them incur any liability for failure to give such notification.  Tenders
of  Securitized Equipment Leases will not be deemed to have been made until such
irregularities  have  been  cured  or  waived.  Any Securitized Equipment Leases
received  by  the  Company  that  are  not properly tendered and as to which the
defects or irregularities have not been cured or waived will be returned without
cost  by  the  Company  to the tendering Holder unless otherwise provided in the
Letter  of  Transmittal,  as  soon as practicable following the Expiration Date.

                                       13
<PAGE>
     In  addition,  the  Company  reserves  the  right in its sole discretion to
purchase  or  make  offers  for  any  Securitized  Equipment  Leases that remain
outstanding  subsequent  to  the  Expiration  Date,  or,  as  set  forth  under
"Termination,"  to  terminate  the  Exchange  Offer.

WITHDRAWAL  OF  TENDERS

     Except  as  otherwise  provided  herein,  tenders  of Securitized Equipment
Leases  may  be  withdrawn at any time prior to 5:00 p.m. CDT, on the Expiration
Date.

     To withdraw a tender of Securitized Equipment Leases in the Exchange Offer,
a written or facsimile transmission notice of withdrawal must be received by the
Company  at  its  address  set  forth  herein  prior  to  5:00  p.m. CDT, on the
Expiration  Date  and  prior  to acceptance for exchange thereof by the Company.
Any  such  notice  of  withdrawal must (i) specify the name of the person having
deposited  the  Securitized  Equipment Leases to be withdrawn (the "Depositor"),
(ii)  identify  the  Securitized Equipment Leases to be withdrawn (including the
certificate  number or numbers or principal amount of such Securitized Equipment
Leases),  (iii)  be  signed  by the Depositor in the same manner as the original
signature  on  the  Letter  of  Transmittal  by which such Securitized Equipment
Leases  were  tendered  (including  any  required  signature  guarantee)  or  be
accompanied  by  documents  of  transfer  sufficient  to permit the Trustee with
respect  to  the  Securitized  Equipment Leases to register the transfer of such
Securitized  Equipment  Leases  into  the  name of the Depositor withdrawing the
tender  and (iv) specify the name in which any such Securitized Equipment Leases
are to be registered, if different from that of the Depositor.  All questions as
to  the  validity,  form  and  eligibility  (including  time of receipt) of such
withdrawal  notices will be determined by the Company, whose determination shall
be  final  and  binding  on  all  parties.  Any  Securitized Equipment Leases so
withdrawn  will  be deemed not to have been validly tendered for purposes of the
Exchange  Offer  and  no common stock will be issued with respect thereto unless
the  Securitized Equipment Leases so withdrawn are validly tendered as set forth
under  "Procedures  for  Tendering."  Any Securitized Equipment Leases that have
been tendered for exchange but are not accepted for exchange will be returned to
the  Holder  thereof  without  cost  to such Holder as soon as practicable after
withdrawal,  rejection of tender or termination of the Exchange Offer.  Properly
withdrawn Securitized Equipment Leases may be retendered by following one of the
procedures described above under "Procedures for Tendering" at any time prior to
the  Expiration  Date.

TERMINATION

     Notwithstanding  any other term of the Exchange Offer, the Company will not
be  required  to  accept  for  exchange,  or  exchange  common  stock  for,  any
Securitized  Equipment  Leases  not  theretofore  accepted for exchange, and may
terminate  or  amend the Exchange Offer as provided herein before the acceptance
of  such  Securitized  Equipment  Leases  if (i) any injunction, order or decree
shall have been issued by any court or by or before any governmental agency with
respect  to  the  Exchange  Offer,  which,  in  the  Company's  judgment,  would
materially  impair  the Company's ability to proceed with the Exchange Offer, or
(ii)  any  law,  statute, rule or regulation is proposed, adopted or enacted, or
any existing law, statute, rule or regulation is interpreted by the staff of the
Commission  in  a manner which, in the Company's sole judgment, might materially
impair  the  Company's  ability to proceed with the Exchange Offer, or (iii) any
governmental  approval  or  approval  by  Holders  has  not been obtained, which
approval  the  Company shall, in its reasonable judgment, deem necessary for the
consummation  of  the  Exchange  Offer  as  contemplated  hereby.

     If  the Company determines that it may terminate the Exchange Offer, as set
forth  above,  the  Company  may  (i) refuse to accept any Securitized Equipment
Leases  and  return  any Securitized Equipment Leases that have been tendered to
the  Holders  thereof, (ii) extend the Exchange Offer and retain all Securitized
Equipment  Leases  tendered  prior to the Expiration Date of the Exchange Offer,
subject  to  the rights of such Holders of tendered Securitized Equipment Leases
to  withdraw  their  tendered  Securitized  Equipment Leases or (iii) waive such
termination  event  with  respect  to the Exchange Offer and accept all properly
tendered  Securitized  Equipment  Leases  that have not been withdrawn.  If such
waiver  constitutes  a  material  change in the Exchange Offer, the Company will
disclose  such  change by means of a supplement to this Exchange Offer that will
be  distributed  to  each  registered  Holder,  and  the Company will extend the
Exchange  Offer  for  a  period of five to ten business days, depending upon the
significance  of  the  waiver  and  the  manner  of disclosure to the registered
Holders,  if  the  Exchange  Offer  would  otherwise  expire during such period.

                                       14
<PAGE>
DELIVERY  INSTRUCTIONS

     All  executed Exchange Forms, which are part of the Letters of Transmittal,
should  be  directed  to the Company.  Questions and requests for assistance and
requests  for  additional  copies  of  this  Exchange  Offer or of the Letter of
Transmittal  should  be  directed  to  the  Company  as  follows:

               Entertainment Technologies & Programs, Inc.
               Attention:  Exchange  Offer
               17300  Saturn  Lane;  Suite  111
               Houston,  Texas  77058
               Telephone:  (281)  486-6115

FEES  AND  EXPENSES

     The  expenses  of soliciting tenders pursuant to the Exchange Offer will be
borne  by  the  Company.  The principal solicitation for tenders pursuant to the
Exchange  Offer  is being made by mail.  Additional solicitations may be made by
officers and regular employees of the Company and their affiliates in person, by
facsimile,  telegraph,  telephone  or  telecopier.

     The  Company  has  not  retained  any dealer-manager in connection with the
Exchange  Offer.  However, the Company may pay consulting fees payable in shares
of  restricted  common stock of the Company for their assistance in effecting an
exchange  of  Securitized  Equipment  Leases  into  shares of common stock.  The
Company  may  also  pay  brokerage  houses  and  other  custodians, nominees and
fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding
copies  of  this Exchange Offer, Letters of Transmittal and related documents to
the  beneficial  owners  of  the Securitized Equipment Leases and in handling or
forwarding  tenders  for  exchange.  Holders of the Secured Equipment Leases are
encouraged  to  seek  their  own  legal  and  advice  at  their  own  expense.

CONSEQUENCES  OF  FAILURE  TO  EXCHANGE

     Following  the completion of the Exchange Offer, Holders of the Securitized
Equipment  Leases  not  tendered  will continue to retain all of the rights that
existed  prior  to the Exchange Offer.  However, there can be no guarantee as to
the  Company's ability to continue to pay interest on such Securitized Equipment
Leases  or  the  ability  of the Company to meet any other obligations under the
Securitized  Equipment Leases.  In addition, there can be no guarantee as to the
Company's  ability  to  raise  sufficient cash through operations, borrowings or
issuances  of its common stock to repurchase the Securitized Equipment Leases or
meet  any  other  obligations  thereunder.

ACCOUNTING  TREATMENT

     The  common  stock issued would be credited and recorded as paid-in-capital
at  the same carrying value as the Securitized Equipment Leases, as reflected in
the  Company's  accounting records on the date of the exchange.  Accordingly, no
gain  or loss for accounting purposes will be recognized by the Company upon the
consummation  of  the  Exchange  Offer.  The costs of the Exchange Offer and the
unamortized expenses related to the issuance of the Securitized Equipment Leases
will  be  debited  against  paid-in-capital.

CERTAIN  U.S.  FEDERAL  INCOME  TAX  CONSIDERATIONS

     Each  holder  of a Securitized Equipment Lease that is participating in the
exchange  offer  is  strongly  urged  to  consult  with  its own tax advisors to
determine  the  impact  of  such  holder's  particular  tax  situation  on  the
anticipated tax consequences, including the tax consequences under state, local,
foreign  or  other  tax laws, of the exchange of the Securitized Equipment Lease
for  the  common  stock  pursuant  to  the  Exchange  Offer.

                                 USE OF PROCEEDS

     The  Company  will not receive any proceeds from the issuance of the common
stock  pursuant  to the Exchange Offer.  In consideration for issuing the common
stock  as  contemplated  in  this  Exchange  Offer,  the Company will receive in
exchange $816,000 aggregate principal amount of Securitized Equipment Leases and
the extinguishments of $28,288 of accrued interest through October 15, 2001. The
Securitized  Equipment  Leases  surrendered in exchange for common stock will be
terminated  as  of  October  22, 2001. Accordingly, issuance of the common stock
will  decrease  the  indebtedness  of  the  Company  by  a  total  of  $844,288.

                                       15
<PAGE>
                                 CAPITALIZATION

     The  following  table  sets  forth  the  consolidated capitalization of the
Company  at  June  30,  2001.  This  table  should  be  read in conjunction with
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations"  and  the  Consolidated  Financial  Statements  and  related  Notes.

<TABLE>
<CAPTION>
                                                                 June 30, 2001
                                                        --------------------------------
                                                            Actual       As Adjusted (1)
                                                        ---------------  ---------------
<S>                                                     <C>              <C>
Current maturities of notes payable and capital lease
obligations (2). . . . . . . . . . . . . . . . . . . .  $    1,965,987   $    1,594,962
Notes payable and capital lease obligations, net of
current portion (2). . . . . . . . . . . . . . . . . .         444,975               --
Total debt . . . . . . . . . . . . . . . . . . . . . .       2,410,962        1,594,962
Shareholders' deficit:
Common stock, $.001 par value, 200,000,000
shares authorized, 49,544,317 shares issued and
49,144,317 shares outstanding at June 30, 2001 . . . .          49,544           60,098
Additional paid-in capital . . . . . . . . . . . . . .       7,960,474        8,765,920
Accumulated deficit. . . . . . . . . . . . . . . . . .      (8,820,405)      (8,820,405)
Treasury stock, 400,000 shares at cost . . . . . . . .        (150,000)        (150,000)
                                                        ---------------  ---------------
Total shareholders' deficit. . . . . . . . . . . . . .        (960,387)        (144,387)
                                                        ---------------  ---------------
Total liabilities and shareholders' deficit. . . . . .  $    1,450,575   $    1,450,575
                                                        ===============  ===============
<FN>
----------------
(1)  Assumes  that  the  Holders exchange $816,000 aggregate principal amount of
     Securitized  Equipment  Leases  and  $28,288  of  accrued  interest through
     October  15,  2001  for  10,553,603  shares of Common Stock of the Company.

(2)  Of the $816,000 aggregate principal amount of Securitized Equipment Leases,
     $371,025  are  current  liabilities and $444,975 are long term liabilities.
</TABLE>

                          MARKET FOR OUR COMMON EQUITY

     The  shares of the Company are trading on the OTC Electronic Bulletin Board
under  the  stock  ticker  symbol "ETPI" (CUSIP 293810107); however, there is no
"established  trading market" for the shares of common stock of the Company, and
no  assurance  can be given that such a market will develop.  If an "established
trading market" for the Company's common stock does develop in the future, there
can  be  no  assurance that it will continue or be maintained.  Any market price
for  shares  of  common  stock of the Company is likely to be very volatile, and
factors  such  as  competition,  governmental  regulation  and  fluctuations  in
operating  results  may  all  have a significant effect.  In addition, the stock
markets  generally have experienced and continue to experience extreme price and
volume  fluctuations  which have affected the market price of many small capital
companies  and  which  have often been unrelated to the operating performance of
these  companies.  These  broad market fluctuations, as well as general economic
and political conditions, may adversely affect the market price of the Company's
common  stock.

     The  sale  of  "restricted  securities"  held  by members of management and
others  could  also have an adverse effect on any such market.  As of August 31,
2001, 54,333,455 shares of the Company's common stock are outstanding 25,605,104
of  which  are  designated  as  "restricted  securities."  Of  this  amount,
substantially  all  of  these  "restricted  securities"  have  been  held  for a
sufficient  period  of  time  to  be  sold  under Rule 144 of the Securities and
Exchange  Commission.

                                       16
<PAGE>
     The  following  table  sets  forth  the  reported  high and low closing bid
quotations  for  our  common  stock.  The  bid  prices  reflect  inter-dealer
quotations,  do not include retail mark-ups, markdowns or commissions and do not
necessarily  reflect  actual  transactions.

<TABLE>
<CAPTION>
QUARTER ENDED               HIGH BID   LOW BID
--------------------------  ---------  --------
<S>                         <C>        <C>
December 31, 1998           $    0.63  $   0.13
March 31, 1999                   0.82      0.21
June 30, 1999                    0.34      0.13
September 30, 1999               0.49      0.12

December 31, 1999                0.24      0.12
March 31, 2000                   0.43      0.12
June 30, 2000                    0.31      0.11
September 30, 2000               0.23      0.08

December 29, 2000                .094      .063
March 30, 2001                    .12       .10
June 29, 2001                     .08       .06
Through September 25, 2001        .10       .08
</TABLE>

     On  August 31, 2001, there were 428 holders of record of outstanding shares
of  common  stock.

                                 DIVIDEND POLICY

     We  have  not paid any cash dividends on our common stock and do not expect
to  pay cash dividends on our common stock in the foreseeable future.  The Board
of  Directors  anticipates  that  all cash flow generated from operations in the
foreseeable  future will be retained and used to develop and expand our business
and  reduce outstanding indebtedness.  Any future payment of cash dividends will
depend  upon  our  results of operations, financial condition, cash requirements
and  other  factors  deemed  relevant  by  the  Board  of  Directors.

          SELECTED HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

     The information presented below, except nightclub data, for, and at the end
of,  each  of the years in the two-year period ended September 30, 1999 and 2000
is  derived  from the consolidated financial statements, which have been audited
by  Ham,  Langston  &  Brezina,  L.L.P.,  independent auditors.  The information
presented below, except nightclub data, for, and at the end of, each of the nine
month  periods  ended  June  30,  2000 and 2001 is derived from the consolidated
financial  statements,  which  have  been  reviewed  by Ham, Langston & Brezina,
L.L.P.,  independent  auditors.

     The  information  presented  below  should  be  read  in  conjunction  with
"Management's  Discussion  and  Analysis  of  Financial Condition and Results of
Operations," the Consolidated Financial Statements at June 30, 2000 and June 30,
2001  and  for each of the years in the two year period ended September 30, 1999
and  2000  and  the  related  notes  and Independent Auditors' Report, which are
included  elsewhere  in  this  Exchange  Offer.

                                       17
<PAGE>
<TABLE>
<CAPTION>
                                         FOR THE TWELVE MONTHS ENDED   FOR THE NINE MONTHS ENDED
                                                 SEPTEMBER 30,               JUNE 30,
                                      -------------------------------  -------------------------
                                           1999            2000             2000          2001
                                      --------------  ---------------  --------------  ---------
<S>                                   <C>             <C>              <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues . . . . . . . . . . . . . .  $   5,153,961   $    4,817,594   $   3,747,750   $2,535,312
Gross margin . . . . . . . . . . . .      2,268,376        2,363,308       1,716,615    1,272,490
General & administrative expenses. .      3,018,379        3,067,203       1,354,892    1,212,144
Net income (loss). . . . . . . . . .     (3,830,948)      (2,226,489)       (772,656)    (428,000)
Net income (loss) per share. . . . .          (0.12)           (0.06)          (0.02)       (0.01)

OTHER DATA:
EBITDA(1). . . . . . . . . . . . . .  $    (750,003)        (703,895)  $     361,723       60,346
Capital expenditures . . . . . . . .        861,142          324,077         254,952      357,374

STORE DATA:
Military bases serviced. . . . . . .             42               42              41           41
NiteLife venues on bases . . . . . .            106              107             106          106

                                         FOR THE NINE MONTHS ENDED
                                               JUNE 30, 2001
                                      -------------------------------
                                                             AS
                                          ACTUAL         ADJUSTED(2)
                                      --------------  ---------------
BALANCE SHEET DATA (AT PERIOD END):
Working capital. . . . . . . . . . .  $  (2,555,780)  $   (2,184,755)
Total assets . . . . . . . . . . . .      2,800,311        2,800,311
Current liabilities (3). . . . . . .      3,315,723        2,944,698
Long-term liabilities. . . . . . . .        444,975               --
Shareholders' equity (deficit) . . .       (960,387)        (144,387)
<FN>
----------------
(1)  Earnings  before interest income, interest expense, (gain) loss on property
     transactions,  discontinued  operations, extraordinary items, depreciation,
     amortization  and  income  taxes.

(2)  Assumes  that  the  Holders exchange $816,000 aggregate principal amount of
     Securitized  Equipment  Leases  and  $28,288  of  accrued  interest through
     October  15,  2001  for  10,553,603  shares of Common Stock of the Company.

(3)  Of the $816,000 aggregate principal amount of Securitized Equipment Leases,
     $371,025  is  current  liabilities  and  $444,975 is long-term liabilities.
</TABLE>

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

     The  following  discussion should be read in conjunction with the Company's
unaudited  consolidated  interim  financial statements and related notes thereto
included  in  the  quarterly  report and in the unaudited consolidated Financial
Statements  and  Management's Discussion and Analysis of Financial Condition and
Results  of  Operations  ("MD&A") contained in the Company's 10-KSB for the year
ended  September 30, 2000.  Certain statements in the following MD&A are forward
looking  statements.  Words  such  as  "expects", "anticipates", "estimates" and
similar  expressions  are intended to identify forward looking statements.  Such
statements  are  subject  to  risks  and  uncertainties  that could cause actual
results  to  differ  materially  from  those  projected.

YEAR ENDED SEPTEMBER 30, 2000 COMPARED TO YEAR ENDED SEPTEMBER 30, 1999

     Revenues  for the year ended September 30, 2000, decreased $336,367 or 6.5%
to  $4,817,594  from  $5,153,961  for  the  year ended September 30, 1999.  This
decrease  was  due  to  decreased  revenues  in  PS&L  and  the  slightly weaker
performance  by  the  Company's  entertainment  centers.  NiteLife's  revenues
remained  flat  during  2000  and  accounted  for  69%  of  total  revenues.

                                       18
<PAGE>
     Gross  margin  for  the year ended September 30, 2000, increased $94,932 or
4.2%  to $2,363,308 from $2,268,376 for the year ended September 30, 1999.  This
increase  was  due  to  the  elimination  of  the high costs associated with the
initial  year  operations  of  Hero's  Waterworld.

     General  and administrative expenses for the year ended September 30, 2000,
increased  $48,824  or  2.0%  to  $3,067,203  from $3,018,379 for the year ended
September 30, 1999.  This increase is generally attributable to normal increases
in  costs  as  a  result  of  inflationary  trends.

     Depreciation  expense  for  the  year  ended  September 30, 2000, decreased
$146,742  or  16.7%  to  $731,221 from $877,963 for the year ended September 30,
1999.  The  decrease  is  due  to  reduced  installation  of  sound and lighting
equipment  and  full  depreciation  of  certain  assets  added in earlier years.

     Interest  expense  decreased  $454,583  to  $765,120  for  the  year  ended
September  30, 2000, from $1,219,703 for the year ended September 30, 1999.  The
decrease is due to the elimination of certain one-time costs associated with the
addition  of  approximately  $2,000,000  of  new  debt  in  fiscal  year  1999.

     In  October  1998 the Company changed its method of accounting for start-up
costs.  The  change  involved  expensing  these  costs  as incurred, rather than
capitalizing  and  subsequently amortizing such costs.  The change in accounting
principle  resulted  in  the  write-off  of $170,611 which has been expensed and
included  in  the  accompanying  1999  consolidated  statement  of  operations.

THREE  MONTHS  ENDED  JUNE  30, 2001 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
2000

     Revenues  for  the  three  months ended June 30, 2001 decreased by $321,866
from  $1,346,573  for the three months ended June 30, 2000 to $1,024,707 for the
three  months  ended  June  30,  2001  primarily  due  to  lack of sales of live
entertainment  to  the  military  markets  and  the  loss  of  revenues from the
discontinued  operation  of the waterpark during the three months ended June 30,
2001.

     General and administrative expenses increased $28,515 from $324,534 for the
three months ended June 30, 2000 to $353,049 for the three months ended June 30,
2001.  This  increase  is  primarily  a  result  of  legal  expenses  and  legal
settlements.

     Depreciation  expense  for  the  three months ended June 30, 2001 decreased
$139,567  from  $194,319 for the three months ended June 30, 2000 to $54,752 for
the  three  months ended June 30, 2001.  This decrease is due to the movement of
certain  assets,  with  a net book value of $1,909,547, to assets held for sale,
and  elimination of depreciation charges on those assets during the three months
ended  June  30,  2001.

     Interest  expense  decreased by $174,157 from $247,889 for the three months
ended  June  30, 2000 to $73,732 for the three months ended June 30, 2001.  This
decrease is a result of decreased interest charges on $2,600,000 of secured debt
based  on  the  Company's  debt  reduction  plan.

NINE  MONTHS ENDED JUNE 30, 2001 COMPARED TO THE NINE MONTHS ENDED JUNE 30, 2000

     Revenues  for  the  nine months ended June 30, 2001 decreased by $1,212,438
from  $3,747,750  for  the nine months ended June 30, 2000 to $2,535,312 for the
nine  months  ended June 30, 2001 primarily due to the loss of revenues from the
discontinued  operations  of  the  waterpark,  the  lack  of  retail  sales  of
professional  sound and lighting equipment to the non-military consumer markets,
the  military  markets  and  due  to  lack of sales of live entertainment to the
military  markets  during  the  nine  months  ended  June  30,  2001.

     General  and administrative expenses decreased $142,748 from $1,354,892 for
the nine months ended June 30, 2000 to $1,212,144 for the nine months ended June
30,  2001.  This  decrease  is primarily a result of a reduction in common stock
issued  as  compensation  and  legal  settlements.

     Depreciation  expense  for  the  nine  months ended June 30, 2001 decreased
$295,995  from  $582,957 for the nine months ended June 30, 2000 to $286,962 for
the  nine  months  ended June 30, 2001.  This decrease is due to the movement of
certain  assets,  with  a net book value of $1,909,547, to assets held for sale,
and  elimination  of depreciation charges on those assets during the nine months
ended  June  30,  2001.

                                       19
<PAGE>
     Interest  expense  decreased  by $301,135 from $502,519 for the nine months
ended  June  30, 2000 to $201,384 for the nine months ended June 30, 2001.  This
decrease is a result of decreased interest charges on $2,600,000 of secured debt
based  on  the  Company's  debt  reduction  plan.

LIQUIDITY  AND  CAPITAL  RESOURCES

     During  the year ended September 30, 2000, the Company experienced negative
financial  results  which  have  continued during the nine months ended June 30,
2001  as  follows:

<TABLE>
<CAPTION>
                                      NINE MONTHS     YEAR ENDED
                                      ENDED JUNE     SEPTEMBER 30,
                                       30, 2001          2000
                                     -------------  ---------------
<S>                                  <C>            <C>
Net loss. . . . . . . . . . . . . .  $   (428,000)  $   (2,226,489)
Negative working capital. . . . . .    (2,555,780)      (5,442,904)
Negative cash flows from operations      (257,222)        (403,055)
Accumulated deficit . . . . . . . .    (8,820,405)      (8,392,405)
Stockholders' deficit . . . . . . .  $   (960,387)  $   (1,920,370)
</TABLE>

     In  addition  to  its  negative  financial  results,  the  Company has also
experienced  operational  problems  as  follows:

     The Company is delinquent on payments of principal and accrued interest for
a  certain  capital  lease obligations (See Note 5 to the unaudited consolidated
condensed  financial  statements).  Additionally, at March 31, 2001, the Company
is  in  violation  of  various financial and non-financial covenants included in
such  capital  lease  agreements on a long-term debt agreement for which waivers
have  not  been  obtained.  Debt  under  those agreements has been classified as
current  in  the  accompanying  financial  statements and could be called by the
creditors.

     Management  has  developed  specific current and long-term plans to address
its  viability  as  a  going  concern  as  follows:

     -    The  Company has executed a debt reduction plan to exchange certain of
          its  assets  to  repay  approximately $2,900,000 of long-term debt and
          related  accrued  interest. The debt reduction plan is described below
          and  became  effective  in  March  2001.

     -    Management  is  currently exploring ways to extinguish additional debt
          in  exchange  for  assets  or  through issuance of common stock and to
          concentrate  on  its  core  business.

     -    On  July  17,  2001,  the  Company  began the process of formulating a
          restructuring  plan  for  the  Hero's  subsidiary,  which  suffered
          significant  damage  from  the  tropical  storm,  named  Allison  that
          devastated  the  city of Houston on June 8, 2001. Although the Company
          continues  to make progress in its Company-wide restructuring efforts,
          the amusement division is faced with cash flow constraints in the near
          term.  The Company will make an offer to all equipment leaseholders to
          exchange  their  capital  leases  for  cash  and  or  stock.

     -    Management  of  the  Company  strongly  believes  that  with  the debt
          reduction  plan along with the additional depth to the management team
          and  a  focus  on its core business, the Company will achieve adequate
          profitability  and  cash  flow  from  operations  to  meet its current
          obligation.

     There  can  be  no  assurance  that  the  Company  will have the ability to
implement  its business plan and ultimately attain profitability.  The Company's
long-term  viability  as a going concern is dependent upon three key factors, as
follows:

     -    The  Company's  ability  to  obtain adequate sources of debt or equity
          funding  to  meet current commitments and fund the continuation of its
          business  operations  in  the  near  term.

     -    The  ability  of the Company to control costs and expand revenues from
          existing  or  new  businesses.

                                       20
<PAGE>
     -    The  ability  of  the  Company  to  ultimately  achieve  adequate
          profitability  and  cash  flows  from  operations  to  sustain  its
          operations.

     As  a result of non-payment related covenant violations and other liquidity
issues  facing  the  Company,  the  Company's  independent  auditors included an
emphasis paragraph in their report on the Company's financial statements for the
year  ended September 30, 2000 stating that these issues raise substantial doubt
about  the  Company's  ability  to  continue  as  a  going  concern.

DEBT  REDUCTION  PLAN

     On  March  31, 2001, the Company obtained 100% approval and began the asset
transfer  under  a  debt  reduction  agreement (the "Debt Reduction Agreement").
Under  the  Debt  Reduction  Agreement  the  Investor  Notes  (See Note 6 to the
Company's  audited  financial  statements for the year ended September 30, 2000)
were  brought  current  and  will  ultimately  be  repaid  through the Company's
contribution  of certain property (a waterpark facility, a racetrack and certain
raw land) located in Midland, Texas and 2,200,000 shares of the Company's common
stock,  to  a trust for liquidation, with the proceeds used for repayment of the
Investor  Notes.  The Debt Reduction Agreement provides for any shortfall in the
proceeds  from  liquidation  of  the property and shares of the Company's common
stock to be satisfied through the Company's issuance of additional shares of the
Company's  common  stock  or  through the trustee's foreclosing on certain other
property pledged by the Company.  If excess proceeds are received, such proceeds
would  be  returned  to  the  Company  after  satisfaction of fees of the trust.

                                   THE COMPANY

     Entertainment  Technologies  & Programs, Inc., a Delaware corporation, is a
23-year-old  vertically  integrated  entertainment  and  amusement game company.
NiteLife,  Inc.,  a predecessor company, was incorporated on October 2, 1985 and
was formed to provide audio and video entertainment at military bases located in
the  United States and internationally, to provide mobile musical entertainment,
and  to operate a music store in San Diego, California.  Since our formation, we
have  expanded  both  the  number  of  products  and services we provide and the
markets  into  which  such products and services are distributed.  Today, we are
strategically  positioned  as  the  provider  of  a  comprehensive  array  of
entertainment  products  and  services  to  both  the  military and the civilian
markets.  We  are  primarily engaged in the design and construction of nightclub
facilities in military venues and the provision of entertainment services within
these  facilities,  the retail sale of professional sound and lighting equipment
through  catalogs  and the internet, the installation and operation of amusement
gaming  equipment,  and  the  promotion  and  production  of  live performances.

     We have a unique and dominant market share in the creation and operation of
approximately  110  entertainment  systems  within  nightclub  venues on 40 U.S.
military  bases  located  in the United Sates, Europe and Asia.  The barriers to
entry  in  our  business  with the military are formidable for any private group
attempting  to  compete  in this market.  New entrants would require significant
time  and  effort  to  develop the necessary relationships to become a preferred
independent  contractor  to the government, especially for entertainment venues.
We  are  the  only  supplier  of  entertainment  services on U.S. military bases
worldwide  to  have  been  awarded  AFNAF  (Armed  Forces Non Appropriated Fund)
contracts  and the first service company to be awarded such AFNAF status.  AFNAF
contracts  allow us to obtain business from the various branches of the military
without  entering  into  competitive  bids, a process typically required of most
independent government contractors and service providers.  Through our renewable
AFNAF  contracts  and  many  years  of  reliable  and  quality services, we have
developed very strong relationships with base commanders and venue coordinators,
and  have become the leading independent entertainment provider to U.S. military
bases.  This  highly  unique  advantage  has  been  developed  through  years of
successful  interaction  with  all  branches  of  the  Armed  Forces in military
entertainment  venues throughout the world.  In addition to military markets, we
have  the  opportunity  to exploit our success through expansion into commercial
markets,  both  domestically  and  internationally,  utilizing  our  valuable
experience  and  developed  expertise.

     We provide our services through three wholly-owned subsidiaries as follows:

     1.   NiteLife  Military Entertainment, Inc. The development, management and
          operation of entertainment systems within nightclub venues, located on
          U.  S.  military  bases  throughout  the  world,  and  the  designing,
          planning,  promotion,  and  production  of live performances and other
          entertainment  bookings in both the military and the civilian markets.

                                       21
<PAGE>
     2.   Performance  Sound and Light, Inc. The design, installation and retail
          sale  of  professional sound and lighting equipment through mail order
          catalogs,  the internet and direct sales targeting the military market
          through  AFNAF  purchase  agreements  and  civilian  consumer markets.

     3.   Hero's  Family Fun Entertainment, Inc. The ownership, installation and
          operation  of  amusement  equipment  in  company-owned  and  operated
          facilities  and  the  design  and  construction  of  entertainment
          facilities.

HISTORY

     The Music Makers, our predecessor company, was a small mobile music company
that  provided disc jockey, music, sound and lighting services to Naval military
clubs  for  parties,  dances  and  other  special  events.  The Music Makers was
started in 1978 by our current Chairman and Chairman Executive Officer, James D.
Butcher,  who  provided  these  entertainment  services to the military bases on
which  he was stationed.  The business grew as Mr. Butcher secured several Naval
contracts  to  perform  with  Music Makers on base nightclubs throughout the San
Diego, California area.  In 1985, The Music Makers was incorporated as NiteLife,
Inc.  and  purchased a San Diego-based retail music store to lower its music and
related  equipment  costs.  NiteLife  evolved  into  a  successful  designer and
provider  of  entertainment  services  to  themed  entertainment  centers  and
nightclubs,  located  exclusively  on  U.S.  military  bases.  Further, NiteLife
developed  a  unique turnkey equipment installation and entertainment service by
securing  separate  contracts  with  each  individual  military customer.  These
contracts  provided  for  the  design,  construction  and installation of custom
entertainment  facilities,  often with little or no capital expenditure from the
military  customer.  Subsequently,  NiteLife  provided  a  full  array  of
entertainment  services  to these facilities, including club disc jockeys, music
videos,  club  promotions  and  production  of  live  artist  performances.

     After  establishing  a  highly  successful  track  record  of  profitably
designing,  constructing,  installing,  managing  and  operating  military
entertainment  systems  within venues throughout the world, NiteLife was awarded
the  Department  of  Defense's  first  service-oriented  AFNAF contract in 1993.
This  highly  coveted  contract  allows NiteLife to secure negotiated, renewable
12-month  equipment  installation  and  entertainment service contracts with any
U.S.  Military  customer  worldwide,  without  the  requirement  of  competitive
bidding.  NiteLife is currently the only provider of such entertainment services
to possess this unique advantage.  The AFNAF contract allows NiteLife to recover
its  entire  expenditure  for  designing,  equipping and providing entertainment
services  to  each  entertainment  facility  via monthly service fees, generally
within  the  first  year  of  the  facility  opening.

     Performance  Sound & Light was formed in 1994 to handle all equipment sales
and installations.  The Company applied for and received a second AFNAF contract
from  the  military  that not only allowed for the sale of equipment in NiteLife
facilities,  but  also  for  sales  of  sound,  lighting, music, stage and other
related  entertainment  equipment  for  the  military's  use  on  other  on-base
facilities,  all  without the requirement of competitive bidding.  NiteLife sold
its  retail music stores in 1995 so it could concentrate on the global expansion
and  continued  vertical  integration  of  its  location-based  entertainment
installations  and  operations.

     In  April  1995,  NiteLife  entered  into  a  merger  transaction  with the
shareholders  of  Westcott Financial Corporation, a public company, in which the
assets  and  the  business  of  NiteLife  became  a  wholly-owned  subsidiary of
Westcott.  Westcott  subsequently changed its name to Entertainment Technologies
&  Programs,  Inc.

NITELIFE  ENTERTAINMENT [GRAPHIC  OMITTED] (AFNAF  NPA#:  F4199-96-D6183)
[GRAPHIC  OMITTED]

     NiteLife  is  engaged  in  the  development,  management  and  operation of
approximately 110 entertainment systems within nightclub venues located on 40 U.
S.  military  bases  located  in the United Sates, Europe and Asia.  NiteLife is
also  involved  in  the  designing,  planning, promotion, and production of live
performances  and  other  entertainment  bookings  in  both the military and the
civilian  markets.  Nightclubs  have  historically  been established on military
bases  in  an  attempt  to:

     1.   retain  service  men  and  women  on  base, thereby avoiding potential
          problems  arising out of interaction between servicemen and civilians;

     2.   boost  morale  by  providing  U.S.  style  entertainment  in  foreign
          countries  where  none  otherwise  exists;  and

                                       22
<PAGE>
     3.   provide a less expensive on-base alternative using U.S. currency which
          often  is devalued against the foreign currencies that servicemen must
          use  if  they  go  off  base  for  entertainment.

     In order to meet the needs of this market, NiteLife provides a wide variety
of  entertainment  programs  and  services  to military nightclubs by installing
audio  and  video  equipment,  including  custom-built  disc  jockey  booths,
state-of-the-art  industrial  DVD players and turntables, top-of-the-line mixing
consoles  and  several television monitors in each nightclub.  Nitelife provides
the  maintenance  of all the equipment installed and supplies all of the records
and  music  videos for use within its managed nightclubs.  NiteLife hires (on an
independent contractor basis), trains and manages all club coordinators and disc
jockey  talent  operations within its managed nightclubs.  NiteLife also designs
and produces club promotions for nightclub managers.  This comprehensive package
of  entertainment  equipment and services is provided to military customers on a
fee  basis pursuant to one-year renewable contracts (as required by Federal Law)
between  the  Company  and  the  Armed  Forces  Non-Appropriated Fund Purchasing
Office.  Each  contract  provides  for  a minimum number of hours of disc jockey
services  at  a  specified  hourly rate.  These minimum hours are established so
that  NiteLife can recover its initial investment in approximately eight months.

     NiteLife  currently  operates  110 entertainment and nightclub venues on 40
bases  throughout  the  United  States, Europe and Asia.  We project significant
growth  from  NiteLife  in  2001 and beyond, as there are over 360 U.S. military
bases  worldwide  available for expansion.  With the appropriate financing, this
growth  can  be greatly enhanced and accelerated, and can also provide us access
to  a  large, untapped consumer marketplace with tremendous growth potential for
years  to  come.

     Star  Concerts  and  Promotions,  formerly  Vision  Quest Productions and a
subsidiary  of  NiteLife,  was  created in January 2001 to concentrate solely on
booking,  promoting and producing live entertainment performances (i.e., popular
bands,  comedians,  etc.)  on U.S. military bases around the world, an operation
NiteLife  has  performed since its inception.  In 1993, the Company was selected
by  the Pacific Air Force to produce a program entitled "Stateside Sounds" which
brought  top  40  bands to the Asian theater for a tour of U. S. military bases.
"Sounds  of  NiteLife"  is  another  program which has been produced by us since
1993,  and  brings  top  40,  rock,  and  country acts to military bases located
throughout  the United States, Europe and Asia.  Past performance promotions and
productions  have  included  acts  such  as  Kansas,  Eddie Money, Starship, REO
Speedwagon,  Tami  Wynette  and  Lee  Greenwood,  to  name  a  few.
Entertainment  Products  and  Services

     We  design  our  program  to  minimize  or  eliminate  the need for capital
expenditures  from  our  military clientele.  Unless otherwise desired, NiteLife
capitalizes  all  the  equipment  costs and renovates the nightclub with minimal
government  expense.  This  is very important to our military customers who have
been  effected  over  the  last  decade  by a downsizing of the military budget.
There  are  very few budgeted dollars for nightclub upgrades which are necessary
to  compete  with  civilian  markets.  NiteLife solves that problem by supplying
state-of-the-art  sound,  light and video products such as, DVD Players, Speaker
Systems, Amplification Systems, Dual Compact Disc Players, Industrial VCR's with
Jog  and  Shuttle,  Mixers  &  Turntables  with  Pitch  Control for Mixing, Club
Lighting,  Televisions,  Custom  Built  Deejay  Booths,  among  many  others.

     NiteLife sends in installation teams of audio/video technicians, carpenters
and  electricians to professionally install these systems.  NiteLife derives its
income  by  charging  an  hourly  fee  for the deejay service.  There are weekly
minimums  of  deejay  hours a nightclub must use from the NiteLife service.  The
contracted  weekly  minimums  of deejay hours are directly related to the amount
and type of equipment NiteLife installs.  NiteLife attempts to recover its costs
within  the  first  eight  months  of  the  contracted  period  of  service.

     The  most  important  service  is  the  hiring  of  the  deejay talent.  An
important  element  of  the  hiring  of the deejay is training.  Deejays must be
trained  to  use  the  microphone,  to  create  a  fun atmosphere and to promote
upcoming  events.  The  NiteLife  area  manager,  known  as  the  Area  Talent
Coordinator  ("ATC"),  hires, schedules and pays the deejay.  All of this allows
the  nightclub  management  to spend more time on their own staff, while keeping
total  control  and  final approval of the deejay staff.  NiteLife also controls
the  music  formats  through use of its newsletter containing music charting and
with  playlists  that  are  routinely  used  to  monitor  nightly  formats.

     The  service  contract also provides for equipment maintenance and software
support.  Even  if a military nightclub has the money to buy the equipment, they
often  do  not  have  the  capital to repair or replace equipment when it breaks
down.  NiteLife  bears  the  cost  of  removing,  repairing and/or replacing and
reinstalling  the  equipment.  In many cases back up equipment is also provided.
NiteLife  also  provides  the  software  package to the military nightclub which

                                       23
<PAGE>
includes the most recent DVD Technology for music video play.  Opening libraries
of music video consist of 60 hours of DVD.  Formats include Country and Western,
Top  40  Dance, Rock and Alternative music.  This library is updated ten times a
year.  Deejays also bring their tools of the trade and provide all the latest in
CD  selections.  All  of  the  software  is  provided  in  NiteLife hourly fees.

     NiteLife,  through  ATCs,  provides  promotional  support  through  weekly
brainstorming  sessions with management.  These sessions are held to develop fun
and  exciting  contests  and  prizes,  resulting  in  more  clientele and a more
interesting  atmosphere.  NiteLife  provides  interactive  games  such  as  Sumo
Wrestling  and Jousting as seen on television.  The success of special events is
largely  dependent on the promotion of such events.  NiteLife works as a partner
with  the  military base to produce camera ready flyers and calendars.  NiteLife
deejays  promote the events each night in the nightclub, on ships and throughout
the  base.

     NiteLife strives for total client satisfaction and is active in a system of
quality  control  throughout  the length of the contract.  Through an aggressive
phone  campaign  NiteLife  keeps  monthly  tabs  on  each client's situation and
entertainment  desires.  When  there  are  problems in the field, a Total Client
Satisfaction  team is dispatched immediately to the location.  This team is made
up  of  administrative  personnel  along  with technical support.  Whether it be
deejay  training,  promotional  support  or  equipment  maintenance, these teams
handle  the  problems  on  site.

Competition

     NiteLife  has  developed  a  unique  and  dominant  market share within the
military  entertainment  industry.  It  is now embarking upon the utilization of
this  presence  and expertise for expansion into the private sector.  Currently,
Nitelife  is  the  only  company of its type to possess AFNAF contracts with the
U.S.  military, which creates a significant barrier to entry for other companies
that may attempt to penetrate this market.  We believe we are significantly more
experienced,  are more vertically integrated and more developed than any similar
company.  Other  entertainment  companies  have  certain  limited  joint venture
relationships  with  the  military, but most of these are for a single facility,
the  operation  of  which  reverts  back  to  the  military  shortly after it is
constructed.  NiteLife  renews  its  contracts  annually  for,  in  most  cases,
multiple  facilities  on  each  base  throughout  the  world,  providing us with
ongoing,  monthly  revenue  streams.  If  a  base  elects  for  non-renewal of a
contract,  NiteLife  either  recovers its equipment from the facility for use in
future  installations  or  allows  the base to purchase the installed equipment.
NiteLife  has experienced an average annual renewal rate in excess of 90%, which
we  believe  attests to the satisfaction level the military customers enjoy from
us.

Base  Locations
<TABLE>
<CAPTION>
                              UNITED STATES BASES (29)

NAME OF BASE                      BRANCH     VENUES  BASE LOCATION            FIRST CONTRACT
--------------------------------  ---------  ------  -----------------------  --------------
<S>                               <C>        <C>     <C>                      <C>
San Diego. . . . . . . . . . . .  Naval           5  San Diego, CA            Oct. 98
Sheppard . . . . . . . . . . . .  Air Force       5  Wichita Falls, TX        Jun. 95
Hickam . . . . . . . . . . . . .  Air Force       3  Honolulu, HI             Jan.94
Randolph . . . . . . . . . . . .  Air Force       3  San Antonio, TX          Jul 96
Miramar. . . . . . . . . . . . .  Marine          2  San Diego, CA            Jan. 87
Hill . . . . . . . . . . . . . .  Air Force       2  Salt Lake City, UT       Oct. 95
China Lake . . . . . . . . . . .  Naval           2  Ridgecrest, CA           Oct 95
Bangor . . . . . . . . . . . . .  Naval           2  Silverdale, WA           Dec 90
Maxwell. . . . . . . . . . . . .  Air Force       2  Montgomery, AL           Nov 95
Great Lakes. . . . . . . . . . .  Naval           2  Chicago, IL              Mar 95
Mayport. . . . . . . . . . . . .  Naval           3  Jacksonville, FL         Apr 96
Patuxent River . . . . . . . . .  Naval           3  Lexington Park, MD       Sep 90
Keesler. . . . . . . . . . . . .  Air Force       2  Biloxi, MS               Feb 96
Scott. . . . . . . . . . . . . .  Air Force       2  St. Louis, IL            Apr 95
Gunter . . . . . . . . . . . . .  Air Force       1  Montgomery, AL           Jul 95
Travis . . . . . . . . . . . . .  Air Force       2  Fairfield, CA            Apr 97
Whidbey Island . . . . . . . . .  Naval           2  Oak Harbor, WA           Dec 90
Fort Stewart . . . . . . . . . .  Army            2  Savannah, GA             Nov 98
Fort Hood. . . . . . . . . . . .  Army            3  Killeen, TX              Dec 98
Barksdale. . . . . . . . . . . .  Air Force       2  Shreveport, LA           Feb 99

                                       24
<PAGE>
Beale. . . . . . . . . . . . . .  Air Force       3  Sacramento, CA           Jul 99
Edwards. . . . . . . . . . . . .  Air Force       3  Edwards, CA              Oct 99
Ft. McCoy. . . . . . . . . . . .  Army            1  Madison, WI              Feb 00
Minot. . . . . . . . . . . . . .  Air Force       2  Minot, ND                May 00
Fort Lewis . . . . . . . . . . .  Army            3  Seattle, WA              Sep 00
Fallon . . . . . . . . . . . . .  Navy            1  Fallon, NV               Oct 01 Start
Tyndall. . . . . . . . . . . . .  Air Force       4  Panama City, FL          Oct 01 Start
Bremerton. . . . . . . . . . . .  Navy            3  Silverdale, WA           Jan 01
Ft. Polk . . . . . . . . . . . .  Army            1  Ft. Polk, LA             Jul 00
                                          ---------
TOTAL NUMBER OF U.S. VENUES: . .                 71
                                         ==========

                                           ASIAN BASES (5)

NAME OF BASE                      BRANCH     VENUES  BASE LOCATION            FIRST CONTRACT
--------------------------------  ---------  ------  -----------------------  --------------
Kadena . . . . . . . . . . . . .  Air Force       6  Okinawa City, OKI        Jul 93
Yokota . . . . . . . . . . . . .  Air Force       5  Misawa, Japan            Mar 92
Kunsan . . . . . . . . . . . . .  Air Force       4  Kunsan, Korea            Aug 95
New Sanno. . . . . . . . . . . .  Naval           1  Tokyo, Japan             Jul 95
Osan . . . . . . . . . . . . . .  Air Force       5  Seoul, Korea             Jul 93
                                          ---------
TOTAL NUMBER OF ASIAN VENUES . .                 21
                                         ==========

                                         EUROPEAN BASES (6)

NAME OF BASE                      BRANCH     VENUES  BASE LOCATION            FIRST CONTRACT
--------------------------------  ---------  ------  -----------------------  --------------
Ramstein . . . . . . . . . . . .  Air Force       6  Kaiserslautern, Germany  Jul 94
Mildenhall . . . . . . . . . . .  Air Force       3  Mildenhall, UK           Dec 94
Sigonella. . . . . . . . . . . .  Naval           2  Catania, Italy           Nov 93
Rhein Main . . . . . . . . . . .  Air Force       2  Frankfurt, Germany       May 96
Sembach. . . . . . . . . . . . .  Air Force       1  Kaiserslautern, Germany  Jul 94
Lakenheath . . . . . . . . . . .  Air Force       4  Lakenheath, UK           Oct 99
                                          ---------
TOTAL NUMBER OF EUROPEAN VENUES.                 18
                                         ==========
</TABLE>

PERFORMANCE  SOUND  &  LIGHT [GRAPHIC OMITTED]   (AFNAF  NPA#:  F4199-95-D6012)
[GRAPHIC OMITTED]

     Realizing  the  benefit  of  cross selling to the government as a preferred
independent  contractor,  we formed Performance Sound & Light ("PS&L").  PS&L is
engaged  in  providing  professional  sound  and  lighting equipment to military
nightclubs  and  the  civilian markets through catalogs, the internet and direct
sales.  In January 1995, PS&L commenced distribution of its sales catalog, which
is  being  promoted  throughout  the military using our existing sales force and
commission-based  contract  sales  representatives.  We  believe  that  the
exclusivity  of  our  AFNAF  contract  combined  with an aggressive direct sales
marketing  program, will establish PS&L as a primary source from which nightclub
managers  and  professionals  may  meet  their  entertainment  equipment  needs.
Furthermore,  PS&L  recently  received  AFNAF  approval  to  the  only  link for
professional  sound  and  lighting  equipment  on the military's website for its
purchasing  managers.

     PS&L  produces  two  mail  order catalogs, each targeting a specific market
niche.  The  first  catalog offers sound and lighting equipment to the military.
The  PS&L's  management  believes  an opportunity exists to provide business and
institutional  purchases  of  turnkey

                                       25
<PAGE>
sound  and  lighting  systems  in an easy to read mail order catalog. The second
catalog  targets  the  civilian  consumer  market.  This  catalog  also contains
professional  sound and lighting equipment. The marketing emphasis is to provide
business and institutional purchasers professional equipment and turnkey systems
solutions  in  an  easy  to  read  and purchase mail-order format. Pricing is an
integral  part  of  marketing.  PS&L  prices  its competitively in order to meet
margin  requirements  and  retain  customers.  Although there are many companies
offering  this  type  of  catalog,  we  believe,  as a result of our presence on
military  bases,  we possess a unique ability to be extremely price competitive.
The  catalog  targets  distribution  towards professional users of entertainment
products  such  as  classrooms  across  the  nation  using computer monitors and
televisions that allow them to interact, churches that have full sound and light
production  capabilities,  retail  stores  that  have  giant  screen projectors,
cameras  and  special  lighting  effects to enhance the shopping experience, and
airports  that  require  television  monitors.  The  active  interaction  of
entertainment equipment is ubiquitous and appears to be a permanent trend in our
society.

     We  have  established  a  national base of targeted customers from coast to
coast  through  advertising, sales and acquisition of third-party mailing lists.
We  continue  to  successfully  build  our  customer base through nationally run
advertisements  in various trade publications and magazines such as DJ Times and
Mobile  Beat.  Our  customers  have  expressed  their  satisfaction  at having a
dependable  source  for  competitively  priced  products,  resulting in customer
referrals.  PS&L's marketing strategy is to aggressively promote and support the
existing  product  lines  and offer total client satisfaction and service on all
sales.  The  principle  method  of  marketing  is  through the distribution of a
comprehensive  catalog.  The  catalog  features  professional  sound  and  light
equipment  and  is  distributed through the mail, displayed in retail stores and
inserted  in  publications.  Upon  request from the customer, an 80-page tabloid
sized,  black  and  white  publication  and smaller spot mailers is distributed.
Telephone  follow  up  to  past and potential customers is scheduled to coincide
with  marketing  efforts.

     PS&L  expects  to  be  on  the  forefront  of  the  very  exciting world of
electronic  commerce.  PS&L  operates  an  advanced  web  site
(www.performance-s-l.com) that repeatedly scores in the top 30 search "hits". We
------------------------
expect  a  period  of  very  solid  growth  over  the  next  18 to 24 months, by
attracting new customers through our Internet site and the distribution of a new
CD-ROM  based  catalog  to the U.S. military and civilian markets.

Entertainment Products and Services

     We  sell premium quality products that are required by our customers.  PS&L
currently  offers  a  comprehensive  assortment  of  brand names and established
product  lines.  Other  brands  that  cater  to the professional sound and light
market  are  being pursued.  As the demonstrated needs of our market change, new
products  and  services  will  be  continually  developed  to expand our current
product lines and custom support products.  Our principal product lines include:

<TABLE>
<CAPTION>
<S>             <C>              <C>
American DJ     JBL              Samson Audio
Audio Technica  JBL Electronics  Sanyo
BBE             Martin           Seleco
Best Devices    Middle Atlantic  Sonic
Cerwin Vega     Mitsubishi       Sony
Consoles        Mobil Tech       Spirit
Crest           NSI              Stanton
Crown           Pioneer          TC Electronics
Denon           QSC              Videosel
Fisher          Sabine           Vestax
</TABLE>

Mail  Order  and  Catalog  Market

     The  overall  mail-order business remains a growth market and is continuing
to  expand.  According  to  the  National Mail Order Association, U.S mail order
sales  reached $357.3 billion in 1998, up 12% over 1997.  This figure represents
an  approximate  $42.8  billion  increase  over 1997.  In addition, according to
Catalog  Age's  Exclusive  Consumer  Shopping Survey report (Catalog Age, August
2001),  the number of U.S. consumers that shop from traditional catalogs rose 7%
over  the  previous  year  and  online catalog purchases increased approximately
164%.  The  music industry's catalog sales are continuing to expand according to
published information.  Music industry leaders who are engaged in mail order are
among  the  fastest  growing  segment  of  the  music  market.

     A  review of current music industry catalog offerings reveals a majority of
the music industry's catalogs are geared towards the consumer market and focused
primarily on musical instruments, sheet music and recordings.  Currently, in the
area  of  professional  sound  and  lighting  and  special  effects  equipment,
businesses  must  rely on a

                                       26
<PAGE>
variety of catalogs and retail sources to obtain the various components required
to  equip  their  entertainment  venues.  These venues include nightclubs, bars,
hotels,  motels,  resorts,  recording  studios,  restaurants,  amusement  parks,
band/talent  agencies,  independent  DJ's,  schools, and churches, among others.
There are no national mail order catalogs specializing in professional sound and
lighting equipment that targets the military market. Based on these facts, there
currently  exists  a distinct opportunity for PS&L to become the dominate source
for  the  music  industry's  professional  sound and light catalog market with a
focus  on  providing  total entertainment solutions to the professional customer
market.

     More  often  than  not,  the buying process associated with the purchase of
this  type  of  equipment  comes  down  to  a  purchasing  agent,  owner  of  an
establishment  or  building  contractor  who  must  acquire  the components from
various  sources.  Once  received,  those products may or may not work together,
and  may  also require the expertise of additional contractors to integrate them
into  a  total  working  system  for  the purchaser.  Internal research into the
market indicates that only one privately-owned company provides both catalog and
retail  sales  of  primarily  professional  sound,  lighting and special effects
products.  This  company  is  located  in  Southern California, and shipping and
distribution costs have stopped them from being effective outside the West Coast
market.

Competition

     Even though the overall size of the retail music industry can be estimated,
the  exact  size  of  the market share, which the music industry encompasses, is
impossible  to  determine.  Many  of  the  largest  companies that produce music
catalogs  also operate retail stores and use a catalog to compliment their store
operations.

     The  quality  of  products  offered in music catalogs varies significantly.
The  goal  for  a storefront retailer is to use the catalog to generate revenues
and  profits in a tightly focused market to increase their local stores customer
base.  Nearly  all  the  music  catalogers  target  the  largest consumer market
possible.  If  they  are  using  the  catalog  strictly to compliment the retail
store,  they  market  their catalog to the broadest consumer base possible since
they  normally  ship  out  of  their  store.

     There are some targeted business-to-business music catalogs that sell sheet
music  and  retail/leased  band  instruments.  However,  this  market is tightly
focused  on  schools  and  they  generally do not deviate from the market.  Most
musical  catalogs  are targeting the civilian consumer market within their local
region  and  to the best of our knowledge, only one catalog in the United States
is  focused  on  professional  sound  and  lighting.

HERO'S  FAMILY  FUN  ENTERTAINMENT

     Hero's  Family  Fun  Entertainment,  Inc.  recently  underwent  a  major
restructuring  to  position  itself in the family entertainment center industry.
It  is  engaged  in  developing  and  operating a system of family entertainment
centers under the name Hero's.  Our family entertainment centers are designed to
operate  attractions  meeting the demands of local demographics.  Our facilities
offer  entertainment for the entire family unit and generally include laser tag,
soft  play area, redemption center, high-end video games, a restaurant and party
rooms.  Hero's  acquired  its  first family entertainment center, "Hero's Family
Fun  Center," in Pasadena, Texas.  Hero's Pasadena occupies a 16,000 square foot
stand-alone  building.  Hero's second facility is located in Channelview, Texas.
Hero's  Channelview  occupies 8,251 square feet in a strip shopping center.  Our
future  plans  for  Hero's  include building, acquiring and operating additional
entertainment  centers  where  appropriate.

Entertainment  Products  and  Services

     The Company's family entertainment centers are designed to offer children a
unique entertainment experience while meeting their parents' needs for value and
convenience.  We  believe  our  Company  is  well  positioned to capitalize on a
variety  of  favorable  demographics  in  our customer base, including projected
growth  in the population of children under the age of 12, which we believe will
increase  spending  on  children's leisure activities.  Our family entertainment
centers  will  generally be divided into four areas: a kitchen and related areas
(cashier, prize area, restrooms, manager's office, etc.) occupying approximately
5%  of  the premises, a dining area occupying approximately 10% of the premises,
party  rooms for birthdays and other group events occupying approximately 20% of
the  premises; and an activity area occupying approximately 65% of the premises.

     Each  Hero's contains a family-oriented playroom area.  Our facilities will
typically  include:  (i)  laser  tag;  (ii)  "soft play" zones consisting of any
combination  of  a  series  of tubes, slides, ball bins, climbing mountains, air
trampolines,  obstacle  courses,  ramps and other devices for crawling, jumping,
running,  swinging and climbing, all of

                                       27
<PAGE>
which  have  been designed and constructed with an emphasis on safety; and (iii)
"game  zones"  consisting  of  coin  and  token-operated  attractions  such  as
arcade-style  games,  kiddie  rides, video games, skill-oriented games and other
similar  entertainment  venues  that  award  tickets redeemable for prizes. Most
games dispense tickets that can be redeemed by guests for prize merchandise such
as  toys  and  dolls.

     Laser  tag  is  an  adventure  game  offering  players  an  interactive
entertainment  experience.  The  15 to 20 minutes spent in the unique, laser tag
arena  is  all-encompassing,  and  both mentally and physically challenging.  As
such,  the  experience  has  broad  demographic  appeal  and  is  suitable  for
individuals,  families,  parties,  leagues  and corporate groups.  The object of
laser  tag is to achieve as many points as possible, either individually or as a
team,  by  hitting  opposing targets or capturing the other team's headquarters.
The custom-designed computer-energized packs worn by players consist of a laser,
as  well  as  front, back and shoulder LED targets.  When fired, the laser emits
both  an  invisible  infrared and a visible red laser beam.  A successful target
hit  is  indicted  by  vibration,  LED  color change and deactivation of the hit
players  pack.  Points  are  scored for hits to the pack target areas and to the
laser.  During the game, details of the scoring as it occurs are communicated to
players and each player's score is transmitted to the central game computer.  At
the  end  of  the  game  each player receives a personalized scorecard detailing
individual  player  statistics and scores, as well as team scores if a team game
was  played.

     Hero's  employ one general manager and various shift managers, as required,
to  conduct  its operations.  Electronics specialists are shared between the two
facilities.  Management  maintains  direct  and frequent contact with unit level
managers.

Competition

     The  family  entertainment  industry  is  a broad and growing industry. The
spectrum  of  entertainment  opportunities  for  families with young children is
extremely  broad,  ranging from low-cost, short-lived activities to more lengthy
and  expensive  activities.  Low  cost, low commitment activities include events
such  as  stopping  for  treats,  ice  cream,  etc.  while  high cost, high time
commitment  activities  would  be  events  such  as amusement park visits, field
trips,  etc.  Hero's  and  its  entertainment  industry  peer  group  are  more
medium-cost,  medium-time  commitment  activities,  typically  offering
value-oriented,  activity-based  entertainment  costing  approximately $7.25 per
person  per  visit  and  lasting approximately one and one-half hours per visit.
The  family  restaurant  industry  is also very broad.  Young children, however,
greatly  limit  the  range  of  opportunities for family restaurant-goers.  As a
result,  convenience  and  value  are  significant decision factors for families
dining  out with young children; the ultimate objective is to minimize the adult
"hassle  factor"  and  provide  value.

Marketing  Strategy

     The  primary customer for Hero's is a family with children between 2 and 16
years  old.  We  estimate that the typical customer visits a Hero's location two
to  six  times  a  year,  spends  an  average  of  $7.25  per  person and spends
approximately  one  and one-half hours per visit.  We believe that approximately
75%  of  Hero's customers have children under the age of 12.  The typical Hero's
customer  has young children and seeks a fun, entertaining restaurant experience
that  includes  a  fun  atmosphere  quality  food  and  good  value.

     The  Company  conducts  advertising  campaigns  primarily through radio and
print  media that target families with young children.  Parents are periodically
targeted  by  advertising  campaigns  in local newspapers.  These advertisements
feature  package  deals  available  at  Hero's  which include laser tag and game
tokens.  These  birthday package deals provide tokens with meal purchases rather
than  requiring  continual  purchases  by  parents.

BUSINESS  GROWTH  AND  EXPANSION  STRATEGY

     Through  our  NiteLife  division,  we  have  successfully  diversified
geographically  into both domestic and international U.S. military bases located
throughout  the  United  States,  Europe  and  Asia.  Base locations include all
branches  of  the U.S. Armed Forces.  As of September 2001, we had operations in
110 venues on more than 40 bases worldwide.  The U.S. operates over 360 military
bases  worldwide,  providing  potential  for growth within the military.  It has
been  our  experience  that, with the continued loss of military budget funding,
military  nightclubs  must  become  self-sufficient  or they will be closed.  We
believe  that  Nitelife's  turnkey  nightclub installation and operation program
provides  an  attractive and cost effective solution for military bases that may
be  experiencing budget reductions, as well as those military bases that are not
experiencing  such  budget  constraints.

                                       28
<PAGE>
     In  addition  to  increasing the number of military bases on which Nitelife
provides  its  traditional  services,  we  intend  to  identify  and  acquire
strategically  positioned  companies  which  expand  the  scope  of products and
services we currently provide to the military.  Furthermore, we continually seek
to enhance our cost-effectiveness, our operating efficiencies and our capability
to  provide a broader spectrum of entertainment experiences to both military and
private  markets, as well as the expansion opportunities with multi-venue family
entertainment  centers  as  well.

EMPLOYEES

     As  of August 31, 2001, we had approximately 35 employees, of which 20 were
full  time and 15 were employed part time.  Our employees are not represented by
any  collective  bargaining  agreements,  and  we  have never experienced a work
stoppage.  We  believe  that  our  employee  relations  are  good.

<TABLE>
<CAPTION>
                                                       Number of
          Company                                      Employees
          -------                                      ---------
<S>                                                    <C>

          Entertainment Technologies & Programs, Inc.          6
          Performance Sound & Light, Inc.                      4
          NiteLife Military Entertainment, Inc.                6
          Hero's Family Fun Entertainment, Inc.               19
</TABLE>

GOVERNMENT  REGULATION

     The  development  and operation of Hero's facilities are subject to various
federal,  state  and  local  laws  and regulations, including but not limited to
those  that  impose  restrictions,  levy  a  fee  or tax, or require a permit or
license on the operation of games and rides.  The Company is subject to the Fair
Labor  Standards  Act,  the  Americans  With  Disabilities  Act and family leave
mandates.  A  significant  portion  of the Company's personnel are paid at rates
related  to the minimum wage established by federal and state law.  Increases in
such minimum wage will result in higher labor costs to the Company, which may be
partially  offset  by  price  increases  and  operational  efficiencies.

DESCRIPTION  OF  PROPERTIES

     We  lease  office  space  at  the  monthly  rate of $1,339.20 consisting of
approximately  2,160 square feet, for our corporate headquarters at 17300 Saturn
Lane,  Suite  110  Houston  Texas,  77058.  The  lease  expires  May  31,  2004.

     NiteLife  Military  Entertainment,  Inc. leases office space at the monthly
rate  of  $1,488.00  consisting  of app. 2,400 square feet for its operations at
17300  Saturn  Lane,  Suite  111  Houston Texas, 77058. The lease expires on May
31,2004.

     Performance  Sound  and Light, Inc. leases office space at the monthly rate
of $ 1,686.40 consisting of approximately 2,720 square feet for its operation at
17300  Saturn  Lane,  Suite  109  Houston Texas, 77058. The lease expires on May
31,2004.

     Hero's  Entertainment  -  Pasadena  is a 2.2-acre parcel of land located at
7770  Spencer Highway, Pasadena, Texas 77505, consisting of a 16,000 square foot
building,  which  is  owned  by  the  Hero's.

     Hero's  Entertainment  - Channelview leases 8,251 square feet from Taranito
Properties  at  a  monthly  rate  of $4,290.  The lease expires on May 31, 2002.

LEGAL  PROCEEDINGS

     1.   Entertainment  Technologies  &  Programs, Inc. vs. Bronco Group, Mgt.,
          Inc.  and  Bowling  &  Billiard  Supply  Company, Inc.; 191st Judicial
          District  Court;  Dallas  County,  Texas

          This is a breach of contract and tortious interference with a business
          relationship case. Entertainment Technologies & Programs, Inc. entered
          into  a  contract  with  Bronco  Group Management, Inc. concerning the
          installation  of  video  games  at a location provided by Bronco Group
          Management, Inc. Thereafter, Bowling & Billiard Supplies Company, Inc.

                                       29
<PAGE>
          approached  Bronco  and induced them to breach their contract with the
          Company.  The  Company  brought  suit against Bronco Group Management,
          Inc.  for  breach of contract and against Bowling & Billiard Supplies,
          Inc.  for tortuous interference with the business relationship between
          the  Company.  and  Bronco.  The  contract  with  Bronco  contained  a
          mandatory  binding  arbitration  clause.  Arbitration  resulted  in  a
          judgment  being  entered  against Bronco for breach of contract in the
          sum  of  $339,878.00.  The  Company  has  filed  a  pleading seeking a
          severance  of  the  two  causes of action to make the judgment against
          Bronco  a  final judgment and shall continue its case against Billiard
          for tortuous interference with a business relationship. Management has
          aggressively pursued this case and a favorable outcome and recovery in
          excess  of  $250,000  against  Billiard  is, in our opinion, possible.

     2.   Verizon  Capital  v.  Entertainment  Technologies  &  Programs,  Inc.,
          pending  in the 11th District Court of Harris County, Texas, Cause No.
          2001-08321

          On  February  14, 2001, Verizon Capital filed suit against the Company
          seeking  to  recover  an  unspecified  amount  of  damages  due to the
          Company's  alleged breach of the lease agreement between Bell Atlantic
          and  the  Company  dated  May 18, 1998. On March 22, 2001, the Company
          filed  its  original  answer asserting several affirmative defenses to
          Verizon  Capital's  claims.  In  addition,  the  Company  filed  a
          counterclaim asserting causes of action for breach of contract, breach
          of  warranties, fraud, negligent misrepresentation and mutual mistake.
          The  Company's  counterclaims  are  based  upon allegations that (1) a
          large  portion  of  the  equipment  under the lease at issue was never
          delivered by the lessor, Bell Atlantic; (2) Bell Atlantic made various
          misrepresentations regarding its ability to deliver the equipment; and
          (3)  Bell  Atlantic wrongfully kept approximately $75,000 in insurance
          proceeds  with  respect  to  equipment  that was damaged before it was
          transferred  to  the  Company. The parties have engaged in significant
          settlement  discussions  to  date.  Settlement  talks  are  currently
          ongoing.  The  Company  cannot predict with any certainty the eventual
          outcome  of  this  litigation  or  the  settlement  talks.

     3.   Entertainment  Technologies  &  Programs, Inc., et a vs. GameCom, Inc.
          and  Ferris  Productions,  Inc.  United  States District Court for the
          Southern  District  of  Texas;  Houston  Division

          On  April  23,  2001, the Company filed suit against GameCom, Inc. and
          Ferris  Productions,  Inc. seeking to recover an unspecified amount of
          damages  due  to  Ferris' alleged breach of a letter of intent between
          Ferris  and  the  Company  dated March 9, 2001. The Company also seeks
          injunctive  and  declaratory  relief relating to the letter of intent.
          The Company asserts causes of action for breach of contract, fraud and
          tortuous  interference.  The  Company's  claims  are  based  upon  the
          Company's  allegations  that  Ferris breached the letter of intent and
          that GameCom wrongfully interfered with the Company's rights under the
          letter  of  intent.  On  July 17, 2001, the Company filed a motion for
          partial summary judgment with respect to the counterclaims and seeking
          summary  judgment in its favor on multiple issues. On August 24, 2001,
          the  Company  received  a partial summary judgment against GameCom and
          Ferris.  In  this  partial  summary  judgment, the court held that the
          contract is governed by Delaware law -- not Texas law -- as Ferris and
          GameCom  have  contended.  Second, the court held that the ETPI/Ferris
          letter  of  intent  contains  no  contractual  limitation  of  Ferris'
          liability  for  a  breach.  Finally,  the  court  held  that GameCom's
          tortuous  interference  counter-claim  is  barred  because  ETPI  is
          justified  in  bringing  this  legal  action.  The court did not grant
          ETPI's  request  to declare that Delaware law grants a cause of action
          for  breach of a covenant to negotiate in good faith, but invited ETPI
          to  resubmit  this  issue  with  additional  authority.  The Company's
          management  intends  to  vigorously  prosecute  this  matter  to  a
          conclusion,  though, the Company cannot predict with any certainty the
          eventual  outcome  of  the  motion  for  summary  judgment  or  this
          litigation.

CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

     There  have  been no material transactions, series of similar transactions,
currently  proposed  transactions, or a series of similar transactions, to which
the  Company  or  any  of its subsidiaries was or is to be a party, in which the
amount  involved  exceeds $60,000 and in which any director or executive officer
or  any  security  holder  who  is  known  to  the  Company  to own of record or
beneficially  more  than  5%  of the Company's common stock or any member of the
immediate  family  of  any  of  the  foregoing persons, had a material interest.

                                       30
<PAGE>
MANAGEMENT

     The following table sets forth certain information concerning the Company's
executive  officers  and  directors:

<TABLE>
<CAPTION>
Name                   Age  Position
----                   ---  --------
<S>                    <C>  <C>
James D. Butcher. . .   41  Chairman of the Board and Chief Executive Officer
George C. Woods . . .   43  President, Chief Financial Officer and Director
Mark A. Madamba . . .   39  President, Performance Sound & Light
Robert Carrol . . . .   46  President, NiteLife Entertainment
Timothy B. Hay. . . .   55  Director of Sales and Marketing, NiteLife Entertainment
Mark E. Stutzman. . .   42  Director
Jack D. Nolan . . . .   62  Secretary and Director
Gabriel Albert Martin   68  Director
</TABLE>

     JAMES  "DOUG"  BUTCHER,  the  Company's  founder,  Chairman of the Board of
Directors  and  Chief  Executive  Officer, formed a mobile music company in 1978
while  in  the Navy, to provide entertainment services to the military nightclub
at the bases on which he was stationed.  After being transferred to San Diego in
1980, Mr. Butcher continued in the entertainment business obtaining several Navy
contracts  in  the  San Diego area.  By 1982, after departing the Navy, the disc
jockey  business became a full time venture based on two clubs, one mobile D. J.
system  and a need for quality entertainment.  Mr. Butcher has built the Company
into  the  provider  of  comprehensive  entertainment service and products it is
today.

     GEORGE  C.  WOODS, President and Chief Financial Officer, has been with the
Company since June 2000.  Mr. Woods has considerable experience in consolidation
transactions,  capital  formation,  IPO's  and  mergers  and acquisitions.  Most
recently,  Mr.  Woods  was  Vice President-Finance of Fallright America, L.L.C.,
where  he  obtained  capital  for  growth  and provided monetization of existing
shareholder  equity.  Prior to joining Fallright, Mr. Woods was a co-founder and
principal  of  WJG  Capital,  L.L.C.,  a  Houston, Texas-based limited liability
company  dedicated  to  identifying  consolidation  opportunities  in  highly
fragmented industries.  WJG Capital funded Nationwide Staffing Services, Inc., a
consolidation company in the staffing industry.  WJG Capital assisted Nationwide
with  the  simultaneous merger of eight founding companies and the filing of its
initial  public  offering  registration  statement  to be listed on the New York
Stock  Exchange.  From  1987  to  1996,  Mr.  Woods  held  senior  financial and
accounting  positions  at  Quality  Tubing  at  which he was the Chief Financial
Officer,  Vice  President-Finance and Administration.  From 1982 to 1987, he was
the  Corporate Controller and Treasurer of Paragon Industries, a privately-owned
manufacturing  division  of  the  WEDGE Group, Inc. a private company developing
consolidations  in  numerous  industries.  Mr.  Woods  is  a  graduate  of  the
University  of  Texas  with  a  B.B.A.  in  Finance  and  earned an MBA from the
University  of  Houston.

     MARK MADAMBA, President, Performance Sound & Light, Inc., has been with the
Company  since  May  1994.  Prior  to  joining  the  Company,  Mr. Madamba spent
approximately  14  years  in the U.S. Air Force where, among other positions, he
served  as Technical Advisor and Program Manager for the Air Force's $30 million
per  year  slot  machine program, which encompassed 35 military bases worldwide.
During  his  career  in  the  Air Force, Mr. Madamba became recognized as one of
their  top  electronics  troubleshooters  and  designers.  He  later  provided
technical  and  management  oversight  to  10  bases at Headquarters Pacific Air
Forces  and  was  based out of Osan Air Base, South Korea.  Mr. Madamba received
his  Digital  Electronics diploma from the Technical Vocational Institute of New
Mexico  in  1980.

     ROBERT CARROLL has been associated with NiteLife since 1991.  He had a dual
career  serving  in  the military Recon Operations and was the owner/operator of
Oasis  Entertainment  before joining NiteLife in 1991.  He started with NiteLife
as a DJ and became the Area Talent Coordinator at Yokota Air Force Base in 1992.
As  operation  expended in Asia, he was chosen as NiteLife's first Area Director
of Asia in 1993 and served in this capacity until 1995.  After retiring from the
military  in 1996, he moved to Houston to become Vice-President of NiteLife.  In
January  2001,  Mr.  Carroll  became  President  of  NiteLife.  He  has 25 years
experience  in  DJ  entertainment,  concerts,  promotion,  club  designing  and
technical  application.

     TIMOTHY  B.  HAY joined the Company in June of 2000.  He brings 32 years of
government  and  military  experience  in  the  area  of  Morale,  Welfare  and
Recreation.  Mr. Hay served 22 years in the United States Air Force specializing
in  the  management  of military clubs and dining facilities all over the world.

                                       31
<PAGE>
After  leaving active duty, he continued working with the Air Force by accepting
a civil service position with the Department of Defense as Chief, Morale Welfare
and  Recreation  at  Incirlik  Air  Base,  Turkey, where he was promoted for his
efforts  during  Desert Storm.  He continued on to several locations in the Asia
Theater  including  Headquarters  Pacific  Air  Forces where he served as Chief,
Business Operations for the eight large Air Force Bases in the Pacific Rim.  Mr.
Hay received numerous awards for his outstanding efforts in providing Quality of
Life  Programs  for  our  military,  their  dependents  and government employees
serving  overseas.

     MARK  E.  STUTZMAN has been director of the Company since June 2001.  He is
also  the  Chief  Operating  Officer  and  General  Counsel  for  Capital Growth
Planning,  Inc.  and  all its affiliated companies.  Mr. Stutzman joined Capital
Growth  in  October  of  1997  after 12 years in private practice.  Mr. Stutzman
earned  his  degree from the Northwestern School of Law, graduating with Honors.
Mr.  Stutzman coordinates the due diligence process for all underwritings placed
through  Capital  Growth  Resources.  Other  core  responsibilities  include
management  of  all  Corporate  &  Broker/Dealer Operations.  Mr. Stutzman holds
licenses  in  securities  and  is  licensed  to  practice  law  in  the State of
California.

     JACK  D.  NOLAN  has  been director of the Company since June 2001.  He has
also  had  his  own  private  law  practice  since 1973.  Mr. Nolan received his
Bachelor  of  Science  and  Mathematics/Systems  Engineering  in  1965  from the
University  of  Houston,  along  with  his Doctorate of Jurisprudence from South
Texas  College  of  Law.  Mr.  Nolan also was a Lieutenant in the U.S. Air Force
from  1957-1960.  Mr.  Nolan  has legal experience in Tortious Interference with
Business Relationships, Employment Law and Litigation, Covenants Not to Compete,
Proprietary  Information Agreements, Mergers and Acquisitions, Discrimination in
the  Work  Place,  considerable  business  and Commercial Litigation and General
Counsel  for  Community  Associations.  Mr.  Nolan  is  a  staff writer on legal
subjects  for  the  Bay  Runner  Publications,  and has been General Counsel for
Entertainment  Technology  &  Programs,  Inc.  for  the  past  5  years.

     GABRIEL ALBERT MARTIN was recently elected to an open position on the board
of  directors,  pursuant  to  a financing entered into between an investor group
lead  by  Mr.  Martin  and  the  Company earlier this year.  Mr. Martin, born in
Argentina,  has  been  a  successful  restaurateur  and real estate developer in
Houston, Texas for over 40 years.  Currently, Mr. Martin serves as President and
Director  of  Gabriel's  Inc., which owned and operated the world-renowned Swiss
Chalet  Restaurant, among many other restaurant establishments.  Gabriel's, Inc.
also  owns  several  rental  properties,  develops  raw  land,  and  has several
interests  in  oil  and gas properties, among other investments.  Mr. Martin has
served  as  a  Director  and  Vice  President  of Magna Flux, Inc., as well as a
Director  of  InterFirst  Bank  in  Houston,  Texas.

EXECUTIVE  COMPENSATION

     The  following  table sets forth information concerning compensation of the
chief  executive  officer  and all other executive officers of the Company whose
salary  and bonus exceeded $100,000 for services rendered to the Company for the
fiscal  year  ended  September  30,  2000.

<TABLE>
<CAPTION>
                                     SUMMARY COMPENSATION TABLE

                                   Annual Compensation
                                --------------------------  Other Annual
Name and Principal Position     Year   Salary    Bonus(1)   Compensation
------------------------------  ----  --------  ----------  ------------
<S>                             <C>   <C>       <C>         <C>

James D. Butcher, Chairman and
Chief Executive Officer. . . .  2000  $156,000  840,000(2)  None.

George C. Woods, President and
Chief Financial Officer. . . .  2000   102,000  700,000(3)  None.

<FN>
----------------
(1)  The  Company  currently  has  not  adopted  any  bonus,  profit  sharing or
     long-term  compensation  plan  providing any executive officer, director or
     employee  with  any  compensation  except  as  provided  above.
(2)  Mr.  Butcher  received  840,000  shares  for  compensation  in  2000.
(3)  Mr.  Woods  received  700,000  shares for a signing bonus in his employment
     agreement,  signed  February  28,  2001.
</TABLE>

                                       32
<PAGE>
EMPLOYMENT  AGREEMENTS

     Effective  November  10,  1995,  the  Company entered a ten-year employment
agreement  with James D. Butcher. The Agreement provides for an annual salary of
$156,000,  increasing  to $240,000 upon completion of a secondary offering.  All
future  increases  will  be  at  the  discretion  of  the  Board  of  Directors
Compensation  Committee.  The agreement may be terminated upon death, disability
or  for  "just  cause"  (as  defined  therein).

     Effective  June  19, 2000, the Company entered into a three year employment
agreement  with George C. Woods.  The agreement provides for an annual salary of
$102,000,  with  annual  increases and bonuses at the discretion of the Board of
Directors.  All  future  increases  will  be  at  the discretion of the Board of
Directors  Compensation  Committee.  The agreement may be terminated upon death,
disability  or  for  "just  cause"  (as  defined  therein).

COMPENSATION  OF  DIRECTORS

     The Company is compensating members of the Board of Directors as follows:

          50,000  shares          For  all  four  Meetings  attended
          10,000  shares          Per  Meeting  Attended
          10,000  shares          Additional  for  any  special  meetings
          2,500  shares           For  Telephone  Attendance

         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth certain information regarding the beneficial
ownership  of  the  Company's  common  stock as of August 31, 2001, for (a) each
person  known  by  the  Company  to  own beneficially more than 5% of the common
stock,  (b)  each  director,  (c)  each  executive  officer  identified  in  the
compensation  table  above,  and  (d) officers and directors of the Company as a
group.

<TABLE>
<CAPTION>
                                              NUMBER OF
                                                SHARES
                                             BENEFICIALLY  PERCENTAGE
     NAME OF BENEFICIAL OWNER                   OWNED         OWNED
     --------------------------------------  ------------  -----------
<S>                                          <C>           <C>

     Butcher Family Trust &
     Beneficial Ownership . . . . . . . . .    10,194,612       18.76%

     Jack D. Nolan. . . . . . . . . . . . .       180,000         .33%

     Mark E. Stutzman . . . . . . . . . . .       155,000        0.29%

     George C. Woods. . . . . . . . . . . .       800,000        1.47%

     Gabriel Albert Martin(1) . . . . . . .       214,286         .39%

     All Officers and Directors as a group.    11,543,898       21.25%

<FN>
     (1)Warrants  were  granted  to  Gabriel  Albert  Martin,  a director of the
company,  as  part  of  a  $15,000 equity financing completed in July 2001.  Mr.
Martin  has the right to acquire up to 500,000 shares of our common stock.   The
warrant grants the holder the right to acquire each share of our common stock at
a  price  of  $0.07  per  share.  The  warrant  expires  in  December  2001.
</TABLE>

                          DESCRIPTION OF CAPITAL STOCK

     Our authorized capital stock consists of 200,000,000 shares of common stock
and 10,000,000 shares of preferred stock.  The statements under this caption are

                                       33
<PAGE>
brief  summaries  of  certain  material  provisions  of  our  certificate  of
incorporation  and  by-laws.  These summaries do not purport to be complete, and
are  subject  to,  and  are  qualified  in  their entirety by reference to, such
documents.

COMMON  STOCK

     As  of  August  31,  2001,  there  were  54,333,455  shares of common stock
outstanding  that  were  held  of  record  by  approximately 428 shareholders of
record.  In  addition, as of August 31, 2001, we had issued options and warrants
to  purchase  a  total  of  2,776,081  shares of common stock that are currently
exercisable  within  60  days  of  the  date  of  this  filing.

     Holders  of  our  common  stock  are  entitled to one vote per share on all
matters  to  be  voted  upon  by the shareholders.  Subject to the rights of the
holders  of the shares of our outstanding preferred stock, holders of our common
stock  are entitled to receive ratably any dividends that our board of directors
may  from  time to time declare out of funds legally available therefor.  In the
event  of  the  liquidation,  dissolution  or winding up of our company, whether
voluntary  or  involuntary,  holders  of  our common stock are entitled to share
ratably  in  all  assets  legally  available for distribution, if any, remaining
after  the  payment  or  provision  for  the  payment of all our debts and other
liabilities  and  the  payment and setting aside for payment of any preferential
amount  due  to  the  holders of shares of our outstanding preferred stock.  Our
common  stock  has  no  preemptive  or  conversion  rights or other subscription
rights.  There  are  no  redemption or sinking fund provisions applicable to our
common  stock.  All  outstanding  shares  of  common  stock  are  fully paid and
nonassessable.

     Up  to 2,776,091 shares may be issued upon the exercise of certain warrants
to  purchase  common  stock.  The outstanding warrants consist of the following:

PREFERRED  STOCK

     Our  board  of directors has the authority to issue up to 10,000,000 shares
of  preferred  stock  in one or more series.  The board is authorized to fix the
rights,  preferences,  privileges  and  restrictions  of  the  preferred  stock,
including  dividend  rights,  dividend  rates, conversion rights, voting rights,
terms  of  redemption, redemption prices, liquidation preferences and the number
of shares constituting any series or the designation of such series, without any
action by the shareholders.  The issuance of preferred stock may have the effect
of  delaying, deferring or preventing a change in control of our company and may
adversely affect the voting and other rights of the holders of our common stock.
The  issuance of preferred stock with voting and conversion rights may adversely
affect  the  voting power of the holders of our common stock, including the loss
of voting control to others.  At present, we have no preferred stock outstanding
and  we  have  no  plans  to  issue  any  preferred  stock.

TRANSFER  AGENT  AND  REGISTRAR

     The  transfer agent and registrar for our common stock is American Register
&  Transfer,  432  East  900  South,  Salt  Lake  City,  UT  84111.

                                  LEGAL MATTERS

     Certain  legal  matters  with  respect to the validity of the shares of our
common  stock  covered  by  this  Exchange  Offer  will be passed upon for us by
Sonfield  &  Sonfield,  Houston,  Texas.

                                     EXPERTS

     The  consolidated  financial  statements  and  schedules  included  in this
Exchange  Offer  and  incorporated  by  reference  in this Exchange Offer of the
Company  and  its subsidiaries appearing in our Annual Report on Form 10-KSB for
the  years  ended September 30, 1999 and 2000 have been audited by Ham, Langston
and Brezina, L.L.P., independent certified public accountants, to the extent and
for the periods set forth in their reports incorporated herein by reference, and
are  incorporated  herein  by reference in reliance upon such reports given upon
the  authority  of  said  firm  as  experts  in  accounting  and  auditing.

                                       34
<PAGE>
                             ADDITIONAL INFORMATION

     The  Company is subject to the informational requirements of the Securities
Exchange Act of 1934 and, in accordance therewith, files periodic reports, proxy
statements  and other information with the Commission at 450 Fifth Street, N.W.,
Washington,  D.C. 20549. Copies of the reports, proxy statements and information
so  filed  can  be obtained from the Public Reference Section of the Commission,
upon  payment  of  certain  fees  prescribed  by  the  Commission  or  from  the
Commission's  Web  site.  The  Company's  common  stock  is  traded  on  the
Over-The-Counter Electronic Bulletin Board.  The foregoing material is available
for  inspection  at the National Association of Securities Dealers, Inc., 1735 K
Street,  N.W.,  Washington,  D.C.  20006.

                  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                     ON ACCOUNTING AND FINANCIAL DISCLOSURE

     On  September  3, 1999, the Company was notified by Brian S. Nathanson, CPA
("Brian  S.  Nathanson")  that  he  would  not  be  continuing  as the Company's
independent  accountant.  The  Company  engaged  Ham, Langston & Brezina, L.L.P.
("Ham,  Langston & Brezina") as its new independent accountant.  The decision to
change  the Company's independent accountant was recommended and approved by the
Company's  Board  of  Directors.

     Brian  S.  Nathanson's  reports  on  the  Company's  consolidated financial
statements  for  the  nine  months  ended  September 30, 1998 and the year ended
December  31,  1997,  respectively,  did  not  contain  an  adverse  opinion  or
disclaimer  of  opinion,  nor  were  such  reports  qualified  or modified as to
uncertainty,  audit  scope,  or  accounting  principles.

     During  the  Company's  two  fiscal  years ended September 30, 1998 and the
subsequent  interim  period  preceding  the  decision  to  change  independent
accountants,  there  were no disagreements with Brian S. Nathanson on any matter
of  accounting  principles  or  practices,  financial  statement  disclosure, or
auditing  scope  or  procedure,  which  disagreement(s),  if not resolved to the
satisfaction  of Brian S. Nathanson, would have caused it to make a reference to
the  subject  matter  or  the  disagreement(s)  in  connection  with its reports
covering  such  periods.

     During  the  Company's  two  fiscal  years ended September 30, 1998 and the
subsequent  interim  period  preceding  the  decision  to  change  independent
accountants,  there  were no "reportable events" (hereinafter defined) requiring
disclosure  pursuant  to  Section  229.304(a)(1)(v)  of Regulation S-K.  As used
herein,  the term "reportable event" means any of the items listed in paragraphs
(a)(1)(v)(A)-(D)  of  Section  304  of  Regulation  S-K.

     Effective  September  28, 1999, the Company engaged Ham, Langston & Brezina
as  its independent accountants. During the two fiscal years ended September 30,
1998  and  the  subsequent  interim  period  preceding  the  decision  to change
independent  accountants, neither the Company nor anyone on its behalf consulted
Ham,  Langston  &  Brezina  regarding  either  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 consolidated financial
statements,  nor  has  Ham, Langston & Brezina provided to the Company a written
report  or  oral  advice  regarding  such  principles  or  audit  opinion.

                                       35
<PAGE>
<TABLE>
<CAPTION>
                                ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                                                __________

                         CONSOLIDATED FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT
                         ACCOUNTANTS FOR THE YEARS ENDED SEPTEMBER 30, 2000 AND 1999

                                            TABLE OF CONTENTS

<S>                                                                                                    <C>
Report of Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-3

Consolidated Financial Statements:

     Consolidated Balance Sheet as of September 30, 2000. . . . . . . . . . . . . . . . . . . . . . .  F-4

     Consolidated Statements of Operations for the years ended September 30, 1999 and 2000. . . . . .  F-5

     Consolidated Statements of Cash Flows for the years ended September 30, 1999 and 2000. . . . . .  F-6

     Consolidated Statements of Stockholders' Deficit for the years ended September 30, 1999 and 2000  F-7

     Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .  F-8
</TABLE>

                                      F-1
<PAGE>
                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of
Entertainment Technologies & Programs, Inc.

We  have  audited  the  accompanying consolidated balance sheet of Entertainment
Technologies & Programs, Inc. and its subsidiaries (collectively, the "Company")
as of September 30, 2000, and the related consolidated statements of operations,
stockholders'  deficit  and  cash  flows for each of the two years in the period
then  ended.  These financial statements are the responsibility of the Company's
management.  Our  responsibility  is  to  express  an opinion on these financial
statements  based  on  our  audits.

We  conducted  our  audits  in  accordance  with  generally  accepted  auditing
standards.  Those  standards  require  that  we  plan  and perform the audits 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 financial statements referred to above present fairly, in
all  material  respects,  the financial position of Entertainment Technologies &
Programs,  Inc.  and  subsidiaries  as of September 30, 2000, and the results of
their  operations  and  their cash flows for each of the two years in the period
then  ended  in  conformity  with  generally  accepted  accounting  principles.

The  accompanying  financial  statements have been prepared assuming the Company
will  continue  as  a  going  concern.  As  discussed in Note 2 to the financial
statements,  the  Company  has  suffered recurring losses from operations and at
September  30,  2000 is in a negative working capital position and stockholders'
deficit  position.  These  factors  raise  substantial doubt about the Company's
ability  to  continue as a going concern.  Management's plans in regard to these
matters  are  also described in Note 2.  The financial statements do not include
any  adjustments  that  might  result  from  the  outcome  of  this uncertainty.

As  explained in Note 15 to the financial statements, effective October 1, 1998,
the  Company  changed  its  method  of  accounting  for  start-up  costs.

/s/  Ham,  Langston  &  Brezina,  L.L.P.

Houston,  Texas
December 30, 2000, except for Note 3, as to which the date is January 16, 2001

                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                           ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                                    CONSOLIDATED BALANCE SHEET
                                        SEPTEMBER 30, 2000

                                                                                                UNAUDITED
                                                                                                 PROFORMA
                                                                                    ACTUAL       (NOTE 3)
                                                                                 ------------  ------------
<S>                                                                              <C>           <C>
ASSETS
------
   Current Assets:
       Cash and cash equivalents                                                 $     9,604   $     9,604
       Accounts receivable, net                                                      300,353       300,353
       Inventory                                                                      92,729        92,729
       Restricted cash                                                                54,210        54,210
                                                                                 ------------  ------------
           Total current assets                                                      456,896       456,896
Property and equipment, net                                                        3,894,443     1,937,093
Other assets                                                                          28,091        28,091
                                                                                 ------------  ------------
                   Total Assets                                                  $ 4,379,430   $ 2,422,080
                                                                                 ============  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------
   Current Liabilities:
        Current maturities of notes payable                                      $ 3,736,002   $ 1,136,002
        Current portion of capital lease obligations                                 568,430       568,430
        Accounts payable and accrued liabilities                                   1,512,536     1,313,738
        Accrued phase-out period losses of discontinued restaurant operations         82,832        82,832
                                                                                 ------------  ------------
            Total current liabilities                                              5,899,800     3,101,002
Capital lease obligations, net of current portion                                    400,000       400,000
                                                                                 ------------  ------------
                Total liabilities                                                  6,299,800     3,501,002
                                                                                 ============  ============

Commitments and contingencies
Stockholder's deficit:
   Common stock, $.001 par value, 50,000,000 shares authorized, 41,540,211
       (45,734,620 proforma) shares issued and 41,140,211 (45,334,620 proforma)
        shares outstanding at September 30, 2000                                      41,540        45,334
   Additional paid-in capital                                                      6,580,495     7,038,086
   Accumulated deficit                                                            (8,392,405)   (8,012,342)
   Treasury stock, 400,000 shares at cost                                           (150,000)     (150,000)
                                                                                 ------------  ------------
            Total stockholders' deficit                                           (1,920,370)   (1,078,922)
                                                                                 ------------  ------------
                Total liabilities and stockholders' deficit                      $ 4,379,430   $ 2,422,080
                                                                                 ============  ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                   ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 2000

                                                                                  UNAUDITED
                                                            ACTUAL                PROFORMA
                                                   --------------------------       2000
                                                       1999           2000        (NOTE 3)
                                                   -----------    -----------    -----------
<S>                                                <C>            <C>            <C>
Revenue:
  Entertainment services                           $ 4,208,963    $ 4,048,720    $ 3,570,739
  Retail                                               944,998        768,874        768,874
                                                   -----------    -----------    -----------
    Total revenue                                    5,153,961      4,817,594      4,339,613
                                                   -----------    -----------    -----------
Cost of sales and services:
  Entertainment services                             2,102,550      2,087,329      2,028,283
  Retail                                               783,035        366,957        366,957
                                                   -----------    -----------    -----------
    Total cost of sales and services                 2,885,585      2,454,286      2,395,240
                                                   -----------    -----------    -----------
Gross margin                                         2,268,376      2,363,308      1,944,373
General and administrative expenses                  3,018,379      3,067,203      2,620,803
Depreciation and amortization expense                  877,963        731,221        683,418
                                                   -----------    -----------    -----------
  Loss from operations                              (1,627,966)    (1,435,116)    (1,359,848)
                                                   -----------    -----------    -----------
Other income (expenses):
  Gain (loss) on disposal of assets                     (2,342)             -        348,798
  Interest expense                                  (1,219,703)      (765,120)      (304,529)
                                                   -----------    -----------    -----------
    Total other income (expenses)                   (1,222,045)      (765,120)        44,269
                                                   -----------    -----------    -----------
Loss from continuing operations                     (2,850,011)    (2,200,236)    (1,315,179)
Discontinued operations:
  Loss from operation of discontinued
    restaurant division                               (510,962)             -              -
  Loss on disposal of discontinued restaurant
    division, including provision for losses
    during the phase-out period                       (299,364)       (26,253)       (26,253)
                                                   -----------    -----------    -----------
Loss before cumulative effect of change in
  accounting principle                              (3,660,337)    (2,226,489)    (1,341,432)
Cumulative effect of change in accounting for
  start up expenses                                   (170,611)             -              -
                                                   -----------    -----------    -----------
Net loss                                           $(3,830,948)   $(2,226,489)   $(1,341,432)
                                                   ===========    ===========    ===========
Basic and diluted net loss per common share:
  Continuing operations                            $     (0.09)        $(0.06)        $(0.03)
  Discontinued operations                                (0.02)             -              -
  Cumulative effect of change in accounting
    principle                                            (0.01)             -              -
                                                   -----------    -----------    -----------
    Net loss                                       $     (0.12)        $(0.06)        $(0.03)
                                                   ===========    ===========    ===========
Weighted average shares outstanding                 31,922,657     37,060,044     41,254,457
                                                   ===========    ===========    ===========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                   ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 2000

                                                            1999           2000
                                                         -----------    -----------
<S>                                                      <C>            <C>
Cash flows from operating activities:
  Net loss                                               $(3,830,948)   $(2,226,489)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Loss from discontinued operations                        510,962              -
    Loss on disposal of discontinued operations              299,364         26,253
    Depreciation and amortization                            877,963        731,221
    Provision for doubtful accounts                            4,985              -
    Loss on disposal of property and equipment                 2,342              -
    Common stock issued for services                          60,400        199,930
    Common stock issued for interest expense                 486,000        323,514
    Cumulative effect of a change in accounting              110,510              -
    Cumulative effect of a change in accounting
      related to discontinued operations                      60,091              -
    Changes in operating assets and liabilities,
      net of effects from acquisitions:
      Accounts receivable                                    144,593        141,508
      Inventory                                              111,036           (284)
      Restricted cash                                              -        (54,210)
      Other assets                                            83,076         21,756
      Book overdraft                                          36,888        (36,888)
      Accounts payable and accrued liabilities               610,873        344,055
                                                         -----------    -----------
        Net cash used in continuing operations              (431,865)      (529,634)
        Net cash provided by (used in) discontinued
          operations                                        (444,523)       126,579
                                                         -----------    -----------
          Net cash used in operating activities             (876,388)      (403,055)
                                                         -----------    -----------
Cash flows from investing activities:
  Capital expenditures                                      (861,142)      (324,077)
  Capital expenditures of discontinued operations            (12,879)             -
  Proceeds received from sale of property and
    equipment                                                 66,561              -
                                                         -----------    -----------
          Net cash used in investing activities             (807,460)      (324,077)
                                                         -----------    -----------
Cash flows from financing activities:
  Proceeds from notes payable                              2,223,165        702,639
  Proceeds from sale of common stock                          10,000        167,500
  Payments on notes payable                                 (352,880)      (133,403)
  Payments on capital lease obligation                       (53,177)             -
  Purchase of treasury stock                                (150,000)             -
                                                         -----------    -----------
          Net cash provided by financing activities        1,677,108        736,736
                                                         -----------    -----------
Increase (decrease) in cash and cash equivalents              (6,740)         9,604
Cash and cash equivalents, beginning of year                   6,740              -
                                                         -----------    -----------
Cash and cash equivalents, end of year                   $         -    $     9,604
                                                         ===========    ===========
Supplemental disclosure of cash flow information:
 Cash paid for interest expense                          $   887,491    $   143,430
                                                         ===========    ===========
 Cash paid for income taxes                              $         -    $         -
                                                         ===========    ===========
</TABLE>

             See accompanying notes to consolidated financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                                 ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                                              CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
                                               FOR THE YEARS ENDED SEPTEMBER 30, 1999 AND 2000

                                                               ADDITIONAL    UNISSUED
                                           COMMON STOCK          PAID-IN      COMMON     ACCUMULATED     TREASURY
                                         SHARES      AMOUNT      CAPITAL       STOCK       DEFICIT         STOCK         TOTAL
                                       ----------   --------   -----------   ---------   ------------   -----------   -----------
<S>                                    <C>          <C>        <C>           <C>         <C>            <C>           <C>
Balance at September 30,
  1998                                 30,093,460    $30,093   $5,049,378    $ 60,000    $(2,334,968)   $     -       $ 2,804,505
Purchase of 400,000 shares of
  treasury stock                                -          -            -                          -      (150,000)      (150,000)
Issuance of common stock in con-
  nection with the funding of
  notes payable                         2,050,000      2,050      543,950     (60,000)             -             -        486,000
Issuance of common stock for cash          66,667         68        9,934           -              -             -         10,000
Issuance of common stock for
  services                                369,750        369       60,031           -              -             -         60,400
Net loss for the year ended
  September 30, 1999                            -          -            -           -     (3,830,948)            -     (3,830,948)
                                       ----------    -------   ----------    --------    -----------    ----------    -----------
Balance at September 30, 1999          32,579,877     32,580    5,663,293           -     (6,165,916)     (150,000)      (620,043)
Issuance of common stock for cash         988,889        989      166,511           -              -             -        167,500
Issuance of common stock for
  services                              1,519,500      1,519      198,411           -              -             -        199,930
Notes payable converted to common
  stock                                 1,975,693      1,976      233,242           -              -             -        235,218
Issuance of common stock as
  collateral                            2,000,000      2,000       (2,000)          -              -             -              -
Issuance of common stock in pay-
  ment of accrued interest              2,476,252      2,476      321,038           -              -             -        323,514
Net loss                                        -          -            -           -     (2,226,489)            -     (2,226,489)
                                       ----------    -------   ----------    --------    -----------    ----------    -----------
Balance at September 30, 2000          41,540,211    $41,540   $6,580,495    $     -     $(8,392,405)    $(150,000)   $(1,920,370)
                                       ==========    =======   ==========    ========    ===========    ==========    ===========
</TABLE>

                    See accompanying notes to consolidated financial statements.

                                      F-6
<PAGE>
                   ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   BACKGROUND  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

          BACKGROUND
          ----------

               Entertainment  Technologies  &  Programs,  Inc.  ("ETP")  and its
          wholly-owned  subsidiaries  (the "Company") are engaged in three major
          areas  of  operations  as  follows:

                    -    Operation  of  night  clubs  and  other  entertainment
               facilities  on United States military bases throughout the world,
               including  the  planning,  promotion  and  production  of  live
               performances  at  such  facilities.

                    -    Design  and  retail  sale  of  professional  sound  and
               lighting  equipment  to  both  the United States military and the
               non-military  consumer  markets.

                    -    Design  and  operation  of  amusement  facilities  and
               equipment.

               During  1999,  the Company was also in restaurant operations, but
          made  a  strategic decision to discontinue those operations. (See Note
          10)

               The  accompanying  consolidated  financial statements include the
          accounts  and  transactions  of  ETP,  along  with  its  wholly-owned
          subsidiaries.  All  intercompany  balances  and transactions have been
          eliminated in consolidation. The consolidated financial statements and
          notes  thereto  are  presented  as  if  all  mergers  and  business
          combinations  accounted  for  as poolings of interest have operated as
          one  entity  since  inception.

          USE  OF  ESTIMATES
          ------------------

               The  preparation  of  financial  statements  in  conformity  with
          generally  accepted  accounting principles requires management to make
          estimates  and  assumptions  that  affect reported amounts and related
          disclosures.  Actual  results  could  differ  from  estimates.

          REVENUE  RECOGNITION
          --------------------

               Revenue  is recognized at the time services are performed or when
          products  are  shipped.

          CONCENTRATIONS  OF  CREDIT  RISK
          --------------------------------

               Financial instruments which subject the Company to concentrations
          of  credit  risk  include  cash  and  cash  equivalents  and  accounts
          receivable.  The  Company  maintains  its  cash  in  well  known banks
          selected  based  upon  management's assessment of the banks' financial
          stability.  Balances  periodically  exceed  the  $100,000  federal
          depository  insurance  limit; however, the Company has not experienced
          any losses on deposits. Accounts receivable generally arise from sales
          of  equipment  and  services  to  the  United States Government and to
          United  States  consumers.  Collateral  is  generally not required for
          credit  granted. Sales to the United States government approximate 70%
          of  total sales reported in the accompanying statements of operations.

          CASH  EQUIVALENTS
          -----------------

               For  purposes  of reporting cash flows, the Company considers all
          short-term  investments  with  an original maturity of three months or
          less  when  purchased  to  be  cash  equivalents.

                                      F-7
<PAGE>
          INVENTORIES
          -----------

               Inventories,  consisting primarily of items available for catalog
          sales  are  valued  at the lower of cost or market. Cost is determined
          based  upon  the  first-in,  first-out  (FIFO)  method.

          PROPERTY  AND  EQUIPMENT
          ------------------------

               Property  and  equipment  is  stated  at  cost.  Depreciation  is
          computed principally by the straight-line method over estimated useful
          lives  as  follows:

                                                          ESTIMATED
               DESCRIPTION                              USEFUL  LIVES

               Amusement  games                             5  years
               Furniture  and  equipment                  5-7  years
               Club  equipment                            5-7  years
               Leasehold  improvements                     15  years
               Vehicles                                     5  years
               Buildings                                   39  years

          INCOME  TAXES
          -------------

               The  Company  uses  the liability method in accounting for income
          taxes.  Under  this  method,  deferred  tax assets and liabilities are
          determined based on differences between financial reporting and income
          tax  carrying amounts of assets and liabilities and are measured using
          the  enacted  tax  rates  and  laws  that  will  be in effect when the
          differences  are  expected  to  reverse.

          LOSS  PER  SHARE
          ----------------

               Basic  and diluted loss per share is computed on the basis of the
          weighted  average  number of shares of common stock outstanding during
          each  period.

          STOCK-BASED  COMPENSATION
          -------------------------

               The  Company  accounts  for  its  stock compensation arrangements
          under  the  provisions  of  APB No. 25 "Accounting for Stock Issued to
          Employees".  The  Company  provides  disclosure in accordance with the
          disclosure-only provisions of SFAS No. 123 "Accounting for Stock-Based
          Compensation".

          IMPAIRMENT  OF  LONG-LIVED  ASSETS
          ----------------------------------

               In  the  event  that  facts  and  circumstances indicate that the
          carrying  value  of  a  long-lived  asset,  including  associated
          intangibles,  may  be  impaired,  an  evaluation  of recoverability is
          performed  by  comparing  the estimated future undiscounted cash flows
          associated  with  the asset or the asset's estimated fair value to the
          asset's  carrying  amount to determine if a write-down to market value
          or  discounted  cash  flow  is  required.

          FAIR  VALUE  OF  FINANCIAL  INSTRUMENTS
          ---------------------------------------

               The  Company  includes  fair  value  information  in the notes to
          financial  statements when the fair value of its financial instruments
          is  different  from  the  book value. When the book value approximates
          fair  value,  no  additional  disclosure  is  made.

          COMPREHENSIVE  INCOME
          ---------------------

               The  Company  has  adopted  Statement  of  Financial  Accounting
          Standard  ("SFAS")  No.  130,  "Reporting  Comprehensive  Income".
          Comprehensive income includes such items as unrealized gains or losses

                                      F-8
<PAGE>
          on  certain  investment  securities  and  certain  foreign  currency
          translation  adjustments.  The  Company's financial statements include
          none  of  the  additional  elements  that affect comprehensive income.
          Accordingly,  comprehensive  income  and  net  income  are  identical.

          SEGMENT  INFORMATION
          --------------------

               The Company has adopted SFAS No. 131, "Disclosures about Segments
          of  an  Enterprise  and  Related Information". SFAS No. 131 supersedes
          SFAS  No.  14,  "Financial  Reporting  for  Segments  of  a  Business
          Enterprise".  Under  the  new standard, the Company is required to use
          the  management  approach  to  reporting  its segments. The management
          approach  designates  that  the  internal organization that is used by
          management for making operating decisions and assessing performance as
          the  source  of the Company's segments. The accounting policies of the
          segments  are  the  same  as  those  described  elsewhere  in  Note 1.

          RECLASSIFICATIONS
          -----------------

               Certain  items  in  these  financial  statements  have  been
          reclassified  to  conform  to  the  current  period  presentation.

2.   GOING  CONCERN  CONSIDERATIONS

     During  the  years  ended  September  30,  1999  and  2000, the Company has
experienced  negative  financial  results  as  follows:

<TABLE>
<CAPTION>
                                       1999           2000
                                    -----------    ------------
<S>                                 <C>            <C>
      Net loss                      $(3,830,948)   $(2,226,489)

      Negative cash flows from
       operations                      (913,276)      (403,055)

      Negative working capital       (2,221,853)    (5,442,904)

      Accumulated deficit            (6,165,916)    (8,392,405)

      Stockholders' deficit            (620,043)    (1,920,370)
</TABLE>

     In  addition  to  its  negative  financial  results,  the  Company has also
experienced  operational  problems  as  follows:

          -    During  1999,  Redfish  Management,  Inc. ("RMI"), a wholly owned
     subsidiary  of  the  Company, filed for Chapter 11 bankruptcy protection to
     allow  the Company to limit future losses by its restaurant operations (See
     Note  11).

          -    The  Company  is  delinquent on payments of principal and accrued
     interest  for  a  significant portion of its note payable and capital lease
     obligations.  Additionally,  at  September  30,  2000,  the  Company  is in
     violation  of  numerous  financial  and non-financial covenants included in
     such  note  payable and capital lease agreements for which waivers have not
     been  obtained.  Debt under those agreements has been classified as current
     in  the  accompanying  financial statements (See Note 6 and 9) and could be
     called  by  the  creditors.

          -    Management  has developed specific current and long-term plans to
     address  its  viability  as  a  going  concern  as  follows:

          -    During  1999  the  Company  adopted  plans  to  discontinue  its
     restaurant  operations because those operations require significant amounts
     of  debt  financing  and  have  contributed  significantly to the Company's
     financial  problems.  Seeking Chapter 11 bankruptcy for Redfish Management,
     Inc.  was  a  step  necessary  to  allow  the  Company  to  eliminate those
     operations  without  increasing risk to its more profitable operations. The
     elimination  of  restaurant operations resulted in a reduction of losses of
     approximately  $800,000  in  2000  as  compared  to  1999.

                                      F-9
<PAGE>
          -    The  Company  is  currently  in the final negotiation stages of a
     debt  reduction  plan  to  exchange  certain  of  its  assets  to  repay
     approximately  $2,900,000  of  long-term debt and related accrued interest.
     (See  Note  3)

          -    During 2000 the Company took steps to add depth to its management
     team  with  the  addition  of  an  experienced  chief financial officer and
     controller. Management is currently exploring ways to extinguish additional
     debt  in  exchange  for  assets  or through issuance of common stock and to
     concentrate  on  its  core  business.

          -    There can be no assurance that the Company's debt reduction plans
     will  be  successful or that the Company will have the ability to implement
     its  business  plan  and  ultimately  attain  profitability.  The Company's
     long-term viability as a going concern is dependent upon three key factors,
     as  follows:

          -    The  Company's  ability  to  obtain  adequate  sources of debt or
     equity funding to meet current commitments and fund the continuation of its
     business  operations  in  the  near  term.

          -    The  ability  of the Company to control costs and expand revenues
     from  existing  or  new  businesses.

          -    The  ability  of  the  Company  to  ultimately  achieve  adequate
     profitability  and  cash  flows  from operations to sustain its operations.

3.   DEBT  REDUCTION  PLAN  AND  PRO-FORMA  INFORMATION

     The  Company  has  entered the final negotiation stages of a debt reduction
agreement  (the "Debt Reduction Agreement"), the completion of which is probable
at  September  30,  2000.  Under the Debt Reduction Agreement the Investor Notes
(See Note 6) will be brought current and ultimately repaid through the Company's
contribution  of certain property (a waterpark facility, a racetrack and certain
raw land) located in Midland, Texas and 2,200,000 shares of the Company's common
stock,  to  a trust for liquidation, with the proceeds used for repayment of the
Investor  Notes.  The Debt Reduction Agreement provides for any shortfall in the
proceeds  from  liquidation  of  the property and shares of the Company's common
stock to be satisfied through the Company's issuance of additional shares of the
Company's  common  stock  or  through the trustee's foreclosing on certain other
property pledged by the Company.  If excess proceeds are received, such proceeds
would  be  returned  to  the  Company  after  satisfaction of fees of the trust.

     The  unaudited proforma balance sheet as of September 30, 2000 gives effect
to  the  transaction  as if it had occurred at that date. The unaudited proforma
statement  of  operations  for the year ended September 30, 2000 gives effect to
the  transaction  as  if  it  had  occurred  on  October  1,  1999.

     The unaudited proforma financial statements are presented for informational
purposes  only  and  are not necessarily indicative of the results of operations
that  would  have been achieved had the transaction been completed at October 1,
1999,  nor  are  they  indicative of the Company's future results of operations.

     The  Company  believes that the assumptions used in preparing the unaudited
proforma  balance  sheet and statement of operations provides a reasonable basis
for  presenting  all of the significant effects of the debt repayment agreement,
and  that  the  proforma  adjustments  give  effect  to those assumptions in the
unaudited  proforma  statements  of  operations.

     Unaudited  proforma  adjustments  to  the consolidated balance sheet are as
follows:

          a.  Reduction  of $1,957,350 to property to reflect the net book value
     of  assets  to  be placed in trust to provide proceeds for repayment of the
     Investor  Notes.  The  value of the property is assumed to be $2,450,000 at
     September  30,  2000,  based  on  independent  appraisal.

                                      F-10
<PAGE>
          b.  Elimination  of the Investor Notes in the amount of $2,600,000 and
     related  accrued  interest  of  $198,798  at  September  30,  2000.

          c. Issuance of 4,194,409 shares of the Company's common stock to repay
     the  remaining  portion  of  the  Investor  Notes  and accrued interest not
     extinguished  with  proceeds  from  sale of the property placed in trust as
     described  in  a. above. The price of the Company's common stock is assumed
     to  be  $0.11  based  on  the  quoted  market  price at September 30, 2000.

     Unaudited  proforma adjustments to the consolidated statement of operations
     are  as  follows:

          a.  Reduction  in  depreciation  expense  of  $47,803, attributable to
     elimination  of  the  property  placed  in  trust  to  provide proceeds for
     repayment  of  the  Investor  Notes.

          b.  Reduction  in  interest  expense  of  $460,591  related  to  the
     elimination  of  interest  expense  on  the  Investor  Notes.

          c.  Gain  on  sale  of  the  property  placed  in trust to provide for
     repayment  of  the  Investor  Notes  in  the  amount of $348,798 based on a
     comparison  of  the appraised value with the net book value of the property
     at  October  1,  1999.

          d.  Decrease  in  revenues,  cost  of  revenues  and  general  and
     administrative  expenses  associated  with  the  elimination  of  operating
     activities  involving the property placed in trust to provide for repayment
     of  the  Investor  Notes. The effect of these items (excluding depreciation
     expense)  was  an  improvement  to  loss  from  operations  of  $27,465.

4.  ACCOUNTS  RECEIVABLE

     Accounts  receivable  consist  primarily  of amounts due from U.S. military
bases  for  the  purchase of entertainment equipment and services.  An allowance
for  doubtful  accounts  is provided, when appropriate, based on past experience
and  other  factors which, in management's judgment, deserve current recognition
in  estimating  probable  bad  debts.  Such  factors  include circumstances with
respect  to  specific  accounts  receivable,  growth and composition of accounts
receivable,  the relationship of the allowance for doubtful accounts to accounts
receivable  and  current  economic  conditions.  Accounts  receivable  at  both
September 30, 1999 and 2000 are stated net of an allowance for doubtful accounts
of  $17,985.

5.  PROPERTY  AND  EQUIPMENT

<TABLE>
<CAPTION>
     Property  and  equipment  consisted of the following at September 30, 2000:

<S>                                                        <C>
          Land                                             $  913,485
          Buildings and improvements                        1,626,405
          Club equipment                                    2,446,974
          Amusement games                                   2,035,259
          Furniture and equipment                             351,702
          Vehicles                                            111,701
                                                           ----------
                                                            7,485,526
          Less: accumulated depreciation and amortization   3,591,083
                                                           ----------
          Property and equipment, net                      $3,894,443
                                                           ==========
</TABLE>

     Depreciation  expense  for  the years ended September 30, 1999 and 2000 was
$920,589  and  $731,221,  respectively.

                                      F-11
<PAGE>
6.  NOTES  PAYABLE

<TABLE>
<CAPTION>
     Notes  payable  consist  of  the  following  at  September  30,  2000:

<S>                                                 <C>
          Note payable to a bank (the "SBA Loan"),
          bearing interest of 12.25% per year and
          due in monthly payments of $5,928,
          including interest, through November
          2016.  This note is guaranteed by the
          United States Small Business Adminis-
          tration ("SBA") and is collateralized
          by certain real estate and by the per-
          sonal guarantee of an officer/stock-
          holder of the Company.                     $  515,157

          Notes payable to investors (the "Investor
          Notes") under private placements handled
          by an investment company.  These notes
          bear interest at stated rates ranging
          from 12.0% to 14.0% per year and are
          collateralized by substantially all
          assets of the Company.                      2,600,000

          Notes payable to individuals, due on
          demand, bearing interest at various
          rates up to 10% per year.  These
          notes are not collateralized.                 192,045

          Note payable to factoring companies,
          bearing interest at graduated rates
          based upon the collection period
          for factored receivables.                     309,797

          Note payable to a bank, bearing interest
          of 14.25% per year and due on demand.
          This note is not collateralized.               68,750

          Note payable to a leasing company,
          due in monthly payments of $1,112
          through September 2004 and collateralized
          by certain equipment.                          50,253
                                                     ----------

                 Total notes payable                 $3,736,002
                                                     ==========
</TABLE>

     The SBA Loan, contains various financial and non-financial covenants, which
require  the  Company,  among  other  things, to maintain certain levels of cash
flows,  stockholders'  equity  and debt to equity.  The covenants also prohibit,
without  the  consent of the lender, the Company from making material changes to
its business, declaring or paying dividends, transferring ownership interests in
the  Company,  paying  salaries  to certain officers of the Company in excess of
specified limits, or incurring new debt.  The Company is in violation of many of
the covenants of the SBA Loan.  Accordingly, the SBA Loan could be called at any
time  by  the  lender.  The  Company  has  not  requested  or  received covenant
violation  waivers  from  the  lender  and  the  SBA Loan has been classified as
current  in  the  financial  statements.

In  connection  with  the  funding  of the Investor Notes, the Company issued a
total  of  2,050,000  shares  of  its  common  stock  and  paid  loan  costs  of
approximately  $420,000.  Accordingly, the actual weighted average interest rate
on  these  notes,  including  the effect of the issuance of common stock and the

                                      F-12
<PAGE>
payment  of  loan  costs,  approximated  61% during the year ended September 30,
1999.  During  the  year ended September 30, 2000, the Company incurred costs of
approximately  $126,000  to  further extend the Investor Notes. Accordingly, the
weighted  average  interest rate on these notes approximated 18% during the year
ended  September  30,  2000.

     The  Investor  Notes  consist  of  five notes in face values of $200,000 to
$600,000.  The  investment  company  arranged  for funding of the Investor Notes
using  two methods.  Two of the notes with a total face value of $1,200,000 were
placed in unit trusts in which investors acquired interest in $1,000 units.  The
remaining $1,400,000 was funded through the sale of undivided interests in three
notes.  The  Company, in order to secure the funding under Investor Notes issued
a  total  of  2,050,000  shares  of  its  common  stock to the investors and the
investment  company.  The  issuance  of  those  shares  resulted  in the Company
recognizing  $486,000  of  additional interest expense in 1999. The Company also
incurred  loan  costs  in  connection  with  the Investor Notes of approximately
$420,000  in  the  form  of  legal  fees, accounting fees, commissions and other
directly  related  costs  and  substantially  all  such  costs were amortized to
expense  in  1999.

     The  Investor  Notes  contain  certain  covenants that require, among other
things,  that the Company make all payments under the notes when due, experience
no  significant  change  in  its  financial  condition  or be the subject of any
bankruptcy  proceedings  (See Note 2).  At September 30, 2000 the Company was in
violation  of  certain  covenants  under  the  Investor Notes and the Company is
currently  arranging  to repay the Investor Notes under the Debt Reduction Plan.
(See  Note  3)

7.   ACCOUNTS  PAYABLE  AND  ACCRUED  LIABILITIES

<TABLE>
<CAPTION>
     Accounts  payable  and  accrued  liabilities  consisted of the following at
     September  30,  2000:

<S>                                          <C>
          Accounts payable, trade            $  545,803
          Accrued payroll and related taxes     136,944
          Accrued rent expense                   79,373
          Accrued interest expense              353,324
          Sales taxes payable                    56,493
          Accrued property tax expense           65,241
          Other accrued expenses                192,858
          Accrued litigation settlement          82,500
                                             ----------
                                             $1,512,536
                                             ==========
</TABLE>

8.   INCOME  TAXES

     The Company has incurred losses since its inception and, therefore, has not
been subject to federal income taxes.  As of September 30, 1999, the Company had
net  operating  loss  ("NOL")  carryforwards  for  income  tax  purposes  of
approximately  $8,800,000  which expire in various tax years through 2021. Under
the  provisions of Section 382 of the Internal Revenue Code the greater than 50%
ownership  change  in the Company that could result from the debt agreement with
an  investment company could severely limit the Company's ability to utilize its
NOL  carryforward  to  reduce future taxable income and related tax liabilities.
Additionally,  because  United  States  tax laws limit the time during which NOL
carryforwards may be applied against future taxable income, the Company will, in
all  likelihood,  be unable to take full advantage of its NOL for federal income
tax  purposes  should  the  Company  generate  taxable  income.

                                      F-13
<PAGE>
     The  composition of deferred tax assets and liabilities and the related tax
effects  at  September  30,  2000  are  as  follows:

<TABLE>
<CAPTION>
<S>                                              <C>
            Deferred tax assets:
              Net operating losses               $ 3,007,071
              Other asset basis difference            34,805
              Accrued liabilities and reserves        28,050
              Valuation allowance                (2,989,882)
                                                 -----------
                Total deferred tax assets             80,044
                                                 -----------
             Deferred tax liabilities:
              Property and equipment                (80,044)
                                                ------------
                Total deferred tax liability        (80,044)
                                                ------------
             Net deferred tax asset (liability)  $         -
                                                 ===========
</TABLE>

     The difference between the income tax benefit in the accompanying statement
of  operations  and  the  amount that would result if the U.S. Federal statutory
rate  of 34% were applied to pre-tax loss for the years ended September 30, 2000
and  1999  is  as  follows:

<TABLE>
<CAPTION>
                                                                   2000                  1999
                                                           -----------------    --------------------
                                                            AMOUNT        %        AMOUNT        %
                                                         -----------    ----    ------------    ----
                                                                                (AS RESTATED)
<S>                                                       <C>           <C>     <C>             <C>
          Benefit for income tax at
            federal statutory rate                         $(757,006)    (34)%   $(1,302,522)    (34)%
          Difference in depreciation                         (28,267)     (1)         50,266       1
          Difference in amortization
            of start-up costs                                (11,601)     (1)         46,406       1
          Difference in recognition
            of accrued expenses                                6,847       1          21,203       -
          Difference in recognition of
            accrued loss on disposal of
            discontinued operations                         (101,784)     (5)        101,784       3
          Difference in gain on sale
            of asset                                               -       -           7,565       -
          Non-deductible expenses                              3,500       -           2,119       -
          Increase in valuation
            allowance                                        888,311      40       1,073,179      28
                                                           ---------    ----     -----------    ----
                                                           $      -        0%    $         -       0%
                                                           =========    ====     ===========    ====
</TABLE>

9.   LEASE  OBLIGATIONS

     Included in property and equipment in the accompanying consolidated balance
sheet at September 30, 2000 are the following assets held under a capital lease:

          Amusement  games                        $1,200,000
          Accumulated  amortization                 (519,999)
                                                  -----------
          Assets  under  capital  leases,  net     $  680,001
                                                   ==========

     The  Company has also entered into certain operating leases for offices and
retail  operations.  Certain  of the leases provide for renewal options, payment
of  taxes  and  utilities  by  the Company, and increases to rent should certain
costs  to  the  landlord  increase.  Rental  expense  under operating leases was
$100,908  and  $423,013  for  the  years  ended  September  30,  2000  and 1999,
respectively.  At  September 30, 2000, due to liquidity problems, the Company is
eighteen months delinquent on rent at its headquarters in the amount of $79,373.

     Minimum  lease  payments  due  under  leases  with remaining lease terms of
greater  than one year and expiration dates subsequent to September 30, 2000 are
summarized  as  follows:

                                      F-14
<PAGE>
<TABLE>
<CAPTION>
           YEAR  ENDED                                   CAPITAL
          SEPTEMBER 30,                                   LEASE
          -------------                                 ----------
<S>                                                     <C>
               2001                                     $  975,412
               2002                                         75,000
               2003                                         75,000
               2004                                         75,000
               2005                                         75,000
               Thereafter                                  516,925
                                                        ----------
           Total  minimum  leases                        1,792,337
           Less  amount  representing  interest            823,907
                                                        ----------
           Present  value  of  minimum  lease  payments    968,430
           Less  current  portion                          568,430
                                                        ----------

                                                        $  400,000
                                                        ==========
</TABLE>

     The  capital  lease  agreement  includes certain covenants that require the
Company  to  provide  various  financial  information  to the lessor in a timely
manner.  During  the year ended September 30, 2000 and 1999, the Company did not
comply  with  the  lease  covenants  and  at September 30, 2000, the Company was
thirty  months  past  due  on required payments under the lease obligation. Such
past  due  payments  total  $690,197  and  include  accrued  interest expense of
$136,377,  accrued  sales  tax  expense  of  $53,590  and  principal payments of
$500,230.  Accordingly, the Company is in default of the lease agreement and the
lessor  could  repossess  the  amusement  games  or  request payment of past due
amounts.  If  the  lessor  requested payment of past due amounts and the Company
was  unable  to comply, the lessor's only recourse is repossession of the leased
amusement  games.  The  Company  has  not  requested  or  received any waiver of
covenant  violations and its present financial circumstances prevent the Company
from  making  past  due  lease  payments.

10.  DISCONTINUED  OPERATIONS

     On  September  15,  1999,  the  Company  adopted  a  plan to dispose of all
restaurant  operations.  The  Company's  restaurant  operations  were  conducted
through  its wholly owned subsidiary, Redfish Management, Inc. ("RMI").  As part
of  the  Company's  plan, RMI sought Chapter 11 federal bankruptcy protection in
November  1999  and  began  an  effort  to  sell  all  assets  of  RMI.

     Based  on  discussions with prospective buyers of RMI's assets, the Company
recognized  an  estimated  loss  on  disposal  of  RMI's  assets  of $279,364 at
September  30,  1999.  The  Company  has  also  recorded a $20,000 provision for
losses  from  continued  operation  of  its restaurants to the date of disposal.
Management  expects to complete disposition of RMI's assets by January 31, 2000.

     The  gain  (loss)  from  operation  of the discontinued restaurant division
presented  in  the accompanying statements of operations includes the following:

<TABLE>
<CAPTION>
                                                1999        2000
                                             ----------    --------
<S>                                          <C>           <C>
          Net  sales                          $1,607,613   $      -
          Gain  (loss)  from  operations        (316,992)         -
          Gain  (loss)  from  discontinued
            operations                          (510,962)   (26,353)
</TABLE>

     Net  current  liabilities  of  discontinued  restaurant  operations consist
primarily  of  accounts  payable  and accrued liabilities at September 30, 2000.

11.  CONTINGENCIES

     During  October  1998,  the  Company  abandoned  certain  lease  space in a
shopping  mall  in  Arlington,  Texas  before  the expiration of the lease term.
Management  abandoned  the  lease  because  management  believed that the lessor

                                      F-15
<PAGE>
improperly  induced  the  Company  to enter the lease through misrepresentations
about the ability of the shopping mall to support the amusement services offered
by the Company.  In January 1999, the lessor filed a lawsuit against the Company
seeking  damages  of $124,727, plus applicable interest and attorney's fees, for
breach  of  lease.  During  2000,  the  case  went  to  mediation and the lessor
received a settlement of $135,000.  The Company paid $67,500 during 2000 and has
recorded  an  accrual  of  $67,500  at  September  30,  2000.

     As  described  in Note 2 to the financial statements, on November 16, 1999,
RMI,  a  wholly-owned subsidiary that includes all of the Company's restaurants,
filed  for  bankruptcy  protection under Chapter 11 of the U.S. Bankruptcy Code.
In  connection  with the bankruptcy filing, the Company's plan of reorganization
is  based  upon  a planned sale of all assets of RMI and use of the proceeds for
payment  of  creditors.  At  September  30,  1999  the  Company  has treated the
operations  of  RMI  as  a  discontinued  business segment and wrote the related
assets  down  to  their  estimated  net  realizable  values.

     The Company is currently a party to certain other litigation arising in the
normal  course  of  business.  Management believes that such litigation will not
have  a  material  impact  on  the  Company.

12.  BUSINESS  SEGMENTS

     During  the  fiscal  year  ended  September  30, 1999 and 2000, the Company
operated  primarily  in  three  strategic  business  units  that offer different
products  and  services:  providing military entertainment services, retail sale
of sound and lighting equipment and design and operation of amusement facilities
and  equipment.  Restaurant  operations  have  not  been  included  in  segment
information  since  they  were  reported as discontinued operations in 1999 (See
Note  10).  Financial  information  regarding  the other business segments is as
follows:

<TABLE>
<CAPTION>
                                            MILITARY      RETAIL    AMUSE-
                                         ENTERTAINMENT     SALES     MENT     OTHER     TOTAL
                                         --------------   -------   -------   ------   --------
                                                         (AMOUNTS IN THOUSANDS)
<S>                                      <C>              <C>       <C>       <C>      <C>
   YEAR ENDED SEPTEMBER 30,
    2000:

   Revenues                                $3,327           $ 769    $   722    $  -     $ 4,818
   Income (loss) from operations             (109)           (113)      (935)    (278)    (1,435)
   Total assets                             1,060             163      3,128       28      4,379
   Interest expense                            74              18        673        -        765
   Depreciation expense                       357               5        362        7        731
   Capital expenditures                       303               7         14        -        324

   YEAR ENDED SEPTEMBER 30.
    1999:

   Revenues                                $3,309           $ 945    $   857    $  43    $ 5,154
   Income (loss) from operations             (197)           (166)    (1,107)    (157)    (1,627)
   Total assets                             1,413             272      3,256       35      4,976
   Interest expense                            38              35      1,021      126      1,220
   Depreciation expense                       383               1        484       10        878
   Effect of change in accounting               -               -        111        -        111
   Capital expenditures                       337               2        497       25        861
</TABLE>

     The  accounting policies of the segments are the same as those described in
the summary of significant accounting policies. All intersegment sale prices are
market  based.  The Company evaluates performance based on operating earnings of
the  respective  business  units.

13.  NON-CASH  FINANCING  AND  INVESTING  ACTIVITY

     During  the  year  ended  September  30,  1999,  the  Company  sold certain
equipment  in exchange for the buyer's assumption of a $130,565 directly related
note  payable.

     During  the  year  ended  September  30, 2000, the Company issued 1,975,693
shares  of  common  stock  to  convert  $235,218  of  notes  payable  to equity.

                                      F-16
<PAGE>
14.  CUMULATIVE  EFFECT  OF  CHANGE  IN  ACCOUNTING  PRINCIPLE

     Effective  October  1,  1998,  the Company, in accordance with the American
Institute  of  Certified Public Accountants' Statement of Position 98-5, changed
its method of accounting for start-up costs. The change involved expensing these
costs  as  incurred,  rather  than capitalizing and subsequently amortizing such
costs. The change in accounting principle resulted in the write-off of the costs
capitalized as of October 1, 1998. The cumulative effect of the write-off, which
totals  $170,611,  has  been  expensed  and  included  in  the accompanying 1999
consolidated  statement  of  operations.  The  effect of adopting this change in
accounting  principle  for  the  year  ended  September  30, 1999 is as follows:

<TABLE>
<CAPTION>
<S>                                                        <C>
     Loss  from  continuing  operations                    $110,520
     Net  loss  per  share  from  continuing  operations       0.01

     Loss  from  discontinued  operations                    60,091
     Net  loss  per  share  from  discontinued  operations     0.00

     Net  loss                                              170,611
     Net  loss  per  share                                     0.01
</TABLE>

                                      F-17
<PAGE>
<TABLE>
<CAPTION>
                         ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES

                        UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS FOR THE
                          THREE MONTHS AND NINE MONTHS ENDED JUNE 30, 2001 AND 2000

                                             TABLE OF CONTENTS

                                                                                                 PAGE
                                                                                                 ----
<S>                                                                                              <C>
Unaudited Consolidated Condensed Financial Statements:

  Unaudited Consolidated Condensed Balance Sheet as of June 30, 2001 and September 30, 2000      F-19

  Unaudited Consolidated Condensed Statement of Operations for the three months and nine months
  ended June 30, 2001 and 2000                                                                   F-20

  Unaudited Consolidated Condensed Statement of Cash Flows for the nine months ended June 30,
    2001 and 2000                                                                                F-21

  Unaudited Consolidated Condensed Statement of Stockholders' Deficit for the nine months
    ended June 30, 2001                                                                          F-22

Notes to Unaudited Consolidated Condensed Financial Statements                                   F-23
</TABLE>

                                      F-18
<PAGE>
<TABLE>
<CAPTION>
          ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES
                      CONSOLIDATED CONDENSED BALANCE SHEET

                                                       JUNE 30,
                                                         2001       SEPTEMBER 30,
     ASSETS                                          (UNAUDITED)       2000
     ------                                        ---------------  ------------
<S>                                                <C>              <C>
Current assets:
  Cash and cash equivalents                        $            -   $     9,604
  Accounts receivable, net                                584,951       300,353
  Inventory                                                62,199        92,729
  Prepaid expenses                                         54,531             -
  Restricted assets                                        58,262        54,210
                                                   ---------------  ------------

    Total current assets                                  759,943       456,896

Property and equipment, net                             1,995,954     3,894,443
Other assets                                               44,414        28,091
                                                   ---------------  ------------

      Total assets                                 $    2,800,311   $ 4,379,430
                                                   ===============  ============

LIABILITIES AND STOCKHOLDERS' DEFICIT
-------------------------------------

Current liabilities:
  Book overdraft                                   $        6,262   $         -
  Current maturities of notes payable and
    capital lease obligation                            1,965,987     4,304,432
  Accounts payable and accrued liabilities              1,343,474     1,512,536
  Accrued phase-out period losses of discontinued
    restaurant operations                                       -        82,832
                                                   ---------------  ------------

    Total current liabilities                           3,315,723     5,899,800

Notes payable and capital lease obligation, net
  of current portion                                      444,975       400,000
                                                   ---------------  ------------

      Total liabilities                                 3,760,698     6,299,800
                                                   ---------------  ------------

Commitments and contingencies

Stockholders' deficit:
  Common stock, $.001 par value, 50,000,000
    shares authorized, 49,544,317 and 41,540,211
    shares issued and  49,144,317 and 41,140,211
    shares outstanding at June 30, 2001 and
    September 30, 2000, respectively                       49,544        41,540
  Additional paid-in capital                            7,960,474     6,580,495
  Accumulated deficit                                  (8,820,405)   (8,392,405)
  Treasury stock: 400,000 shares at cost                 (150,000)     (150,000)
                                                   ---------------  ------------

      Total stockholders' deficit                        (960,387)   (1,920,370)
                                                   ---------------  ------------

        Total liabilities and stockholders'
          deficit                                  $    2,800,311   $ 4,379,430
                                                   ===============  ============

<FN>
Note:  The balance sheet at September 30, 2000 has been derived from the audited
financial  statements  at  that date but does not include all of the information
and  footnotes required by generally accepted accounting principles for complete
financial  statements.
</TABLE>

     See  accompanying  notes.

                                      F-19
<PAGE>
<TABLE>
<CAPTION>
               ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS

                                 THREE MONTHS ENDED JUNE 30, NINE MONTHS ENDED JUNE 30,
                                  -------------------------  --------------------------
                                      2001         2000         2001           2000
                                  -----------  ------------  ------------  ------------
<S>                               <C>          <C>           <C>           <C>
Total revenue                     $ 1,024,707  $ 1,346,573   $ 2,535,312   $ 3,747,750

Total cost of sales and
  services                            530,953      744,228     1,262,822     2,031,135
                                  -----------  ------------  ------------  ------------

Gross margin                          493,754      602,345     1,272,490     1,716,615

General and administrative
  expenses                            353,049      324,534     1,212,144     1,354,892

Depreciation and amortization          54,752      194,319       286,962       582,957
                                  -----------  ------------  ------------  ------------

  Income (loss) from operations        85,953       83,492      (226,616)     (221,234)

Interest expense                       73,732      247,889       201,384       502,519
                                  -----------  ------------  ------------  ------------

Income (loss) from continuing
  operations                           12,221     (164,397)     (428,000)     (723,753)

Discontinued operations-loss
  from operation of discontin-
  ued restaurant division                  -       (48,903)           -         48,903
                                  -----------  ------------  ------------  ------------

Net income (loss)                 $    12,221  $  (213,300)  $  (428,000)  $  (772,656)
                                  ===========  ============  ============  ============

Basic and diluted net loss
  per common share                $      0.00  $     (0.01)  $     (0.01)  $     (0.02)
                                  ===========  ============  ============  ============

Weighted average shares
 outstanding                       48,310,400   35,043,230    47,245,769    34,566,028
                                  ===========  ============  ============  ============
</TABLE>

                               See accompanying notes.

                                      F-20
<PAGE>
<TABLE>
<CAPTION>
      ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

                                            NINE MONTHS ENDED JUNE 30,
                                            --------------------------
                                                 2001        2000
                                              ----------  -----------
<S>                                           <C>         <C>
Cash flows from operating activities:
  Net loss                                    $(428,000)  $ (772,656)
  Adjustments to reconcile net loss to net
    cash provided by (used in) operating
    activities                                  170,778    1,139,010
                                              ----------  -----------

      Net cash provided by (used in)
        operating activities                   (257,222)     366,354
                                              ----------  -----------

Cash flows from investing activities:
  Capital expenditures                         (357,374)    (254,952)
                                              ----------  -----------

      Net cash used in investing activities    (357,374)    (254,952)
                                              ----------  -----------

Cash flows from financing activities:
  Increase (decrease) in book overdrafts          6,262      (36,888)
  Proceeds from sale of common stock            205,400       25,000
  Proceeds from notes payable and capital
    lease obligations                           393,330      461,269
  Payments on notes payable and capital
    lease obligations                                 -     (423,839)
                                              ----------  -----------

      Net cash provided by (used in)
        financing activities                    604,992       25,542
                                              ----------  -----------

Increase (decrease) in cash and cash
  equivalents                                    (9,604)     136,944

Cash and cash equivalents, beginning of
  period                                          9,604            -
                                              ----------  -----------

Cash and cash equivalents, end of period      $       -   $  136,944
                                              ==========  ===========
</TABLE>

                        See accompanying notes.

                                      F-21
<PAGE>
<TABLE>
<CAPTION>
                   ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES
                UNAUDITED CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' DEFICIT
                              FOR THE NINE MONTHS ENDED JUNE 30, 2001

                                          COMMON STOCK        ADDITIONAL
                                                 PAR AMOUNT    PAID-IN    ACCUMULATED
                                                  TREASURY
                                       SHARES      $0.001      CAPITAL      DEFICIT       STOCK
                                    -----------  -----------  ----------  -------------  ----------
<S>                                 <C>          <C>          <C>         <C>            <C>
Balance at September 30, 2000        41,540,211  $    41,540  $6,580,495  $ (8,392,405)  $(150,000)

Common stock issued for services      2,033,980        2,034     190,816             -           -

Common stock issued or issuable
  for cash                            2,521,311        2,521     202,879             -           -

Note payable converted to common
  stock                                 990,000          990     100,810             -           -

Accrued interest settled through
  issuance of common stock            1,721,815        1,722     170,460             -           -

Long-term debt contributed as
  additional paid-in capital                  -            -     642,051             -           -

Legal proceeding settled through
  issue of common stock                 737,000          737      72,963             -           -

Net loss for the nine months ended
  June 30, 2001                               -            -           -      (428,000)       -  _
                                    -----------  -----------  ----------  -------------  ----------

Balance at June 30, 2001             49,544,317  $    49,544  $7,960,474  $ (8,820,405)  $(150,000)
                                    ===========  ===========  ==========  =============  ==========
</TABLE>

              See selected notes to consolidated condensed financial statements.

                                      F-22
<PAGE>
          ENTERTAINMENT TECHNOLOGIES & PROGRAMS, INC. AND SUBSIDIARIES
         NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   __________

1.   GENERAL
     -------
     The  unaudited  consolidated condensed financial statements 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  generally  accepted  accounting  principles  have  been
     condensed  or  omitted,  pursuant  to  such  rules  and  regulations. These
     unaudited  consolidated  condensed  financial  statements should be read in
     conjunction  with  the  audited consolidated financial statements and notes
     thereto  of  Entertainment  Technologies  & Programs, Inc. and Subsidiaries
     (the  "Company") included in the Company's Annual Report on Form 10-KSB for
     the  year ended September 30, 2000 and 1999. Certain reclassifications have
     been  made  to  prior  year  amounts  to  conform  with  the  current  year
     presentation.

     In  the  opinion  of  management,  the  unaudited  consolidated  condensed
     financial  information  included herein reflect all adjustments, consisting
     only  of  normal,  recurring  adjustments,  which  are necessary for a fair
     presentation of the Company's financial position, results of operations and
     cash flows for the interim periods presented. The results of operations for
     the  interim periods presented herein are not necessarily indicative of the
     results  to  be  expected  for  a  full  year  or any other interim period.

2.   BACKGROUND
     ----------
     Entertainment  Technologies  &  Programs, Inc. ("ETP") and its wholly-owned
     subsidiaries (the "company") are engaged in three major areas of operations
     as  follows:

     -    Operation  of night clubs and other entertainment facilities on United
          States  military  bases  throughout the world, including the planning,
          promotion  and  production  of  live  performances at such facilities.

     -    Design and retail sale of professional sound and lighting equipment to
          both the United States military and the non-military consumer markets.

     -    Design  and  operation  of  amusement  facilities  and  equipment.

     The  accompanying  consolidated  condensed financial statements include the
     accounts and transactions of ETP, along with its wholly-owned subsidiaries.
     All  intercompany  balances  and  transactions  have  been  eliminated  in
     consolidation.

3.   COMPREHENSIVE  INCOME
     ---------------------

     The Company has adopted Statement of Financial Accounting Standard ("SFAS")
     No.  130, "Reporting Comprehensive Income", which establishes standards for
     reporting  and display of comprehensive income and its components in a full
     set of financial statements. Comprehensive income includes all changes in a
     company's  equity,  except  those  resulting  from  investments  by  and
     distributions to owners. There was no difference between comprehensive loss
     and  net  loss  for the three and nine months ended June 30, 2001 and 2000.

4.   INCOME  TAXES
     -------------

     Deferred  income  taxes  reflect  the  tax effects of temporary differences
     between  the  carrying  amounts  of  assets  and  liabilities for financial
     reporting  purposes  and  the  amounts  used  for  income tax purposes. The
     Company  has  provided deferred tax valuation allowances for cumulative net

                                      F-23
<PAGE>
     operating tax losses to the extent that the net operating losses may not be
     realized.  The difference between the federal statutory income tax rate and
     the  Company's effective income tax rate is primarily attributed to changes
     in  valuation  allowances  for deferred tax assets related to net operating
     losses.

5.   LITIGATION
     ----------

     The  Company filed suit against Bronco Group Management, Inc. for breach of
     contract  and  against  Bowling  &  Billiard  Supplies,  Inc.  for tortuous
     interference with the business relationship between the Company and Bronco.
     The  contract  between the Company and Bronco contained a mandatory binding
     arbitration  clause.  Arbitration  resulted  in  a  judgment  being entered
     against  Bronco  for  breach  of  contract  in  the amount of $339,876. The
     Company  has  achieved a severance of the two causes of action and made the
     judgment  against  Bronco  a  final  judgment  and  shall continue its case
     against  Billiard  for  tortuous interference with a business relationship.
     The  Company is aggressively pursuing this case and a favorable outcome and
     recovery in excess of $250,000 against Bowling Billiard is, in our opinion,
     probable.

     On  February  14,  2001,  Verizon  Capital  filed  suit against the Company
     seeking  to  recover  an unspecified amount of damages due to the Company's
     alleged breach of the lease agreement between Bell Atlantic and the Company
     dated  May  18,  1998.  On  March  22, 2001, the Company filed its original
     answer  asserting several affirmative defenses to Verizon Capital's claims.
     In  addition,  the  Company filed a counterclaim asserting causes of action
     for  breach  of  contract,  breach  of  warranties,  fraud,  negligent
     misrepresentation and mutual mistake. The Company's counterclaims are based
     upon  allegations that (1) a large portion of the equipment under the lease
     at  issue  was  never  delivered  by  the  lessor,  Bell Atlantic; (2) Bell
     Atlantic  made  various misrepresentations regarding its ability to deliver
     the  equipment; and (3) Bell Atlantic wrongfully kept approximately $75,000
     in  insurance proceeds with respect to equipment that was damaged before it
     was  transferred  to  the  Company. The parties have engaged in significant
     settlement discussions to date. Settlement talks are currently ongoing. The
     Company  cannot  predict  with  any  certainty the eventual outcome of this
     litigation  or  the  settlement  talks.

     On  April 23, 2001, the Company filed suit against GameCom, Inc. and Ferris
     Productions,  Inc.  seeking to recover an unspecified amount of damages due
     to  Ferris'  alleged  breach  of  a letter of intent between Ferris and the
     Company  dated  March  9,  2001.  The  Company  also  seeks  injunctive and
     declaratory  relief  relating  to the letter of intent. The Company asserts
     causes  of  action for breach of contract, fraud and tortuous interference.
     The  Company's  claims are based upon the Company's allegations that Ferris
     breached  the  letter of intent and that GameCom wrongfully interfered with
     the  Company's  rights  under  the  letter of intent. On July 17, 2001, the
     Company  filed  a  motion  for partial summary judgment with respect to the
     counterclaims and seeking summary judgment in its favor on multiple issues.
     The  Company  cannot predict with any certainty the eventual outcome of the
     motion  for  summary  judgment  or  this  litigation.

6.   BUSINESS  SEGMENTS
     ------------------

     During  the  nine months ended June 30, 2001 and 2000, the Company operated
     primarily  in  three strategic business units that offer different products
     and  services:  providing  military  entertainment services, retail sale of
     sound  and  lighting  equipment  and  design  and  operation  of  amusement
     facilities and equipment. Financial information regarding business segments
     is  as  follows:

                                      F-24
<PAGE>
<TABLE>
<CAPTION>
                         MILITARY         RETAIL
                         ENTERTAINMENT    SALES     AMUSEMENT     OTHER       TOTAL
                         --------------  --------  -----------  ----------  -----------
<S>                      <C>             <C>       <C>          <C>         <C>
     NINE MONTHS ENDED
       JUNE 30, 2001:

     Revenues            $    1,768,431  $459,627  $  307,254   $       -   $2,535,312
     Income (loss) from
       operations               328,868    49,641     (94,340)   (510,785)    (226,616)
     Total assets             1,076,719   461,690   1,261,902      78,328    2,800,311

     NINE MONTHS ENDED
       JUNE 30, 2000:

     Revenues            $    2,531,754  $825,764  $  390,232   $       -   $3,737,750
     Income (loss) from
       operations                35,362    97,040    (320,565)    (33,071)    (221,234)
     Total assets             1,553,966   554,980   3,076,828     162,609    5,348,383

     THREE MONTHS ENDED
       JUNE 30, 2001:

     Revenues            $      598,565  $327,898  $   98,244   $       -   $1,024,707
     Income (loss) from
       operations               122,882   108,844       5,899    (151,672)      85,953
     Total assets             1,076,719   461,690   1,261,902      78,328    2,800,311

     NINE MONTHS ENDED
       JUNE 30, 2000:

     Revenues            $      857,287  $215,173  $  274,114   $       -   $1,346,573
     Income (loss) from
       operations                15,623    25,811     (76,705)    118,763       83,492
     Total assets             1,553,966   554,980   3,076,828     162,609    5,348,383
</TABLE>

     The  accounting policies of the segments are the same as those described in
     the  summary of significant accounting policies. All intersegment sales are
     eliminated.  The  Company evaluates performance based on operating earnings
     of  the  respective  business  units.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
------   -----------------------------------------------------------------------
OF  OPERATIONS.
--------------

     The  following  discussion should be read in conjunction with the Company's
unaudited  consolidated  interim  financial statements and related notes thereto
included  in  this  quarterly report and in the unaudited consolidated Financial
Statements  and  Management's Discussion and Analysis of Financial Condition and
Results  of  Operations  ("MD&A") contained in the Company's 10-KSB for the year
ended  September 30, 2000.  Certain statements in the following MD&A are forward
looking  statements.  Words  such  as  "expects", "anticipates", "estimates" and
similar  expressions  are intended to identify forward looking statements.  Such
statements  are  subject  to  risks  and  uncertainties  that could cause actual
results  to  differ  materially  from  those  projected.

                                      F-25
<PAGE>
     RESULTS  OF  OPERATIONS
     -----------------------

     THREE  MONTHS  ENDED  JUNE 30, 2001 COMPARED TO THE THREE MONTHS ENDED JUNE
     30,  2000:

     Revenues  for  the  three  months ended June 30, 2001 decreased by $321,866
from  $1,346,573  for the three months ended June 30, 2000 to $1,024,707 for the
three  months  ended  June  30,  2001  primarily  due  to  lack of sales of live
entertainment  to  the  military  markets  and  the  loss  of  revenues from the
discontinued  operation  of the waterpark during the three months ended June 30,
2001.

     General and administrative expenses increased $28,515 from $324,534 for the
three months ended June 30, 2000 to $353,049 for the three months ended June 30,
2001.  This  increase  is  primarily  a  result  of  legal  expenses  and  legal
settlements.

     Depreciation  expense  for  the  three months ended June 30, 2001 decreased
$139,567  from  $194,319 for the three months ended June 30, 2000 to $54,752 for
the  three  months ended June 30, 2001.  This decrease is due to the movement of
certain  assets,  with  a net book value of $1,909,547, to assets held for sale,
and  elimination of depreciation charges on those assets during the three months
ended  June  30,  2001.

     Interest  expense  decreased by $174,157 from $247,889 for the three months
ended  June  30, 2000 to $73,732 for the three months ended June 30, 2001.  This
decrease is a result of decreased interest charges on $2,600,000 of secured debt
based  on  the  Company's  debt  reduction  plan.

     NINE  MONTHS ENDED JUNE 30, 2001 COMPARED TO THE NINE MONTHS ENDED JUNE 30,
     2000:

     Revenues  for  the  nine months ended June 30, 2001 decreased by $1,212,438
from  $3,747,750  for  the nine months ended June 30, 2000 to $2,535,312 for the
nine  months  ended  June  30,  2001  primarily  due  to lack of retail sales of
professional  sound and lighting equipment to the non-military consumer markets,
the  military  markets  and  due  to  lack of sales of live entertainment to the
military  markets  and  the loss of revenues from the discontinued operations of
the  waterpark  during  the  nine  months  ended  June  30,  2001.

     General  and administrative expenses decreased $142,748 from $1,354,892 for
the nine months ended June 30, 2000 to $1,212,144 for the nine months ended June
30,  2001.  This  decrease  is primarily a result of a reduction in common stock
issued  as  compensation  and  legal  settlements.

     Depreciation  expense  for  the  nine  months ended June 30, 2001 decreased
$295,995  from  $582,957 for the nine months ended June 30, 2000 to $286,962 for
the  nine  months  ended June 30, 2001.  This decrease is due to the movement of
certain  assets,  with  a net book value of $1,909,547, to assets held for sale,
and  elimination  of depreciation charges on those assets during the nine months
ended  June  30,  2001.

     Interest  expense  decreased  by $301,135 from $502,519 for the nine months
ended  June  30, 2000 to $201,384 for the nine months ended June 30, 2001.  This
decrease is a result of decreased interest charges on $2,600,000 of secured debt
based  on  the  Company's  debt  reduction  plan.

     LIQUIDITY  AND  CAPITAL  RESOURCES
     ----------------------------------

     During  the year ended September 30, 2000, the Company experienced negative
financial  results  which  have  continued during the nine months ended June 30,
2001  as  follows:

                                      F-26
<PAGE>
<TABLE>
<CAPTION>
                                           NINE MONTHS
                                              ENDED        YEAR ENDED
                                            JUNE 30,      SEPTEMBER 30,
                                              2001             2000
                                          -------------  ---------------
<S>                                       <C>            <C>
     Net loss                             $   (428,000)  $   (2,226,489)

     Negative working capital               (2,555,780)      (5,442,904)

     Negative cash flows from operations      (257,222)        (403,055)

     Accumulated deficit                    (8,820,405)      (8,392,405)

     Stockholders' deficit                    (960,387)      (1,920,370)
</TABLE>

     In  addition  to  its  negative  financial  results,  the  Company has also
experienced  operational  problems  as  follows:

     -    The  Company  is  delinquent  on  payments  of  principal  and accrued
          interest  for  a  certain capital lease obligations (See Note 5 to the
          unaudited  consolidated condensed financial statements). Additionally,
          at  March  31,  2001, the Company is in violation of various financial
          and  non-financial covenants included in such capital lease agreements
          on  a  long-term  debt  agreement  for  which  waivers  have  not been
          obtained.  Debt  under those agreements has been classified as current
          in  the  accompanying  financial statements and could be called by the
          creditors.

     Management  has  developed  specific current and long-term plans to address
its  viability  as  a  going  concern  as  follows:

     -    The  Company has executed a debt reduction plan to exchange certain of
               its  assets  to  repay approximately $2,900,000 of long-term debt
               and  related  accrued  interest.  The  debt  reduction  plan  is
               described  below  and  was  effective  in  March  2001.

     -    Management  is  currently exploring ways to extinguish additional debt
               in exchange for assets or through issuance of common stock and to
               concentrate  on  its  core  business.

     -    On  July  17,  2001,  the  Company  began the process of formulating a
               reconstructing  plan  for  the amusement division, which suffered
               significant  damage  from  the  tropical storm named Allison that
               devastated  the  city  of  Houston  on June 8, 2001. Although the
               Company  continues  to  make  progress  in  its  Company-wide
               reconstructing efforts, the amusement division is faced with cash
               flow  constraints in the near term. The Company, after the filing
               of certain documents with the Securities and Exchange Commission,
               will  make  an  offer  to  all equipment leaseholders to exchange
               their  capital  leases  for  cash  and/or  stock.

     -    Management  of  the  Company  strongly  believes  that  with  the debt
               reduction  plan  and  with the additional depth to the management
               team  and  a  focus  on  its  core business that the Company will
               achieve  adequate  profitability and cash flow from operations to
               meet  its  current  obligation.

     There  can  be  no  assurance  that  the  Company  will have the ability to
implement  its business plan and ultimately attain profitability.  The Company's
long-term  viability  as a going concern is dependent upon three key factors, as
follows:

     -    The  Company's  ability  to  obtain adequate sources of debt or equity
               funding  to meet current commitments and fund the continuation of
               its  business  operations  in  the  near  term.

                                      F-27
<PAGE>
     -    The  ability  of the Company to control costs and expand revenues from
               existing  or  new  businesses.

     -    The  ability  of  the  Company  to  ultimately  achieve  adequate
               profitability  and  cash  flows  from  operations  to sustain its
               operations.

     As  a  result  of covenant violations and other liquidity issues facing the
Company,  the  Company's  independent auditors included an emphasis paragraph in
their  report on the Company's financial statements for the year ended September
30,  2000  stating that these issues raise substantial doubt about the Company's
ability  to  continue  as  a  going  concern.

     DEBT  REDUCTION  PLAN
     ---------------------

     The Company has obtained 100% approval and began the asset transfer under a
debt  reduction  agreement  (the  "Debt  Reduction  Agreement").  Under the Debt
Reduction  Agreement  the  Investor  Notes  (See Note 6 to the Company's audited
financial statements for the year ended September 30, 2000) were brought current
and  will  ultimately  be  repaid  through the Company's contribution of certain
property  (a  waterpark  facility,  a racetrack and certain raw land) located in
Midland,  Texas  and  2,200,000 shares of the Company's common stock, to a trust
for

liquidation,  with  the  proceeds used for repayment of the Investor Notes.  The
Debt  Reduction  Agreement  provides  for  any  shortfall  in  the proceeds from
liquidation  of  the  property  and  shares  of the Company's common stock to be
satisfied  through  the Company's issuance of additional shares of the Company's
common  stock  or  through  the  trustee's foreclosing on certain other property
pledged by the Company.  If excess proceeds are received, such proceeds would be
returned  to  the  Company  after  satisfaction  of  fees  of  the  trust.

     INFORMATION  REGARDING  AND  FACTORS  AFFECTING  FORWARD LOOKING STATEMENTS
     ---------------------------------------------------------------------------

     The  Company  is  including  the  following  cautionary  statement  in this
Quarterly  Report on Form 10-Q for any forward-looking statements made by, or on
behalf of the Company.  Forward-looking statements include statements concerning
plans,  objectives,  goals,  strategies,  future  events  or  performance  and
underlying  assumptions  and other statements which are other than statements of
historical  facts.  Certain  statements  contained  herein  are  forward-looking
statements  and,  accordingly, involve risks and uncertainties which could cause
actual  results  or  outcomes  to  differ materially from those expressed in the
forward-looking statements.  The Company's expectations, beliefs and projections
are expressed in good faith and are believed by the Company to have a reasonable
basis,  including  without  limitations,  management's examination of historical
operating  trends,  data  contained  in  the  Company's  records  and other data
available  from  third  parties, but there can be no assurance that management's
expectation,  beliefs  or  projections  will  result,  or  be  achieved,  or  be
accomplished.

                                      F-28
<PAGE>

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