Made in America Entertainment, Inc. – ‘10KSB’ for 12/31/02

On:  Monday, 4/14/03, at 8:15pm ET   ·   As of:  4/15/03   ·   For:  12/31/02   ·   Accession #:  1108890-3-106   ·   File #:  0-24727

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Dated 12-31-02                                        55    249K 
 2: EX-23.1     Consent of Independent CPA                             1      6K 
 3: EX-99.1     Certification of CEO                                   1      6K 

10KSB   —   Dated 12-31-02
Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
 FORM 10-KSB

[X] Annual Report under Section 13 or 15(d) of the Securities Exchange
 Act of 1934

 For the fiscal year ended December 31, 2002

[ ] Transition report under Section 13 Or 15(d) of the Securities Exchange
 Act of 1934

 For the transition period from ______________ to ______________

Commission file number 000-24727

Raven Moon Entertainment, Inc.
----------------------------------------------------
(Exact name of registrant as specified in its charter)

Florida                                           59-348779     
----------------------                      ----------------------------------
(State of incorporation)                    (I.R.S. Employer Identification No.)

120 International Parkway, Suite 220
                     Heathrow, Florida                     32746
               --------------------------------------       --------
               (Address of principal executive offices)     (Zip Code)

Issuer's telephone number, including area code: (407) 304-4764
                                                ----------------
Securities registered pursuant to Section 12(g) of the Act:                     

Title of Class:                                      Name of each exchange      
                                              on which registered:

Common Stock, par value $.0001                       None                       

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was     
required to file such reports), and (2) has been subject to such filing         
requirements for the past 90 days. Yes |X| No |_|                               

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-B is not contained herein, and will not be contained, to the    
best of Registrant's knowledge, in definitive proxy or information statements   
incorporated by reference in Part III of this Form 10-KSB or any amendment to   
this Form 10-KSB. | |                                                           

Issuer's gross revenues for its most recent fiscal year are $30,000.  

  The aggregate market value of the voting stock held by non-affiliates of
the registrant based on the closing sale price on April 14, 2003 was            
approximately $1,120,518.                                                       

 The approximate number of shares outstanding of the registrant's Common
Stock as of April 1, 2003 was 719,668,471.                                      

Transitional Small Business Disclosure Format:       Yes | __ |  No | X |       

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 TABLE OF CONTENTS

Part I                                                                    Page  

Item 1   Description of Business                                            2   

Item 2   Properties                                                         9   

Item 3   Legal Proceedings                                                  9   

Item 4   Submission of Matters to a Vote of Security Holders                9   

Part II                                                                         

Item 5   Market for Company's Common Equity and Related                         
            Stockholder Matters                                         10

Item 6   Management Discussion and Analysis                                11   

Item 7   Financial Statements  5                                                

               Independent Auditors Report                             F-1

               Balance Sheet                                           F-2
               Statement of Operations                                 F-3
               Stockholders Deficit                                    F-4
               Statement of Cash Flows                                 F-5
               Statement of Cash Flows - Net Loss Reconciliation       F-6
                  Notes to Financial Statements                         F-7-F-24

Item 8   Changes in and Disagreements with Accountants on Accounting and        
               Financial Disclosure                                     15

Part III                                                                        

Item 9   Directors, Executive Officers, Promoters, and Control Persons;         
             Compliance with Section 16(a) of the Exchange Act          15

Item 10   Executive Compensation                                           18   

Item 11   Security Ownership of Certain Beneficial Owners and Management   19   

Item 12   Certain Relations and Related Transactions                       20   

Item 13   Exhibits and Reports on Form 8-K                                 22   

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 FORWARD LOOKING STATEMENT INFORMATION

Certain statements made in this Annual Report on Form 10-KSB are      
"forward-looking statements"(within the meaning of the Private Securities       
Litigation Reform Act of 1995) regarding the plans and objectives of management 
for future operations. Such statements involve known and unknown risks,         
uncertainties and other factors that may cause our actual results, performance  
or achievements of the Company to be materially different from any future       
results, performance or achievements expressed or implied by such               
forward-looking statements. The forward-looking statements included herein are  
based on current expectations that involve numerous risks and uncertainties. Our
plans and objectives are based, in part, on assumptions involving judgments with
respect to, among other things, future economic, competitive and market         
conditions and future business decisions, all of which are difficult or         
impossible to predict accurately and many of which are beyond our control.      
Although we believe that our assumptions underlying the forward-looking         
statements are reasonable, any of the assumptions could prove inaccurate and,   
therefore, there can be no assurance that the forward-looking statements        
included in this report will prove to be accurate. In light of the significant  
uncertainties inherent in the forward-looking statements included herein        
particularly in view of the current state of our operations, the inclusion of   
such information should not be regarded as a statement by us or any other person
that our objectives and plans will be achieved. Factors that could cause actual 
results to differ materially from those expressed or implied by such            
forward-looking statements include, but are not limited to, the factors set     
forth herein under the headings "Business," "Risk Factors" and "Management's    
Discussion and Analysis of Financial Condition and Results of Operations."      

PART I

Item 1.  Description of Business.                                               

General                                                                         
-------                                                                         

     The primary business focus of Raven Moon Entertainment, Inc. (the "Company"
or "Raven Moon") is the development and production of children's television     
programs and videos, CD music production, e-commerce internet websites focused  
on the entertainment industry and music publishing and talent management. Our   
long-term business goals include the development and production of children's   
television programs, Family Values videos, Family Values television programs, CD
music production, e-commerce Internet websites focused on the entertainment     
industry and music publishing. The market for this product and these services is
worldwide, although the Company will devote most of its efforts within North    
America. We believe that there are approximately 200 separate television-viewing
markets in the United States alone.                                             

Our research has indicated that television advertising revenues have  
declined and are anticipated to decline further, and that television and cable  
networks are cutting back on new program productions. However, the Family Values
media market is believed to be growing and remains strong. Therefore, the       

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Company has determined to produce up to 15 half-hour episodes of "Gina D's Kids 
Club" at a potential up-front cost of approximately $2,465,000 and to develop,  
produce and market 15 additional "family values" home video products and 5 music
CD products. These products can be marketed directly to consumers through       
infomercials on television stations, bookstores, retail stores, print           
advertising, the Internet and other direct sales and marketing companies.       

The first product that has been completed for distribution is a family
values-themed home video called "Gina D's Kids Club" targeted to 3-6 year old   
children. This product contains positive sing-along songs, funny, live-action   
educational characters and animated a safety message called "Mr. Bicycle Man".  
We plan to produce a home video library of up to 15 half-hour episodes of "Gina 
D's Kid's Club," a video and television show targeted to 3-6 year old children  
at a cost of $2,465,000, thus developing two product at a cost of one. The      
program features a host named "Gina D" and other Kid Club friends that are all  
part of the rights Option package. They include characters such as "Hammy,"     
"Fishy," "Kitty," "Simon," "TV Ted," and "Miss Muffin." Although we also own the
rights to an exclusive option to "Baby and the Transistor Sisters", they do not 
appear in the initial pilot.                                                    

     At the appropriate time, and with a budget of $300,000 per program, we plan
to produce two versions of a new home video exercise product for Christian women
called "Praise-n-Shine". One version will be a multi-cultural Gospel version and
the second will be a Latino version. The Company intends to enter into a        
ten-year license agreement with Beyond the Kingdom, Inc., to acquire the rights 
to this product.                                                                

     In 2001, we focused our efforts on raising the necessary funds to produce a
pilot episode of a television program and first video entitled "Gina D's Kid's  
Club" that is targeted to 3-6 year old children. The properties we initially    
focused on were new characters that have been integrated into this program.     

We estimate the total cost to produce the initial video, episode was  
approximately $350,000, including the cost of designing and building a state of 
the art 3 dimensional animated virtual reality stage set, costumes and other    
materials that will be used in the initial episode, as well as future planned   
episodes. By producing the show in the Orlando, Florida area, rather than Los   
Angeles or New York, we believe that we can produce the additional episodes at a
cost of approximately $175,000 per episode, as opposed to $350,000 to $400,000, 
while utilizing local production resources and talent to produce quality        
comparable to that of shows produced by Disney or Warner Brothers.              

To increase the shareholder value and to better position itself in the          
marketplace, the Company has decided to "spin-off" its subsidiary, Raven Moon   
Home Video Products LLC. Raven Moon Home Video Products LLC has merged into     
Clubhouse Videos, Inc. and the Company will subsequently issue a dividend to its
stockholders of record as of March 7, 2003, of shares of Clubhouse Videos, Inc. 
but as of April 14, 2003 the stock dividend has not yet been issued. The Company
will license the next 11 videos to Clubhouse Videos, Inc. for a $300,000        
licensing fee per episode plus 10% of gross revenues from worldwide sales of the
"Gina D's Kids Club" product line from Clubhouse Videos Inc., and will reduce   
its debt by approximately $1 million as a result of this merger.                

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Competitive Business Conditions                                                 
-------------------------------                                                 

    The main competition in our industry comes from the major studios, such as
Disney and Universal Studios that produce a large percentage of children's      
programming. The next level of competition is from other independents production
companies. To be competitive, we must produce high quality creative productions 
and must develop the reputation and contacts to meet with the principal players 
in this industry. We expect our distributors to provide the support necessary to
enable us to compete in this marketplace.                                       

Creative Talent                                                                 
---------------                                                                 

We expect to obtain the talent necessary to develop and produce this  
programming, including actors, set designers and builders, television production
crews, scriptwriters, and musicians, from sub-contractors available in the      
metropolitan Orlando, Florida area, many of whom presently develop and produce  
materials and productions for Disney and Universal Studios.                     

    Joey and Bernadette DiFrancesco, the Company's principle creative officers
and directors have spent a substantial time developing these properties and     
products during the last two fiscal years. They will be in charge of the        
production of the product on an ongoing basis.                                  

Intellectual Property                                                           
---------------------                                                           

We have determined to focus our primary efforts on audio and video    
production for television and Family Values Videos and more specifically on the 
present development of the "Gina D's Kids Club" children's videos. On April 11, 
2001, we acquired from Joseph and Bernadette DiFrancesco, a One (1) year option 
for the rights to the program "Gina D's Kids Club," the cartoon characters "TV  
Ted", "Baby and the Transistor Sisters" and other characters from the show      
including: "Simon," "Fishy," "Kitty," "Hammy," "Miss Muffin," and the music     
publishing rights to songs written by Mr. and Mrs. DiFrancesco, in exchange for 
30,000,000 shares of our common stock at par value that will be registered in   
our public offering. In order to keep these rights beyond the one-year option,  
the Company must produce a minimum of ten (10) half-hour episodes plus two (2)  
Specials during the option period that will be available to consumers in retail 
stores, Home Shopping Club or Christian television outlets, schools and         
bookstores. If we fail to meet this obligation, all rights revert back to Mr.   
and Mrs. DiFrancesco immediately after the one-year Option period. If the       
Company meets its obligations, we will have the rights for an additional 20     
years. At the end of 20 years, all rights revert back to J&B DiFrancesco their  
assigns and heirs. Because the Company failed to have produced the required     
number of programs and videos by April 1, 2002, the Option was extended for an  
additional year in exchange for 20,000,000 shares of common stock to J&B        
DiFrancesco. In addition, an Option Agreement for the rights of the project     
"Praise -n-Shine" have been entered into with Beyond The Kingdom, Inc. The      
Company agreed to cover all production costs and to pay a royalty equal to 15%  
of all gross revenues from video sales and sub-licenses for 10 years.           

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Marketing and Distribution                                                      
--------------------------                                                      

To facilitate direct marketing to consumers, the Company established a
wholly owned subsidiary, Raven Moon Home Video Products, LLC ("Video LLC"). The 
Video LLC filed its Articles of Organization with the Florida Department of     
State on September 26, 2001. The Company granted the Video LLC a limited,       
ten-year license to produce and market a series of videos and music CD's of the 
"Gina D's Kids Club" program. Video LLC will bear all costs associated with the 
production, distribution and sale of video products and will pay to the Company 
their share of net profits after costs. The Video LLC has two classes of        
members. The Company is the sole Class A member and serves as the managing      
partner. Only Class A member interest have voting rights in the LLC. Investors  
in the LLC will acquire Class B member interests, which are non-voting. The     
Class B members will be entitled to receive all distributions from the gross    
profits of Video LLC until such holders have received an amount equal to their  
initial investment. Thereafter, the Class B holders will receive 85% of gross   
profits derived from the sale of any products produced by Video LLC.            

  We entered into a ten year license agreement with the Video LLC covering
the limited rights to produce, market and distribute a video series. The Company
plans to develop a home video for this project with the funds from Video LLC, in
addition to other "Gina D's Kids Club" videos and music CD's. Management has    
begun to commence initial operations with funding of approximately $4,300,000   
from a private offering by the Video LLC.                                       

Recently the Company elected to spin off the LLC into its own public  
company and issue a stock dividend to all Raven Moon Entertainment, Inc.        
shareholders of record at March 7, 2003.                                        

 In 2002, we raised approximately $900,000 in a LLC private offering. We
also require funds for working capital of $1,000,000 and $1,000,000 for         
administration and marketing costs. We plan to use the capital from the LLC     
offering to build a library of up to 15 half-hour television episodes and home  
video products. In addition, the funds will be used to create Internet websites 
to market tied-in branded products and to create music CD's, for distribution in
the United States and abroad.                                                   

    With these resources in place and with the expected market penetration and
acceptance of the Company's TV characters, we will be in a position to attempt  
to exploit this fast growing and very profitable segment of the market (i.e.,   
entertainment items for 3 year olds to 5 year olds).                            

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 This "spin-off" of Clubhouse Videos, Inc., formerly known as Raven Moon
Home Video Products LLC, reduced the company's debt significantly and put the   
Company into a position where it can become profitable in the short term.       

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

     During 2002, we spent approximately $350,000 on the development and
production of two episodes and the promotional PSA announcements for the "Gina  
D's Kid's Club" program.                                                        

Customers                                                                       
---------                                                                       

The Company is not dependant on a few major customers because every television  
station in the country is involved in filling its production day and is         
constantly seeking quality program material to enable it to meet that demand.   
The Company intends to allow the television stations to keep 100% of advertising
revenues in addition to 50% of the executive producer's 10% gross revenues from 
world wide licensing revenues, provided that they air the programs each week for
two years. A similar concept has been previously used by the Lion's Group to    
marker the "Barney" character on the Public Broadcast System.                   

Personnel                                                                       
---------                                                                       

     We currently have 2 full-time employees and no part-time employees. We have
no plan to hire any additional employees in the immediate future. We expect to  
meet our additional personnel needs through the hiring of independent           
contractors. The source of independent contractors is readily available in      
Central Florida from many different sources including the talent pool of        
professionals who have worked with companies such as Disney/MGM, Universal      
Studios and Nickelodeon. Recently the Company signed a 36 month financing       
agreement with MG Studios to produce 12 new episodes of Gina D's Kids Club".    

Government Regulation                                                           
---------------------                                                           

        There is no need for any governmental approval of products or services
of this type. The Federal Communications Commission Rules of Broadcast mandate  
that broadcasters must broadcast educational programs for children or lose their
broadcast license. The programs that Raven Moon Entertainment, Inc. produces are
educationally sound, original with fresh characters, have new music along with  
interesting and appealing promotional tie-in concepts for children and their    
parents and will thus comply fully with those Rules of Broadcast. Accordingly,  
the Company believes that any governmental regulation on the business will have 
a positive effect on the Company's business activities.                         

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Company Background                                                              
------------------                                                              

    Ybor City Shuttle Service, Inc. was formed on January 7, 1998, pursuant to
the Articles of Incorporation filed with the Office of Secretary of State of the
State of Florida on January 8, 1998. On December 31, 1998, Articles of Merger   
for the merger of Ybor City Shuttle Service, Inc., Raven Moon Entertainment,    
Inc. and International Resorts and Entertainment Group, Inc. were filed with the
State of Florida merging those three corporations. The name of the surviving    
entity, Ybor City Shuttle Services, Inc., was changed to Raven Moon             
International, Inc. as a part of the merger. The original business of Ybor City 
Shuttle Service, Inc. was intended to be the operation of a shuttle bus service 
initially operating in Tampa, Florida, and intended to be expanded throughout   
the Tampa Bay area and ultimately to other cities. Management of the company has
subsequently determined not to pursue that line of business. During 1998 the    
company was involved in the vacation resort business formerly operated by       
International Resorts and Entertainment Group, Inc. On June 1, 1998, that       
business was sold to North American Resorts, Inc. because this company          
determined it to be unprofitable.                                               

Risk Factors
------------

     A purchase of our common stock is speculative and involves a high degree of
risk. You should carefully consider the risks described below together with all 
of the other information included or incorporated by reference in this report   
before making an investment decision. The risks and uncertainties described     
below are not the only ones we face. If any of the following risks actually     
occur, our business, financial condition or operating results could be harmed.  
In such case, the trading price of our common stock could decline and you could 
lose all or part of your investment.                                            

We have experienced operating losses in prior years.                            
----------------------------------------------------                            

For the year ended December 31, 2002, we increased gross revenues from
$7,100 to $30,000 and had net loss of $5,500,000 as compared with a net loss of 
$5,300,000 in the prior year.                                                   

We have limited marketing and sales capabilities                                
------------------------------------------------                                
Our future success depends, to a great extent, on our ability to      
successfully market our products. We currently have limited sales and marketing 
capabilities. We cannot assure you that any marketing and sales efforts         
undertaken by us will be successful or will result in any significant sales.    

Our industry is intensely competitive, which may adversely affect our operations
--------------------------------------------------------------------------------
and financial results.                                                          
----------------------                                                          

All our markets are intensely competitive and numerous companies offer
products that compete with our products. We anticipate that this competition    
will continue to increase. Many of our competitors have substantially greater   
capital resources, sales and marketing resources and experience. We cannot      
assure you that we will be able to effectively compete with our competitors in  
effecting our business expansion plans.                                         

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We depend on the continued services of our president.                           
-----------------------------------------------------                           

     Our future success depends, in large part, on the continuing efforts of our
president, Joey DiFrancesco, our principal creative officer, who also developed 
our strategic plan and who is responsible for executing that plan. The loss of  
Mr. DiFrancesco would adversely affect our business. At this time we do not have
any term "key man" insurance on Mr. DiFrancesco. If we lose the services of Mr. 
DiFrancesco, our business, operations and financial condition would be          
materially adversely affected.                                                  

Our stock price is volatile and could be further affected by events not within  
------------------------------------------------------------------------------  
our control.                                                                    
------------                                                                    

   The trading price of our common stock has been volatile and will continue
to be subject to:                                                               

o    volatility in the trading markets generally;                     

o    significant fluctuations in our quarterly operating results; and 

o    announcements regarding our business or the business of our      
competitors.                                                

  Statements or changes in opinions, ratings or earnings estimates made by
brokerage firms or industry analysts relating to the markets in which we operate
or expect to operate could also have an adverse effect on the market price of   
our common stock. In addition, the stock market as a whole has from time to time
experienced extreme price and volume fluctuations which have particularly       
affected the market price for the securities of many small cap companies and    
which often have been unrelated to the operating performance of these companies.

 The price of our common stock may be adversely affected by the possible
issuance of shares of our common stock as a result of the conversion of         
outstanding debentures or the exercise of outstanding options.                  

  We have granted options covering approximately 195 million shares of our
common stock. In addition, we have $30,000 of outstanding debentures convertible
at the option of the holders into approximately 800,000 shares of our common    
stock. As a result of the actual or potential sale of these shares into the     
market, our common stock price may decrease.                                    

The liquidity of our stock is severely reduced because we are classified as a   
-----------------------------------------------------------------------------   
"penny stock".                                                                  
--------------                                                                  

    The Securities and Exchange Commission (SEC) has adopted regulations which
generally define a "penny stock" to be any non-Nasdaq equity security that has a
market price (as therein defined) of less than $5.00 per share or with an       

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exercise price of less than $5.00 per share. Our securities are subject to the  
existing rules on penny stocks and, accordingly, the market liquidity for our   
securities could be severely adversely affected. For any transaction involving a
penny stock, unless exempt, the rules require substantial additional disclosure 
obligations and sales practice obligations on broker-dealers where the sale is  
to persons other than established customers and accredited investors (generally,
those persons with assets in excess of $1,000,000 or annual income exceeding    
$200,000, or $300,000 together with their spouse). For transactions covered by  
these rules, the broker-dealer must make a special suitability determination for
the purchase of the common stock and have received the purchaser's written      
consent to the transaction prior to the purchase. Additionally, for any         
transaction involving a penny stock, unless exempt, the rules require the       
delivery, prior to the transaction, of a risk disclosure document mandated by   
the SEC relating to the penny stock market. The broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered            
representative, current quotations for the securities and, if the broker-dealer 
is the sole market-maker, the broker-dealer must disclose this fact and the     
broker-dealer's presumed control over the market. Finally, monthly statements   
must be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. Consequently, the
"penny stock" rules may restrict the ability of broker-dealers to sell our      
common stock and accordingly the market for our common stock.                   

Item 2.  Description of Properties                                              

  We presently lease a small, one-room office located at 120 International
Parkway, Suite 220, Heathrow, Florida, for a monthly rental of $450. The lease  
is on a month-to-month basis. We believe these facilities will be adequate for  
our purposes because our primary business will be conducted in rented           
professional recording studios and facilities of subcontractors used in the     
television, motion picture, and recording business.                             

Item 3.  Legal Proceedings.                                                     

     On March 11, 2003, a counsel for Mr. Randolph S. Shaw contacted the Company
with a demand related to 400,000 convertible preferred shares of the Company he 
owns, redeemable by the Company in February 2003 at a price of $1.00 per share. 
The Company disputes this claim and the Company's counsel currently negotiating 
with Mr. Shaw the terms and conditions of the redemption of those shares by the 
Company.                                                                        

Item 4. Submission Of Matters To A Vote Of Security Holders                     

    The following proposal was submitted to shareholders at our Annual Meeting
of Shareholders held November 8, 2002. This proposal was approved by a majority 
of the shares present at the meeting.                                           

 To re-elect five directors to serve for the ensuing year or until their
successors are duly elected and qualified.                                      

                                   Shares For              Shares Withheld
                                    ---------------         --------------------
Joseph DiFrancesco                    296,820,503                1,113,830      
Bernadette DiFrancesco                296,820,503                1,113,830      
Stephen Chrystie                      296,820,503                1,113,830      
Norman Weistock                       296,820,503                1,113,830      
Anthony Arcari                        290,613,348                7,320,985      

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 PART II

Item 5.  Market For Registrant's Common Equity And Related Stockholder Matters  

Our common stock began trading on the NASDAQ over-the-counter bulletin
board under the symbol "RMOO" on December 1, 2000.                              

Historical Market Price Data for Common Stock of Raven Moon Entertainment, Inc. 
------------------------------------------------------------------------------  

     The following table sets forth the range of high and low bid prices for the
common stock for the period beginning January 1, 2001 and ending December 31,   
2002, as reported by NASDAQ. These over-the-counter market quotations reflect   
inter-dealer prices, without retail mark-up, markdown or commission, and may not
necessarily represent actual transactions. The prices do reflect the 10-for-1   
forward split effective January 1, 2001.                                        

Common Stock                 High ($)                          Low ($)

1st Quarter 2001            $ .38 (3.80 pre-forward split)     $ .05  
2nd Quarter 2001            $ .05                              $ .015 
3rd Quarter 2001            $ .015                             $ .003 
4th Quarter 2001            $ .155                             $ .003 

1st Quarter 2002            $ .08                              $ .025 
2nd Quarter 2002            $ .575                             $ .025 
3rd Quarter 2002            $ .03                              $ .0065
4th Quarter 2002            $ .016                             $ .004 

Number of Shareholders and Total Outstanding Shares                             
---------------------------------------------------                             

 As of December 31, 2002, approximately 529,731,964 shares of our common
stock were outstanding and, as far as we can determine, were held by            
approximately 866 holders of record of our common stock.                        

Dividends                                                                       
---------                                                                       

We have not paid any cash dividends since our inception and do not    
anticipate paying cash dividends in the foreseeable future.                     

Preferred Shares                                                                
----------------                                                                

As of December 31, 2002, the Company had 6,024,755 shares of preferred
stock outstanding. The preferred shares are convertible into 6,024,755 shares of
common stock, or can be redeemed at $1.00 per share if the Company has the      
ability to redeem them.                                                         

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   Our common stock is traded in the over-the-counter market, and the shares
are subject to the provisions of Section 15(g) and Rule 15g-9 of the Securities 
Exchange Act of 1934, commonly referred to as the "penny stock" rule. Section   
15(g) sets forth certain requirements for transactions in penny stocks and Rule 
15g9(d)(1) incorporates the definition of penny stock as that term is used in   
Rule 3a51-1 of the Exchange Act.                                                

  The Commission generally defines a penny stock to be any equity security
that has a market price less than $5.00 per share, as well as the shares of     
companies that are considered blind pools or blank check companies, subject to  
certain exceptions. Rule 3a51-1 provides that any equity security is considered 
to be a penny stock unless that security is: registered and traded on a national
securities exchange meeting specified criteria set by the Commission; authorized
for quotation on one of the trading systems (not including the OTC Bulletin     
Board) of The NASDAQ Stock Market; issued by a registered investment company;   
excluded from the definition on the basis of price (at least $5.00 per share) or
the issuer's net tangible assets; or exempted from the definition by the        
Commission. If the Company's shares are deemed to be a penny stock, trading in  
the shares will be subject to additional sales practice requirements on         
broker-dealers who sell penny stocks to persons other than established customers
and accredited investors, generally persons with assets in excess of $1,000,000 
or annual income exceeding $200,000, or $300,000 together with their spouse. In 
addition, several states restrict or prohibit trading in penny stocks and shares
of blank check and blind pool companies.                                        

     For transactions covered by the penny stock rules, broker-dealers must make
a special suitability determination for the purchase of such securities and must
have received the purchaser's written consent to the transaction prior to the   
purchase. Additionally, for any transaction involving a penny stock, unless     
exempt, the rules require the delivery, prior to the first transaction, of a    
risk disclosure document relating to the penny stock market. A broker-dealer    
also must disclose the commissions payable to both the broker-dealer and the    
registered representative, and current quotations for the securities. Finally,  
monthly statements must be sent to customers purchasing penny stocks disclosing 
recent price information for the penny stocks held in their account and         
information on the limited market in penny stocks. These rules may make it less 
likely that a broker-dealer will act as a market maker for our shares or agree  
to engage in transactions for the purchase and sale of our shares.              

Item 6. Management's Discussion and Analysis of Financial Condition and Results 
Operations                                                                      

 Cautionary statement identifying important factors that could cause our
actual results to differ from those projected in forward looking statements.    

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Item 6. Management's Discussion and Analysis of Financial Condition and Results 
Operations                                                      

 Cautionary statement identifying important factors that could cause our
actual results to differ from those projected in forward looking statements.    

Pursuant to the "safe harbor" provisions of the Private Securities    
Litigation Reform Act of 1995, readers of this report are advised that this     
document contains both statements of historical facts and forward looking       
statements. Forward looking statements are subject to certain risks and         
uncertainties, which could cause actual results to differ materially from those 
indicated by the forward looking statements. Examples of forward looking        
statements include, but are not limited to (i) projections of revenues, income  
or loss, earnings per share, capital expenditures, dividends, capital structure 
and other financial items, (ii) statements of our plans and objectives with     
respect to business transactions and enhancement of shareholder value, (iii)    
statements of future economic performance, and (iv) statements of assumptions   
underlying other statements and statements about our business prospects.        

 This report also identifies important factors, which could cause actual
results to differ materially from those indicated by the forward looking        
statements. These risks and uncertainties include the factors discussed under   
the heading "Risk Factors" beginning at page 7 of this report.                  

   The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with our financial      
statements and the notes thereto appearing elsewhere in this report.            

Overview                                                                        

     In the past year, Raven Moon Entertainment has produced ten products; "Gina
D's Kids Club" Volume 1, ("Join The Club"), "Gina D's Kids Club" Volume 2,      
("Good News"), "Gina D's Kids Club" Volume 3, ("Smile-A-bility"), the "Gina D's 
Kids Club" Three Episode DVD, the "Gina D's Kids Club" Music CD Volume 1, the   
"Gina D's Kids Club" Music CD Volume 2, the "Young America" Limited Edition CD  
single, the "Sing A Long With Gina" VHS, the "Sing A Long With Gina" DVD, and   
the "Cuddle Bug" plush toy.                                                     

 Raven Moon has also established certain relationships with distributors
which have already generated orders from Christian bookstores throughout the    
country and most major online retailers including Wal-Mart, Target, Books A     
Million, Borders, Toys R Us, Babies R US, and Amazon. The Company has begun     
generating revenue on a weekly basis.                                           

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     In order to reduce Raven Moon Entertainment's debt and expedite the revenue
stream the company recently elected to spin off Raven Moon Home Video Products, 
LLC into a separate publicly traded company. The debt, which is reflected on the
company's balance sheet as an advance from class B members of LLC amounts to    
$1,958,800. The reduction of almost 2 million dollars of debt, which should be  
reflected in the upcoming quarterly financial statements, will put the company  
and its shareholders in a much better position to achieve its ultimate goal for 
year end 2003 profitability.                                                    

    The company plans to complete a total of 15 episodes of the "Gina D's Kids
Club" series. As part of our business plan, the completion of these episodes    
creates multiple revenue streams which includes worldwide licensing and         
merchandising opportunities for the videos, CD's, and toys that have been       
inspired by the show, as well as future advertising revenue. Parents told us    
that they wanted better programming for their children, and we are committed to 
our goal of providing the very best in family values children's entertainment.  

Results of Operations                                                           

Revenue                                                                 

Total revenue increased from $7,110 in 2001 to $30,590 in 2002.                 

Consulting fees                                                         

Consulting fees increased from $849,709 in 2001 to $1,473,706 in 2002. This     
increase was primarily due to the higher cost of our consulting services.       

Option rights to intellectual property                                  

Total cost of option rights to intellectual property increased from $585,000 in 
2001, to $1,541,400 in 2002. This increase was primarily due to the extension of
the option period for the intellectual property right owned by Joey and         
Bernadette DiFrancesco to April 2004 at a cost of $1,000,000.                   

Production expenses.                                                            

Our production expenses decreased from $1,651,734 in 2001 to $1,582,759 in 2002.
The decrease in our production expenses was mainly contributable to suspension  
of several development projects.                                                

General and Administrative.                                                     

Our general and administrative expenses consist primarily of professional fees. 
General and administrative expenses have decreased from $2,056,910 in 2001 and  
to $1,643.369 in 2002. The decrease from 2001 to 2002 was primarily due to      
decrease in professional fees and contract labor cost.                          

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS                                       

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated    
with Exit or Disposal Activities." SFAS No. 146 supersedes Emerging Issues Task 
Force Issue No. 94-3, "Liability Recognition for Certain Employee Termination   
Benefits and Other Costs To Exit an Activity (Including Certain Costs Associated
with a Restructuring)" and requires that a liability for a cost associated with 
an exit or disposal activity be recognized when the liability is incurred, as   
opposed to when management is committed to an exit plan. SFAS No. 146 also      
establishes that the liability should initially be measured and recorded at fair
value. SFAS No. 146 is effective for exit or disposal activities initiated after
December 31, 2002. The provisions of SFAS No. 146 are required to be applied    
prospectively after the adoption date to newly initiated exit activities.       

In November 2002, the FASB's Emerging Issues Task Force reached a consensus on  
Issue No. 00-21, "Accounting for Revenue Arrangement with Multiple              
Deliverables," which addresses circumstances involving the delivery or          
performance of multiple products, services, and/or rights to use assets, and for
which performance may occur at different points in time or over different       
periods of time. Issue No. 00-21 also addresses whether the different           
revenue-generating activities, or deliverables, are sufficiently separable, and 
there exists sufficient evidence of their fair values to separately account for 
some or all of the deliverables. The issue applies to all contractual           
arrangements under which a vendor will perform multiple revenue-generating      
activities. Issue No. 00-21 is effective for all revenue arrangements entered   
into in fiscal periods beginning after June 15, 2003, with early adoption       
permitted. The Company will adopt this guidance prospectively for all revenue   
arrangements entered into after December 29, 2002. The Company does not expect  
Issue No. 00-21 to have a material impact on the financial statements.          

In December 2002 the FASB issued SFAS No. 148, "Accounting for Stock-Based      
Compensation -- Transition and Disclosure" that amends SFAS No. 123, "Accounting
for Stock-Based Compensation." The standard provides for (1) alternative methods
of transition for an entity that voluntarily changes to the fair-value method of
accounting for stock-based employee compensation; (2) requires more prominent   
disclosure of the effects of an entity's accounting policy decisions with       
respect to stock-based employee compensation on reported income; and (3) amends 
APB Opinion No. 28, "Interim Financial Reporting," to require disclosure of     
those effects in interim financial information. SFAS No. 148 is effective for   
fiscal years ending after December 15, 2002, and for financial reports          
containing condensed financial statements for interim periods beginning after   
December 15, 2002. The Company will continue to account for employee stock      
options using the fair value method in accordance with of SFAS No. 123 and 148. 

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Item 7. Financial Statements.                                                   

RAVEN MOON ENTERTAINMENT, INC.

 TABLE OF CONTENTS

                                                                      Page
                                                                      ----

Independent Auditors' Report                                              F-1   

Consolidated Balance Sheets                                               F-2   

Consolidated Statements of Operations                                     F-3   

Consolidated Statements of Deficit in Stockholders' Equity                F-4   

Consolidated Statements of Cash Flows                                     F-5   

Notes to Consolidated Financial Statements                              F-7-F-24

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INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of                                   
Raven Moon Entertainment, Inc.                                                  

We have audited the accompanying consolidated balance sheets of Raven Moon      
Entertainment, Inc. and subsidiaries as of December 31, 2002 and 2001, and the  
related consolidated statements of operations, deficit in stockholders' equity  
and cash flows for the years then ended. These consolidated financial statements
are the responsibility of the Company's management. Our responsibility is to    
express an opinion on these consolidated financial statements based on our      
audits.                                                                         

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

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the financial position of Raven Moon          
Entertainment, Inc. and subsidiaries as of December 31, 2002 and 2001 and the   
results of their operations and their cash flows for the years then ended in    
conformity with accounting principles generally accepted in the United States of
America.                                                                        

The accompanying consolidated financial statements have been prepared assuming  
that the Company will continue as a going concern. As discussed in Note 3 to the
consolidated financial statements, the Company has suffered losses from         
operations and has a net capital deficiency that raises substantial doubt about 
its ability to continue as a going concern. Management plans in regard to these 
matters are described in Note 3. The consolidated financial statements do not   
include any adjustments that might result from the outcome of this uncertainty. 

/s/  Richard L. Brown & Company, P.A.                                           
-------------------------------------                                           
Richard L. Brown & Company, P.A.                                      

Tampa, Florida                                                                  
March 7, 2003, except for Note 12 dated March 10, 2003                          

 F-1

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                                      RAVEN MOON ENTERTAINMENT, INC.                                      

                                        CONSOLIDATED BALANCE SHEETS                                       

                                        December 31, 2002 and 2001                                        

                                                  ASSETS                                                  

                                                                                  2002           2001     
                                                                              ------------   ------------ 

                                                                                                          
Cash                                                                          $     19,200   $     16,397 
Receivable from affiliated company                                                    --            4,223 
Accounts receivable                                                                  6,512           --   
Prepaid expense                                                                     28,300           --   
Inventory                                                                            6,586           --   
Office equipment, net of $6,900 and $5,329 of                                                             
       accumulated depreciation                                                       --            1,571 
Organization costs, net of $17,978 and $14,070 of                                                         
       accumulated amortization                                                      1,560          5,468 
Intellectual properties                                                               --          200,000 
Advance on future royalties-related party                                           46,000         20,000 
                                                                              ------------   ------------ 
                                                                              $    108,158   $    247,659 
                                                                              ============   ============ 

                             LIABILITIES AND DEFICIT IN STOCKHOLDERS' EQUITY                              

Accounts payable to third parties                                             $     10,500   $       --   
Accrued salaries and wages to officers                                             186,383        685,480 
Accrued consulting fees                                                               --          295,000 
Accrued interest payable to officers and related parties                            77,952         78,717 
Notes payable to officers and related parties                                       83,000        264,295 
Loans from shareholders                                                             62,000         82,000 
Advance from Class B Members of LLC                                              1,958,800        104,600 
Debentures payable                                                                  30,000         30,000 
                                                                              ------------   ------------ 

                 Total liabilities                                               2,408,635      1,540,092 

COMMITMENTS AND CONTINGENCIES (note 7)                                                                    

DEFICIT IN STOCKHOLDERS' EQUITY                                                                           
          Preferred stock, $.0001 par value, authorized 800,000,000 shares;                               
                issued and outstanding 6,024,755 in 2002 and 2001                      602            602 
          Common stock, $.0001 par value, authorized 8000,000,000 shares;                                 
                529,731,964 shares issued and outstanding in 2002 and                                     
                304,472,722 in 2001                                                 52,972         30,247 
          Additional paid-in capital                                            12,063,812      7,597,865 
          Accumulated deficit                                                  (14,417,863)    (8,921,147)
                                                                              ------------   ------------ 

                Total deficit in stockholders' equity                           (2,300,477)    (1,292,433)
                                                                              ------------   ------------ 

                                                                              $    108,158   $    247,659 
                                                                              ============   ============ 

See notes to Consolidated Financial Statements.                                                           

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                                   RAVEN MOON ENTERTAINMENT, INC.                                 

                               CONSOLIDATED STATEMENTS OF OPERATIONS                              

                           For the years ended December 31, 2002 and 2001                         

                                                                           2002          2001     
                                                                        -----------   ----------- 
REVENUES:                                                                                         
                                                                                                  
           Sales                                                        $    30,590   $     7,110 
                                                                        -----------   ----------- 
COSTS AND EXPENSES:                                                                               
           Consulting fees                                                1,473,706       849,709 
           Depreciation                                                       1,571         1,758 
           Interest expense                                                  34,501        38,079 
           Write-off of intellectual property                                  --         103,754 
           Option rights to intellectual properties                       1,541,400       585,000 
           Production expense                                             1,582,759     1,651,734 
           General and administrative expense                             1,643,369     2,056,910 
                                                                        -----------   ----------- 

                                                                          6,277,306     5,286,944 
                                                                        -----------   ----------- 

Net loss before forgiveness of accrued salaries and wages to officers    (6,246,716)   (5,279,834)

Forgiveness of accrued salaries and wages to officers                       750,000          --   
                                                                        -----------   ----------- 
Net loss                                                                 (5,496,716)   (5,279,834)
                                                                        ===========   =========== 
Net loss per share                                                            (0.01)        (0.02)
                                                                        ===========   =========== 

See notes to Consolidated Financial Statements.                                                   

                                                F-3                                               

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                                   RAVEN MOON ENTERTAINMENT, INC.                                  

                     CONSOLIDATED STATEMENTS OF DEFICIT IN STOCKHOLDERS' EQUITY                    

                           For the years ended December 31, 2002 and 2001                          

                                             Preferred Stock                  Common Stock         
                                      ----------------------------    ---------------------------- 
                                         Shares          Amount          Shares          Amount    
                                      ------------    ------------    ------------    ------------ 
                                                                                                   
Balance December 31, 2000               21,125,730    $      2,113      99,962,420    $      9,996 

  Preferred shares issued for                                                                      
     beneficial conversion feature       2,273,320             227                                 
  Preferred shares issued for                                                                      
     expenses                            7,940,500             794                                 
  Preferred shares issued for loan                                                                 
     payment                             6,449,500             645                                 
  Conversion of preferred stock to                                                                 
     common stock                      (23,064,295)         (2,307)     23,064,295           2,307 
  Common stock warrants granted  to                                                                
     officers and directors                                                                        
  Common stock options granted to                                                                  
     related party                                                                                 
  Exercise of warrants                                                   3,200,000             320 
  Exercise of options                                                    7,000,000             700 
  Shares issued for conversion of                                                                  
     debenture                                                          72,612,504           7,261 
  Shares issued for intellectual                                                                   
     property                                                            7,000,000             700 
  Shares issued for option on                                                                      
    rights to Gina D                                                    30,000,000           3,000 
  Shares issued for expenses                                            65,993,003           6,599 
  Shares issued for loan repayment                                          90,000               9 
  Cancelled shares                      (8,700,000)           (870)     (6,449,500)           (645)
  Net loss for the year                                                                            
                                      ------------    ------------    ------------    ------------ 
      Balance December 31, 2001          6,024,755             602     302,472,722          30,247 

  Common stock warrants granted to                                                                 
     senior consultants                                                                            
  Common stock warrants granted to                                                                 
     debenture holders                                                                             
  Common stock options granted to                                                                  
     officers and directors                                                                        
  Common stock options granted to                                                                  
     related party                                                                                 
  Common stock options granted to                                                                  
     senior consultants                                                                            
  Common stock options granted for                                                                 
     expenses                                                                                      
  Exercise of warrants by directors                                                                
     and officers                                                       10,000,000           1,000 
  Exercise of warrants by senior                                                                   
     consultants                                                         2,700,000             270 
  Exercise of warrants                                                     176,152              17 
  Exercise of options by related                                                                   
     party                                                              72,902,640           7,290 
  Exercise of options                                                   12,000,000           1,200 
  Shares issued for cash                                                 1,250,000             125 
  Shares issued for option on                                                                      
     rights to Gina D                                                   20,000,000           2,000 
  Shares issued for accrued                                                                        
     consulting fees                                                     6,500,000             650 
  Shares issued to related party                                                                   
     for expense                                                        15,000,000           1,500 
  Shares issued to senior                                                                          
     consultant for expenses                                            45,000,000           4,500 
  Shares issued for expenses                                            60,930,454           6,093 
  Cancelled shares previously                                                                      
     issued for intellectual                                                                       
     property                                                           (7,000,000)           (700)
  Cancelled shares                                                     (12,200,004)         (1,220)
  Net loss for the year                                                       --              --   
                                      ------------    ------------    ------------    ------------ 

     Balance December 31, 2002           6,024,755    $        602     529,731,964    $     52,972 
                                      ============    ============    ============    ============ 

See notes to Consolidated Financial Statements.                                                    

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                          RAVEN MOON ENTERTAINMENT, INC.                           

            CONSOLIDATED STATEMENTS OF DEFICIT IN STOCKHOLDERS' EQUITY             

                  For the years ended December 31, 2002 and 2001                   
                                   (Continued)                                     

                                       Additional                                  
                                        paid-in       Accumulated                  
                                        capital         deficit          Total     
                                      ------------    ------------    ------------ 
                                                                                   
Balance December 31, 2000             $  2,455,814    $ (3,641,313)   $ (1,173,390)

  Preferred shares issued for                                                      
     beneficial conversion feature                                             227 
  Preferred shares issued for                                                      
     expenses                              237,206                         238,000 
  Preferred shares issued for loan                                                 
     payment                                86,515                          87,160 
  Conversion of preferred stock to                                                 
     common stock                                                             --   
  Common stock warrants granted  to                                                
     officers and directors                 12,000                          12,000 
  Common stock options granted to                                                  
     related party                          70,700                          70,700 
  Exercise of warrants                      42,680                          43,000 
  Exercise of options                      139,300                         140,000 
  Shares issued for conversion of                                                  
     debenture                           1,270,325                       1,277,586 
  Shares issued for intellectual                                                   
     property                              199,300                         200,000 
  Shares issued for option on                                                      
    rights to Gina D                       582,000                         585,000 
  Shares issued for expenses             2,485,519                       2,492,118 
  Shares issued for loan repayment          14,991                          15,000 
  Cancelled shares                           1,515                            --   
  Net loss for the year                                 (5,279,834)     (5,279,834)
                                      ------------    ------------    ------------ 
      Balance December 31, 2001          7,597,865      (8,921,147)     (1,292,433)

  Common stock warrants granted to                                                 
     senior consultants                    112,400                         112,400 
  Common stock warrants granted to                                                 
     debenture holders                      13,580                          13,580 
  Common stock options granted to                                                  
     officers and directors                170,000                         170,000 
  Common stock options granted to                                                  
     related party                         705,100                         705,100 
  Common stock options granted to                                                  
     senior consultants                    369,000                         369,000 
  Common stock options granted for                                                 
     expenses                               89,300                          89,300 
  Exercise of warrants by directors                                                
     and officers                           29,000                          30,000 
  Exercise of warrants by senior                                                   
     consultants                            59,730                          60,000 
  Exercise of warrants                       2,193                           2,210 
  Exercise of options by related                                                   
     party                                 372,708                         379,998 
  Exercise of options                      154,800                         156,000 
  Shares issued for cash                    14,875                          15,000 
  Shares issued for option on                                                      
     rights to Gina D                      388,000                         390,000 
  Shares issued for accrued                                                        
     consulting fees                       294,350                         295,000 
  Shares issued to related party                                                   
     for expense                           193,500                         195,000 
  Shares issued to senior                                                          
     consultant for expenses               606,500                         611,000 
  Shares issued for expenses             1,088,991                       1,095,084 
  Cancelled shares previously                                                      
     issued for intellectual                                                       
     property                             (199,300)                       (200,000)
  Cancelled shares                           1,220                            --   
  Net loss for the year                                 (5,496,716)     (5,496,716)
                                      ------------    ------------    ------------ 

     Balance December 31, 2002        $ 12,063,812    $(14,417,863)   $ (2,300,477)
                                      ============    ============    ============ 

See notes to Consolidated Financial Statements.                                    

                                    F-4(Con't)                                     

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                                        RAVEN MOON ENTERTAINMENT, INC.                                      

                                    CONSOLIDATED STATEMENTS OF CASH FLOWS                                   

                                For the years ended December 31, 2002 and 2001                              

                                                                                     2002          2001     
                                                                                  -----------   ----------- 

CASH FLOWS FROM OPERATING ACTIVITIES                                                                        
                                                                                                            
         Net loss                                                                 $(5,496,716)  $(5,279,834)
         Adjustments to reconcile net loss to net cash                                                      
              used by operating activities:                                                                 
                   Decrease in advances                                                  --          20,000 
                   Decrease in receivables from affiliated company                      4,223       262,009 
                   (Increase) in accounts receivable                                   (6,512)         --   
                   (Increase) in prepaid expense                                      (28,300)         --   
                   (Increase) in inventory                                             (6,586)         --   
                   Depreciation and amortization                                        5,479         5,666 
                   Writeoff of production and royalty rights                             --         103,754 
                   (Increase) in advanced royalty payments to related party           (26,000)      (20,000)
                   Increase in accounts payable to third parties                       10,500       261,037 
                   (Decrease) in accrued interest on debentures                          --         (20,119)
                   (Decrease) increase in accrued salaries and wages to officers     (499,097)      354,280 
                   (Decrease) increase in accrued interest payable to officers                              
                        and related party                                                (765)       31,547 
                   Class B membership issued for option on rights to Gina D         1,000,000          --   
                   Common stock options granted for expenses                        1,333,400        12,000 
                   Common stock warrants granted for expenses                         125,980        70,700 
                   Shares issued for expenses                                       2,291,084     3,315,118 
                                                                                  -----------   ----------- 

                                    Net cash (used) by operations                  (1,293,310)     (883,842)

CASH FLOWS FROM FINANCING ACTIVITIES                                                                        
         Advances from Class B Membership Units                                       854,200       104,600 
         Proceeds from sale of common stock                                            15,000          --   
         Proceeds from exercise of options                                            535,998       140,000 
         Proceeds from exercise of warrants                                            92,210        43,000 
         Proceeds from sale of debentures                                                --         741,245 
         Payments on notes payable - shareholders                                     (20,000)       (5,000)
         Proceeds from notes payable to officers and affiliated companies             135,600          --   
         Repayments of notes payable - officers and affiliated companies             (316,895)     (123,326)
                                                                                  -----------   ----------- 

                                    Net cash provided by financing activities       1,296,113       900,519 
                                                                                  -----------   ----------- 

         Net increase in cash                                                           2,803        16,677 

         Cash at beginning of period                                                   16,397          (280)
                                                                                  -----------   ----------- 

                                                                                  $    19,200   $    16,397 
                                                                                  ===========   =========== 

See notes to Consolidated Financial Statements.                                                             

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RAVEN MOON ENTERTAINMENT, INC.      

CONSOLIDATED STATEMENTS OF CASH FLOWS     

For the years ended December 31, 2002 and 2001      

                                                2002          2001
                                                ----------    ----------

NON CASH FINANCING ACTIVITIES 
------------------------------

Preferred shares issued for                                                     
         beneficial conversion feature          $     --      $      227
                                                ==========    ==========
Preferred shares issued for                                                   
         loan payment                           $     --      $   87,160
                                                ==========    ==========
Shares issued for conversion                                                  
         of indebtedness                        $     --      $1,277,586
                                                ==========    ==========
Shares issued  (subsequently cancelled)                                       
         for intellectual property              $ (200,000)   $  200,000
                                                ==========    ==========
Shares issued for accrued                                                     
       consulting fees                        $  295,000    $     --
                                                ==========    ==========
Shares issued for option on                                                   
         rights to Gina D                       $  390,000    $  585,000
                                                ==========    ==========
Shares issued for loan repayment                   $             $   15,000   
                                                ==========    ==========

See notes to Consolidated Financial Statements.                                 

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 1-- Description of the Company                                             

Raven Moon Entertainment, Inc. and its wholly owned subsidiaries are primarily  
engaged in the production, development, promoting, selling and distributing     
Family Values and Christian-oriented video entertainment products. The market   
for these products is worldwide, although the company will devote most of its   
efforts within the continental United States.                                   

Note 2-- Summary of Significant Accounting Policies                             

Principles of Consolidation                                                     

The accompanying consolidated financial statements include the accounts of Raven
Moon Entertainment, Inc. and its wholly owned subsidiaries Raven Moon Home Video
Products, LLC and JB Toys, LLC. Raven Moon Home Video Products, LLC will cease  
to exist on December 11, 2011, and JB Toys, LLC will cease to exist on December 
5, 2012. Inter-company transactions and balances have been eliminated in        
consolidation.                                                                  

Revenue Recognition                                                             

Revenue from distribution of video entertainment products is recognized upon    
receipt of payment or delivery of product, which does not vary significantly    
from the time the products are shipped.                                         

Revenue from one customer in 2002 accounted for 33% to total sales and the      
balance of accounts receivable at December 31, 2002 is due from one customer.   

Production Costs                                                                

Production costs include costs to develop and produce video entertainment       
products. These costs were paid primarily to companies and individuals hired to 
perform a specific task. The Company out-sources these activities in order to   
reduce overhead costs. Production costs are amortized by the ratio of current   
year's revenue bear to management's estimated ultimate revenue. Because the     
Company cannot demonstrate through its experience the ultimate revenue from the 
video entertainment products it has elected to expense all production costs.    

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 2-- Summary of Significant Accounting Policies (continued)                 

Stock Based Compensation                                                        

The Company accounts for stock options issued to employees under Statement of   
Financial Accounting Standards 123, wherein such options are valued based upon  
the Block-Scholes option pricing model.                                         

Debt with Stock Purchase Warrants and Beneficial Conversion Features            

The proceeds received from debt issued with stock purchase warrants is allocated
between debt and the warrants, based upon the relative fair value of the two    
securities and/or beneficial conversion features.                               

Accounts Receivable                                                             

The Company considers accounts receivable to be fully collectible; accordingly, 
no allowance for doubtful accounts is required. If amounts become uncollectible,
they will be charged to operations when that determination is made.             

Inventory                                                                       

Inventory consists of various video entertainment products recorded on CDs.     
Inventories are stated at the lower of cost or market, with cost being          
determined by the first-in, first-out method.                                   

Unclassified Balance Sheet                                                      

In accordance with the provisions of SOP 00-2, the Company has elected to       
present an unclassified balance sheet.                                          

Intellectual Property                                                           

Intellectual property is recorded at the lower of cost or net realizable value. 
The Company performs an impairment test of intellectual property quarterly. SFAS
142 requires the Company to compare the fair value of the intellectual property 
to its carrying amount to determine if there is potential impairment. If the    
carrying amount of the intellectual property exceeds its fair value, an         
impairment loss is recognized. Fair values for intellectual property are        
determined based on discounted cash flows, market multiples or appraised values 

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 2-- Summary of Significant Accounting Policies (continued)                 

Intellectual Property (continued)                                               

as appropriate. Because the Company cannot demonstrate through its experience   
the ultimate revenue from intellectual property it has elected to expense all   
costs associated with intellectual property.                                    

Management Estimates                                                            

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

Net Loss Per Share                                                              

Primary loss-per-share computations are based on the weighted average number of 
shares outstanding during the period. The weighted average number of shares     
outstanding were 409,200,000 and 211,000,000 for the years ended December 31,   
2002 and 2001, respectively. Common Stock equivalents were not considered in the
calculation of net loss per share because their effect would be antidilutive.   

Income Taxes                                                                    

The Company has incurred approximately $14,400,000 of net operating losses which
may be carried forward and used to reduce taxable income in future years.       
Deferred tax assets created by the net operating losses are offset by an equal  
valuation allowance.                                                            

Office Equipment                                                                

Office equipment is recorded at cost. Depreciation is calculated using the      
straight-line method.                                                           

Reclassifications                                                               

Certain amounts reported in previous years have been reclassified to the 2002   
financial statement presentation.                                               

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 2-- Summary of Significant Accounting Policies (continued)                 

Recently Issued Accounting Pronouncements                                       

In June 2002, the FASB issued SFAS No.146, "Accounting for Costs Associated with
Exit or Disposal Activities". SFAS No. 146 supersedes Emerging Issues Task Force
Issue No. 94-3, "Liability Recognition For Certain Employee Termination Benefits
and Other Costs To Exit an Activity (Including Certain Costs Associated with a  
Restructuring)" and requires that a liability for a cost associated with an exit
or disposal activity be recognized when the liability is incurred, as opposed to
when management is committed to an exit plan. SFAS No. 146 also establishes that
the liability should initially be measured and recorded at fair value. SFAS No. 
146 is effective for exit or disposal activities initiated after December 31,   
2002. The provisions of SFAS No. 146 are required to be applied prospectively   
after the adoption date to newly initiated exit activities.                     

In November 2002, the FASB's Emerging Issues Task Force reached a consensus on  
Issue No. 00- 21, "Accounting For Revenue Arrangement With Multiple             
Deliverables", which addresses circumstances involving the delivery or          
performance of multiple products, services, and/or rights to use assets, and for
which performance may occur at different points in time or over different       
periods of time. Issue No. 00-21 also addresses whether the different           
revenue-generating activities, or deliverables, are sufficiently separable and  
there exits sufficient evidence of their fair values to separately account for  
some or all of the deliverables. The issue applies to all contractual           
arrangements under which a vendor will perform multiple revenue-generating      
activities. Issue No. 00-21 is effective for all revenue arrangements entered   
into in fiscal periods beginning after June 15, 2003, with early adoption       
permitted. The Company will adopt this guidance prospectively for all revenue   
arrangements entered into after December 29, 2002. This Company does not expect 
Issue No. 00-21 to have a material impact on the financial statements.          

In December 2002 the FASB issued SFAS No. 148, "Accounting For Stock-based      
Compensation- Transition and Disclosure" that amends SFAS No. 123, "Accounting  
For Stock-Based Compensation". The standard provides for; (1) alternative       
methods of transition for an entity that voluntarily changes to the fair-value  
method of accounting for stock-based employee compensation; (2) requires more   
prominent disclosure of the effects of an entity's accounting policy decisions  
with respect to stock-based employee compensation on reported income; and (3)   
amends APB Opinion No. 28, "Interim Financial Reporting", to require disclosure 
of those effects in interim financial information. SFAS No. 148 is effective for
fiscal years ending after December 15, 2002, and for financial reports          
containing condensed financial statements for interim periods beginning after   
December 15, 2002. The Company will continue to account for employee stock      
options using the fair value method in accordance with SFAS No. 123 so no       
additional disclosures under SFAS No. 148 are required.                         

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 3-- Business and Operations                                                

The Company is currently working to establish the following lines of business:  

           Home Video and Television Productions
Internet Retail Sales     
Music CDs                 
Plush Toys                

These financial statements are prepared on a going concern basis which assumes  
that the Company will be able to realize assets and discharge liabilities in the
normal course of business. Accordingly, it does not give effect to adjustments, 
if any, that would be necessary should the Company be unable to continue as a   
going concern and therefore be required to realize assets and liquidate its     
liabilities, contingent obligations and commitments in other than the normal    
course of business and the amounts which may be different from those shown in   
these financial statements. The ability to continue as a going concern is       
dependent on its ability to:                                                    

                  Obtain additional debt and equity financing.
                   Generate profitable operations in the future.

The Company has initiated several actions to generate working capital and       
improve operating performances, including equity and debt financing and cost    
reduction measures. There can be no assurance that the Company will be able to  
successfully implement its plan, or if successfully implemented, the Company    
will achieve its goals. Furthermore, if the Company is unable to raise          
additional funds it may be required to reduce its workforce, reduce compensation
levels, reduce dependency on outside consultants, modify its growth and         
operating plans, and even be forced to terminate operations completely.         

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 4-- Intellectual Properties                                                

During 1997, the Company acquired intellectual properties, production rights and
royalty rights in connection with an acquisition accounted for as a purchase. As
of the date this transaction was consummated, and currently, there were no      
outstanding agreements or contracts related to the above productions. While     
management believes these intellectual properties have significant value,       
establishing this value in the absence of definitive agreements cannot be       
accomplished. Therefore, during the fourth quarter of 2001, the Company elected 
to write-off the carrying value of these assets as the Company has no current   
plans to develop these projects.                                                

On March 27, 2001, the Company entered into an Interim Management Services      
Agreement with Hacker-Rumsley (HR). The agreement was from March to July of 2001
and the Company paid approximately $290,000 and 6,500,000 shares of common      
stock, valued at $295,000, issued in January 2002. For this payment the Company 
received certain carrying interests and rights to three of the four HR owned    
properties, "The Icely Brothers", "Wild Streets", "Star Ridz", and "Dirts Trax",
based upon the following terms:                                                 

-   A recoupment of $200,000 in development costs on a pari 
  parsu basis with total production costs against series
sold in market.                                     

    - An equal participation to HR "Producers Share" of Net Profits.

As of the date this transaction was consummated, there were no outstanding      
agreements or contracts related to the above productions. While management      
believes these intellectual properties have significant value, establishing this
value in the absence of definitive agreements cannot be accomplished. Therefore,
during the fourth quarter of 2001, the Company has charged the costs associated 
with these production rights to production expense because the Company has no   
current plans to develop these projects.                                        

On July 11, 2001, the Company purchased the assets and rights to intellectual   
property from Knightlights Foundation, Inc. for 7,000,000 shares of the         
Company's common stock, valued at $200,000, which approximates the fair market  
value of the assets received. The assets consisted of twenty stories and related
artwork. As of December 31, 2002, the Company has agreed with the Knightlights  
Foundation, Inc. to rescind this transaction and return this project in exchange
for the 7,000,000 shares of the Company's common stock originally issued, or    
$200,000.                                                                       

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 5-- Debt                                                                   

Debt for the Company consists of the following:                                 

Notes payable to officers and affiliated companies bear interest at 10%         
annually. These are demand notes, and are unsecured.                            

Loans from shareholders are non-interest bearing, but the shareholders received 
additional shares of preferred stock and common stock in 2000 and are also      
entitled to gross revenue royalty fees of the gross revenue of the Company for  
ten years. The royalties range from .0125% to .5% of gross revenues. No         
royalties were earned in 2002 and 2001.                                         

Debentures payable are two year 12% convertible subordinated debentures due     
January 10, 2003. Substantially all of the debenture holders have converted the 
debentures into the Company's common stock.                                     

The advances from Class B members of LLC are non-interest bearing. The members  
are entitled to receive all distributions from gross profits of the LLC until   
the members have received an amount equal to their initial investment. In       
addition, the holders of the loans are entitled to annually receive 15% of all  
gross profits of the LLC derived from the sale of products. The Class B members 
have no voting rights. The advances from Class B members have been recorded as a
liability because all advances must be repaid prior to any distributions to the 
parent company.                                                                 

Note 6-- Related Party Transactions                                             

The Company is affiliated through ownership of shares of the Company's common   
stock by the following companies:                                               

J. & B. FiFrancesco, Inc.                           
WEE-OOO, LTD.                                       
Beyond the Kingdom, Inc.                            
T.V. Toys, Inc.                                     
2221 Music                                          

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 6-- Related Party Transactions (continued)                                 

      The Company had incurred aggregate consulting, production,
marketing and management fees with:                 

                                                   2002           2001
                                                   ----           ----
Officers, directors                         
                     and other related parties     $2,619,300     $1,260,900
                                                   ==========     ==========

During the year ended December 31, 2002, Raven Moon Entertainment, Inc.         
purchased 15 units of Raven Moon Home Video Products, LLC for $150,000. This    
transaction was eliminated in consolidation.                                    

On January 3, 2001, the Company entered into a talent agreement with Gina       
Mouery, who is the hostess for the "Gina D's Kids Club Show" and the daughter of
Joseph DiFrancesco, President and Chief Executive Officer of the Company. Under 
terms of the agreement, Mrs. Mouery granted the Company an exclusive, worldwide 
license to use her name, the registered name "Gina D", her likeness and         
performance for the "'Gina D's Kids Club Show" program. The term of the license 
is ten years. The Company agreed to pay Ms. Mouery 3,200,000 shares. These      
shares were valued at $544,000. Because the Company cannot demonstrate through  
its experience the ultimate revenue from the video entertainment products it has
elected to charge consulting expense of $544,000. The Company is obligated to   
pay Ms. Mouery a monthly advance of $2,000 against one percent of any and all   
gross revenues from the show and for ten years following the term of the        
license. The Company paid Ms. Mouery $26,000 and $20,000 for the years ended    
December 31, 2002 and 2001, respectively, and the payments were recorded on the 
balance sheet as advance on future royalties - related party.                   

The Company agrees to pay or reimburse Ms. Mouery $635 a month for a leased car 
during the first two years of the agreement. The Company paid approximately     
$7,200 for the years ended December 31, 2002 and 2001, which is included in the 
general and administrative expenses. The Company also granted Ms. Mouery options
to purchase up to 10,000,000 shares of common stock at an exercise price of $.02
per share, this option was valued at $70,700. Because the Company cannot        
demonstrate through its experience the ultimate revenue from the video          
entertainment products, it has elected to charge consulting expenses $70,700.   

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 6-- Related Party Transactions (continued)                                 

Of these options, 7,000,000 were vested and exercised in January of 2001. Of the
remaining options, 2,000,000 were vested and exercised in March of 2002. Of the 
remaining options, 250,000 will vest and be exercisable on January 1 for each of
the calendar years 2003 through and including 2006. In addition, the Company    
amended this agreement on March 3, 2002, to grant Ms. Mouery options to purchase
an additional 3,000,000 shares of common stock at exercise price of $.02 per    
share. This option was valued at $102,100. Because the Company cannot           
demonstrate through its experience the ultimate revenue from the video          
entertainment products, it has elected to charge consulting expenses $102,100.  
During the year ended December 31, 2002, Gina Mouery exercised 5,000,000 options
for shares of common stock for $100,000. (See Note No. 12.)                     

On April 11, 2001, the Company issued a non refundable grant of 30,000,000      
restricted shares of common stock, valued at $585,000, to Joseph and Bernadette 
DiFrancesco in exchange for a one year exclusive option to the program, certain 
cartoon characters and music publishing rights related to songs written and used
in "Gina D's Kids Club Show" which have been created by Joseph and Bernadette   
DiFrancesco. The Company was not able to meet its requirements under the option 
agreement, and the option expired April 11, 2002. The Company charged the option
price to expense during the year 2001. On May 17, 2002, the Company made an     
addendum to the Option Agreement in exchange for a $100,000 note payable to     
Joseph and Bernadette DiFrancesco and a non-refundable grant of 20,000,000      
shares of common stock, valued at $390,000 and provided that the terms,         
conditions and payment due in the Agreement dated April 11, 2001 are met and    
fulfilled by April 11, 2003, the option agreement granted to the Company on     
April 11, 2001 shall be in force for a period of twenty (20) years. Because the 
Company cannot demonstrate through its experience the ultimate revenue from the 
video entertainment products, it has elected to charge option rights to         
intellectual properties $490,000 during 2002. On November 29, 2002, the Company 
made another addendum to the original agreement dated April 11, 2001, whereby   
the Company granted to Joseph and Bernadette DiFrancesco a non-refundable grant 
of 100 units of Class B memberships in Raven Moon Home Video Products, LLC. In  
exchange for the Class B membership units, the Company obtained an additional   
year beginning April 2003 to meet the terms and conditions of the agreement     
dated April 11, 2001. The Class B memberships were valued at $1,000,000. Because
the Company cannot demonstrate through its experience the ultimate revenue from 
the video entertainment products it has elected to charge $1,000,000 to option  
rights to intellectual properties expense during 2002.                          

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 6-- Related Party Transactions (continued)                                 

In December of 2002, the Company, through its subsidiary JB Toys, LLC, granted  
to WEE-OOO, LTD, a limited partnership owned by Joseph and Bernadette           
DiFrancesco, a non-refundable grant of 100 units of Class B memberships for the 
rights to reproduce characters of Gina D for sale. The Class B memberships were 
valued at $52,000. Because the Company cannot demonstrate through its experience
the ultimate revenue from the video entertainment products, it has elected to   
charge option rights to intellectual properties $52,000 during 2002. The total  
value of the Class B memberships in JB Toys, LLC is $92,000 and are all owned by
WEE-OOO, LTD. (See Note No. 12).                                                

On August 14, 2002, the Company entered into a Consulting and Marketing         
Agreement with David Mouery, the son-in-law of Joseph DiFrancesco, President and
Chief Executive Officer of the Company. The Company issued 15,000,000 shares of 
common stock and options for 90,000,000 shares of common stock to David Mouery. 
The option exercise price of the common stock is a 50% discount from the closing
bid price for the ten trading days immediately preceding the date of exercise.  
The stock was valued at $195,000, and the options were valued at $603,000 and   
charged to consulting expense. During the year David Mouery exercised options   
for 67,902,640 shares of common stock for $280,000. (See Note No.12).           

The officers and directors were granted the following common stock warrants for 
a three year term:                                                              

Date                    Common Stock Warrants          Exercise Price per Share 
----                    ---------------------          ------------------------ 

April 5, 2000                  7,500,000                         $.044          

September 1, 2001             15,000,000                         $.003          

On May 20, 2002, several of the officers and directors exercised 10,000,000     
warrants at .003 per warrant.                                                   

The directors were granted the following common stock options for a ten year    
term:                                                                           

Date                    Common Stock Options           Exercise Price per Share 
----                    --------------------           ------------------------ 

November 29, 2002             50,000,000                         $.005          

These options were valued at $170,000, and charged to general and administrative
expense.                                                                        

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 6-- Related Party Transactions (continued)                                 

During the year loans from officers, directors, senior management and related   
parties are summarized as follows:                                              

                                       2002               2001
                                       ----               ----

   Balance at beginning of year        $264,295           $489,781
   Increase in loans                    135,600            204,000
    Payments on loans                   (316,895)          (429,486)
                                       --------           --------
   Balance at end of year              $ 83,000           $264,295
                                       ========           ========

Interest expense accrued on these loans was approximately $22,000 and $35,000   
for the year ended December 31, 2002 and 2001, respectively.                    

On September 16, 2002, the Company paid Gina Mouery $22,500 related to the      
promissory loan balance due to her for a talent agreement. This balance was     
included in the notes payable to officers and related parties.                  

In December of 2002, WEE-OOO, LTD, a limited partnership owned by Joseph and    
Bernadette DiFrancesco, purchased $40,000 of Class B Units of JB Toys, LLC. In  
February of 2003, $40,000 of this loan was repaid from gross profits of the LLC.
(See Notes No. 5 and 12).                                                       

Note 7-- Commitments and Contingencies                                          

a)   The Company has entered into an employment contract with the officers,     
  Joseph and Bernadette DiFrancesco. Under the terms of the agreement, the
     Company is obligated to make the following annual payments through November
15, 2005:                                                             

2003              $510,000                                  
2004              $612,000                                  
2005              $627,000                                  

  In addition, the officers are to receive a "Founders" royalty of 10% for
 any entertainment revenue received by the Company for any entertainment
  project developed and or produced by the Company during the term of this
 agreement. This royalty will be paid between November 16th and December
31st in perpetuity.                                                   

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 7-- Commitments and Contingencies (continued)                              

b)   The Company had entered into various month to month verbal agreements with 
     unrelated third parties to provide production, marketing and administrative
services. Payments are made based on invoices rendered for specific   
services provided.                                                    

c)   On March 25, 2002, the Company entered into an agreement with MG Studios   
 for the production of twelve videos of "Gina D's Kids Club". MG Studios
will finance and provide all the pre- production, production and post 
   production facilities, work and services necessary to complete the twelve
  videos. The Company was obligated to pay $10,000 on June 1, 2002, and to
  continue to pay MG Studios on a regular basis, but not more than $10,000
  per week. The Company has complied with the terms of this agreement. The
  cost per episode is estimated at $135,700. Any changes during production
  approved by the Company that result in additional costs will be added to
the estimated cost per episode. If the charges for all twelve episodes
 exceed $1,800,000, the Company will incur interest charges at 8% on the
   excess. If the Company fails to make its required payments to MG Studios,
it will incur interest at 8%. (See Note No. 12.)                      

d)   On March 1, 2002, the Company entered into a one year agreement with Big   
     Apple Consulting U.S.A., Inc. (Big Apple) to market and promote the Company
 to brokers, investors, advisors and other individuals and entities. The
Company will issue 18,000,000 restricted shares on common stock and   
     6,000,000 warrants. The Company issued 5,000,000 restricted shares on March
     11, 2002, which were valued at $130,000 and charged to consulting fees. The
Company issued 2,000,000 restricted shares on June 7, 2002, which were
valued at $39,000 and charged to consulting fees. The Company issued  
 8,000,000 restricted shares on September 30, 2002, which were valued at
  $72,000 and charged to consulting fees. The warrants issued to Big Apple
     were valued at $112,400 and charged to consulting fees. Big Apple exercised
     warrants for 2,500,000 shares at $.02 per share in May and June of 2002 and
   exercised 200,000 warrants at $.05 per share in June of 2002. The Company
    is still obligated to issue 3,000,000 restricted shares as of December 31,
2002.                                                                 

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 7-- Commitments and Contingencies (continued)                              

e)   On May 8, 2002, the Company entered into a one year agreement with a race  
   car driver for a non-exclusive license to use the Company's trademarks on
     his race car, equipment and clothing. Upon execution of this agreement, the
Company has agreed to grant a non-qualified stock option valued at    
    $1,080,000. The exercise price is either 70% of the low price for the five
   days immediately preceding the date of exercise or not less than $.04 per
  share. $180,000 of options shall immediately vest following execution of
     this agreement, thereafter, $180,000 in options shall vest on the first day
     of each of the five consecutive successive months thereafter beginning June
1, 2002. Any options that remain unexercised at termination of this   
   agreement will expire. The options were valued at $62,400 and included in
general and administrative expense.                                   

f)   On July 14, 2002, the Company entered into a three year agreement with     
   Jackie Joyner Kersee for a grant of 5,000,000 shares of common stock. The
     common stock was valued at $49,000 and charged to consulting fees. She will
be a member of the Board of Advisors to the Company and will allow the
    Company to utilize her initials, character, name, likeness, photograph and
endorsement in personal appearances to promote the Company's products.

g)   On August 12, 2002, the Company entered into a three year executive sales  
   and marketing consulting agreement with a Consultant. The Consultant will
   assist the CEO on an as needed basis for mergers, acquisitions, meetings,
conventions and travel, and to initiate new contracts, contacts and   
     increase the sales of the Company's products, merchandise and services with
  distributors and all other opportunities and assignments given to him by
the CEO. Compensation for services provided for year one is 30,000,000
  restricted shares of common stock to be registered in the SB-2, $300,000
   options of common stock @ 50% discount from the closing bid price for the
   ten trading days immediately preceding the date of exercise of the option
     against a 10% gross commission of any sales of merchandise or products sold
   by the Company from any deal approved by the Company and initiated by the
    Consultant. In year two a draw of $250,000 or stock based upon the average
  closing share price of the previous ten trading days from the end of the
     term against a 10% gross commission of any sales of merchandise or products
    sold by the Company from any deal approved by the Company and initiated by
  the Consultant. In year three a draw of $300,000 or stock based upon the
   average closing share price of the previous ten trading days from the end
   of the term against a 10% gross commission of any sales of merchandise or
products sold by the Company from any deal approved by the Company and
 initiated by the Consultant. The 30,000,000 shares of restricted common
stock were valued at $390,000 and the options granted were valued at  
$369,000. These items were charged to consulting fees.                

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 8-- Preferred Stock                                                        

At the Company's option, each share of preferred stock can be sold to the       
Company by the holders for $1.00 per share after three years and before five    
years, or in the alternative, the preferred shares can be converted into common 
stock on a one to one basis. Also, the Company has the right to call the        
preferred shares at a price of $.75 per share, after giving a 90 day notice,    
during the fourth and fifth year. At this time the Company has elected not to   
reacquire any shares of preferred stock.                                        

Note 9-- Stock Option Plan                                                      

The Company established a stock option plan for its executives, consultants, key
employees, directors and its affiliates. (The "2001 Stock Option Plan".) The    
2001 Stock Option Plan allows for incentive stock options to be granted to      
future participants at a price not less than 100% of the market value per share 
on the date of the grant. Non-statutory options are granted at prices and terms 
determined by the board of directors.                                           

                                                              Weighted Average
                                              Shares          Exercise Price
                                              ------          --------------

Outstanding at December 31, 2000                   --                 --        

    Granted                             10,000,000            $.0200

    Exercised                           (7,000,000)           $.0200
                     -----------

Outstanding at December 31, 2001               3,000,000            $.0200      

    Granted                            185,000,000            $.0073

    Exercised                          (84,902,640)           $.0062
                    ------------

Outstanding at December 31, 2002             103,097,360            $.0039      
                    ============

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 9-- Stock Option Plan (continued)                                          

The exercise price for 10,000,000 of common stock options granted in 2001 was   
$.02 per share. The fair market value of common stock at the date of grant was  
$.06 per share. The exercise price and the market value for common stock options
granted in 2002 is as follows:                                                  

Options granted         Exercise Price                       Fair Market Value  

3,000,000                    $.02                                  $.040      
6,000,000              not less than $.04                          $.030      
60,000,000              1/2 of previous 10 days average price       $.020       
6,000,000              1/2 of previous 10 days average price       $.009      
50,000,000                    $.005                                 $.005       
60,000,000              1/2 of previous 10 days average price       $.006       

The weighted average fair value of options granted during 2002 and 2001 were    
$.0073 and $.0200, respectively. The weighted-average remaining life of options 
granted were 6.44 and 4.00 years at December 31, 2002 and 2001, respectively.   

The fair value of these options was estimated at the date of grant using a      
Black-Scholes option pricing model with the following weighted average          
assumptions for 2002 and 2001: Risk free interest rate of 5.0%, a dividend yield
of zero and a volatility factor of .50, respectively                            

Note 10-- Common Stock Warrants                                                 

                                                              Weighted Average
                                              Shares          Exercise Price
                                              ------          --------------

Outstanding at December 31, 2000              10,886,860            $.0423      

    Granted                             22,637,424            $.0114

    Exercised                           (3,300,000)           $.0138
                     -----------

Outstanding at December 31, 2001              30,224,284            $.0224      

    Granted                             12,174,000            $.0150

    Exercised                          (12,876,152)           $.0072
                     -----------

Outstanding at December 31, 2002              29,522,132            $.0252      
                     ===========

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 10-- Common Stock Warrants (continued)                                     

The exercise price and the fair market value of common stock warrants issued is 
summarized as follows:                                                          

Granted                                Exercise price      Fair market value    
-------                                --------------      -----------------    

2001                                                                            
----                                                                            

15,000,000                                 $.0030                $.008          
200,000                                 $.0350                $.010       
3,000,000                                 $.0143                $.100         
4,437,424                                 $.0385                $.130         

2002                                                                            
----                                                                            

6,000,000                                 $.02 to .03           $.04          
6,174,000                                 $.01                  $.01          

The weighted average fair value of warrants granted during 2002 and 2001 were   
$.0150 and $.0114, respectively. The weighted-average remaining life of warrants
granted were .73 and 1.72 years at December 31, 2002 and 2001, respectively.    

The fair value of these warrants was estimated at the date of grant using a     
Black-Scholes option pricing model with the following weighted average          
assumptions for 2002 and 2001: Risk free interest rate of 5.0%, a dividend yield
of zero and a volatility factor of .50, respectively.                           

Note 11-- Legal Proceedings                                                     

On March 11, 2003, counsel for Mr. Randolph S. Shaw contacted the Company with a
demand related to 400,000 convertible preferred shares of the Company he owns.  
The shares are redeemable by the Company in February 2003. The Company is       
currently negotiating with Mr. Shaw the terms and conditions of the redemption  
of those shares by the Company.                                                 

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 12-- Subsequent Events                                                     

On January 14, 2003, the Company announced its intention to split into two      
independent publicly traded companies by spinning off Raven Moon Home Video     
Products, LLC as a dividend to shareholders. Raven Moon Entertainment, Inc.     
shareholders will be awarded a pro-rata distribution of stock in the new        
company. The exact ratio and timing of the distribution have not been finalized,
but the estimated date for the spin-off is mid-2003.                            

Through the period ended March 7, 2003, the Company has received an additional  
$364,000 in cash and $154,000 of services in exchange for the sale of Class B   
membership units in Raven Moon Home Video Products, LLC. This includes $228,000 
of cash received from Raven Moon Entertainment, Inc.                            

Through the period ended March 7, 2003, David Mouery has exercised options for  
93,123,043 shares of common stock for $169,000.                                 

Through the period ended March 7, 2003, Gina Mouery has exercised options for   
43,539,681 shares of common stock for $59,000.                                  

Raven Moon Home Video Products, LLC issued a one-time bonus to its four         
songwriters, valued at $20,000 per songwriter. Two of the songwriters are Joseph
and Bernadette DiFrancesco, officers of the Company.                            

On January 13, 2003, the Company issued 15,000,000 shares of free trading common
stock to the producer of Gina D's episodes. The shares of common stock were     
valued at $44,000.                                                              

On January 14, 2003, February 19, 2003 and March 4, 2003, the Company made      
available an additional 45,000,000 shares of common stock each date to be       
exercised by David Mouery in accordance with his consulting agreement (see Note 
6). These transactions were valued at $130,500, $85,500 and $99,000, and are    
recorded as consulting expense.                                                 

On January 27, 2003, the Company amended its talent agreement with Gina Mouery  
and granted options for 45,000,000 shares of common stock. The option exercise  
price of the common stock is a 50% discount from the closing bid price for the  
ten trading days immediately preceding the date of exercise. The options were   
valued at $94,500 and charged to production expense.                            

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RAVEN MOON ENTERTAINMENT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2002 and 2001

Note 12-- Subsequent Events (continued)                                         

On February 19, 2003, JB Toys, LLC paid WEE-OOO, LTD $40,000 to pay-off its     
advance to Class B members, in accordance with its subscription agreement.      

On March 3, 2003, the Company executed a contract with a media service company  
for a signing bonus of $250,000, $125,000 to be paid approximately 10 days after
signing and $125,000 when the Company orders approximately 1,000,000 pieces of  
product. The repayment of the advance will be added to the cost of products the 
Company orders from the media service company at the rate of $.20 per item, plus
the regular cost of the product.                                                

On March 10, 2003, the Company amended its contract with MG Studios to produce a
"Sing Along With Gina" television special, the "Gina D's Cuddle Bug Christmas"  
and 10 regular series half-hour episodes for $175,000 per episode.              

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Item 8. Changes in and Disagreements on Accounting and Financial Disclosure.    

None.                                                                           

PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
with Section 16(a) of the Exchange Act.                                         

Set forth below are the names and certain information regarding the   
individuals elected as directors of the Company.                                

Name                         Age            Positions Held                      
----                         ---            --------------                      

Joseph DiFrancesco           60             President and a Director            

Bernadette DiFrancesco       58             Vice President, Secretary and a     
                Director

Stephen Chrystie             67             Director                            

Norman P. Weinstock          65             Director                            

Anthony Arcari               60             Director                            

     The directors of the Company are elected annually by the shareholders for a
term of one year, or until their successors are elected and qualified. The      
Officers are appointed by the Board of Directors at the annual meeting of       
directors immediately following each annual meeting of shareholders of the      
Company and serve at the pleasure of the Board of Directors.                    

Background of Directors and Executive Officers                                  
----------------------------------------------                                  

Joey DiFrancesco - President and Director. Mr. DiFrancesco has served as a      
director and the President of the Company since November 1999. Mr. DiFrancesco  
has been a producer and director of children's television programs for more than
20 years. Prior to that, he was employed in the music publishing and record     
production business in New York City with Laurie Records, RCA, Columbia/Sony and
MCA. From 1994 to November 1997, Mr. DiFrancesco served as the president and a  
director of St. Anthony's Entertainment, Inc., an entertainment company he      
founded. From January 1997 to January 1999, Mr. DiFrancesco served as president 
and a director of International Resorts and Entertainment, Inc., a Florida      
corporation in the vacation club business. This company was merged into Raven   
Moon Entertainment, Inc. in December 1998. Mr. DiFrancesco has been             
self-employed in the fields of television, audio and video programming for more 
than the past ten years. From November 1999 to date, Mr. DiFrancesco has served 
as President of Raven Moon, Inc., a Florida corporation in the entertainment    

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industry. Mr. DiFrancesco also serves as director of the Company. From 1994 to  
date, Mr. DiFrancesco has served as President and a director of J & B           
DiFrancesco, Inc., a Florida Corporation in the entertainment business.         

Bernadette DiFrancesco - Vice President and Director. Mrs. DiFrancesco has      
served as Vice President and a director of the Company since November of 1999.  
Mrs. DiFrancesco has been self-employed with her husband, Joey DiFrancesco for  
more than 20 years during which time she and Mr. DiFrancesco have produced      
television programs, developed the "Praise-R-cise" alternative to aerobic       
dancing, and produced 26 half hour episodes of "Curly's Kids" with former Harlem
Globetrotter star Curly Neil, among other ventures. She has been actively       
involved in development of all of our present intellectual properties above.    
From January 1994 to January 1997, Mrs. DiFrancesco served as vice president of 
St. Anthony's Entertainment, Inc., a Florida corporation in the entertainment   
business. From January 1997 to January 1999, Mrs. DiFrancesco served as vice    
president of International Resorts and Entertainment, Inc., a vacation club     
company that merged into Raven Moon in December 1998. From 1994 to date, Mrs.   
DiFrancesco has served as Vice President and a director of J & B DiFrancesco,   
Inc., a Florida corporation in the entertainment business.                      

Stephen Chrystie - Director. Mr. Chrystie has served as a Director of the       
Company since November 1999. Mr. Chrystie was a practicing attorney in the state
of California from 1963 until his retirement in 1998. He specialized in banking,
bankruptcy, commercial and entertainment law. Mr. Chrystie now serves as the    
Director of a non-profit corporation serving at-risk youth, with offices in Los 
Angeles, California.                                                            

Norman P. Weinstock - Director. Mr. Weinstock has a Bachelors of Science Degree 
in Business Administration. Having spent over 20 years in the dental industry,  
Mr. Weinstock is the President of the Zahn Dental Company. He formed a          
partnership with the Henry Schein Company to purchase the Zahn Dental Company,  
which is now the world's largest dental laboratory supply company. He is also   
Vice President of Henry Schein, Inc. and President of the Dental Manufacturers  
of America.                                                                     

Anthony Arcari - Director. Mr. Arcari is a graduate of the Boston School of     
Mechanical Dentistry, Boston MA. He has spent many years in the Dental Lab      
business and presently owns Affordable Family Dental Clinic in Boston.          

Meetings and Committees of the Board                                            
------------------------------------                                            

    The Board of Directors met two times during the 2002 fiscal year, and took
action by written consent numerous times. The Board of Directors has an audit   
committee consisting of Stephen Chrystie, Norman P. Weinstock and Anthony       
Arcari.                                                                         

Compensation of Directors                                                       
-------------------------                                                       

     Our directors receive no cash compensation for their services as directors.
Our policy is to reimburse non-employee directors for expenses actually incurred
in connection with attending meetings of our board of directors. Directors and  

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executive officers are also eligible for stock and option grants under our stock
option plans as determined by our board of directors. Each Director also        
received, in lieu of Director's liability insurance, an option for 10,000,000   
common shares at the option price of $.005.                                     

Compliance With Section 16(A) Of Securities Exchange Act Of 1934                
----------------------------------------------------------------                

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our 
directors and officers, and persons who own more than ten percent of the        
Company's Common Stock, are required to file with the Securities and Exchange   
Commission initial reports of ownership and reports of changes in ownership of  
common stock and other equity securities of the Company. Officers, directors and
greater than ten-percent shareholders are required by regulation to furnish us  
with copies of all Section 16(a) reports they file. To our knowledge, based     
solely on a review of the copies of such reports furnished to the Company and   
written representations that no other reports were required during the fiscal   
year ended December 31, 2001, except as disclosed here, directors, officers and 
greater than ten percent beneficial owners complied with all applicable Section 
16(a) filing requirements.                                                      

Anthony E. Arcari:                                                              

Mr. Arcari did not file a report on Form 4 at the time that he was granted      
option to purchase 10,000,000 common shares granted to Directors in lieu of     
Director's insurance, on November 29, 2002.                                     

Stephen Chrystie:                                                               

Mr. Chrystie did not file a report on Form 4 at the time that he was granted    
option to purchase 10,000,000 common shares granted to Directors in lieu of     
Director's insurance, on November 29, 2002.                                     

Joseph DiFrancesco:                                                             

Mr. DiFrancesco did not file a report on Form 4 at the time that he was granted 
option to purchase 10,000,000 common shares granted to Directors in lieu of     
Director's insurance, on November 29, 2002.                                     

Bernadette DiFrancesco:                                                         

Mrs. DiFrancesco did not file a report on Form 4 at the time that he was granted
option to purchase 10,000,000 common shares granted to Directors in lieu of     
Director's insurance, on November 29, 2002.                                     

Norman Weinstock                                                                

Mr. Weinstock did not file a report on Form 4 at the time that he was granted   
option to purchase 10,000,000 common shares granted to Directors in lieu of     
Director's insurance, on November 29, 2002.                                     

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Item 10.  Executive Compensation.                                               

  The following table discloses compensation received for the three fiscal
years ended December 31, 2000, 2001 and 2002 by the Named Executive Officers.   
The Company did provide medical insurance and leased vehicles as discussed      
below.                                                                          

---------------------------- ------ ------------------ ----------------------   
                               Accrued and Unpaid   Other Compensation
Name and Principal Position   Year       Salary          Paid(3)_               
---------------------------- ------ ------------------ ----------------------   

Joseph DiFrancesco(1)                                                           
President                                                                 
---------------------------- ------ ------------------ ----------------------   
2000      221,400   
---------------------------- ------ ------------------ ----------------------   
2001      265,680   
---------------------------- ------ ------------------ ----------------------   
2002      319,34    
---------------------------- ------ ------------------ ----------------------   
Bernadette DiFrancesco(2)                                                       
Vice President                                                            
---------------------------- ------ ------------------ ----------------------   
2000       73,800   
---------------------------- ------ ------------------ ----------------------   
2001       88,480   
---------------------------- ------ ------------------ ----------------------   
2002      106,254   
---------------------------- ------ ------------------ ----------------------   

(1) On June 1, 1997, one of our predecessors, International Resorts and         
Entertainment Group, Inc., entered into an employment agreement with Joey       
DiFrancesco, our President. This agreement was amended on November 3, 1998 and  
again on November 19, 1999. The agreement, as amended, provides that Mr.        
DiFrancesco is employed as President and Chief Executive Officer for a          
seven-year term of employment commencing November 16, 1999. The initial yearly  
salary was $180,000, with 20% increases per year, plus an annual bonus of 3.5%  
to 10% of that year's annual salary, subject to certain conditions and approval 
by the Board of Directors. Mr. DiFrancesco has the right and option to renew the
agreement for an additional 7-year term. If Mr. DiFrancesco is removed as       

President or Chief Executive Officer, or his duties diminished without his      
consent, or if we do not renew the agreement and he does not consent to such    
nonrenewal, then Mr. DiFrancesco is entitled to receive an amount equal to the  
full 7 year's salary, if the termination or nonrenewal is without justification,
or an amount equal to 50% of the full 7 years' salary payable in four annual    
installments. As amended on November 19, 1999, the agreement also provides for  
Mr. DiFrancesco and his wife to receive a "Founders" royalty of 10% of any and  
all gross entertainment revenues received by the Company in conjunction with any
entertainment projects developed and/or produced by the Company during the term 
of his employment. Such royalty is to be paid to them annually between each     
November 16th and December 31st in perpetuity. As of December 31, 2002, we owed 
Mr. DiFrancesco and Ms. DiFrancesco $186,383 in accrued and unpaid combined     
salaries, after they has forgiven $750,000 owed by the Company for their accrued
and unpaid combined salaries.                                                   

(2) We also entered into an employment agreement with Bernadette DiFrancesco on 
June 1, 1997, as amended on November 3, 1998, and amended again on November 16, 
1999. Mrs. DiFrancesco's agreement is identical in terms to that of Mr.         
DiFrancesco, except that she is employed as Vice President and Secretary, and   
her initial annual salary was $60,000. Her salary also is subject to a 20%      
annual increase. Mrs. DiFrancesco also may be paid an annual bonus of 3.5% to   
10% of her annual salary, based on performance over projections and subject to  
approval by the board of directors. If Mrs. DiFrancesco is removed as Vice      
President or Secretary, or her duties diminished without her consent, or if we  
do not renew the agreement and she does not consent to such nonrenewal, then    
Mrs. DiFrancesco is entitled to receive an amount equal to the full 7 year's    
salary, if the termination or nonrenewal is without justification, or an amount 
equal to 50% of the full 7 years' salary payable in four annual installments. As
amended on November 19, 1999, the agreement provides for Mrs. DiFrancesco to    
receive with her husband the "Founders" royalty referenced above. As of December
31, 2002, we owed Mr. DiFrancesco and Ms. DiFrancesco $186,383 in accrued and   
unpaid combined salaries, after they has forgiven $750,000 owed by the Company  
for their accrued and unpaid combined salaries.                                 

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Item 11.  Security Ownership of Certain Beneficial Owners and Management.       

   The following table sets forth information regarding beneficial ownership
of the Company's Common Stock by each Director and Officer, by all persons known
by the Company to own beneficially 5% or more of the outstanding shares of the  
Company's Common Stock, and all of our executive officers and Directors as a    
group, as of December 31, 2002:                                                 

---------------------------------- --------------------- ---------------        
                                               %
Name and Address of                  Number of Shares      Ownership            
Beneficial Owner                                                                
---------------------------------- --------------------- ---------------        

WEE-OOO, LLC                            60,587,325            8.4               
---------------------------------- --------------------- ---------------        

Beyond the Kingdom, Inc.                 3,350,000             *                
---------------------------------- --------------------- ---------------        

Beyond the Kingdom, LP                                                          
2221 Music                               3,023,477             *                
---------------------------------- --------------------- ---------------        

J&B DiFrancesco, Inc.                    1,387,229             *                
---------------------------------- --------------------- ---------------        

TV Toys, Inc.                           14,594,430            2.0               
---------------------------------- --------------------- ---------------        

Joseph & Bernadette DiFrancesco(1)                                              
2221 Springs Landing Blvd.              80,779,097           11.2               
Longwood, FL 32779                                                              
---------------------------------- --------------------- ---------------        

Stephen Chrystie (2)                                                            
270 N. Cannon Drive                     15,092,680            2.0               
Beverly Hills, CA 90210                                                         
---------------------------------- --------------------- ---------------        

Anthony E. Arcari                                                               
1 Strawberry Lane                       12,941,558            1.7               
N. Reading, MA 01864                                                            
---------------------------------- --------------------- ---------------        

Norman Weinstock                                                                
43 Crest Road                           18,586,360            2.5               
Framingham, MA 01702                                                            
---------------------------------- --------------------- ---------------        

All executive officers and             210,342,156           29.2               
directors as a group (1),(2)                                                    
---------------------------------- --------------------- ---------------        

* Less than 1%                                                                  

(1) Includes 12,650,520 shares owned by Mr. and Mrs. DiFrancesco as joint       
tenants, and 30,000,000 shares held by the Bernadette DiFrancesco Trust of which
Joseph and Bernadette DiFrancesco are co-trustees.                              

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(2) The numbers set forth above include warrants to purchase up to 2,500,000    
shares of the Company's Common Stock issued to each of Mr. DiFrancesco, Mrs.    
DiFrancesco, Mr. Chrystie, Norman Weinstock and Anthony E. Arcari. The warrants 
were issued April 5, 2000 and expire April 5, 2003 and are exercisable at any   
time prior to expiration at an exercise price of $.044 per share. Also included 
are 10,000,000 common shares issuable pursuant to the stock option granted to   
Directors in lieu of Director's insurance.                                      

Item 12.  Certain Relationships and Related Transactions.                       

         The merger of Ybor City Shuttle Service, Inc., Raven Moon Entertainment
and International Resorts and Entertainment Group, Inc. on December 31, 1998,   
resulted in Joey DiFrancesco and Bernadette DiFrancesco becoming shareholders in
the Company, both individually and as owners of corporate entities they control,
and both are now officers and directors of the Company.                         

     Mr. DiFrancesco and his wife own all the copyrights and trademarks to "Gina
D's Kids Club" which are optioned to the Company through April 1, 2003. On April
11, 2001, the Company issued a non refundable grant of 30,000,000 restricted    
shares of common stock, valued at $585,000, to Joseph and Bernadette DiFrancesco
in exchange for a one year exclusive option to the program, certain cartoon     
characters and music publishing rights related to songs written and used in     
"Gina Ds Kids Club Show" which have been created by Joseph and Bernadette       
DiFrancesco. The Company was not able to meet its requirements under the option 
agreement, and the option expired April 11, 2002. On May 17, 2002 the Company   
made an addendum to the Option Agreement, in exchange for $100,000 note payable 
to Joseph and Bernadette DiFrancesco and a non-refundable grant of 20,000,000   
shares of common stock, valued at $390,000, and provided that the terms,        
conditions and payment due in the Agreement dated April 11, 2001 are met and    
fulfilled by April 11, 2003 the option agreement granted to the Company on April
11, 2001 shall be in force for a period of twenty (20) years. On November 29,   
2002 the Company made another addendum to the original agreement dated April 11,
2001 whereby the company granted to Joseph and Bernadette DiFrancesco a         
nonrefundable grant of 100 units of Class B memberships in Raven Moon Home Video
Products, LLC. In exchange for the Class B membership units the Company obtained
an additional year beginning April 2003 to meet the terms and conditions of the 
Agreement dated April 11, 2001. The Class B membership were valued at           
$1,000,000.                                                                     

John Pierce, as Trustee, owns a Company's obligations of approximately
$40,000 plus accrued interest as of December 31, 2002. Mr. Pierce is a former   
director and corporate SEC attorney of the Company and is a current shareholder.
The debt is evidenced by 2 separate unsecured promissory notes, each of which   
bears interest at the rate of 10%. The Company intends to assert its rights of  
"set-off" against this obligation.                                              

 Effective January 1, 2001, we entered into a Talent Agreement with Gina
Mouery, the hostess for the "Gina D's Kids Club show. Ms. Mouery is the daughter
of Joseph and Bernadette DiFrancesco. Under the terms of the agreement, Ms.     
Mouery granted us an exclusive, worldwide license to use her name, the          
registered name "Gina D", her likeness and performance for the "Gina D's Kids   
Club" program. The term of the license is ten years. We are obligated to pay Ms.
Mouery a monthly advance of $2,000 against one percent of any and all gross     
revenues from the show we receive from any source and any media throughout the  

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world during the term of the license and for ten years following the term of the
license. We agreed to either reimburse her or pay her $635 a month for a leased 
car during the first two years of the agreement. We also granted Ms. Mouery     
options to purchase up to 10,000,000 shares of our common stock at an exercise  
price of $.02 per share. Of these options 7,000,000 were vested and exercised in
January 2001. Of the remaining options, 2,000,000 were vested and exercised as  
of January 1, 2002, and 250,000 will vest and be exercisable on January 1 for   
each of the calendar years 2003 through and including 2006. We agreed to        
register the shares issuable upon exercise of the option, either through a      
registration on Form S-8 or through some other form of registration permitted   
under applicable securities laws. In January 2002,this agreement was amended and
additional 2,000,000 options were issued to Ms. Mouery. We granted options for  
additional 45,000,000 shares of common stock to Ms. Mouery in 2003 pursuant to  
the amended the talent Agreement.                                               

In December of 2002 the Company, granted to WEE-OOO, LTD, a limited   
partnership owned by Joseph and Bernadette DiFrancesco, 100 units of Class B    
memberships in exchange for the rights to market the character of Gina D. The   
Class B membership were valued at $52,000. The total value of the Class B       
memberships in JB Toys, LLC is $92,000 and are all owned by WEE-OOO, LTD.       

During 2002, the Company issued 15,000,000 shares of common stock and 
options for 90,000,000 shares common stock to David Mouery, the son -in-law of  
Mr. and Mrs. DiFrancesco, pursuant to the General Business Affairs Consulting   
Agreement with David D. Mouery, J.D., dated as of August 14, 2002 and amended on
December 1, 2002. These shares were valued at $195,000 and ptions were valued at
$369,000. During 2002, David Mouery exercised options for 67,902,640 shares of  
common stock for $280,000.                                                      

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 The Company's officers and directors were granted on September 1, 2001,
15,000,000 common stock warrants for a three-year term at exercise price of     
$.003 per share. On May 20, 2002, the Company's officers and directors exercised
10,000,000 warrants at .003 per warrant.                                        

   On November 29, 2002, the Company's directors were granted the 50,000,000
common stock options for a ten-year term at an exercise price of $.005 per      
share. These options were valued at $170,000                                    

During 2002, the interest expense accrued on loans from officers,     
directors, senior management and related parties was approximately $11,000. The 
interest expense for 2001 was approximately $35,000.                            

   On September 16, 2002 the Company paid Gina Mouery $22,500 to pay-off the
promissory loan balance due to her for a talent agreement. This balance was     
included in the notes payable to officers and related parties.                  

     In December of 2002 WEE-OOO, LTD, a limited partnership owned by Joseph and
Bernadette DiFrancesco, purchased $40,500 of Class B Units of JB Toys, LLC.     

During the year ended December 31, 2002 Raven Moon Entertainment, Inc.
purchased 15 units of Raven Moon Home Video Products, LLC for $150,000. This    
transaction was eliminated in consolidation.                                    

   The Company issued shares of its common stock for legal services pursuant
to the Consulting Agreement with J. Bennett Grocock, dated as of March 20, 2003.

Item 13.  Exhibits and Reports on Form 8-K.                                     

(a)  Exhibits. See Index to Exhibits for a list of those exhibits filed as part 
of this report.                                                       

(b)  Reports on Form 8-K. No reports were filed on Form 8-K for the year ended  
December 31, 2002.                                                    

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.                       

RAVEN MOON INTERNATIONAL, INC.                                                  
(Registrant)                                                                    

By:  /s/  Joseph DiFrancesco                     Date:  April 10, 2003          
-------------------------------                                           
Joseph DiFrancesco, President                               

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the          
Registrant and in the capacities and on the dates indicated.                    

Signature and Title                                                             

By:  /s/  Joseph DiFrancesco                     Date:  April 10, 2003          
-------------------------------                                           
Joseph DiFrancesco                                          
President and Director                                      
(Principal Executive Officer and                            
Principal Financial Officer)                                

By:  /s/  Bernadette DiFrancesco                 Date:  April 10, 2003          
-------------------------------                                           
Bernadette DiFrancesco                                      
Vice President, Secretary,                                  
and Director                                                

By:  /s/  Anthony E. Arcari                      Date:  April 10, 2003          
-------------------------------                                           
Anthony E. Arcari                                           
Director                                                    

By:  /s/  Stephen Chrystie                       Date:  April 10, 2003          
-------------------------------                                           
Stephen Chrystie                                            
Director                                                    

By:  /s/  Norman Weinstock                       Date:  April 10, 2003          
-------------------------------                                           
Norman Weinstock                                            
Director                                                    

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 CERTIFICATION

I, Joey DiFrancesco, certify that:                                              

1.   I have reviewed this annual report on Form 10-KSB of Raven Moon            
Entertainment, Inc.                                                   

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 quarterly 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;

4.   I am responsible for establishing and maintaining disclosure controls and  
 procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:                                                  

a)   designed such disclosure controls and procedures to ensure that  
  material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
        entities, particularly during the period in which this annual report
is being prepared;                                          

  b)   evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
this annual report (the "Evaluation Date"); and             

c)   presented in this annual report our conclusions about the        
        effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                       

5.   I have disclosed, based on our most recent evaluation, to the registrant's 
 auditors and the audit committee of registrant's board of directors (or
persons performing the equivalent functions):                         

  a)   all significant deficiencies in the design or operation of internal
     controls which could adversely affect the registrant's ability to
 record, process, summarize and report financial data and have
       identified for the registrant's auditors any material weaknesses in
internal controls; and                                      

    b)   any fraud, whether or not material, that involves management or other
      employees who have a significant role in the registrant's internal
controls; and                                               

6.   I have indicated in this quarterly report whether or not there were        
 significant changes in internal controls or in other factors that could
   significantly affect internal controls subsequent to the date of our most
recent evaluation, including any corrective actions with regard to    
significant deficiencies and material weaknesses.                     

Date: April 10, 2003                                                            

                                  By:  /s/  Joey DiFrancesco
                                              --------------------------------
                                            Joey DiFrancesco
                                                      President, Chief Executive
                                       Officer and
                                                   Chief Financial Officer

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                                               INDEX TO EXHIBITS                                                 

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

EXHIBIT            DESCRIPTION                                      LOCATION                                     
------------------ ------------------------------------------------ ---------------------------------------------
                                                                                                                 
3.1                Articles of Incorporation of                     Incorporated by reference from Exhibit 3(i)  
                   YBOR CITY SHUTTLE SERVICE, INC., as filed with   to the Company's Registration Statement on   
                   the Florida Department of State on January 7,    Form 10-SB filed with the SEC on August 3,   
                   1998, effective January 8, 1998                  1998                                         
------------------ ------------------------------------------------ ---------------------------------------------
3.2                Bylaws of YBOR CITY SHUTTLE SERVICE, INC.        Incorporated by reference from Exhibit       
                                                                    3(ii) to the Company's Registration          
                                                                    Statement on Form 10-SB filed with the SEC   
                                                                    on August 3, 1998                            
------------------ ------------------------------------------------ ---------------------------------------------
3.3                Plan of Merger dated October 21, 1998, and       Incorporated by reference from the Company   
                   Articles of Merger by and among Raven Moon       Report on Form 10-QSB filed with the SEC on  
                   Entertainment,  Inc., Ybor City Shuttle          November 19, 2001                            
                   Service,  Inc. and International  Resorts and                                                 
                   Entertainment  Group, Inc. dated December 18,                                                 
                   1998 filed with the Florida Department of                                                     
                   State on December 31, 1998                                                                    
------------------ ------------------------------------------------ ---------------------------------------------
3.4                Amendment to the Articles of Incorporation of    Incorporated by reference from the Company   
                   Raven Moon International, Inc. filed with the    Report on Form 8-K filed with the SEC on     
                   Florida Department of State on June 30, 1999     March 30, 1999                               
------------------ ------------------------------------------------ ---------------------------------------------
3.5                Amendment to the Articles of Incorporation of    Incorporated by reference from Exhibit A to  
                   Raven Moon International, Inc. filed with the    the Company's Information Statement on       
                   Florida Department of State on December 4,       Schedule 14-C filed with the SEC on          
                   2000, effective January 1, 2001                  November 30, 2001.                           
------------------ ------------------------------------------------ ---------------------------------------------
3.6                Amendment to the Articles of Incorporation of    Incorporated by reference from Exhibit A to  
                   Raven Moon International, Inc. filed with the    the Company's Information Statement on       
                   Florida Department of State on March 9, 2001,    Schedule 14-C filed with the SEC on March    
                   effective March 25, 2001                         6, 2001.                                     
------------------ ------------------------------------------------ ---------------------------------------------
3.7                Amendment to the Articles of Incorporation of    Incorporated by reference from Exhibit A to  
                   Raven Moon International, Inc. filed with the    the Company's Information Statement on       
                   Florida Department of State on May 24, 2001,     Schedule 14-C filed with the SEC on May 2,   
                   effective May 25, 2001                           2001.                                        
------------------ ------------------------------------------------ ---------------------------------------------

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

EXHIBIT            DESCRIPTION                                      LOCATION                                     
------------------ ------------------------------------------------ ---------------------------------------------
                                                                                                                 
3.8                Amendment to the Articles of Incorporation of    Incorporated by reference from Exhibit A to  
                   Raven Moon International, Inc. filed with the    the Company's Information Statement on       
                   Florida Department of State on August 7, 2001,   Schedule 14-C filed with the SEC on August   
                    effective September 1, 2001                     6, 2001.                                     
------------------ ------------------------------------------------ ---------------------------------------------
3.9                Articles of Correction to the Articles of        Incorporated by reference from the Company   
                   Incorporation of Raven Moon International,       Report on Form 10-QSB filed with the SEC on  
                   Inc. filed with the Florida Department of State  November 19, 2001                            
                   on August 21, 2001.                                                                           
------------------ ------------------------------------------------ ---------------------------------------------
4.1                Specimen copy of stock certificate for Common    Incorporated by reference from Exhibit 99    
                   Stock of YBOR CITY SHUTTLE SERVICE, INC.         to the Company's Registration Statement on   
                                                                    Form 10-SB filed with the SEC on August 3,   
                                                                    1998                                         
------------------ ------------------------------------------------ ---------------------------------------------
10.1               2001 Raven Moon Entertainment Stock Option Plan  Incorporated by reference from the Company   
                                                                    Report on Form 10-QSB filed with the SEC on  
                                                                    November 19, 2001                            
------------------ ------------------------------------------------ ---------------------------------------------
10.2               Agreement between The KnightLights Foundation,   Incorporated by reference from the Company   
                   Inc. and the Company dated July 11, 2001,        Report on Form 10-QSB filed with the SEC on  
                   including Addendum dated October 11, 2001        November 19, 2001                            
------------------ ------------------------------------------------ ---------------------------------------------
10.3               Consulting Agreement between Management          Incorporated by reference from the Company   
                   Solutions International, Inc. and the Company    Report on Form 10-QSB filed with the SEC on  
                   dated September 17, 2001                         November 19, 2001                            
------------------ ------------------------------------------------ ---------------------------------------------
10.4               Promotion Agreement between Big Apple            Incorporated by reference from the Company   
                   Consulting U.S.A., Inc. and the Company dated    Report on Form 10-QSB filed with the SEC on  
                   September 17, 2001                               November 19, 2001                            
------------------ ------------------------------------------------ ---------------------------------------------
10.5               Raven Moon International, Inc. License           Incorporated by reference from the Company   
                   Agreement dated September 26, 2001 between the   Report on Form 10-QSB filed with the SEC on  
                   Company and Raven Moon Home Video Products, LLC  November 19, 2001                            
------------------ ------------------------------------------------ ---------------------------------------------
10.6               Talent Agreement between the Company and Gina    Incorporated by reference from the           
                   Mouery, dated January 1, 2001.                   Company's registration statement on Form     
                                                                    S-8 filed with the SEC on March 21, 2002     
------------------ ------------------------------------------------ ---------------------------------------------
10.7               Option Agreement between the Company and Gina    Incorporated by reference from the           
                   Mouery, dated January 1, 2001.                   Company's registration statement on Form     
                                                                    S-8 filed with the SEC on March 21, 2002     
------------------ ------------------------------------------------ ---------------------------------------------

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

EXHIBIT            DESCRIPTION                                      LOCATION                                     
------------------ ------------------------------------------------ ---------------------------------------------
                                                                                                                 
10.8               Limited Duration License Agreement dated         Incorporated by reference from the           
                   January 1, 2002 between the Company and Beyond   Company's Report on Form 10-KSB filed with   
                   The Kingdom, Inc. and Raven Moon Home Video      the SEC on April 16, 2002                    
                   Products, LLC                                                                                 
------------------ ------------------------------------------------ ---------------------------------------------
10.9               Consulting Agreement between the Company and     Incorporated by reference from the           
                   Donald Hacker.                                   Company's registration statement on Form     
                                                                    S-8 filed with the SEC on March 19, 2002     
------------------ ------------------------------------------------ ---------------------------------------------
10.10              Consulting Agreement between the Company and     Incorporated by reference from the           
                   Royce Rumsey.                                    Company's registration statement on Form     
                                                                    S-8 filed with the SEC on March 19, 2002     
------------------ ------------------------------------------------ ---------------------------------------------
10.11              Production Agreement between the Company and     Incorporated by reference from the           
                   MG Studios, Inc., dated March 1, 2002.           Company's Report on Form 10-KSB filed with   
                                                                    the SEC on April 16, 2002                    
------------------ ------------------------------------------------ ---------------------------------------------
10.12              Letter Agreement between the Company and David   Incorporated by reference from the           
                   H. Popper.                                       Company's registration statement on Form     
                                                                    S-8 filed with the SEC on May 21, 2002       
------------------ ------------------------------------------------ ---------------------------------------------
10.13              Consulting Agreement between Farrell Gordon      Incorporated by reference from the           
                   and the Company, dated as of May 8, 2002.        Company's registration statement on Form     
                                                                    S-8 filed with the SEC on June 27, 2002      
------------------ ------------------------------------------------ ---------------------------------------------
10.14              Escrow Agreement among the Company, Charles W    Incorporated by reference from the           
                   Cramer and Farrell Gordon.                       Company's registration statement on Form     
                                                                    S-8 filed with the SEC on June 27, 2002      
------------------ ------------------------------------------------ ---------------------------------------------
10.15              Consulting Agreement between the Company and     Incorporated by reference from the           
                   J. Bennett Grocock, dated as of April 29, 2002.  Company's registration statement on Form     
                                                                    S-8 filed with the SEC on June 27, 2002      
------------------ ------------------------------------------------ ---------------------------------------------
10.16              Consulting Agreement between the Company and     Incorporated by reference from the           
                   David H. Popper, dated as of June 20, 2002.      Company's registration statement on Form     
                                                                    S-8 filed with the SEC on June 27, 2002      
------------------ ------------------------------------------------ ---------------------------------------------
10.17              Production Consultant Agreement between the      Incorporated by reference from the           
                   Company and Mike Gibilisco Production            Company's registration statement on Form     
                   Consultant.                                      S-8 filed with the SEC on June 27, 2002      

------------------ ------------------------------------------------ ---------------------------------------------
10.18              Co-Publishing Agreement between 2221 MUSIC       Incorporated by reference from the           
                   (ASCAP Publisher) and Roynart Music (BMI         Company's Report on Form 10-QSB filed with   
                   Publisher) dated as of June 10, 2002.            the SEC on August 14, 2002                   
------------------ ------------------------------------------------ ---------------------------------------------

                                                      27                                                         


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

EXHIBIT            DESCRIPTION                                      LOCATION                                     
------------------ ------------------------------------------------ ---------------------------------------------
                                                                                                                 
10.19              Work for Hire Agreement with A&S Animation,      Incorporated by reference from the           
                   Inc. cited February 4, 2002 for the production   Company's Report on Form 10-QSB filed with   
                   of the animated PSA "Mr. Bicycle Man".           the SEC on August 14, 2002                   
------------------ ------------------------------------------------ ---------------------------------------------
10.20              Distribution and sales agreement with Seahorse   Incorporated by reference from the           
                   Worldwide for "A Message from God".              Company's Report on Form 10-QSB filed with   
                                                                    the SEC on August 14, 2002                   
------------------ ------------------------------------------------ ---------------------------------------------
10.21              General Business Affairs Consulting Agreement    Incorporated by reference from the           
                   between the Company and David Mouery, dated as   Company's registration statement on Form     
                   of August 18, 2002.                              S-8 filed with the SEC on August 21, 2002    
------------------ ------------------------------------------------ ---------------------------------------------
10.22              Consulting Agreement between the Company and     Incorporated by reference from the           
                   Jackie Joyner Kersee, dated as of July 14,       Company's registration statement on Form     
                   2002.                                            S-8 filed with the SEC on August 27, 2002    
------------------ ------------------------------------------------ ---------------------------------------------
10.23              Consulting Agreement between the Company and     Incorporated by reference from the           
                   Richard C. Popper, dated as of July 12, 2002.    Company's registration statement on Form     
                                                                    S-8 filed with the SEC on August 27, 2002    
------------------ ------------------------------------------------ ---------------------------------------------
10.24              Executive Sales and Marketing Consulting         Incorporated by reference from the Company's 
                   Agreement between Raven Moon Entertainment, Inc. registration statement on Form S-8 filed with
                   and Marc Jablon, dated as of August 12, 2002.    the SEC on March 26, 2003.                   
------------------ ------------------------------------------------ ---------------------------------------------
10.25              Consulting Agreement between the Registrant and  Incorporated by reference from the Company's 
                   J. Bennett Grocock, dated as of March 20, 2003.  registration statement on Form S-8 filed with
                                                                    the SEC on March 26, 2003.                   
------------------ ------------------------------------------------ ---------------------------------------------
23.2               Consent of Richard L. Brown & Company. P. A.,    Filed herewith.                              
                   independent public accountants.                                                               
------------------ ------------------------------------------------ ---------------------------------------------
99.1               Certificate of the President, Chief Executive    Filed herewith.                              
                   Officer and Chief Financial Officer.                                                          
------------------ ------------------------------------------------ ---------------------------------------------

                                                      28                                                         

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		12/5/12		24
		12/11/11		24
		11/15/05		34					NT 10-Q
		6/15/03		15		27
Filed as of:		4/15/03
Filed on:		4/14/03		1		4
		4/11/03		32		47
		4/10/03		50		51
		4/5/03		47
		4/1/03		1		47
		3/26/03		55					S-8
		3/20/03		49		55
		3/11/03		10		39
		3/10/03		17		41
		3/7/03		4		40
		3/4/03		40					S-8
		3/3/03		41
		2/19/03		40		41			S-8
		1/27/03		40
		1/14/03		40					S-8
		1/13/03		40
		1/10/03		30					S-8
For Period End:		12/31/02		1		49			NT 10-K
		12/29/02		15		27
		12/15/02		15		27
		12/1/02		48
		11/29/02		32		49
		11/8/02		10					PRE 14A
		9/30/02		35					10QSB,  NT 10-Q
		9/16/02		34		49
		8/27/02		55					S-8
		8/21/02		55					S-8
		8/18/02		55
		8/14/02		33		55			10QSB
		8/12/02		36		55
		7/14/02		36
		7/12/02		55
		6/27/02		54					S-8
		6/20/02		54
		6/10/02		54
		6/7/02		35
		6/1/02		35		36
		5/21/02		54					S-8
		5/20/02		33		49
		5/17/02		32		47
		5/8/02		36		54
		4/29/02		54
		4/16/02		54					10KSB
		4/11/02		32		47
		4/1/02		5
		3/25/02		35
		3/21/02		53					S-8
		3/19/02		54
		3/11/02		35
		3/3/02		32
		3/1/02		35		54
		2/4/02		55
		1/1/02		48		54
		12/31/01		17		45			10KSB,  4,  NT 10-K
		11/30/01		52
		11/19/01		52		53			10QSB
		10/11/01		53
		9/26/01		6		53
		9/17/01		53
		9/1/01		49
		8/21/01		53
		8/7/01		53
		7/11/01		29		53
		5/24/01		52
		4/11/01		5		47
		3/27/01		29
		3/9/01		52					4,  4/A,  5,  S-8
		1/3/01		31
		1/1/01		11		53
		12/31/00		21		45			10KSB,  10KSB/A,  5/A,  NT 10-K
		12/1/00		11					DEF 14C
		4/5/00		47
		11/19/99		45
		11/16/99		45
		6/30/99		52					10QSB
		3/30/99		52					8-K
		12/31/98		8		52			10KSB,  8-K
		12/18/98		52
		11/3/98		45
		10/21/98		52
		8/3/98		52		53			10SB12G
		6/1/98		8
		1/8/98		8
		1/7/98		8
		6/1/97		45
									List all Filings