SEC Info - Trans Continental Entertainment Group Inc

Chief Executive Officer; Director

Gregory T. McDonald

President

Chief Operating Officer and Acting Chief

Financial Officer; Director

Neil Mauskaf

Chief Technology Officer; Director

David Elliott

Senior Vice President of Marketing and Sales

Terri Bears

Senior Vice President of New Business Development

Rafiah Kashmiri

Director

MOHAMED HADID. Mr. Hadid, has served as the Company's Chairman of the Board since December 1998 and as its Secretary since January 2002. From January 2002 to September 2002, Mr. Hadid also served as the Company's Chief Executive Officer. Since August 1999, Mr. Hadid has served as chairman of the Hadid Development Group, a private property development company. From June 1999 to November 2000, Mr. Hadid served as chairman of The Entertainment Internet, a then public Internet services company. The Entertainment Internet filed for protection under Chapter 11 in 2000, which later was changed to Chapter 7 bankruptcy. Pursuant to the TCC Transaction, Mr. Hadid has agreed to resign from the Company's Board of Directors upon satisfaction by the Company with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder to accommodate the Board changes contemplated in the TCC Merger Agreement and as discussed above. On November 8, 1999, Mr. Hadid filed a voluntary petition in the U.S. Bankruptcy Court for the Central District of California seeking relief relating to personal matters as of November 22, 2000.

MARK R. TOLNER. Mr. Tolner has served as the Company's President and Chief Executive Officer since August 2001 and September 2002, respectively, and was appointed as a member of the Company's Board of Directors in January, 2002. From April 1999 to August 2001, Mr. Tolner served as president of Entertech Media Group, a non-trading but SEC reporting company engaged in film production and distribution. Prior thereto, from November 1979 to May 1998, Mr. Tolner served as president of Shirlstar (Holdings) Ltd., a United Kingdom venture capital firm. During Mr. Tolner's tenure as president of Entertech Media Group and Shirlstar (Holdings) Ltd., the companies employed approximately 20 and 80 persons, respectively.

GREGORY T. MCDONALD. Mr. McDonald, age 53, has served as the Company's President since September 5, 2002, having been appointed in connection with the acquisition by merger of TCC, of which he was principal stockholder and director. In addition to Mr. McDonald's position with the Company, he also is the president of Trans Continental Records, Inc., a position he has held since August 1999. Mr. McDonald also currently serves as the president of Heritage Entertainment Inc., a position he has held since 1983. Heritage Entertainment is in the entertainment and records industry. Mr. McDonald also serves as the chairman of Management One, LLC, a personal management firm representing recording and performing artists including, Julio Iglesias and Jose Feliciano. Mr. McDonald has held this position since early 2002. Mr. McDonald was the President of spinplanet.com, an Internet based entertainment company. Pursuant to the TCC Merger Agreement, upon satisfaction of Section 14(f) under the Exchange Act and Rule 14f-1 promulgated thereunder, Mr. McDonald is expected to be appointed to the Company's Board of Directors. Mr. McDonald was appointed to the Board of Directors of TCTI on September 5, 2002.

ANTHONY R. RUBEN. Mr. Ruben has served as the Company's Chief Operating Officer since June 2002 and the Company's Acting Chief Financial Officer since July 2002, and was appointed as a member of the Company's Board of Directors in June 2002. Prior thereto, from May 2000 to May 2002, Mr. Ruben served as chief financial officer and treasurer of Compass Knowledge Holdings, Inc., a publicly traded distance learning company. From May 1999 to December 1999, he was the treasurer and vice president of corporate development for Industar Digital PCS, a wireless communications company, and from December 1999 to May 2000 he served as a consultant to Industar and other clients. From March 1997 to May 1999, Mr. Ruben was an investment banker with Tucker Anthony. Mr. Ruben received his undergraduate degree from the University of Illinois and his MBA from the University of Michigan; he passed the CPA examination in Illinois.

NEIL E. MAUSKAPF. Mr. Mauskapf has served as our Chief Technology Officer since January 2002, and was appointed as a member of our Board of Directors in June 2002. From May 2000 to December 2001, Mr. Mauskapf served as the director of project management for Merchant Wired LLC, a telecommunications company. As director of project management, Mr. Mauskapf managed the implementation of WAN networks. From January 2000 to April 2000, he served as a contractor with Tek Systems, providing consulting services relating to installation and implementation of computer equipment. From June 1999 to December 1999, Mr. Mauskapf served as a staff technician for Robert Half Inc., where he also provided consulting services relating to installation and implementation of computer equipment. Prior thereto, from February 1990 to May 1999, Mr. Mauskapf served in various retail management positions with Bed Bath and Beyond and CompUSA where he managed operations with up to 120 employees and 25 million dollars in revenue. He holds a BA in Mathematics from University of Missouri, St. Louis, a MA in Political Science from Rutgers University and received an MBA from Indiana University.

TERRI L. BEARS. Ms. Bears, has served as the Senior Vice President of New Business Development of TCTI since July 2000. Prior thereto, Ms. Bears was the director of scouting for eModel, Inc. from May 2000 to September 2000, and held various positions with Studio 58, a division of Modasco, Inc. (whose principal business was the marketing of unrepresented models through Internet web postings), including scout, talent executive and manager from February 2000 to May 2000. From 1997 to 2000 and from 1999 to 2000, Ms. Bears was a teacher with the Brevard County, Florida School District and an educator with the University of Central Florida, respectively. She earned BA and MA degrees in Education from the University of Central Florida.

DAVID ELLIOTT served as a Senior Vice President of Marketing and Sales of the Company from October 2001 through September 25, 2002. Mr. Elliot was terminated on September 25, 2002 with three weeks' notice. Mr. Elliott was subsequently engaged as a consultant on October 12, 2002 for a period of nine weeks. On or about October 18, 1995, Mr. Elliot pled guilty to a federal charge of conspiracy to commit bank fraud in satisfaction of charges brought against him in the United States District Court for the Middle District of Florida and the United States District Court for the District of Columbia.

RAFIAH KASHMIRI has served as a member of the Company's Board of Directors since January 2002. Since 1984, Rafiah Kashmiri has been a principal shareholder, officer and director of Modasco, Inc. Modasco is a privately held company whose principal business is the creation of computer models and simulations and also included, prior to the transfer of the intellectual property relating thereto, the marketing of unrepresented models through Internet web postings. Ms. Kashmiri holds Masters Degrees in nuclear physics and bio physics (with a minor in chemistry) from the University of Kentucky.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on a review of reports furnished to us by our directors, executive officers and beneficial holders of 10% or more of our shares, and upon representations from those persons, all reports required to be submitted by such persons under Section 16(a) of the Securities Exchange Act of 1934 during the fiscal year ended July 31, 2002 were filed on a timely basis, except as follows:

The Jefferson Trust and Joan Randell as trustee failed to file one Form 3 on a timely basis. This filing related to a single transaction pursuant to which the said trust acquired 5,378,788 shares of Common Stock and 1,060,606 shares of Preferred Stock convertible into 63,636,360 shares of Common Stock (in each case prior to the effectiveness of the 100-to-1 reverse stock split).

The Morgan Trust and R. Edward Bell as trustee failed to one Form 3 on a timely basis. This filing related to a single transaction pursuant to which the said trust acquired 5,378,788 shares of Common Stock and 1,060,606 shares of Preferred Stock convertible into 63,636,360 shares of Common Stock (in each case prior to the effectiveness of the 100-to-1 reverse stock split).

The Paramount Trust and Rafiah Kashmiri as trustee failed to file one Form 3 on a timely basis. This filing related to a single transaction pursuant to which the said trust acquired 5,378,788 shares of Common Stock and 1,060,606 shares of Preferred Stock convertible into 63,636,360 shares of Common Stock (in each case prior to the effectiveness of the 100-to-1 reverse stock split).

Mohamed Hadid failed to timely file one Form 3 on a timely basis. This filing related to a single transaction pursuant to which Mr. Hadid acquired 7,250,000 shares of Common Stock and 1,500,000 shares of Preferred Stock convertible into 90,000,000 shares of Common Stock (in each case prior to the effectiveness of the 100-to-1 reverse stock split), and to the reporting of his status as an officer and director of the Company. This filing incorrectly reported that the number of shares of Common Stock acquired was 10,851,852, and Mr. Hadid has not filed an Amendment to his Form 3 to correct this error.

Mark R. Tolner failed to file one Form 4 on a timely basis. This filing related to three transactions pursuant to which Mr. Tolner received (i) a stock award of 1,000,000 shares of Common Stock, (ii) a grant of options to purchase 3,036,000 shares of Common Stock, and (iii) a grant of options to his spouse to purchase 19,998 shares of Common Stock (in each case prior to the effectiveness of the 100-to-1 reverse stock split).

Anthony Ruben failed to file one Form 3 on a timely basis. This filing related to a single transaction pursuant to which Mr. Ruben received a grant of options to purchase 6,000,000 shares of Common Stock (prior to the effectiveness of the 100-to-1 reverse stock split), and to the reporting of his status as an officer and director of the Company. The Form 3 was ultimately filed on or about July 31, 2002.

Neil Mauskapf failed to file two Forms 3 on a timely basis. The first filing related to the reporting of his status as an officer of the Company. The second filing related to a single transaction pursuant to which he received a grant of options to purchase 207,000 shares of Common Stock (prior to the effectiveness of the 100-to-1 reverse stock split). The Form 3 was ultimately filed on or about July 31, 2002.

David Elliot failed to file one Form 3 on a timely basis. This filing related to a single transaction pursuant to which he received a grant of options to purchase 3,450,000 shares of Common Stock (prior to the effectiveness of the 100-to-1 reverse stock split), and to the reporting of his status as an officer of the Company. The Form 3 was ultimately filed on or about July 31, 2002.

Paul Glover, who was removed as a director in June 2002, failed to file a report with respect to the termination of his status as a reporting person under Section 16(a).

Item 11- Executive Compensation

The following table provides information concerning the annual and long-term compensation for services in all capacities to the Company for the fiscal year ended July 31, 2002 of those persons who were the chief executive officer of the Company, and the four other most highly compensated (based upon combined salary and bonus) executive officers of the Company (“Named Executive Officers”).

Name and Principal position

Year

Salary

Bonus

Other Annual Compensation

Restricted Stock Awards

($)

Securities Underlying Options

(#)

LTIP Payout

($)

Mohamed Hadid

Chairman & CEO

FY 2002

FY 2001

FY 2000

President

(1) (2)

FY 2002

FY 2001

FY 2000

$117,115

$2,977

$70,000

30,360

David Elliott

Exec VP Sales

(3) (4)

FY 2002

FY 2001

FY 2000

$18,423

$341,589

$13,497

34,500

Neil Mauskapf

CTO

(5)

FY 2002

FY 2001

FY 2000

$48,077

2,070

Teri Bears

Sr. VP New Business Development (6)

FY 2002

FY 2001

FY 2000

$96,810

$56,840

$158,019

$6,200

8,625

COO

(7)

FY 2002

FY 2001

FY 2000

$30,770

$1,958

60,000

All option counts above reflect the 100-to-1 reverse split effected on September 20, 2002.

(1) Mr. Tolner has served as the Company's President and Chief Executive Officer since August 2001 and September 2002, respectively, and was appointed as a member of the Company's Board of Directors in January, 2002.

(2) As a part of the employment agreement, Mr. Tolner received a stock grant of 10,000 common restricted shares of Options Talent Group. Mr. Tolner’s employment agreement was amended on June 17, 2002 to include participation in the sales performance bonus program detailed in the employment agreements section.

(3) David Elliott serves in the capacity of Executive Vice-President of Sales and Marketing and has been in that position since joining the Company in November of 2001. His primary compensation is a per sale commission. As a part of his compensation package a vehicle allowance is paid by the Company. For this fiscal year the vehicle allowance was $9,946. Mr. Elliott was also granted an option of 34,500 shares of common stock to vest according to the provisions of the stock option plan in place at the time of his employment. Mr. Elliott has not exercised any stock options.

(4) In addition, Mr. Elliott is entitled to participate in all Company sponsored benefit programs at Company expense. For fiscal year 2002, the premiums paid on behalf of Mr. Elliott equaled $3,552.

(5) Neil Mauskapf serves in the capacity of Chief Technology Officer and has been in that position since joining the Company in January of 2001. Mr. Mauskapf receives an annual salary of $100,000 per year. Mr. Mauskapf

was also granted an option of 2,070 shares of common stock to vest according to the provisions of the stock option plan in place at the time of his employment. Mr. Mauskapf has not exercised any stock options.

(6) Terri Bears serves in the capacity of Senior Vice President of New Business Development and has been in that position since July 2000. Her compensation is composed of a base salary of $78,000 per year plus a commission based on the sale of franchises. Ms. Bears was also granted an option of 8,625 shares of common stock to vest according to the provisions of the stock option plan in place at the time of her employment. Ms Bears has not exercised any stock options.

(7) Anthony Ruben has served in the capacity of Chief Operating Officer since June 10, 2002.

Stock Option Grants

The following table sets forth information regarding grants of stock options during fiscal year ending July 31, 2002 made to the Named Executive Officers who have received Company option grants.

Stock Option Grants In Fiscal 2002

Name	Number of Securities Underlying Stock Options Granted (#)	Percent of Total Stock Options Granted to Employees in Fiscal Year 2002	Exercise or Base Price ($/Sh)	Market Price on Date of Grant	Expiration
David Elliott (1)	34,500	14.52%	$1.45	$1.45	Oct 2012
Neil Mauskapf (2)	2,070	0.87%	$6.00	$6.00	Jan 2012
Anthony Ruben (3)	60,000	25.25%	$4.00	$4.00	July 2012
Mark Tolner (4)	30,360	12.78%	$1.45	$16.00	Jan 2012

The above stock options and exercise prices reflect the 100-to-1 reverse split effected on September 20, 2002.

(1)

The stock options granted to Mr. Elliott during the last fiscal year were incentive stock options granted pursuant to the Company’s 2002 Stock Option Plan. Of these options, none have vested. The remaining 34,500 options vest at the rate of 11,500 each on October 15, 2002, October 15, 2003, and October 15, 2004. The options expire ten (10) years from the vesting date. None of these options have been exercised.

(2)

The stock options granted to Mr. Mauskapf during the last fiscal year were incentive stock options granted pursuant to the Company’s 2002 Stock Option Plan. Of these options, none have vested. The remaining 2,070 options vest at the rate of 690 each on January 28, 2003, January 28, 2004, and January 28, 2005. The options expire ten (10) years from the vesting date. None of these options have been exercised.

(3)

The stock options granted to Mr. Ruben during the last fiscal year were incentive stock options granted pursuant to the Company’s 2002 Stock Option Plan. Of these options, none have vested. The remaining 60,000 options vest at the rate of 20,000 each on July 24, 2003, July 24, 2004, and July 24, 2005. The options expire ten (10) years from the vesting date. None of these options have been exercised.

(4)

The stock options granted to Mr. Tolner during the last fiscal year were incentive stock options granted pursuant to the Company’s 2002 Stock Option Plan. Of these options, none have vested. The remaining 30,360 options vest at the rate of 10,120 each on January 31, 2003, January 31, 2004, and January 31, 2005. The options expire ten (10) years from the vesting date. None of these options have been exercised.

FISCAL YEAR-END OPTION VALUES

The following table sets forth the number and value of options held by the executive officers named in the Summary Compensation Table at July 31, 2002. No stock options were exercised by such executive officers during the fiscal year ended July 31, 2002.

Fiscal Year-End Option Values

Name	Number of Securities Underlying Unexercised Options at Fiscal Year-End (1) (2)	Value of Unexercised in-the-money Options at Fiscal Year- End (3)
Mark Tolner (4)	30,360	$168,498
Neil Mauskapf (5)	2,070	$2,070
Anthony Ruben (6)	60,000	$180,000
David Elliott (7)	34,500	$191,475
Terri Bears (8)	8,625	$47,869

_______________

(1) Number of securities has been retroactively adjusted to reflect the 100-to-1 reverse stock split effected on September 20, 2002.

(2) All of the options listed in the table were unexercisable as of July 31, 2002.

(3) In-the-money options are those for which the fair market value of the underlying Common Stock exceeds the exercise price of the option. The value of in-the-money options is determined by subtracting the aggregate exercise price of such options or warrants from the aggregate year-end value of the underlying Common Stock.

(4) Prior to the reverse stock split, the number of shares underlying Mr. Tolner’s options was 3,036,000.

(5) Prior to the reverse stock split, the number of shares underlying Mr. Mauskapf’s options was 207,000.

(6) Prior to the reverse stock split, the number of shares underlying Mr. Ruben’s options was 6,000,000.

(7) Prior to the reverse stock split, the number of shares underlying Mr. Elliot’s options was 3,450,000.

(8) Prior to the reverse stock split, the number of shares underlying Ms. Bears’ options was 862,500.

Tolner Employment Agreement. The Company entered into an employment agreement with Mark R. Tolner dated January 28, 2002, subsequently amended as of June 17, 2002 and September 5, 2002. The amended agreement provides for Mr. Tolner’s employment as Chief Executive Officer for a five-year term. Mr. Tolner is entitled to base salary of $150,000 per annum, subject to an annual cost of living increase equal to three percentage points above the percentage increase in the consumer price index during the preceding calendar year. As bonus compensation for the first year of employment, Mr. Tolner received a stock grant of 1 million restricted shares (subsequently adjusted to 10,000 shares pursuant to the 100-to-1 reverse stock split) of the Company’s common stock under the Company’s Management Incentive Compensation Plan. Mr. Tolner is also entitled to a

sales performance bonus of (i) $10 per customer enrolled on the Company’s web site plus (ii) $10 for each $500 of gross sales of cruises and trips, to the extent such enrollments and sales are generated by the Company’s Orlando, Florida sales office. However, if the bonus calculation for any month is less than $20,000, then Mr. Tolner’s sales performance bonus for such month is forfeited (without any carryforward of revenues to the next month). In addition, the Company pays the premiums for Mr. Tolner’s participation in all life, group insurance, medical care, disability, retirement and other employee benefit plans maintained by the Company. Mr. Tolner is entitled to severance benefits if he is terminated without cause, or if he voluntarily resigns as a result of a change of control or for enumerated reasons including demotion, reduction of salary, relocation, assignment of duties that impair his ability to perform his obligations, or breach of the employment agreement by the Company. In such circumstances, Mr. Tolner will be entitled to (i) a lump sum payment equal to all base salary (at the then-highest annual rate) that would have been payable for the period from the termination of employment through January 28, 2007; (ii) a payment of $10 per model enrolled on the Company’s web site for the period from the termination of employment through January 28, 2007 (without limitation as to which office generates such enrollments or sales); (iii) full medical coverage for Mr. Tolner and his spouse and minor children until he reaches age 65; (iv) accelerated vesting of all options, warrants and other stock appreciation rights held by Mr. Tolner; (v) continued funding by the Company, for the remainder of the employment period (but in any event not less than a period of one year after termination), of all benefits to which Mr. Tolner is entitled under the employment agreement; and (vi) reduction of the period of Mr. Tolner’s non-competition and non-solicitation covenants under the employment agreement from 18 months to 12 months. For purposes of triggering these severance provisions, the merger transaction with TCCI is not deemed a change of control. The employment agreement also provides that, upon any termination of Mr. Tolner’s employment agreement, he may upon mutual agreement provide consulting services to the Company at a rate of $300 per hour, which compensation would be in addition to any severance payments to which he is otherwise entitled. Mr. Tolner has entered into a separate agreement among the consultants and Mr. Pearlman and Mr. McDonald with respect to the ability to waive bonus compensation as described in Item 13.

Ruben Employment Agreement. The Company entered into an employment agreement with Anthony Ruben dated May 1, 2002, amended as of May 1, 2002. The agreement provides for Mr. Ruben’s employment as Chief Operating Officer for a three-year term. Mr. Ruben is entitled to base salary of $160,000 per annum. For each fiscal quarter in which the Company generates earnings before taxes, depreciation, amortization, one-time and impairment charges and write-offs (EDITDA) of at least $1,250,000, Mr. Ruben is entitled to bonus compensation equal to a percentage of EBITDA, which percentage can range between 1.0% to 2.0% depending on the ratio of EBITDA to Net Sales for the applicable quarter. The Company also agreed to issue to Mr. Ruben options to purchase 6 million shares (subsequently adjusted to 60,000 shares pursuant to the 100-to-1 reverse stock split) of common stock of the Company. In addition, the Company pays the premiums for Mr. Ruben’s participation in all life, group insurance, medical care, disability, retirement and other employee benefit plans maintained by the Company. Mr. Ruben is entitled to severance benefits if he is terminated without cause, or if he voluntarily resigns as a result of a change of control or for enumerated reasons including demotion, reduction of salary, relocation, assignment of duties that impair his ability to perform his obligations, or breach of the employment agreement by the Company. In such circumstances, Mr. Ruben will be entitled to (i) a lump sum payment equal to twice the sum of his highest base salary plus highest bonus for any year within the 3-year period preceding termination (or the annualized sum of base salary plus maximum bonus for the year in which termination occurs); (ii) accelerated vesting of all options, warrants and other stock appreciation rights held by Mr. Ruben; (iii) continued funding by the Company, for the remainder of the employment period (but in any event not less than a period of one year after termination), of all benefits to which Mr. Ruben is entitled under the employment agreement; and (iv) reduction of the period of Mr. Ruben’s non-competition and non-solicitation covenants under the employment agreement from 18 months to 12 months.

Pearlman Employment Agreement. The Company entered into an employment agreement with Louis J. Pearlman dated September 5, 2002, providing for his employment as Chairman of the Board for a five-year term. Mr. Pearlman is entitled to base salary of $150,000 per annum, subject to an annual cost of living increase equal

to three percentage points above the percentage increase in the consumer price index during the preceding calendar year. Mr. Pearlman is also entitled to a sales performance bonus of (i) $10 per customer enrolled on the Company’s web site plus (ii) $10 for each $500 of gross sales of cruises and trips, to the extent such enrollments and sales are generated by the Company’s Orlando, Florida sales office. However, if the bonus calculation for any month is less than $20,000, then Mr. Pearlman’s sales performance bonus for such month is forfeited (without any carryforward of revenues to the next month). In addition, the Company has agreed to pay the premiums for Mr. Pearlman’s participation in all life, group insurance, medical care, disability, retirement and other employee benefit plans maintained by the Company. Mr. Pearlman is entitled to severance benefits if he is terminated without cause, or if he resigns as a result of a change of control or for enumerated reasons including demotion, reduction of salary, relocation, assignment of duties that impair his ability to perform his obligations, or breach of the employment agreement by the Company. In such circumstances, Mr. Pearlman will be entitled to (i) a lump sum payment equal to twice the sum of his highest base salary plus highest bonus for any year within the 3-year period preceding termination (or the annualized sum of base salary plus maximum bonus for the year in which termination occurs); (ii) accelerated vesting of all options, warrants and other stock appreciation rights held by Mr. Pearlman; (iii) continued funding by the Company, for the remainder of the employment period (but in any event not less than a period of one year after termination), of all benefits to which Mr. Pearlman is entitled under the employment agreement; and (iv) reduction of the period of Mr. Pearlman’s non-competition and non-solicitation covenants under the employment agreement from 18 months to 12 months. Mr. Pearlman has entered into a separate agreement among the consultants and Mr. Tolner and Mr. McDonald with respect to the ability to waive bonus compensation as described in Item 13.

McDonald Employment Agreement. The Company entered into an employment agreement with Gregory T. McDonald dated September 5, 2002, providing for his employment as President of the Company for a five-year term. Mr. McDonald is entitled to base salary of $150,000 per annum, subject to an annual cost of living increase equal to three percentage points above the percentage increase in the consumer price index during the preceding calendar year. Mr. McDonald is also entitled to a sales performance bonus of (i) $10 per customer enrolled on the Company’s web site plus (ii) $10 for each $500 of gross sales of cruises and trips, to the extent such enrollments and sales are generated by the Company’s Orlando, Florida sales office. However, if the bonus calculation for any month is less than $20,000, then Mr. McDonald’s sales performance bonus for such month is forfeited (without any carryforward of revenues to the next month). In addition, the Company has agreed to pay the premiums for Mr. McDonald’s participation in all life, group insurance, medical care, disability, retirement and other employee benefit plans maintained by the Company. Mr. McDonald is entitled to severance benefits if he is terminated without cause, or if he resigns as a result of a change of control or for enumerated reasons including demotion, reduction of salary, relocation, assignment of duties that impair his ability to perform his obligations, or breach of the employment agreement by the Company. In such circumstances, Mr. McDonald will be entitled to (i) a lump sum payment equal to twice the sum of his highest base salary plus highest bonus for any year within the 3-year period preceding termination (or the annualized sum of base salary plus maximum bonus for the year in which termination occurs); (ii) accelerated vesting of all options, warrants and other stock appreciation rights held by Mr. McDonald; (iii) continued funding by the Company, for the remainder of the employment period (but in any event not less than a period of one year after termination), of all benefits to which Mr. McDonald is entitled under the employment agreement; and (iv) reduction of the period of Mr. McDonald’s non-competition and non-solicitation covenants under the employment agreement from 18 months to 12 months. Mr. McDonald has entered into a separate agreement among the consultants and Mr. Pearlman and Mr. Tolner with respect to the ability to waive bonus compensation as described in Item 13.

Under the above employment agreements, for each customer enrolled on the Company’s web site (at a current cost of $595 per enrollment) through the Orlando office, and for each $500 of gross sales of cruises and trips produced by the Orlando office, the Company pays out an aggregate of $30 in commissions, in each case subject to the minimum monthly revenue target being achieved.

Compensation of Directors

Directors receive no compensation for serving on the Board of Directors. Directors who are also employees receive no additional remuneration.

Item 12. Security Ownership of Management and Principal Stockholders

The following table sets forth data as of October 15, 2002 concerning the beneficial ownership of common shares by (i) the persons known to the Company to beneficially own more than 5% of the outstanding common shares, (ii) all directors and nominees and each Named Executive Officer (as defined under "Executive Compensation" below) and (iii) all directors and executive officers as a group. This table reflects options and warrants that have vested or will vest within the next 60 days and which are exercisable.

Common Stock

Obtainable Upon

Options/Warrants

Name and Address of

Shares of Common

Conversion of

for Common

Total

Percentage

Beneficial Owner

Stock Owned

Preferred Stock(5)

Stock Owned(8)

Shares Owned

(7)(9)

Management

Mohamed Hadid(1)(11)

72,500

900,000

972,500

30.37%

Louis Pearlman(12)

581,400

25.25%

Gregory McDonald(12)

581,400

25.25%

Mark Tolner(1)(4)(6)

11,500

Terri Bears(3)

5,750

All officers, directors and

Advisory Board

As a Group (5 persons)

1,246,800

900,000

5,750

2,152,550

67.10%

Other Principal Stockholders

Jefferson Trust and Joan

Randell, sole Trustee of the

Jefferson Trust (10)(11)

53,788

636,364

690,152

23.49%

Morgan Trust and Edward

Bell, sole Trustee of

Morgan Trust (10)(11)

53,788

636,364

690,152

23.49%

Paramount Trust and

Rafiah Kashmiri, sole

Trustee of the

Paramount Trust (10)(11)

53,788

636,364

690,152

23.49%

____________

* Indicates less than one percent.

(1) Individuals who are both officers and directors.

(2) Individuals who are directors only.

(3) Individuals who are officers only.

(4) On February 22, 2002, Mark Tolner was granted 10,000 shares under the terms of the Employment Agreement.

(5) On July 16, 2002, selected members of the Company’s Advisory Board were awarded shares in return for their advice to the Company and participation on the Advisory Board.

(6) Includes 1,500 shares of common stock owned by Mr. Tolner’s wife, Cynthia Klein.

(7) All percentages have been determined as of July 31, 2002 in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended. For purposes of this table, a person or group of persons is deemed to have “beneficial ownership” of any shares of Common Stock which such person has the right to acquire within 60 days of July 31, 2002.

(8) Reflects options granted under our option plans which may be exercised within the next 60 days.

(9) In accordance with the rules of the SEC, the percentage shown in this column opposite the name of each person has been computed assuming the exercise of any options held by such person or group and that no exercises by others have occurred. Based upon 2,302,165 issued and outstanding common shares and all options, warrants, and other convertible instruments (i.e., the Series “C” Convertible Preferred) that may be either exercised or converted into common stock within the next 60 days. Each share of the Series C Preferred Stock is convertible into 60 shares of OTG common stock, then reduced by the 100-to- reverse split on September 20, 2002.

(10) Mrs. Joan Randell, the wife of Mr. Randell, is the sole Trustee of The Jefferson Trust, whose beneficiaries are the Randell’s children. Mr. Bell is the Trustee of The Morgan Trust, and is a beneficiary, in addition to Mr. Bell's spouse and child of The Morgan Trust. Rafiah Kashmiri, the mother of Mr. DeFrawy, is the Trustee and Beneficiary of The Paramount Trust

(11) A Stockholders' Agreement was entered into on January 14, 2002 among the Company, Mohamed Hadid, Graye Capital Ltd., Homesite Capital, Ltd., Fortune Multimedia, Ltd., each a British Virgin Islands corporation (collectively, the “BVI Corporations”), Richard J. Walk and The Jefferson Trust, Morgan Trust and Paramount Trust (collectively, “the Trusts”), pursuant to which Mr. Hadid and the BVI Corporations have granted irrevocable proxies with respect to their capital stock of the Company to each of the Trusts, apportioned as equal as possible. In accordance with the Certificate of the Designations, Powers, Preferences and Rights of the Series C Convertible Preferred Stock of the Company, the holders of a majority of the Series C Preferred Stock are entitled to elect three of the five members of the Board, and pursuant to the Stockholders' Agreement, the Trusts have agreed to vote their shares of capital stock of the Company and those shares over which they have a proxy in favor of one Series C Preferred Board nominee designated by each of Jefferson, Paramount and Morgan.

(12) In connection with the acquisition by merger of Trans Continental Classics, Inc., Messrs. Louis J. Pearlman and Gregory T. McDonald, the sole stockholders of TCC (the "Former TCC Stockholders"), received in exchange for their shares of common stock in TCC and the agreements and covenants of Mr. Pearlman an aggregate initial issuance of 116,280,000 (or 1,162,800 after taking into account the 100-to-1 reverse stock split) shares of Common Stock of the Company (the "Initial Shares"). In addition, the Company agreed to issue to the Former TCC Stockholders an additional number of shares of Common Stock, upon the completion of the then contemplated 100-to-1 reverse split of the Company's Common Stock with a corresponding decrease in the authorized shares of Common Stock from 500,000,000 to 5,000,000 and a subsequent contemplated increase of the authorized number of shares of Common Stock back to 500,000,000 shares of Common Stock, equal to that number of shares which, when added to the Initial Shares (as adjusted for the reverse split), would equal 51% of the issued and outstanding shares of Common Stock of the Company as of the closing date of the TCC acquisition on a fully diluted basis (including the Company's Series C Convertible Preferred Stock ("Series C Preferred Stock") on an as-converted into shares of Common Stock basis).

EQUITY COMPENSATION PLAN INFORMATION

Number of securities to be issued upon exercise of outstanding options, warrants and rights

(a)

Weighted- average exercise price of outstanding options, warrants and rights

(b)

Number of securities remaining for future issuance under equity compensation plans (excluding securities reflected in column (a))

(c)

Equity compensation plans approved by security holders

48,468,270

$0.0337

5,431,072

Equity compensation plans not approved by security holders

n/a

Total

48,468,270

$0.0337

5,431,072

Item 13- Transactions with Management and Other Related Parties

CORTES RANDELL; RELATIONSHIP TO THE JEFFERSON TRUST AND MADISON CONSULTING COMPANY; INDEMNIFICATION, REIMBURSEMENT AND SECURITY AGREEMENT; OTHER RELATED TRANSACTIONS

General. As previously discussed, The Jefferson Trust, of which Joan Randell, the wife of Cortes Randell, is the sole Trustee and with respect to which their children are the sole beneficiaries, is the record owner of 53,788 shares of Common Stock and 1,060,606 shares of Series C Preferred Stock, which convert into 636,364 shares of Common Stock, totaling, assuming conversion of the Series C Preferred Stock, 690,152 shares of Common Stock, or 13.0% of the Company’s Common Stock as of October 15, 2002. See “Item 12. Security Ownership of Management and Principal Stockholders” for additional information. Mr. Randell, through a consulting agreement between the Company and Madison Consulting Company provides consulting services to the Company and TCTI. Mr. Randell was the former chairman of the board and chief executive officer of TCTI (then eModel, Inc.) prior to its acquisition by the Company in January 2002, and held similar positions with Corporate Media Services, Inc. (“CMS”), a consulting company providing consulting services to the Company and TCTI as discussed below. Mr. Randell is the sole owner of CMS.

Mr. Randell pled guilty 27 years ago (1975) to four related securities fraud charges. In 1979, Mr. Randell was convicted of mail and securities fraud and related charges. In 1995, Mr. Randell entered into a Consent Order with the Federal Trade Commission (“FTC”) arising out of allegations by the FTC that Financial News Service Group, Inc., a company in which Mr. Randell was an officer, director and principal shareholder, had entered into an anti-competitive agreement with Reuters America, Inc. regarding the production and sale of fast turnaround news transcripts, thereby restricting competition, allocating markets and restraining prices. Under the Consent Order, Mr. Randell agreed not to enter into any agreement with Reuters America, Inc. relating to fast turnaround news transcripts and not to enter into any agreements to allocate or divide customers or markets or to maintain resale prices in the news transcript business.

Indemnification Agreement. Mr. Randell presently guarantees, or acts as principal on behalf of the Company and/or TCTI with respect to, various equipment leases of the Company and/or TCTI which aggregate

approximately $200,000 and additionally guarantees the Company’s and/or TCTI’s obligations under certain merchant accounts, primarily with the Provident Bank, which relate to the bank’s processing of credit card transactions by individuals purchasing the services of the Company (the “Merchant Account Guarantees”). The aggregate amount of Merchant Account Guarantees is approximately $2,300,000. The ability of the Company and TCTI to access and have available to it merchant accounts is viewed by the Company as critical to its present and ongoing business, and the loss of Mr. Randell as a guarantor of these obligations would have a material adverse impact on the business of the Company.

On January 14, 2002, the Company and TCTI (together, the “Debtors”) and Mr. Randell entered into an Indemnification, Reimbursement and Security Agreement, as amended on January 31, 2002 (the “Indemnification Agreement”), in connection with the guarantees and obligations undertaken by Mr. Randell as discussed in the preceding paragraph (the “Guaranties”). The Indemnification Agreement provides that the Debtors will indemnify and defend Mr. Randell from any liabilities incurred or paid by him with respect to his

personal guarantees of TCTI’s obligations to certain of its creditors, lessors and equipment vendors. The Company has granted to Randell a first priority security interest in all of its existing and after-acquired tangible and intangible property including accounts receivable and its database of models. The Company agreed to maintain insurance policies with respect to its properties and business designating Mr. Randell as loss

payee under such policies. If any amounts become due and payable to Mr. Randell, they will bear interest at the rate of 7% per annum until fully paid.

Consulting Agreement with Madison Consulting Company. The Company is also a party to a consulting agreement with Madison Consulting Company ("MCC"), which renders certain consulting services to the Company, principally through Mr. Randell. The consulting services rendered by Mr. Randell are principally rendered to the Company's Board of Directors, Chief Financial Officer and such accounting personnel as the Chief Financial Officer may direct. These services principally relate to the cash management function of the business and consist of ongoing analysis of the Company's cash position, the monitoring of revenue inflow to the Company through credit card sales and direct consumer payments, the monitoring of refunds to consumers and charge backs, the reconciliation of the daily financial status of the Company to assist the Company in not incurring an overdraft position, and advising with respect to account payable disbursements other than normal and recurring payroll and regular recurring payments, such as for rent and utilities. The foregoing consulting services are intended to benefit and facilitate the Company in its regular operations and are also intended to assist Mr. Randell in monitoring his ongoing exposure as a guarantor of the Company's obligations. Other than the foregoing consulting in the cash management function of the business, Mr. Randell does not control or direct the Company's external auditors or internal accounting personnel; does not prepare, direct or give input into the general ledger of the Company or other books and records of the Company; does not enter, participate or direct the entry of data into the Company's software accounting system; and does not engage in any activities relating to accounting.

The cash management functions of the Company as to which Mr. Randell renders consulting services are, however, significant aspects of the Company's operations and, in that context, Mr. Randell and his consulting company may be viewed as making significant contributions to the business of the Company. The Company, however, does not view itself as being dependent upon Mr. Randell, other than for his continuing guarantee, as previously discussed. While the loss of Mr. Randell as a guarantor of the Company would have a material adverse effect on the Company's business, the loss of Mr. Randell with respect to his availability to render

ongoing consulting services would not have an adverse effect upon the Company, and the Company does not view itself to be dependent upon Mr. Randell with respect to those services. The Company believes that it could either recruit direct employees or engage outside consultants to render the same or similar services as those rendered by Mr. Randell.

During fiscal 2002 and for the period from inception through July 31, 2001, the Company paid MCC, for services provided by Mr. Randell, $320,394 and $39,268, respectively in consulting fees and bonuses.

Amounts Due from Mr. Randell and MCC. Mr. Randell owed the Company $300,687 as of July 31, 2002. This amount includes amounts due upon a $199,000 5% promissory note, dated April 30, 2002 and maturing on April 30, 2003, and $98,180 relating to the Company’s acquisition of TCTI (then eModel, Inc.) in January 2002. The $98,180 loan has no stated maturity date and does not accrue interest. As of July 31, 2002, MCC also owed the Company $20,147 relating advances made by TCTI to MCC during fiscal 2002.

The other material terms of the MCC consulting agreement are separately described below.

ALEC DEFRAWY AND RELATIONSHIP TO THE PARAMOUNT TRUST AND GENERAL SERVICES CORPORATION

General. Through a consulting agreement between the Company and General Services Corporation (“GSC”), Ayman A. El-Difrawi (who is referred to herein as “Alec DeFrawy”) renders consulting services to the Company and TCTI, as described below. Mr. DeFrawy is the son of Rafiah Kashmiri, a director of the Company. Ms. Kashmiri is also the trustee and a beneficiary of The Paramount Trust, which Trust, as previously disclosed, is the record owner of 53,788 shares of Common Stock and 1,060,606 shares of Series C Preferred Stock, which convert into 636,364 shares of Common Stock, totaling, assuming conversion of the Series C Preferred Stock, 690,152 shares of Common Stock, or 13.0% of the Company’s Common Stock as of October 15, 2002. See “Item 12. Security Ownership of Management and Principal Stockholders” for additional information.

In relation of a 1991 offence, in 1995, Mr. DeFrawy pled guilty to a criminal charge of conspiracy to commit bank fraud and wire fraud. This charge arose from the same indictment to which Mr. Elliot pled guilty in the United States District Court for the District of Columbia. As part of his sentence, Mr. DeFrawy was ordered to pay restitution.

Consulting Agreement with General Services Corporation. The Company is a party to a consulting agreement with GSC, which renders certain consulting services to the Company, principally performed by Mr. DeFrawy. GSC is owned by Ms. Kashmiri and her husband. Pursuant to the consulting agreement, Mr. DeFrawy advises the Company on website design, promotional and training video development, creation of promotional and training books, advertising and future television productions, special events planning, and other duties assigned by the Company.

The Company does not view itself as being dependent upon GSC or Mr. DeFrawy. The loss of Mr. DeFrawy with respect to his availability to render ongoing consulting services would not have a material adverse effect upon the Company, and the Company does not view itself to be dependent upon GSC and Mr. DeFrawy with respect to those services. The Company believes that it could either recruit direct employees or engage outside consultants to render the same or similar services as those rendered by GSC and Mr. DeFrawy.

During fiscal 2002 and for the period from inception through July 31, 2001, the Company paid GSC, for services provided by Mr. DeFrawy, $274,798 and $64,862, respectively, in consulting fees and bonuses.

The other material terms of the GSC consulting agreement are separately described below.

Amounts Due From GSC. GSC owes TCTI, as of July 31, 2002, $35,647 as a result of non-interest bearing advances made during fiscal 2002. The Company expects that these amounts will be repaid within twelve months from the date of this Form 10-KSB.

RALPH EDWARD BELL AND RELATIONSHIP TO THE MORGAN TRUST AND CORPORATE MEDIA SERVICES.

General. Through a consulting agreement between the Company and Corporate Media Services, Inc., Ralph Edward Bell renders consulting services to the Company and TCTI, as described below. Mr. Bell is the sole trustee of the Morgan Trust, and is a beneficiary, in addition to Mr. Bell’s spouse and children, under such Trust. The Morgan Trust, as previously disclosed, is the record owner of 53,788 shares of Common Stock and 1,060,606 shares of Series C Preferred Stock, which convert into 636,364 shares of Common Stock, totaling, assuming conversion of the Series C Preferred Stock, 690,152 shares of Common Stock, or 13.0% of the Company’s Common Stock as of October 15, 2002. See “Item 12. Security Ownership of Management and Principal Stockholders” for additional information.

In 1999, the FTC commenced an action against Mr. Bell seeking permanent injunctive and other relief relating to alleged unfair and deceptive acts or practices in connection with the advertising, promotion, offering for sale of talent management services for aspiring models or actors. In addition to Mr. Bell, other defendants included Model 1, Inc., Creative Talent Management, Inc. and Jason Hoffman who is also a consultant to TCTI through CMS as an office liaison and travel coordinator. Mr. Bell entered into a Final Consent Order without admitting or denying the allegations of the complaint and was permanently enjoined, among other things, from making or assisting others to make any false or misleading oral or written representation in connection with the offer or sale of any goods or services for aspiring or professional actors and models. The foregoing FTC action and Consent Order was commenced and entered in the United States District Court for the Eastern District of Virginia, Civil Action No. 99-737A.

Consulting Agreement with CMS. The Company is a party to a consulting agreement with CMS, which renders certain consulting services to the Company, principally performed by Mr. Bell. Mr. Randell is the sole owner of CMS. Pursuant to the consulting agreement, Mr. Bell advises the Company on sourcing new and replacement offices and facilities, internal office design, office outfitting, and other duties assigned by the Company.

The Company does not view itself as being dependent upon CMS or Mr. Bell. The loss of Mr. Bell with respect to his availability to render ongoing consulting services would not have a material adverse effect upon the Company, and the Company does not view itself to be dependent upon CMS and Mr. Bell with respect to those services. The Company believes that it could either recruit direct employees or engage outside consultants to render the same or similar services as those rendered by CMS and Mr. Bell.

During fiscal 2002 and for the period from inception through July 31, 2001, the Company paid CMS, for services provided by Mr. Bell, $288,950 and $100,297, respectively, in consulting fees and bonuses.

The other material terms of the CMS consulting agreement are separately described below.

Amounts Due From CMS. CMS owes the Company, as of July 31, 2002, $117,964 pursuant to four 5% promissory notes in the aggregate principal amount of $112,000, maturing in December 2002 and January 2003.

CMS also is indebted to the Company for advances made by TCTI during fiscal 2002 in the $20,147. The advances are non-interest bearing. The Company expects that these amounts will be repaid within twelve months from the date of this Form 10-KSB.

OTHER MATERIAL TERMS OF CONSULTING AGREEMENTS OF MCC, GSC AND CMS

The consulting agreements with Corporate Media Services, General Services Corp. and Madison Consulting Corp., as amended, have substantially identical terms, except with respect to the consulting services provided, which are detailed above. Each agreement is of indefinite duration and can only be terminated by the Company after a period of five years following notification to the consultant. However, the Company may terminate the agreement for cause within a 15-day period if any associate of a consultant is convicted of a felony or if the Company is materially injured as a result of a willful breach of the agreement by the consultant. Under each of the consulting agreements, the consultant is entitled to fees in the amount of $150,000 per annum and a sales performance bonus equal to (i) $10 per model enrolled on the Company’s web site plus (ii) $10 for each $500 of gross sales of cruises and trips, to the extent such enrollments and sales are generated by the Company’s Orlando, Florida sales office. However, if the bonus calculation for any month is less than $20,000, then the sales performance bonus for such month is forfeited (without any carryforward of revenues to the next month). As a result, for each customer enrolled on the Company’s web site through the Orlando office, and for each $500 of gross sales of cruises and trips produced by the Orlando office, the Company pays out an aggregate of $30 in commissions under the consulting agreements, in each case subject to the minimum monthly revenue target being achieved. In addition, to the extent the Company collects any outstanding fees receivable relating to its earlier sale of certain rights in England and Asia, the consultant is entitled to receive a commission equal to 10% of the amount collected. The consultant is also entitled to reimbursement of expenses incurred in the performance of its duties.

The agreements provide for severance benefits if a termination occurs within one year after a change of control, if the Company terminates the agreement without cause, or if the consultant elects to terminate the agreement for enumerated reasons including reduction of annual fees, relocation of the Company’s principal office, the Company’s failure to have the agreement assumed by any successor or assignee, an attempted termination of the agreement by the Company without cause, or a breach of the agreement by the Company. The severance benefits include: (i) a lump sum payment equal to all annual consulting fees (at the then-highest rate) that would have been payable for the period from the termination of the agreement through January 14, 2007; (ii) payment of $10 per model enrolled on the Company’s web site plus $10 for each $500 of gross sales of cruises and trips sales (without limitation as to which office generates such enrollments or sales) for the period from the termination of the agreement through January 14, 2007; and (iii) full medical coverage for the sole owner of the consultant, as well as spouses and minor children, until the sole owner reaches age 65. In addition, upon a change of control, all stock options, stock awards and similar grants will automatically vest. For a period of one year after any change of control, the Company cannot adversely modify the consultant’s bonus compensation, commissions or expense reimbursement. The consulting agreements also provide that, upon any termination of the agreement, the consultant may upon mutual agreement provide consulting services to the Company at a rate of $300 per hour, which compensation would be in addition to any severance payments to which the consultant is otherwise entitled.

AGREEMENT TO ALLOW PARTIES TO DEFER BONUS COMPENSATION UNDER EMPLOYMENT AND CONSULTING AGREEMENTS.

As discussed in this Item 13 and Item 11, “Executive Compensation”, the Company has entered into employment agreements with Louis J. Pearlman, Gregory T. McDonald and Mark R. Tolner, and consulting agreements with Madison Consulting Company, General Services Corp. and Corporate Media Services, Inc. Each of these agreements provides for the payment of sales performance bonuses to the respective employee or consultant based on the level of web site enrollments and/or cruise and trip sales generated by the Company. The parties to these agreements have agreed amongst themselves that if any four of such parties determine in good faith that the Company’s financial condition would be materially adversely affected by the payment of sales performance

bonuses, then they can require all six such parties to permanently waive all sales performance bonuses payable with respect to a specific month under their respective agreements. In addition, any five of such parties can bind

all of them to the terms of any buy-out by the Company of expected future sales performance bonuses, provided that any buy-out of less than all of the future bonuses must be done on a pro rata basis for all six parties.

TRADEMARK SUBLICENSE AGREEMENT

In connection with the acquisition of Trans Continental Classics, Inc. (“TCCI”) in September 2002, TCCI has granted the Company a non-exclusive royalty-free sub-license to use the registered trademark “Trans Continental.” This trademark is licensed to TCCI by the owner of the mark, Trans Continental Records, Inc., a corporation controlled by Louis J. Pearlman and for which Gregory T. McDonald, the Company’s President, serves as President. Under the terms of the license, the Company has the right to use the mark on and in connection with goods and services pertaining to its business of recruiting and promoting models, musicians and vocalists. Although the license is otherwise non-exclusive, the Company has the exclusive right to use the mark in connection with all modeling and modeling related activities. At present, the “Trans Continental” mark is registered with the United States Patent and Trademark Office only for use in connection with music related products and services. However, TCCI will cause an application to be submitted for the registration of the mark in connection with modeling services as well. The Company’s license rights extend throughout the territories of the United States and on the Internet (irrespective of location). TCCI has the right to inspect samples of the Company’s goods and services bearing the mark to ensure compliance with quality standards.

LICENSE AGREEMENT WITH EDGE SPORTS TEAM, INC.

The Company entered into a License Agreement, dated July 10, 2002, with Edge Sports Team, Inc., a privately held Florida Corporation ("Edge"), pursuant to which Edge has licensed its online, web-based system for promoting individual high school athletes and assisting individuals and institutions in recruiting such athletes on the Internet (the "Edge System") to the Company. The License Agreement, which has a three year initial term, will enable the Company to participate in the further development; introduction; marketing and franchising of the Edge System to high school athletes. License Fees under the License Agreement will be paid by the Company on a monthly basis consisting of 20% of initial franchise fees and individual enrollment fees and 10% of recurring monthly fees charged to individual athletes. Pursuant to the License Agreement, Edge will also provide certain services relating to the Edge System for which the Company will pay on a monthly basis $50 of initial enrollment fees paid by individual athletes and 5% of monthly fees charged to such individuals.

The primary owners of Edge are parties who are affiliated with the Company. The shareholders of Edge are Mark Tolner, the Company's current CEO and past President, The Jefferson Trust, The Paramount Trust and The Morgan Trust. Each of the Trusts are shareholders of the Company and each of which, through their Trustees or Beneficiaries, is related to Cortes Randell, Alec DeFrawy, or Ralph Edward Bell.

Notwithstanding the foregoing, the Company believes that the terms of the License Agreement are at least fair as those that the Company could have obtained from unrelated third parties in arms-length negotiations. In this regard, a fairness opinion dated July 31, 2002, which was commissioned by the Company's Board of Directors, was received from Sheldrick, McGehee & Kohler, Inc. (the "Advisor"), a financial advisor. In its fairness opinion, the Advisor opined that the License Agreement is fair and reasonable to the Company and does not harm the interests of stockholders. In addition, the License Agreement has been unanimously approved by the disinterested members of the Company's Board of Directors with full knowledge of the various interests and relationships of the parties. Moreover, such board members acknowledged that the Edge System or a business related thereto was not being pursued by the Company, and considered, among other things, the fact that the Edge System has been under development by affiliates of the Trusts for 15 months prior to the Company's commencement of its current business which consists of developing and marketing services for individuals and business customers in the modeling and acting industries. Such current business of the Company commenced with its acquisition of privately-held, eModel, Inc. effective on January 31, 2002. The Trusts held or had the right to acquire substantially all of the common equity of eModel, Inc. immediately prior to its acquisition by the Company.

ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

3.1.1	Certificate of Incorporation of the Company, as amended. (Incorporated herein by reference to Exhibit 3.1 of the Registrant’s Form 10-KSB for the year ended February 28, 1993.)
3.1.2	Amended Certificate of Incorporation of the Company, as filed with the Secretary of State of Nevada on June 18, 1996
3.1.3	Amended Certificate of Incorporation of the Company, as filed with the Secretary of State of Nevada on January 11, 2002.
3.2	Bylaws of the Company. (Incorporated herein by reference to Exhibit 3.3 of the Registrant's Form 10-KSB for the year ended February 28, 1993.)
3.3	Certificate of the Designations, Powers, Preferences and Rights of the Series C Convertible Preferred Stock (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated January 31, 2002 and filed on February 15, 2002).
4.1	Options Talent Group 2002 Incentive Stock Option Plan
10.1	Agreement and Plan of Merger, dated January 14, 2002, by and among Options Talent Group (formerly Sector Communications, Inc.), Sector Communications Delaware, Inc. and Options Talent, Inc (formerly eModel, Inc.), incorporated herein by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K filed with the Commission on February 15, 2002.)
10.2	Agreement and Plan of Merger, dated September 5, 2002, among the Company, TCC, the Stockholders of TCC and certain Stockholders of the Company (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.3	Stockholders' Agreement, dated January 14, 2002, among the Company, the holders of the Company's Series C Preferred Stock and certain other Common Stockholders (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated January 31, 2002 and filed on February 15, 2002).
10.4	Consulting Agreement, dated January 14, 2002, between the Company and Madison Consulting Company (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated January 31, 2002 and filed on February 15, 2002).
10.5	Consulting Agreement, dated January 14, 2002, between the Company and General Services Corporation (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated January 31, 2002 and filed on February 15, 2002).
10.6	Consulting Agreement, dated January 14, 2002, between the Company and Corporate Media Services, Inc. (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated January 31, 2002 and filed on February 15, 2002).
10.7	First Amendment to Consulting Agreement, dated September 5, 2002, between the Company and Madison Consulting Company (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.8	First Amendment to Consulting Agreement, dated September 5, 2002, between the Company and General Services Corporation (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.9	First Amendment to Consulting Agreement, dated September 5, 2002, between the Company and Corporate Media Services, Inc. (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).

10.10	First Amendment to Employment Agreement, dated September 5, 2002, between the Company and Mark R. Tolner 99.6 (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.11	Employment Agreement, dated September 5, 2002, between the Company and Louis J. Pearlman (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.12	Employment Agreement, dated September 5, 2002, between the Company and Gregory T. McDonald (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.13	Lock-Up and Escrow Agreement, dated September 5, 2002, among the Company, the Trusts, Louis J. Pearlman, Gregory T. McDonald, Jeffrey Kranzdorf and certain other stockholders (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.14	Trademark Sublicense Agreement, dated September 5, 2002, between the Company and Trans Continental Classics, Inc. (incorporated herein by reference to Exhibit 2.1 filed with the Company's Form 8-K dated September 6, 2002 and filed on September 17, 2002).
10.15	License Agreement, dated June 1, 2002, between the Company and Edge Sports Team, Inc. (incorporated herein by reference to Exhibit 10.1 filed with the Company's Form 8-K dated August 1, 2002 and filed on August 8, 2002).
10.16	Employment agreement dated May 1, 2002 between Anthony Ruben and Options Talent Group.
10.17	Amendment to Employment agreement dated June 17, 2002 between Anthony Ruben and Options Talent Group.
10.18	Indemnification, Reimbursement and Security Agreement, dated January 14, 2002 among the Company, between TCTI and Cortes Randell
10.19	First Amendment, Indemnification, Reimbursement and Security Agreement, dated January 31, 2002 among the Company, between TCTI and Cortes Randell.
21.0	Subsidiaries of the Company

(b) Reports on Form 8-K

None filed during the fourth quarter of fiscal 2002.

All Exhibits except as otherwise noted below are filed with this Form 10-KSB.

SIGNATURES

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

OPTIONS TALENT GROUP

(Registrant)

By: /s/ Mark Tolner

Chief Executive Officer

By: /s/ Anthony Ruben

Chief Operating Officer & Acting Chief

Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By: /s/ Mark Tolner

Chief Executive Officer, Director

By: /s/ Anthony Ruben

Chief Operating Officer & Acting Chief

Financial Officer, Director

By: /s/ Mohamed Hadid

Mohamed Hadid

Director

By: /s/ Neil Mauskapf

Neil Mauskapf

Director

By: /s/ Rafiah Kashmiri

Rafiah Kashmiri

Director

CERTIFICATION

I, Mark Tolner, Chief Executive Officer of the Company certify that:

1. I have reviewed this annual report on Form 10-KSB of Options Talent Group;

2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;

/s/ Mark Tolner

_______________________
Mark Tolner

Chief Executive Officer

CERTIFICATION

I, Anthony Ruben, Chief Operating Officer and Acting Chief Financial Officer of the Company, certify that:

1. I have reviewed this annual report on Form 10-KSB of Options Talent Group;