Phoenix Interests Inc · 10KSB40/A · For 12/31/00

Filed On 7/27/01 2:24pm ET   ·   SEC File 0-30949   ·   Accession Number 1132072-1-500146

Amendment to Annual Report -- Small Business -- [X] Reg. S-B Item 405   ·   Form 10-KSB
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Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB40/A   Amendment to Annual Report -- Small Business --       32    154K 
                          [X] Reg. S-B Item 405                                  

Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

   FORM 10-KSB/A

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

 COMMISSION FILE NUMBER: 000-30949

THOROUGHBRED INTERESTS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

NEVADA                           61-1342734 
(STATE OF INCORPORATION)         (I.R.S. EMPLOYER I.D. NUMBER)

127 SOUTH 6TH STREET, LOUISVILLE, KENTUCKY 40202

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

(502-584-4434)

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Securities registered pursuant to Section 12(b) of the Exchange Act: None.      

Securities registered pursuant to Section 12(g) of the Exchange Act:            
Common Stock.                                                                   

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: [X] YES [ ] NO                               

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

Registrant's revenues for its most recent fiscal year (ended December 31, 2000):
$703,015                                                                        

Aggregate market value of voting stock held by non-affiliates: $361,650         

Indicate the number of shares outstanding of each of the registrant's classes of
common stock:                                                                   

26,411,000 common shares were outstanding as of December 31, 2000.              

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 FORM 10-KSB

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

 THOROUGHBRED INTEREST, INC.
 FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

 TABLE OF CONTENTS

PART I.                                                                         

ITEM 1.  DESCRIPTION OF BUSINESS AND RISK FACTORS                      3        
   Company Overview                                            3
   Historical Background of Our Company                        4
   Summary of Sold Horses                                      7
   Inventory of Our Horses                                     8
   Risk Factors                                                9
ITEM 2.  DESCRIPTION OF PROPERTY.                                     12        
ITEM 3.  LEGAL PROCEEDINGS                                            12        
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.         12        

PART II.                                                                        

ITEM 5.  MARKET FOR COMMON EQUITY AND                                           
 RELATED STOCKHOLDER MATTERS.                                 13
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS.               13
ITEM 7.  FINANCIAL STATEMENTS.                                        15        
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.               15        

PART III.                                                                       

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND                           
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)                
 OF THE EXCHANGE ACT.                                         16
ITEM 10. EXECUTIVE COMPENSATION.                                      17        
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS                        
 AND MANAGEMENT.                                              18
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.              19        
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.                            20        

SIGNATURES                                                           S-1        
FINANCIAL STATEMENTS                                                 F-1        

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PART I.                                                                         

ITEM 1. DESCRIPTION OF BUSINESS.                                                

COMPANY OVERVIEW                                                                

    We were organized as a business corporation under the laws of the State of
Nevada on March 25, 1999. We were formed to engage in "pinhooking" and racing of
thoroughbred horses. "Pinhooking" involves the purchase of a yearling, that is, 
a horse which is between one and two years old, with a view towards training and
then reselling that horse as a two-year old. Those horses that we are unable to 
pinhook at an acceptable profit we plan to enter in races because we expect that
if a horse is successful at racing, its value will increase. As of March 31,    
2001 we held full title to 19 thoroughbreds and ownership interests, ranging    
from 20% to 60%, in five thoroughbreds. We purchase most of our thoroughbreds   
from non-affiliated breeders of thoroughbred yearlings through non-affiliated   
industry auction houses, such as Fasig-Tipton and Keeneland.                    

    Our Chief Executive Officer, President and sole employee, James D. Tilton,
Jr., currently makes all the decisions regarding the purchasing, training,      
racing and selling of our thoroughbred horses. In particular, Mr. Tilton makes  
the decisions regarding: (i) whether to purchase a certain thoroughbred horse;  
(ii) who should be retained to break-in and train the thoroughbred; (iii)       
whether the thoroughbred should be sold as a two year old (i.e., pinhooked);    
(iv) whether the thoroughbred should be entered into races; and (v) if raced, at
what point if any, the thoroughbred should be sold.                             

    Mr. Tilton has limited experience in pinhooking and racing of thoroughbred
horses. As a result, Mr. Tilton may, from time to time, retain consultants      
experienced in the thoroughbred industry to: (i) assist him in determining which
thoroughbreds to purchase; (ii) train the purchased thoroughbreds; and (iii)    
assist him in determining whether the thoroughbred should be sold as a two year 
old or raced.                                                                   

    We have in the past and expect to incur in the future numerous expenses in
our efforts to pinhook and race thoroughbred horses. First, we have previously  
paid and expect to continue to pay a 5% consultant fee for all thoroughbreds we 
purchase with the assistance of a consultant. Second, we plan to hire horse     
trainers to maintain, care and train our thoroughbreds. Such horse trainers bill
us for veterinary, food, shipping, blacksmith, breaking in and training         
expenses. We also have previously paid and expect to make payments to these     
horse trainers of 5% of the sales price of each throughbred that they train and 
we sell. Additional expenses could include sale nominations and entry fees,     
advertising and video production.                                               

  We also have in the past and expect to incur in the future mortality and
surgical insurance expense. This insurance costs approximately 2.5% of the      
purchase price of each horse. Additionally, for each thoroughbred we sell at    
auction, we have previously paid and expect to pay a fee of 5% of the sale price
to the auction house.                                                           

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HISTORICAL BACKGROUND OF OUR COMPANY                                            

The following is a detailed chronology of the steps we have taken in  
furtherance of our business plan, beginning in 1997, prior to our incorporation.
Our President, Mr. Tilton, has dedicated much of the past three years to        
developing and building the Company.                                            

                                                                [Download Table]
                                                                                    

(a) 1997:               Mr. Tilton spent much of 1997 studying and developing a plan
                        for engaging in profitable pinhooking. Mr. Tilton's market  
                        research came from several sources, including his personal  
                        experience (e.g., by growing up in Louisville, Kentucky --  
                        the heart of the thoroughbred industry), his participation  
                        in horse ownership, and from his extensive reading of books 
                        and trade publications in the field, including periodicals  
                        such as Blood Horse and Thoroughbred Times. Mr. Tilton's    
                        objective was threefold. He wished to (i) build a solid     
                        understanding of the thoroughbred market, (ii) conduct      
                        extensive first hand research, and (iii) develop a solid    
                        business plan for the Company.                              

(b) January-June of     In addition to networking in Kentucky, Mr. Tilton made      
    1998:               numerous trips to Florida and California to meet with       
                        individuals and entities in the thoroughbred industry. Mr.  
                        Tilton continued to own a few race horses with other        
                        individuals. His continued involvement with other horse     
                        owners provided additional market research.                 

(c) July-Dec. of 1998:  Mr. Tilton attended thoroughbred auctions around the        
                        country, including, but not limited to, the Fasig-Tipton    
                        Auctions. Mr. Tilton met consigners in the horse breeding   
                        and training business. He purchased one race horse in       
                        September of 1998, five race horses in October and two in   
                        December. Three of these horses were resold for a profit in 
                        1999.                                                       

(d) March 1999:         Mr. Tilton formed the Company and was issued 12,000,000     
                        shares of common stock. The Company then issued 1,150,000   
                        shares of its Common Stock to five investors in exchange for
                        various services rendered to the Company by them in         
                        connection with its organization and formation.             
                        Specifically, two of such investors, namely, Rick Fox, Esq. 
                        and Neil Broderick, Esq., provided legal services to the    
                        Company, one, namely Henry Fischer, provided accounting     
                        services to the Company and two, namely Andy Dyer and FT    
                        Trading, provided financial advisory services to the        
                        Company. The Company subsequently issued 43,000 shares of   
                        its Common Stock at $.10 per share to 43 investors for a    
                        total capital raise of $4,300. The Company relied upon the  
                        exemption afforded by Section 4(2) of the Securities Act of 
                        1933, as amended, for the issuance of these shares.         

(e) July 1999:          The Company purchased its first horse at the Fasig Tipton   
                        Auction. Mr Tilton loaned the Company $50,000 for the       
                        purpose of making that purchase.                            

(f) Aug. 1999:          We acquired two additional horses for a total sum of        
                        $121,000 at the Fasig Tipton New York Auction. The funds    
                        used to purchase the horses were also borrowed from Mr.     
                        Tilton.                                                     

(g) Sept. 1999:         We purchased one horse at the Keeneland sale.               


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                                                                [Download Table]
                                                                                    

(h) Sept. 30, 1999:     The Augustine Fund, L.P., an Illinois Limited Partnership   
                        with offices at 141 West Jackson Street, Suite 2182,        
                        Chicago, Illinois 60604 (the "Augustine Fund") loaned the   
                        Company $300,000 for operating expenses. The loan is        
                        evidenced by a promissory note and is secured by 6,000,000  
                        shares of our Common Stock owned by Mr. Tilton. The         
                        promissory note was initially due and payable in the amount 
                        of $375,000 on or before March 28, 2000. On March 22, 2000, 
                        the Augustine Fund extended the due date to May 29, 2000. On
                        October 3, 2000 and April 12, 2001, The Augustine Fund      
                        granted us an additional extension to March 31, 2001 and    
                        January 1, 2002, respectively. The entire loan is           
                        convertible, at the sole discretion of the Augustine Fund,  
                        into shares of the Company's Common Stock (the "Converted   
                        Shares") at $.10 per share and warrants excercisable into   
                        one-half the number of Converted Shares at $.15 per share.  

(i) October 1999:       We purchased three horses at the Fasig Tipton auction in    
                        Maryland and two horses in Kentucky.                        

(j) December 15, 1999:  Mr. Andrew Dyer, with an address c/o The Dyer Group, 100    
                        Tower Drive, Greenville, S.C. 29650, loaned the Company     
                        $50,000 for operating expenses. The loan is evidenced by a  
                        promissory note. The loan was originally due on August 13,  
                        2000 but was extended on October 11, 1999 to March 31, 2001.
                        On April 12, 2001, Mr. Dyer granted us an additional        
                        extension to January 1, 2002. The loan is convertible, at   
                        the sole discretion of Mr. Dyer, into shares of the         
                        Company's Common Stock (the "Converted Shares") at $.10 per 
                        share and warrants excercisable into one-half the number of 
                        Converted Shares at $.15 per share.                         

(k) January 31, 2000:   Mr. Andrew Dyer, with an address c/o The Dyer Group, 100    
                        Tower Drive, Greenhille, S.C. 29600, loaned the Company an  
                        additional $50,000 for operating expenses. The loan is      
                        evidenced by a promissory note. The loan was originally due 
                        on August 13, 2000 but was extended on October 11, 1999 to  
                        March 31, 2001. On April 12, 2001, Mr. Dyer granted us an   
                        additional extension to January 1, 2002. The loan is        
                        convertible, at the sole discretion of Mr. Dyer, into shares
                        of the Company's Common Stock (the "Converted Shares") at   
                        $.10 per share and warrants excercisable into one-half the  
                        number of Converted Shares at $.15 per share.               


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                                                                [Download Table]
                                                                                    

(l) Feb. 2000:          We sold two of our horses at the Ocalar Breeder Sales "OBS" 
                        February sale in Miami. We also sold a 75% ownership        
                        interest in another horse in a private transaction.         

(m) March 2000 - April  We sold three of our horses, one at the OBS March sales in  
    2000:               Ocala, and two at the Keeneland April sale in Lexington,    
                        Kentucky. We also purchased a horse at the OBS June sale in 
                        Ocala as a racing prospect.                                 

(n) May 2000:           We sold one of our horses at the Fasig Tipton May           
                        Midatlantic sale in Baltimore, Maryland. We also purchased a
                        horse as a racing prospect at the same sale.                

(o) June 2000:          We sold ownership interests in three of our horses in       
                        private transactions.                                       

(p) August 2000 -       We purchased five horses at the Keeneland September sale, 6 
    October 2000:       horses at the Fasig Tipton Midatlantic sale, 3 horses at the
                        Fasig Tipton Kentucky sale, and one horse through a         
                        private transaction. We borrowed $300,000 from Mr.          
                        Tilton at an interest rate of 6% per annum as partial       
                        payment for the horses and in consideration thereof         
                        gave Mr. Tilton a security interest in certain of our       
                        horses. This security does not require repayment upon       
                        sale of the horse. Instead, the security interest           
                        attaches to the proceeds from any such sale. The entire     
                        loan is convertible, at the sole discretion of Mr.          
                        Tilton, into shares of our Common Stock (the                
                        "Converted Shares") at $.10 per share and warrants          
                        exercisable into one-half the number of Converted           
                        Shares at $.15 per share.                                   

(q) September 2000:     We purchased the domain name Thoroughbredsales.com in       
                        exchange for 25,000 shares of our Common Stock. We intend to
                        construct a corporate website using this domain name.       

(r) December 2000       We sold one of our horses at Gulfstream Park and sold a 50% 
                        ownership interest in another horse in a private            
                        transaction. We also purchased 5 horses at the Fasig Tipton 
                        December Mixed Sales.                                       


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SUMMARY OF SOLD HORSES                                                          

The following is a summary of the horses we sold prior to March 31, 2001:       

                                                        [Enlarge/Download Table]


                             DATE          DATE      SELLER/PLACE  AFFILIATION    SOURCE OF  
     NAME OF HORSE        PURCHASED        SOLD      OF PURCHASE   TO PURCHASER   FINANCING  
-----------------------  ------------  ------------  ------------  ------------  ------------
                                                                                             
Lord at War/Sa Marche      07/22/99      02/08/00    Fasig Tipton      None          (1)     
Belong to Me/Vivas Lady    08/15/99      02/08/00    Fasig Tipton      None          (1)     
Saint Damien - 75%         10/25/99      02/28/00    Fasig Tipton      None          (2)     
Go for Gin/Bright Omen     10/06/99      03/31/00    Fasig Tipton      None          (2)     
Cozzene/Sheergo            10/25/99      04/18/00    Fasig Tipton      None          (2)     
Two Punch/Truth and        10/05/99      04/18/00    Fasig Tipton      None          (2)     
  Beauty                                                                                     
Belong to Me/Caveat        08/15/99      05/23/00    Fasig Tipton      None          (1)     
Wooglin - 65%              05/22/00      06/08/00    Fasig Tipton      None          (3)     
Defending Honor - 40%      04/27/00      06/08/00    OBS Sales         None          (3)     
Graham Point - 40%         09/14/99      06/08/00    Keeneland         None          (1)     
Given to Fly               10/04/99      01/07/01    Fasig Tipton      None          (2)     
Weekend Lover - 50%        10/25/00      12/01/00    White             None          (3)     
                                                     Oaklawn Farm                            


------------------                                                              
(1) Purchase financed from monies lent to Thoroughbred Interests, Inc. in 1999  
by Mr. Tilton.                                                          

(2) Purchase financed from monies lent to Thoroughbred Interests, Inc. in 1999  
by the Augustine Fund, L.P. and Mr. Tilton.                             

(3) Purchase financed from funds remaining from loans made to Thoroughbred      
  Interests, Inc. in 1999 from the Augustine Fund, L.P., Mr. Tilton, and Mr.
   Dyer, and additional monies lent to Thoroughbred Interests, Inc. in 2000 by
Mr. Tilton and Mr. Dyer.                                                

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INVENTORY OF OUR HORSES                                                         

The following was the inventory of our horses as of March 31, 2001:             

                                                        [Enlarge/Download Table]

                                              DATE       SELLER/PLACE      AFFILIATION TO   SOURCE OF 
    NAME OF HORSE             TYPE          ACQUIRED      OF PURCHASE        PURCHASER      FINANCING 
---------------------  -------------------  --------  -------------------  --------------  -----------
                                                                                                      
20% of Saint Damien    Colt 3-yr            10/25/99  Fasig Tipton              None           (2)    
60% of Graham Point    Colt 3-yr            09/14/99  Keeneland                 None           (1)    
60% of Defending       Colt 3-yr            04/27/00  OBS Sales                 None           (3)    
  Honor                                                                                               
35% of Wooglin         Colt 3-yr            05/22/00  Fasig Tipton              None           (3)    
Allen's Prospect/      Filly Yearling 2-yr  10/03/00  Fasig Tipton              None           (3)    
  Goldfinch Filly                                                                                     
  Dafodilly                                                                                           
Devil's Sword          Colt Yearling 2-yr   10/03/00  Fasig Tipton              None           (3)    
Party Manners/Bid to   Colt Yearling 2-yr   09/07/00  Keeneland                 None           (3)    
  the Mint                                                                                            
Green Dancer/Puff of   Colt Yearling 2-yr   09/13/00  Keeneland                 None           (3)    
  Luck                                                                                                
Cryptoclearance/ Dime  Filly Yearling 2-yr  09/14/00  Keeneland                 None           (3)    
  Baby                                                                                                
K.O. Punch/ Endicotta  Filly Yearling 2-yr  09/15/00  Keeneland                 None           (3)    
  Ridge                                                                                               
Glitterman/Willing     Colt Yearling 2-yr   09/17/00  Keeneland                 None           (3)    
  Partner                                                                                             
Allen's Prospect/      Filly Yearling 2-yr  10/03/00  Fasig Tipton              None           (3)    
  Bobaloubar                                                                                          
Wild Zone/Galleria     Filly Yearling 2-yr  10/03/00  Fasig Tipton              None           (3)    
Allen's Prospect/      Filly Yearling 2-yr  10/04/00  Fasig Tipton              None           (3)    
  Hallow Wean                                                                                         
Allen's Prospect/      Colt Yearling 2-yr   10/04/00  Fasig Tipton              None           (3)    
  Mississippi Lights                                                                                  
50% Nicholas/ Weekend  Filly 2-yr           10/25/00  White Oaklawn Farm        None           (3)    
  Delight                                                                                             
Fox Hound/Angel Puss   Colt 2-yr            10/25/00  Fasig Tipton              None           (3)    
Prospectors Music/     Filly 2-yr           10/25/00  Fasig Tipton              None           (3)    
  Award for Morgan                                                                                    
Go for Gin/ Northern   Filly 2-yr           10/26/00  Fasig Tipton              None           (3)    
  Syl                                                                                                 
Devil's Bag/Star       Filly Yearling       12/03/00  Fasig Tipton              None           (3)    
  Cloud                                                                                               
Not for Love/ Weather  Filly Yearling       12/04/00  Fasig Tipton              None           (3)    
  Vane                                                                                                
Not for Love/God       Colt Yearling        12/05/00  Fasig Tipton              None           (3)    
  Given                                                                                               
Eastern Echo/ Devil's  Colt Yearling        12/04/00  Fasig Tipton              None           (3)    
  Ballad                                                                                              
Rinka Das/Public Band  Colt Yearling        12/05/00  Fasig Tipton              None           (3)    


------------------                                                              
(1) Purchase financed from monies lent to Thoroughbred Interests, Inc. in 1999  
by Mr. Tilton.                                                          

(2) Purchase financed from monies lent to Thoroughbred Interests, Inc. in 1999  
by the Augustine Fund, L.P. and Mr. Tilton.                             

(3) Purchase financed from funds remaining from loans made to Thoroughbred      
  Interests, Inc. in 1999 from the Augustine Fund, L.P., Mr. Tilton, and Mr.
   Dyer, and additional monies lent to Thoroughbred Interests, Inc. in 2000 by
Mr. Tilton and Mr. Dyer.                                                

(4) 5% ownership interest of this horse was transferred to Ciaran Dunne in      
consideration for services.                                             

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RISK FACTORS

 An investment in our Common Stock involves risks. You should be able to
bear a complete loss of your investment. You should consider the following      
risks, among others.                                                            

WE HAVE INCURRED LOSSES FROM INCEPTION AND MAY NEVER GENERATE PROFITS.          

We have only recently been incorporated and we are still engaged in   
structuring our management and our proposed operations. Our operations are      
subject to all of the risks inherent in the establishment of a new business     
enterprise, including the lack of significant operating history. There can be no
assurance that future operations will be profitable. Revenues and profits, if   
any, will depend upon various factors, including our ability to acquire horses  
suitable for pinhooking, to adequately train such horses in order that they     
achieve their potential, the expertise of our management, the market acceptance 
of the products offered, costs and general economic conditions. There can be no 
assurance that we will achieve our projected goals or accomplish our business   
plans; and such failure could have a material adverse effect on us and the value
and price of our securities.                                                    

BECAUSE OF THE LIMITED EXPERIENCE OF MANAGEMENT IN PINHOOKING AND RACING OF     
THOROUGHBRED HORSES OUR BUSINESS COULD SUFFER.                                  

  James D. Tilton, our President and sole employee, currently makes all of
our decisions regarding the purchasing, training, racing and selling of our     
thoroughbred horses. Mr. Tilton has had limited experience in pinhooking and    
racing of thoroughbred horses. Prior to forming Thoroughbred Interests, Mr.     
Tilton had pinhooked a total of six horses. There can be no assurance that Mr.  
Tilton will be able to make the decisions necessary to earn a profit in the     
business.                                                                       

WE MAY NOT BE ABLE TO OBTAIN THE CAPITAL NEEDED TO FINANCE GROWTH AND CAPITAL   
REQUIREMENTS.                                                                   

   We will need additional capital and may not be able to obtain it in which
case our ability to continue in business would be materially and adversely      
affected.                                                                       

We estimate that we require a minimum of approximately $500,000 and a 
maximum of approximately $1,150,000 to operate for the next 12 months. The      
minimum of $500,000 is required for operating expenses. The maximum will be     
required, however, if the Augustine Fund and Mr. Andrew Dyer do not convert     
their promissory notes into Common Stock of the Company. This estimate of       
required funds includes the $375,000 due and payable to the Augustine Fund as of
January 1, 2002, the $100,000 due and payable to Mr. Andrew Dyer as of January  
1, 2002 and $400,000 in estimated operating expenses including office rent,     
boarding, training and/or racing our horses.                                    

 There is no guarantee that we will be able to raise any such capital on
terms acceptable to us or at all. Such financing may be upon terms that are     
dilutive or potentially dilutive to our stockholders. If alternative sources of 
financing are required, but are insufficient or unavailable, we will be required
to modify our growth and operating plans in accordance with the extent of       
available funding. At the present time, we do not intend to obtain any loan     
financing from a lending institution. If necessary, Mr. Tilton may make a       
personal loan to us at or below market rates, on terms customarily used by      
lending institutions in making loans. Mr. Tilton is under no obligation to make 
any such loans to us.                                                           

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    If we are required to obtain loan financing, the amount of our profits (if
any) will decrease or the amount of our losses will increase due to the interest
charged on the loan. Loan financing may subject our operations to restrictions  
imposed by the lending institution, hindering our ability to operate in the     
manner best determined by our management and/or Board of Directors, with the    
potential that such restrictions will impede or prevent our growth and/or       
negatively impact our level of profits. Additionally, the use of debt financing 
or leverage would subject us to the risk that any downturns in the thoroughbred 
industry and any changes in interests rates (if we have an adjustable rate loan)
will substantially increase the likelihood that our operations will not be      
profitable, possibly causing us to become bankrupt or to dissolve the           
corporation.                                                                    

WE DEPEND ON KEY PERSONNEL AND MAY NOT BE ABLE TO RETAIN THEM.                  

    Our future success will depend largely on the efforts and abilities of our
management, especially of our current sole officer, employee and director, James
D. Tilton, Jr. The loss of the services of Mr. Tilton or the inability to       
attract additional, experienced management personnel could have a substantial   
adverse effect on us. We have not obtained a "key man" insurance policy for Mr. 
Tilton. Our ability to implement our strategies depends upon our ability to     
attract highly talented managerial personnel. There can be no assurance that we 
will attract and retain such employees in the future.                           

IF WE ARE UNABLE TO EFFECTIVELY MANAGE OUR ANTICIPATED GROWTH, OUR BUSINESS,    
FINANCIAL RESULTS AND FINANCIAL CONDITION WILL BE MATERIALLY AND ADVERSELY      
AFFECTED.                                                                       

    Our inability to effectively manage our future growth will have a material
adverse effect on us. We anticipate that we will have rapid growth in the number
of horses that we own. This will place a strain on our managerial, operational, 
and financial resources. We will initially use outside consultants and          
specialists to provide thoroughbred consulting, legal counsel and preliminary   
accounting until such persons are required on a full time or ongoing basis. We  
currently employ one person, Mr. Tilton. Our future employment of personnel is  
dependent on the number of horses we obtain. We expect to employ a bookkeeper in
the near future. There can be no assurance that we will be able to effectively  
manage the expansion of our operations, or that our facilities, systems,        
procedures or controls will be adequate to support our expanded operations.     

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WE MAY NOT BE ABLE TO COMPLY WITH ALL CURRENT AND FUTURE GOVERNMENT REGULATION. 

    Our business operations are subject to all government regulations normally
incident to conducting business (e.g., occupational safety and health acts,     
workmen's compensation statutes, unemployment insurance legislation, income tax 
and social security laws and regulations, environmental laws and regulations,   
consumer safety laws and regulations, etc.) as well as to governmental laws and 
regulations applicable to small public companies and their capital formation    
efforts. In addition, we are subject to laws and regulations regarding the      
purchase, sale, breeding, transportation, care, and possibly, racing of horses. 
Although we will make every effort to comply with applicable laws and           
regulations, we can provide no assurance of our ability to do so, nor can we    
predict the effect of those regulations on our proposed business activities.    

IF WE ARE UNABLE TO COMPETE EFFECTIVELY WITH OUR COMPETITORS, WE WILL NOT BE    
ABLE TO INCREASE REVENUES OR GENERATE PROFITS.                                  

 Our ability to increase revenues and generate profitability is directly
related to our ability to compete effectively with our competitors. There are   
many competitors in the pinhooking industry. Due to the fact that the majority  
of pinhooking operations are run by private companies and partnerships, we are  
unable to state the size or profitability of our competitors.                   

THERE IS NO ASSURANCE THAT OUR COMMON STOCK WILL BE CLEARED TO TRADE ON THE     
OVER-THE-COUNTER BULLETIN BOARD.                                                

  A market maker has filed a Form 211 with Nasdaq to have our Common Stock
quoted on the OTC-Bulletin Board. To date, Nasdaq has not cleared our Common    
Stock to be quoted on the OTC-Bulletin Board and there is no assurance that our 
Common Stock will ever be quoted on the OTC-Bulletin Board.                     

WE CANNOT GUARANTEE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR OUR COMMON   
STOCK.                                                                          

There is no public market for our Common Stock and there can be no    
assurance that a regular trading market for our Common Stock will ever develop  
or that, if developed, it will be sustained. Therefore, purchasers of our Common
Stock should have a long-term investment intent and should recognize that it may
be difficult to sell the shares, notwithstanding the fact that they are not     
restricted securities. There has not been a market for our Common Stock. We     
cannot predict the extent to which a trading market will develop or how liquid a
market might become.                                                            

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ITEM 2. DESCRIPTION OF PROPERTY.                                                

     Our executive and administrative office is located at 127 South 6th
Street, Louisville, Kentucky 40202. We lease this facility from a non-affiliated
party. It has approximately 1865 square feet of office space consisting of three
separate offices, a library, a conference room, an kitchen and a bathroom. The  
monthly rent is $2,360 of which Thoroughbred Interests, Inc. pays 50% with the  
other 50% paid by TuneIn Media, Inc. Thoroughbred Interests, Inc. and TuneIn    
Media, Inc. together own the office equipment and furniture. Management believes
that this facility is adequate for us for at least the next 12 months.          

ITEM 3. LEGAL PROCEEDINGS.                                                      

      We are not a party to any material legal proceedings. However, from time
to time we may be subject to legal proceedings and claims in the ordinary course
of business. Such claim, even if not meritous, would result in the expenditure  
by us of syndicated financial and managerial resources.                         

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

      No matters were submitted for shareholder approval during the fourth
quarter of the fiscal year covered by this Report.                              

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PART II.                                                                        

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.               

         Market Price. There is no trading market for the Company's Common Stock
at present and there has been no trading market to date. There is no assurance  
that a trading market will ever develop or, if such a market does develop, that 
it will continue.                                                               

        Holders. There are approximately 53 holders of record of the Company's
Common Stock.                                                                   

       Dividend Policy. We have not had any earnings or profits and have not
paid any dividends. Our proposed operations are capital intensive and we need   
working capital. Therefore, we will be required to reinvest any future earnings 
in the Company's operations. Our Board of Directors has no present intention of 
declaring any cash dividends, as we expect to re-invest all profits in the      
business for additional working capital for continuity and growth. The          
declaration and payment of dividends in the future will be determined by our    
Board of Directors considering the conditions then existing financial condition,
including the Company's earnings, capital requirements, and other factors.      

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS.                                                  

   This Annual Report on Form 10-KSB and the information incorporated by
reference may include "forward-looking statements" within the meaning of Section
27a of the securities act and section 21e of the exchange act. We intend the    
forward-looking statements to be covered by the safe harbor provisions for      
forward-looking statements. All statements regarding our expected financial     
position and operating results, our business strategy, our financing plans and  
the outcome of any contingencies are forward-looking statements. The            
forward-looking statements are subject to risks and uncertainties that could    
cause actual results to differ materially from those set forth or implied by any
forward looking statements.                                                     

RESULTS OF OPERATIONS                                                           

  REVENUES. Our revenues for the year ended December 31, 2000 was $703,015
compared to $0 for the period from March 25, 1999 to December 31, 1999 The      
increase in revenues reflect the various sales of thoroughbred horses for the   
year ended December 31, 2000. We began operations on March 25, 1999 and had no  
sales for the period from inception to December 31, 1999.                       

  OPERATIONAL COSTS. Our operational costs for the year ended December 31,
2000 were $174,649 as compared to $55,720 for the period commencing March 25,   
1999 to December 31, 1999. The increase in operational costs of $118,929 is a   
result of an increase in sales of horses and related costs of an increase in    
inventory.                                                                      

 GENERAL & ADMINISTRATIVE. Our general & administrative expenses for the
year ended December 31, 2000 were $285,873 as compared to $38,947 for the period
commencing March 25, 1999 to December 31, 1999. The increase in general &       
administrative expenses of $246,926 is a result of an increase in compensation  
to our CEO of $90,000 and additional administrative costs from the sale of      
horses.                                                                         

   INTEREST INCOME. Our interest income for the year ended December 31, 2000
was $4,491 as compared to $0 for the period commencing March 25, 1999 to        
December 31, 1999. The increase is due to interest earned on excess cash in our 
bank accounts.                                                                  

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     INTEREST EXPENSE. Our interest expense for the year ended December 31, 2000
was $58,800 as compared to $39,500 for the period commencing March 25, 1999 to  
December 31, 1999. The increase of $19,300 is due to an increase in borrowing by
us in 2000 to fund our operations.                                              

FINANCIAL CONDITION                                                             

At December 31, 2000, we had current assets of $835,908 as compared to
current liabilities of $953,417. Also at December 31, 2000 we had an accumulated
deficit of $409,036 and had a stockholders' deficit of $377,086.                

LIQUIDITY AND CAPITAL RESOURCES                                                 

 We had a net decrease of $7,937 of cash for the year ended December 31,
2000. We have received extensions of the maturity dates of our note obligations 
of $400,000 to January 1, 2002.                                                 

We estimate that we require a minimum of approximately $500,000 and a 
maximum of approximately $1,150,000 to operate for the next 12 months. In either
case, we will be required to raise additional capital within the next 12 months 
in order to fund our business. The minimum of $500,000 is required for operating
expenses. The maximum will be required, however, if the Augustine Fund and Mr.  
Andrew Dyer do not convert their promissory notes into Common Stock of the      
Company. This estimate of required funds includes the $375,000 due and payable  
to the Augustine Fund as of January 1, 2002, the $100,000 due and payable to Mr.
Andrew Dyer as of January 1, 2002 and $400,000 in estimated operating expenses  
including office rent, boarding, training and/or racing our horses.             

    Although there can be no assurance, we expect that both the Augustine Fund
and Andrew Dyer will convert their notes payable into our Common Stock pursuant 
to their Amended Promissory Notes.                                              

Additionally, as of December 31, 2001, we held full title to 19       
thoroughbreds and ownership interests, ranging from 20% to 60% in five          
thoroughbreds. We expect to generate approximately $200,000 to $450,000 in gross
profits from the sales of these horses. This projection is based upon our       
historical performance to date. Specifically, we have pinhooked 12 horses to    
date and generated gross profits of approximately $275,000.00 from these        
efforts. After giving effect to all our operating, general and administrative   
expenses, interest and taxes, however, we still expect to operate at a net loss 
for the next twelve months. We will therefore be required to seek additional    
funds and to raise additional capital from public or private equity or debt     
sources in order to fund our general and administrative costs and expenses, pay 
off startup loans, support further expansion, meet competitive pressures, or    
respond to unanticipated requirements.                                          

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 There is no guarantee that we will be able to raise any such capital on
terms acceptable to us or at all. Such financing may be upon terms that are     
dilutive or potentially dilutive to our stockholders. If alternative sources of 
financing are required, but are insufficient or unavailable, we will be required
to modify our growth and operating plans in accordance with the extent of       
available funding. At the present time, we do not intend to obtain any loan     
financing from a lending institution.                                           

    If we are required to obtain loan financing, the amount of our profits (if
any) will decrease or the amount of our losses will increase due to the interest
charged on the loan. Loan financing may subject our operations to restrictions  
imposed by the lending institution, hindering our ability to operate in the     
manner best determined by our management and/or Board of Directors, with the    
potential that such restrictions will impede or prevent our growth and/or       
negatively impact our level of profits. Additionally, the use of debt financing 
or leverage would subject us to the risk that any downturns in the thoroughbred 
industry and any changes in interests rates (if we have an adjustable rate loan)
will substantially increase the likelihood that our operations will not be      
profitable, possibly causing us to become bankrupt or to dissolve the           
corporation.                                                                    

     To the extent we are unable to meet our operating expenses or matured notes
payable, we may borrow funds from our president Mr. Tilton or others, or we may 
attempt to raise capital from large institutional investment equity funds. Mr.  
Tilton is not legally required to loan any money to us. If we are unable to     
borrow or raise capital, we will have no choice but to sell thoroughbreds to    
meet our operating expenses and/or obligations under the matured notes. In the  
event any of our thoroughbreds have to be sold on an expedited basis, we expect 
that they would have to be sold at a discount to their fair market price. Any   
funds generated from sales of horses or from equity investments, if any, in our 
company that exceeds our operating expenses and debt repayments will be used to 
purchase additional thoroughbred horses.                                        

ITEM 7. FINANCIAL STATEMENTS.                                                   

         The financial statements of Thoroughbred Interests, Inc., including the
notes thereto and the report of independent accountants thereon, commence at    
page F-1 of this Report.                                                        

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.                          

None.                                                         
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PART III.                                                                       

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.           

(a) The following table sets forth the name, age and position with the
Company of each officer and director of the Company as of the date of this      
Report.                                                                         

Our directors, executive officers and key employees, and their ages and position
as of March 31, 2001, are as follows:                                           

                                                                [Download Table]

               NAME  AGE  POSITION                                                  
               ----  ---  --------                                                  
                                                                                    
James D. Tilton, Jr. 40   Chairman of the Board, Chief Executive Officer, President,
                          and Secretary                                             

JAMES "JIM" D. TILTON, JR., has served as Chairman of our Board of    
Directors, Chief Executive Officer, President, Secretary, Treasurer and Sole    
Director since our formation. Mr. Tilton has more than 16 years experience in   
the securities industry. From 1995-1996, he was stockbroker at Morgan Keegan.   
From 1997-1999, he worked independently in the securities industry, specializing
in corporate finance/investment banking. Mr. Tilton has been involved in the    
financing of private and public small growth companies. Mr. Tilton holds Series 
7, Series 24, Series 63 and Series 65 licenses. He also holds a license through 
the State of Kentucky to sell insurance products. He has been inactive since    
January 31, 1999 in order to devote his full attention to matters involving     
Thoroughbred Interests, Inc. and TuneIn Media, Inc. Since January, 1999, Mr.    
Tilton has been TuneIn Media, Inc.'s Chief Executive Officer and President.     
TuneIn Media, Inc. is an interactive media content provider with a network of   
integrated technology business. He is the Chairman of its Board of Directors,   
holds a significant equity position in it and spends approximately five hours a 
week on its business. Mr. Tilton spends the balance of his professional time,   
approximately forty hours per week, on our business. Mr. Tilton has a B.A. in   
Political Science with an emphasis in Accounting/Business from the University of
Louisville.                                                                     

(b) Other significant employees. None                                 
(c) Family Affiliations. None                                         
(d) Investment in certain legal proceedings. None                     

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                         

         Pursuant to Section 16 of the Exchange Act, the Company's Directors and
executive officers and beneficial owners of more than 10% of the Company's      
Common Stock are required to file certain reports, within specified time        
periods, indicating their holdings of and transactions in the Common Stock and  
derivative securities. Based solely on a review of such reports provided to the 
Company and written representations from such persons regarding the necessity to
file such reports, the Company is not aware of any failures to file reports or  
report transactions in a timely manner during the Company's fiscal year ended   
December 31, 2000, except that Jim Tilton filed a late Form 3.                  

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ITEM 10. EXECUTIVE COMPENSATION.                                                

EXECUTIVE COMPENSATION                                                          

       The following table sets forth the compensation awarded to, earned by
or paid to Mr. Tilton from inception of our company (March, 1999) through       
December 31, 2000. We had no other officers during this period.                 

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                                        LONG TERM  
                                                                                       COMPENSATION
                                                                                         AWARDS -  
                                                                                        SECURITIES 
                                                                         OTHER ANNUAL   UNDERLYING 
 NAME AND PRINCIPAL POSITION       YEAR         SALARY       BONUS($)    COMPENSATION   OPTIONS(#) 
-----------------------------  ------------  ------------  ------------  ------------  ------------
                                                                                                   
James D. Tilton, Jr. Chairman      1999           0             0             0             --     
of the Board, Chief Executive                                                                      
Officer and President                                                                              
                                   2000       $90,000(1)        0             0        3,000,000(2)

(1) Mr. Tilton has agreed to defer his salary indefinitely.                     

(2) On January 3, 2000, Mr. Tilton was granted 3,000,000 incentive stock options
   pursuant to our Millennium Stock Option Plan at an exercise price of $0.11.
The options are fully vested and currently exercisable.                 

EMPLOYMENT AND CONSULTING AGREEMENT                                             

     We have an Employment Agreement with James D. Tilton which ends on December
31, 2002. The Agreement provides for the payment of an annual base salary of    
$90,000 for calendar year 2000, $120,000 for calendar year 2001 and $180,000 for
calendar year 2002. The Agreement also provides for an annual incentive bonus of
varying percentages based on our annual earnings before income taxes,           
depreciation and amortization, or EBITA. If our EBITA is at least $1,000,000 the
bonus is 30% of annual base salary, if it is at least $2,000,000 the bonus is   
50% of annual base salary and if it is at least $4,000,000 the bonus is 100% of 
annual base salary. The Agreement provides for the one-time grant pursuant to   
our Millennium Stock Option Plan of 3,000,000 incentive stock options to Mr.    
Tilton at 110% of the fair market value of our Common stock on the date of the  
grant. When his options were issued on January 3, 2000 we used the last sales   
price of our common stock for our then most recent private sale, or $.10, to    
determine the fair market value. The options are fully vested and currently     
exercisable. The Agreement further provides for the payment of Mr. Tilton upon  
the discharge of Mr. Tilton without cause or the resignation of Mr. Tilton for  
"good cause", or as defined in the Agreement of a lump sum equal to his annual  
base salary and bonus. In addition, if the terminating event occurs on or before
June 30, 2001, we are to pay Mr. Tilton an additional $100,000.                 

 Mr. Tilton also has an employment agreement with TuneIn Media, Inc., an
interactive media content provider with a network of integrated technology      
business, of which he is Chief Executive Officer and Chairman of the Board of   
Directors.                                                                      

LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS                             

As permitted pursuant to the corporate law of the State of Nevada, our
state of incorporation, the Certification of Incorporation requires that we     
indemnify its directors and officers against certain liabilities and expenses   
incurred in their service in such capacities to the fullest extent permitted by 
applicable law. These provisions would provide indemnification for liabilities  
arising under the federal securities laws to the extent that such               
indemnification is found to be enforceable under, and to be in accordance with  
applicable law. Furthermore, the personal liability of the directors is limited 
as provided in our Certificate of Incorporation.                                

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Thoroughbred 
Interests, Inc. pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such      
indemnification is against public policy as expressed in the Securities Act and 
is therefore unenforceable.                                                     

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ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.        

     The following table sets forth certain information known to us with respect
to beneficial ownership of our Common Stock as of date of this report by:       

   * each stockholder known by us to be the beneficial owner of more than 5%
of our Common Stock;                                              
* each of our directors;                                              
* the named executive officers; and                                   
* all executive officers and directors as a group.                    

 Except as otherwise indicated, we believe that the beneficial owners of
Common Stock listed below, based on information furnished by such owners, have  
sole investment and voting power with respect to such shares, subject to        
community property laws where applicable.                                       

                                                        [Enlarge/Download Table]


                                       SHARES OF COMMON STOCK OWNED   SHARES OF COMMON STOCK OWNED 
                                             PRIOR TO OFFERING             AFTER OFFERING (3)      
          NAME AND ADDRESS             -----------------------------  -----------------------------
        BENEFICIAL OWNER (1)              NUMBER        PERCENT (2)      NUMBER        PERCENT (4) 
-------------------------------------  -------------   -------------  -------------   -------------
                                                                                                   
James D. Tilton                        31,500,000(5)(6)(7)   92.89%     3,000,000          10.20%  
c/o Thoroughbred Interests, Inc.                                                                   
127 S. 6th Street                                                                                  
Louisville, KY 40202                                                                               
Augustine Fund, L.P.                    5,625,000 (8)        17.56%           --              --   
141 West Jackson Boulevard                                                                         
Suite 2182                                                                                         
Chicago, Illinois 60604                                                                            
Andy Dyer                               2,002,000 (9)         7.17%           --              --   
c/o The Dyer Group                                                                                 
100 Tower Drive                                                                                    
Greenville, South Carolina                                                                         
Total                                  39,127,000                      30,500,000                  
All Directors and Executive Officers   31,500,000            92.89%                                


------------------                                                              
(1) For purposes of this table, a person or group of persons is deemed to have  
"beneficial ownership" of any shares which such person has the right to 
 acquire within 60 days after the date of this Prospectus. For purposes of
computing the percentage of outstanding shares held by which such       
person or group of persons has the right to acquire within 60 days after
such date is deemed to be outstanding for the purpose of computing the  
percentage ownership for such person or persons, but is not deemed to be
   outstanding for the purpose of computing the percentage of ownership of any
other person.                                                           

(2) Calculated on the basis of 26,411,000 shares of Common Stock issued and     
outstanding.                                                            

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(3) Assumes the sale of all 9,802,000 shares offered by us.                     

(4) In the event that we are unable to sell all of the shares offered by us,    
each holder's ownership percentage of our Common Stock after this such  
offering will be higher than set forth.                                 

(5) Includes 6,000,000 shares being held in escrow by H. Glen Bagwell as        
security for the loan made by The Augustine Fund, L.P. (the "Augustine  
  Fund") to us and will be returned to James D. Tilton upon repayment to the
 Augustine Fund of the loan or the conversion by the Augustine Fund of the
amount owing into our Common Stock. Mr. Tilton has sole voting and      
investment power in all of his shares.                                  

(6) Includes 3,000,000 shares issuable upon exercisable of options, all of which
   are exercisable immediately under Thoroughbred Interests, Inc.'s Millennium
Stock Option Plan.                                                      

(7) Includes 3,000,000 shares of our Common Stock and 1,500,000 shares of our   
   Common Stock underlying warrants issuable pursuant to a convertible Secured
Promissory Note dated October, 2000, as amended.                        

(8) Represents shares issuable upon conversion of the convertible Promissory    
Note dated September 30, 1999, as amended.                              

(9) Includes 1,500,000 shares issuable upon the conversion of the convertible   
  Promissory Notes dated December 15, 1999 and January 31, 2000, as amended.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                        

      In connection with our incorporation, we issued 12,000,000 shares of
our Common Stock to Mr. Tilton at the par value of $.001 per share. Mr. Tilton  
received these shares in recognition of his pre-incorporation services.         

        Subsequently, due to our 2 for 1 stock split, Mr. Tilton's shares were
increased to 24,000,000 shares. 6,000,000 of these shares are being held in     
escrow in the name of H. Glen Bagwell as security for the Augustine Fund, L.P.  

         There is no affiliation between Mr. Tilton and The Augustine Fund, L.P.
or Glen Bagwell, Jr.                                                            

   In connection with our purchase of several thoroughbreds in September and
October of 2000, pursuant to a written promissory note dated October 31, 2000   
(the "Note"), Mr. Tilton loaned the Company $300,000 at an interest rate of 6%  
per annum to pay for the horses. In consideration for the Note, pursuant to a   
Pledge and Security Agreement dated October 31, 2000, we gave Mr. Tilton a      
security interest in some of our horses. The entire loan is convertible, at the 
sole discretion of Mr. Tilton, into shares of our Common Stock (the "Converted  
Shares") at $.10 per share and warrants exercisable into one-half the number of 
Converted Shares at $.15 per share.                                             

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ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.                                      

The following Exhibits are filed herewith and made a part hereof.               

No.      Description of Exhibit                                                 
---      ----------------------                                                 
3.1      Articles of Incorporation of Thoroughbred Interests, Inc., dated       
March 25, 1999*                                               

3.2      By-Laws of Thoroughbred Interests, Inc.*                               

4.1      Promissory Note dated September 30, 1999, between Thoroughbred         
Interests, Inc. and Augustine Fund, L.P.*                     

4.2      Note Extension Agreement between Thoroughbred Interests, Inc. and      
Augustine Fund, L.P. dated March 22, 2000*                    

4.3      Note Extension Agreement between Thoroughbred Interests, Inc. and      
Augustine Fund, L.P. dated October 3, 2000*                   

4.4      Amended Promissory Note dated November 21, 2000, between Thoroughbred  
Interests, Inc. and Augustine Fund, L.P.*                     

4.5      Note Extension Agreement dated March 31, 2001, between Thoroughbred    
Interests, Inc. and Augustine Fund, L.P.**                    

4.6      Promissory Note dated December 15, 1999, between Thoroughbred          
Interests, Inc. and Mr. Andrew Dyer*                          

4.7      Promissory Note dated January 31, 2000, between Thoroughbred Interests,
Inc. and Mr. Andrew Dyer*                                     

4.8      Note Extension Agreement between Thoroughbred Interests, Inc. and      
Mr. Andrew Dyer, dated October 11, 2000*                      

4.9      Amended Promissory Note dated November 21, 2000, between Thoroughbred  
Interests, Inc. and Mr. Andrew Dyer*                          

4.10     Amended Promissory Note dated November 21, 2000, between Thoroughbred  
Interests, Inc. and Mr. Andrew Dyer*                          

4.11     Note Extension Agreement dated April 12, 2001, between Thoroughbred    
Interests, Inc. and Mr. Andrew Dyer**                         

4.12     Secured Promissory Note dated October 31, 2000, between James D. Tilton
and Thoroughbred Interests, Inc.*                             

4.13     Amended Secured Promissory Note dated April 12, 2001, between          
Thoroughbred Interests, Inc. and James D. Tilton**            

10.1     Indemnity Agreement dated September 27, 1999, between James D. Tilton  
and Thoroughbred Interests, Inc.*                             

10.2     Stock Escrow Agreement dated September 30, 1999, by and between        
James D. Tilton, The Augustine Fund, and H. G. Bagwell*       

10.3     Pledge and Security Agreement dated September 30, 1999 between James D.
Tilton and the Augustine Fund, LP*                            

10.4     Thoroughbred Interests, Inc. Millennium Stock Option Plan*             

10.5     Internet Domain Name Purchase Agreement, dated September 30, 2000*     

10.6     Employment Agreement dated January 3, 2000 between James D. Tilton     
and Thoroughbred Interests, Inc.*                             

10.7     Lease Agreement dated November 11, 1999 between Goodshape LLC and      
Jim D. Tilton, Jr.*                                           

10.8     Pledge and Security Agreement dated October 31, 2000, between James D. 
Tilton and Thoroughbred Interests, Inc.*                      

-----------------                                                               
* Incorporated by reference to the Company's Form 10-SB, as amended, filed with 
the Securities and Exchange Commission on July 5, 2000.                         

** Incorporated by reference to the Company's Form 10-KSB filed with the        
Securities and Exchange Commission on April 17, 2001.                           

REPORTS ON FORM 8-K: NONE                                                       

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SIGNATURES

   In accordance with the requirements of Section 13 or 15(d) of the
Exchange Act, the registrant has duly caused this report to be signed on its    
behalf by the undersigned, thereunto duly authorized.                           

                          THOROUGHBRED INTERESTS, INC.

                 /s/ James D. Tilton
                                   -------------------------------------
             James D. Tilton
                                      Chairman, President, Secretary and Chief
               Executive Officer

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

Name and Capacity                                        Date         
-----------------                                        ----         

/s/ James D. Tilton                                               
-----------------------------------------------------         July 26, 2001     
Name:  James D. Tilton                                                          
Title: Chairman, President, Secretary                                           
and Chief Executive Officer                                       
(Principal Executive Officer and                                  
Principal Financial and Accounting                                
Officer)                                            

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THOROUGHBRED INTERESTS, INC.

INDEX TO FINANCIAL STATEMENTS 

                                                                [Download Table]

                                                                 PAGE  
                                                                 ----  
                                                                       
Independent Auditors' Report................................        F-2

FINANCIAL STATEMENTS                                                   

Balance Sheets as of December 31, 2000 and 1999.............        F-3

Statements of Operations                                               

  Year ended December 31, 2000 and the period commencing               
     March 25, 1999 (Inception) to December 31, 1999........        F-4

  Statement of Changes in Stockholders' Equity for the Year            
     ended December 31, 2000 and the period commencing March 25,       
     1999 (Inception) to December 31, 1999..................        F-5

Statement of Cash Flows                                                
  Year ended December 31, 2000 and the period commencing               
     March 25, 1999 (Inception) to December 31, 1999........        F-6

Notes to Financial Statements...............................        F-7

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BAUM & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
1515 UNIVERSITY DRIVE - SUITE 209 
CORAL SPRINGS, FLORIDA 33071

INDEPENDENT AUDITORS' REPORT

The Board of Directors                                                          
Thoroughbred Interests, Inc.                                                    
Louisville, Kentucky                                                            

   We have audited the accompanying balance sheet of Thoroughbred Interests,
Inc. as of December 31, 2000 and 1999 and the related statement of income,      
changes in stockholders' equity and cash flows for the year ended December 31,  
2000 and the period commencing March 25, 1999 (inception) to December 31, 1999. 
These financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements based 
on our audit.                                                                   

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

  In our opinion, the financial statements present fairly, in all material
respects, the financial position of Thoroughbred Interests, Inc. at December 31,
2000 and 1999 and the statement of operations, changes in stockholders' equity  
and cash flows for the year ended December 31, 2000 and the period commencing   
March 25, 1999 (inception) to December 31, 1999 in conformity with generally    
accepted accounting principles.                                                 

/s/ Baum & Company, P.A.                                                        
Baum & Company, P.A.                                                            
Certified Public Accountants                                                    

Coral Springs, Florida                                                          
March 15, 2001                                                                  

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THOROUGHBRED INTERESTS, INC.
BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

                                                        [Enlarge/Download Table]

                                                                     2000         1999    
                                                                  ----------   ---------- 
                                                                                          
                                           ASSETS                                         
Current Assets                                                                            
  Cash......................................................      $    3,411   $   11,348 
  Investment in thoroughbred horses.........................         832,496      441,107 
                                                                  ----------   ---------- 
                                                                     835,908      452,455 
Other assets                                                                              
  Deferred registration costs...............................          39,348        5,385 
                                                                  ----------   ---------- 
       Total assets.........................................      $  875,256   $  457,840 
                                                                  ----------   ---------- 
                                                                  ----------   ---------- 

                            LIABILITIES AND STOCKHOLDERS' EQUITY                          
Current liabilities                                                                       
  Note payable..............................................      $  400,000   $  350,000 
  Accounts payable..........................................         376,917       64,235 
  Accrued interest..........................................          86,500       38,000 
  Accrued compensation - related party......................          90,000            0 
                                                                  ----------   ---------- 
       Total current liabilities............................         953,417      452,235 
                                                                  ----------   ---------- 
Other liabilities                                                                         
  Loan payable - related party..............................         298,925      110,447 
                                                                  ----------   ---------- 
       Total liabilities....................................       1,252,342      562,682 
                                                                  ----------   ---------- 
Stockholders equity                                                                       
  Preferred stock, par value $.001, 10,000,000 shares                                     
     authorized; no shares issued...........................               0            0 
  Common stock, par value $.001, 100,000,000 shares                                       
     authorized; 26,411,000 and 26,386,000 shares issued and                              
     outstanding in 2000 and 1999 respectively..............          26,411       26,386 
     Additional paid in capital.............................           5,539        3,064 
     Accumulated deficit....................................        (409,036)    (134,167)
  Less: subscription receivable.............................               0         (125)
                                                                  ----------   ---------- 
                                                                    (377,086)    (104,842)
                                                                  ----------   ---------- 
       Total liabilities & stockholders equity..............      $  875,256   $  457,840 
                                                                  ----------   ---------- 
                                                                  ----------   ---------- 

See accompanying notes to the financial statements. 

F-3 

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THOROUGHBRED INTERESTS, INC.
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD 
COMMENCING MARCH 25, 1999 (INCEPTION) TO DECEMBER 31, 1999

                                                        [Enlarge/Download Table]

                                                                2000          1999     
                                                             -----------   ----------- 
                                                                                       
Revenues.................................................... $   703,015   $         0 
Cost of Horses Sold.........................................     463,053             0 
                                                             -----------   ----------- 
Gross Profit................................................     239,962             0 
Operating Expenses                                                                     
  Operational costs.........................................     174,649        55,720 
  General & administrative..................................     285,873        38,947 
                                                             -----------   ----------- 
  Total operating expenses..................................     460,522        94,667 
                                                             -----------   ----------- 
Net income (loss) before other income and (expense).........    (220,560)      (94,667)
Other income and (expense)                                                             
  Interest income...........................................       4,491             0 
  Interest expense..........................................     (48,500)      (38,000)
  Interest expense - related party..........................     (10,300)       (1,500)
                                                             -----------   ----------- 
                                                                 (54,309)      (39,500)
                                                             -----------   ----------- 
Net income (loss) before provision for income taxes.........    (274,869)     (134,167)
Provision for income taxes..................................           0             0 
                                                             -----------   ----------- 
Net income (loss)........................................... $  (274,869)  $  (134,167)
                                                             -----------   ----------- 
                                                             -----------   ----------- 
Net (loss) per common share................................. $     (0.01)  $     (0.01)
                                                             -----------   ----------- 
                                                             -----------   ----------- 
Weighted average number of common shares outstanding........  26,390,175    26,386,000 
                                                             -----------   ----------- 
                                                             -----------   ----------- 

See accompanying notes to the financial statements. 

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THOROUGHBRED INTERESTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD 
COMMENCING MARCH 25, 1999 (INCEPTION) TO
DECEMBER 31, 1999 

                                                        [Enlarge/Download Table]

                                            COMMON STOCK       ADDITIONAL     STOCK                 
                                        ---------------------   PAID IN    SUBSCRIPTION  ACCUMULATED
                                          SHARES      AMOUNT    CAPITAL     RECEIVABLE     DEFICIT  
                                        ----------   --------  ----------  ------------  -----------
                                                                                                    
Balance - inception (March 25, 1999)...          0         0          0           0               0 
Common stock issued to founder for                                                                  
  services............................. 24,000,000    24,000          0           0               0 
Common stock issued for services.......  2,300,000     2,300     (1,150)          0               0 
Sale of common stock in 1999...........     86,000        86      4,214        (125)              0 
Net (loss) from inception to                                                                        
  December 31, 1999....................          0         0          0           0        (134,167)
                                        ----------   -------     ------        ----       --------- 
Balance - December 31, 1999............ 26,386,000    26,386      3,064        (125)       (134,167)
Payment of subscription................          0         0          0         125               0 
Stock issued for domain name                                                                        
  November 2000........................     25,000        25      2,475           0               0 
Net (loss) December 31, 2000...........          0         0          0           0        (274,869)
                                        ----------   -------     ------        ----       --------- 
Balance - December 31 2000............. 26,411,000   $26,411     $5,539        $  0       $(409,036)
                                        ----------   -------     ------        ----       --------- 
                                        ----------   -------     ------        ----       --------- 

See accompanying notes to the financial statements

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THOROUGHBRED INTERESTS, INC.
STATEMENT OF CASH FLOWS 
FOR THE YEAR ENDED DECEMBER 31, 2000 AND THE PERIOD 
COMMENCING MARCH 25, 1999 (INCEPTION) TO DECEMBER 31, 1999

                                                        [Enlarge/Download Table]

                                                                2000          1999     
                                                             -----------   ----------- 
                                                                                       
Cash flows from operations:                                                            
  Net income (loss)......................................... $  (274,869)  $  (134,167)
  Adjustments to reconciliate net income (loss) to net cash                            
     provided by operating activities:                                                 
  Common stock issued for domain name.......................       2,500             0 
  Common stock issued for services..........................           0         1,150 
  Common stock issued to founder............................           0        24,000 
Changes in operating assets and liabilities:                                           
  (Increase) in investment in thoroughbred horses...........    (391,389)     (441,107)
  Increase in accounts payable and other accrued expenses...     451,182       102,235 
                                                             -----------   ----------- 
Net cash provided (used) from operations....................    (212,576)     (447,889)
                                                             -----------   ----------- 
Cash flows from financing activities:                                                  
  Proceeds of common stock issued...........................         125         4,175 
  (Increase) in deferred registration costs.................     (33,963)       (5,385)
  Increase (decrease) in stockholder loan...................     188,477       110,447 
  Proceeds of note payable..................................      50,000       350,000 
                                                             -----------   ----------- 
Net cash provided (used) from financing activities..........     204,639       459,237 
                                                             -----------   ----------- 
Net increase (decrease) in cash.............................      (7,937)       11,348 
Cash - beginning............................................      11,348             0 
                                                             -----------   ----------- 
Cash - ending............................................... $     3,411   $    11,348 
                                                             -----------   ----------- 
                                                             -----------   ----------- 
Supplemental disclosures:                                                              
  Interest paid............................................. $    10,300   $     1,500 
                                                             -----------   ----------- 
                                                             -----------   ----------- 
  Income taxes paid......................................... $         0   $         0 
                                                             -----------   ----------- 
                                                             -----------   ----------- 

See accompanying notes to the financial statements. 

F-6 

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THOROUGHBRED INTERESTS, INC.
NOTES TO FINANCIAL STATEMENTS 
DECEMBER 31, 2000 AND 1999

NOTE 1 -- BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES               

BUSINESS AND ORGANIZATION                                                       

The Company was organized under the laws of Nevada on March 25, 1999. The       
Company business consists of purchasing, training and sales of thoroughbred     
horses. The Company has emerged from its development stage in early 2000. The   
Company incurred a deficit of $134,167 in its development stage.                

ORGANIZATION COSTS                                                              

The Company has incurred various expenditures in the formation of its corporate 
and organizational structure. In accordance with SOP 98-5 these costs will be   
expensed as incurred.                                                           

REVENUE RECOGNITION                                                             

Revenue is recognized when thoroughbred horses are purchased for cash or        
approved credit and title is transferred to the purchaser. Collectibility of    
proceeds is reasonably assured at the time title is passed to the purchaser.    
Delivery of the thoroughbred horses occurs at the time title is passed to       
purchaser. The purchaser is responsible for delivery and the ultimate possession
of the horses acquired.                                                         

DEFERRED REGISTRATION COSTS                                                     

The Company has incurred various costs to prepare and file the required         
documents for any future stock offering. These costs will be offset against the 
proceeds of a successful offering, or expensed if unsuccessful. Registration    
costs include legal, accounting and out-of-pocket expenses applicable to future 
stock offering.                                                                 

SUBSCRIPTION RECEIVABLE                                                         

Sales of common stock have occurred whereby the proceeds have not been received,
thus the balances have been reflected as an offset to stockholders equity.      

INVESTMENT IN THOROUGHBRED HORSES                                               

The Company's investment in thoroughbred horses are stated at the lower of cost 
market. Costs of maintaining horses and other direct horse related costs are    
expensed in the period incurred.                                                

MANAGEMENT ESTIMATES                                                            

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and revenues and expenses.
The actual outcome of the estimates could differ from the estimates made in the 
preparation of the financial statements.                                        

NET LOSS PER COMMON SHARE                                                       

The Company reports earnings per share in accordance with SFAS No. 128,         
"Earnings per Share." Basic earnings per share is computed by dividing income   
available to common stockholders by the weighted average number of common shares
available. Diluted earnings per share is computed simular to basic earnings per 
share except the denominator is increased to include the number of additional   
common shares that would have been outstanding. If the potential common shares  
had been issued and if the additional common shares were dilutive. The following
potential common shares have been excluded from the computation of diluted net  
loss per share for the periods presented because the effect would have been     
anti-dilutive:                                                                  

F-7 

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THOROUGHBRED INTERESTS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2000 AND 1999

                                                        [Enlarge/Download Table]

                                                               AS OF DECEMBER 31,    
                                                            -------------------------
                                                                                     
                                                              2000            1999   
                                                            ---------       ---------
Options outstanding under the Company's stock option                                 
   plan...................................................  3,000,000               0
Common stock issuable upon conversion of Loan payable -                              
   related party..........................................  3,000,000               0
Warrants issued in conjunction with Loan payable - related                           
   party..................................................  1,500,000               0
Common stock issuable upon conversion of Notes payable....  4,750,000               0
Warrants issued in conjunction with Notes payable.........  2,375,000               0

NOTE 2 -- RELATED PARTY TRANSACTIONS                                            

The Company has issued 24,000,000 shares of common stock to its founder at a par
value of $.001 for his time and effort in establishing the Company.             

The founder of the Company has assumed the role of CEO and Chairman of the Board
of Directors at a salary and a stock option plan subject to the approval by the 
Board of Directors. The financial statements reflect $90,000 of accrued         
compensation in accordance with the agreement to be paid upon sufficient cash   
flow. The employment agreement commenced on January 3, 2000 for a three year    
period ending December 31, 2002. The base salary under this agreement is as     
follows: $90,000, $120,000 and $180,000 for the years 2000, 2001 and 2002,      
respectively.                                                                   

The agreement in addition to scheduled salary increases also provides for       
incentive bonuses in accordance with prescribed performance levels of the       
Company. The incentives are based on annual earnings of the Company before      
deduction of income taxes, depreciation and amortization ("EBIDA") The bonus    
will be computed on annual base salary as detailed above at 30%, 50% and 100% of
base salary if the EBIDA reaches $1,000,000, $2,000,000 and $3,000,000,         
respectively.                                                                   

In addition, the CEO has received a grant of incentive stock options pursuant to
Company's Millennium Stock Option Plan of three million shares of common stock. 

The CEO has advanced funds to the Company as a interest bearing 6% per annum    
secured loan pursuant to a written promissory dated October 31, 2000. The loan  
is payable in full on October 31, 2003. The security consists of certain horses 
held in inventory. The loan is convertible into common stock (the "Converted    
Shares") of the Company at $.10 per share and warrants exercisable into one-    
half the number of Converted Shares at $.15 per share. Based on an approximate  
loan balance at December 31, 2000 of $300,000 of principal only, the amount of  
Converted Shares will be 3,000,000 of common stock and an additional 1,500,000  
of common stock upon the exercise of stock warrants for a total of 4,500,000    
issued shares. As of December 31, 2000, all accrued interest on the note balance
has been paid and has not been added to the loan principal balance. The warrants
are first exercisable at the date of conversion into the Converted Shares and   
expire at the end of five years from such date. The Company used the            
Black-Scholes model to determine the fair market value of these warrants which  
is $0. There is no expense recognized for the conversion feature of the loan    
payable due to the conversion price being equal to the fair value of the        
Company's common stock.                                                         

In addition to the loan as discussed above which is pursuant to the promissory  
note dated October 31, 2000, the CEO has advanced funds to the Company on an    
informal basis as needed. These funds advanced are unsecured, interest bearing  
at 6% per annum payable in three years from the date of the advance and not     
subject to the conversion features of the other funds loaned to the Company.    

The Company commenced in April 2000 utilizing an office facility leased by the  
CEO on a informal agreement at $1,352 per month to conduct its business         
operations. In review of this transaction, the disclosures pursuant to FASB 13  
is not required since the Company has no legal commitment for future payment of 
rent at its option.                                                             

NOTE 3 -- CAPITAL TRANSACTIONS                                                  

a.) The Company at its inception issued 24,000,000 shares of common stock to its
founder. The services rendered by the founder were valued at the par value of   
the stock issued and expensed as startup costs.                                 

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THOROUGHBRED INTERESTS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2000 AND 1999

b.) The Company at its inception issued 2,300,000 shares to individuals for     
services rendered. These services were valued at $1,150 and expensed as startup 
costs.                                                                          

c.) The Company issued 86,000 shares of common stock during March and April 1999
for $4,300 pursuant to Section 4(2) of the Securities Act of 1933, as amended.  

d.) The Company by an unanimous consent in lieu of a special meeting of         
Directors approved a two (2) for one (1) forward stock split for all shares     
issued and outstanding effective July 23, 1999. The authorized shares of common 
stock increased from 50,000,000 to 100,000,000 and the par value remained at    
$.001 per share.                                                                

e.) The Company issued 25,000 of common stock in November 2000 for a domain     
name. The stock was valued at $.10 per share. The value of this domain name has 
been expensed in 2000.                                                          

NOTE 4 -- STOCK OPTION PLAN                                                     

The Board of Directors has approved The Millennium Stock Option Plan effective  
as of January 3, 2000 to compensate executives, key management personnel and    
consultants of the Company. The plan document has authorized a maximum of       
10,000,000 shares of common stock to be optioned at an exercise price to be     
determined by the Company. In the case of the incentive stock option the        
exercise price shall not be less than 100% of the fair market value of the      
shares on the date the option is granted. The stock options are exercisable no  
sooner than six months nor more than ten years from the date it is granted. The 
fair market value of common stock options granted will be reflected as          
compensation issued.                                                            

A summary of the status of the Company's stock option plan as of December 31,   
2000.                                                                           

                                                                [Download Table]

                                                                WEIGHTED AVERAGE
                                                      SHARES     EXERCISE PRICE 
                                                     ---------  ----------------
                                                                                
Outstanding at December 31, 1999....................         0           0      

Granted............................................. 3,000,000        $.11      

Exercised...........................................         0           0      

Forfeited...........................................         0           0      
                                                     ---------        ----      

Outstanding at December 31, 2000.................... 3,000,000        $.11      
                                                     ---------        ----      

Options exercisable at December 31, 2000............ 3,000,000        $.11      
                                                     ---------        ----      

The Company has adopted only the disclosure provisions of SFAS No. 123,         
"Accounting for Stock-Based Compensation." It applies Accounting Principles     
Bulletin ("APB") Opinion No. 25. "Accounting for Stock Issued to Employees," and
related interpertations in accounting for its Stock Option Plan and does not    
recognize compensation expense for its Stock Option Plan other than for         
restricted stock and options issued to outside third parties. If the Company had
elected to recognize compensation expense based upon the fair value at the grant
date for awards under the Stock Option Plan consistent with the methodology     
prescribed by SFAS No. 123, the Comapny's net income and                        

F-9 

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THOROUGHBRED INTERESTS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2000 AND 1999

earnings per share would be reduced to the pro forma amounts indicated below for
the year ended December 31, 2000:                                               

                                                                [Download Table]
                                                                            
Net income (loss)                                                           
  As reported...............................................      $(274,869)
  Pro forma.................................................      $(411,959)
Basic earning (loss) per common share                                       
  As reported...............................................      $   (0.01)
  Pro forma.................................................      $   (0.02)
Diluted earnings (loss) per common share                                    
  As reported...............................................      $   (0.01)
  Pro forma.................................................      $   (0.02)

For purposes of computing the pro forma disclosures required by SFAS No. 123,   
the fair value of each option granted to employees and directors is estimated   
using the Black- Scholes option-pricing model. The fair value is computed as of 
the date of grant using the following assumptions for grants in 2000: (i)       
dividend yield of 0% (ii) expected volatility of 0% (iii) weighted-average      
risk-free interest rate of approximately 6.2%, and (iv) expected life of 10     
years.                                                                          

The weighted average remaining contractual life of options outstanding issued   
under the Stock Option Plan is 9.75 years at December 31, 2000. No compensation 
expense was recognized as a result of the issuance of stock options during the  
year ended December 31, 2000.                                                   

For options granted during the year ended December 31, 2000 where the exercise  
price equaled the stock price at the date of the grant, the weighted-average    
fair value of such options was $.05 and the weighted-average exercise price of  
such options was $0.10. No options were granted during the year ended December  
31, 2000 where the exercise price was greater than the stock price at the date  
of grant or where the exercise price was less than the stock price at the date  
of the grant.                                                                   

NOTE 5 -- NOTES PAYABLE                                                         

On September 30, 1999 pursuant to a written promissory note the Company was     
loaned $300,000 from Augustine Fund, L.P. The note has no stated interest but   
calls for the payment of $375,000 in (180) one hundred eighty days from         
September 30, 1999. The Augustine Fund L.P. has the right to convert all or any 
portion of the $375,000 into 3,750,000 shares of common stock (the "Converted   
Shares") at $.10 per share and warrants exercisable into one-half the number of 
Converted Shares (1,875,000 shares) at $.15 per share. The warrants are first   
exercisable at the date of conversion into the Converted Shares and expire at   
the end of 5 years from such date. As security for this loan, the President of  
the company has placed in escrow 6,000,000 restricted shares of common stock.   
The Augustine Fund, L.P. granted the company an extension to January 1, 2002 for
satisfaction of the note. No additional interest is being accrued for the       
extended period of the loan.                                                    

On December 15, 1999, pursuant to convertible promissory note the Company was   
loaned $50,000 from Andrew Dyer (an individual). The note is unsecured and bears
interest at 12% per annum payable including interest on or before August 13,    
2000.                                                                           

On February 10, 2000 the Company received an additional $50,000 under the same  
terms. The promissory notes are both convertible into 500,000 shares of common  
stock (the "Converted Shares") at $.10 per share and warrants exercisable into  
one-half the number of Converted Shares (250,000 shares) at $.15 per share. The 
warrants are first exercisable at the date of conversion into the Converted     
Shares and expire at the end of 5 years from such date.                         

The Company used the Black-Scholes model to determine the fair value of these   
warrants which is $0. There is no expense recognized for the conversion feature 
of these notes due to the conversion price                                      

F-10

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THOROUGHBRED INTERESTS, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2000 AND 1999

being equal to the fair value of the Company's common stock. The due date of the
notes plus accrued interest has been extended to January 1, 2002.               

NOTE 6 -- INCOME TAXES                                                          

The Company accounts for income taxes using the asset and liability method.     
Under this method, deferred tax assets and liabilities are recognized for the   
future tax consequences attributable to differences between the financial       
statement carrying amounts of existing assets and liabilities and their         
respective tax bases and operating loss and tax credit carryforwards. Deferred  
tax assets and liabilities are measured using currently enacted tax rates. The  
effect on deferred tax assets and liabilities of a change in the tax rates is   
recognized in results of operations in the period that includes the enactment   
date. Because of the uncertainty regarding the Company's future profitability,  
the future tax benefit of its losses have been fully reserved for. Therefore, no
benefit for the net operating loss has been recorded in the accompanying        
financial statements.                                                           

The net operating losses of $409,036 can be carried forward fifteen years       
through 2015 to be offset against net income.                                   

F-11

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10KSB40/A Filing		Date		First		Last			Other Filings
		1/31/99		16
		3/25/99		3		28
		7/23/99		30
		9/27/99		20
		9/30/99		5		31
		10/11/99		5
		11/11/99		20
		12/15/99		5		31
		12/31/99		13		32
		1/3/00		17		30
		1/31/00		5		20
		2/10/00		31
		3/22/00		5		20
		3/28/00		5
		5/29/00		5
		7/5/00		20					10SB12G
		8/13/00		5		31
		9/30/00		20					10QSB
		10/3/00		5		20
		10/11/00		20
		10/31/00		19		29
		11/21/00		20
For The Period Ended		12/31/00		1		32			NT 10-K, 10KSB
		3/15/01		23
		3/31/01		3		20			NT 10-Q, 10QSB, 10QSB/A
		4/12/01		5		20
		4/17/01		20					3, 10KSB
		6/30/01		17					NT 10-Q, 10QSB
		7/26/01		21
Filed On / Filed As Of		7/27/01							10QSB/A
		12/31/01		14					5, 10KSB
		1/1/02		5		32
		12/31/02		17		29			10KSB/A, NT 10-K, 10KSB
		10/31/03		29
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