Majesco Entertainment Co – ‘10KSB’ for 12/31/02

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

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       40    190K 

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================================================================================

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 -------------------------
 FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
 THE SECURITIES EXCHANGE ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 2002               COMMISSION FILE NO. 333-70663

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

 CONNECTIVCORP
(FORMERLY KNOWS AS SPINROCKET.COM, INC.)

 (Exact name of small business issuer as specified in its charter)

DELAWARE                                               06-1529524             
(State or other jurisdiction of                        (I.R.S. Employer       
incorporation or organization)                         Identification No.)    

750 LEXINGTON AVENUE, 24TH FLOOR      (212) 750-5858                  10022     
NEW YORK, NEW YORK                                                              
(Address of Issuer's principal      (Issuer's telephone            (Zip Code)   
executive offices)                   number, including                          
          area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT:

 Common Stock, $.001 par value

 -----------------------------
(Title of Class)

         Check whether the issuer (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.              

Yes      X        No       __                                                   
--                                                            
         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. __                                        

         The issuer's revenues for the year ended December 31, 2002 were $3,500.

         The  aggregate  market value of the  registrant's  voting common equity
(i.e.,  the  Common  Stock)  held by  non-affiliates  as of April  11,  2003 was
$4,430,824,  using  the  closing  sale  price of $0.40  share on such  date,  as
reported by the Nasdaq OTC Bulletin Board.                                      

         The number of outstanding shares of the registrant's Common Stock as of
April 11,  2003 was  11,077,061  after the effect of a reverse one for ten stock
split effected March 12, 2002.                                                  

Transitional Small Business Disclosure Format.                

Yes        No  X                                                                
---       ---                                                           

DOCUMENTS INCORPORATED BY REFERENCE                                             

None.                                                         

         A list of Exhibits to this Annual  Report on Form 10-KSB begins on Page
18.                                                                             

================================================================================

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 TABLE OF CONTENTS

                                                                [Download Table]


PART I                                                                    PAGE
                                                                          ----
                                                                              
Item 1.  Description of Business                                            1 
Item 2.  Description of Property                                            3 
Item 3.  Legal Proceedings                                                  3 
Item 4.  Submission of Matters to a Vote of Security Holders                3 

PART II                                                                       

Item 5.  Market for Common Equity and Related Stockholder Matters           4 
Item 6.  Management's Discussion and Analysis of Financial Condition          
         and Results of Operations                                          5 
Item 7.  Financial Statements                                               8 
Item 8.  Changes In and Disagreements With Accountants on Accounting and      
         Financial Disclosure                                               9 

PART III                                                                      

Item 9.   Directors, Executive Officers, Promoters and Control Persons      9 
Item 10.  Executive Compensation                                           12 
Item 11.  Security Ownership of Certain Beneficial Owners and Management   15 
Item 12.  Certain Relationships and Related Transactions                   16 
Item 13.  Exhibits and Reports on Form 8-K                                 18 

 -----------

         The Company's  principal executive offices are located at 750 Lexington
Avenue,  24th Floor, New York, New York 10022, and the telephone number is (212)
750-5858.                                                                       

 -----------

FORWARD-LOOKING STATEMENTS                                                      

         This Annual Report on Form 10-KSB includes forward-looking  statements,
including statements regarding, among other things, the Company's:              

o        anticipated growth strategies, and                   

o        its intention to introduce new products.             

         The Company has based these  forward-looking  statements largely on its
expectations.  Forward-looking  statements  are subject to a number of risks and
uncertainties,  certain of which are beyond its control.  Actual  results  could
differ  materially  from  those  anticipated  as a result of  numerous  factors,
including among other things: (1) the enactment of new laws and regulations, and
the amendment of existing laws and regulations  which could affect the Company's
business;  (2) changes in the Company's  business  strategy or development plan;
(3) the Company's  ability to obtain  financing on acceptable terms when needed;
and (4) the Company's ability to identify  appropriate  acquisition  candidates,
complete such acquisitions and successfully integrate acquired businesses.      

         The Company does not  undertake any  obligation  to publicly  update or
revise any forward-looking  statements,  whether as a result of new information,
future  events  or  otherwise.  Because  of the  risks  and  uncertainties,  the
forward-looking events and circumstances discussed in this Annual Report on Form
10-KSB might not occur.                                                         

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PART I

ITEM 1.  DESCRIPTION OF BUSINESS                                                

INTRODUCTION AND HISTORY                                                        

         ConnectivCorp (the "Company"),  during late 2001 decided to restructure
its operations and as a result exited the business that it was in. The Company's
management has been pursuing appropriate merger and acquisition partners.  Prior
to its  restructuring,  the Company was a medical  communications  network  with
publishing,  Internet and marketing  services  divisions  that connect  targeted
consumers and professionals with pharmaceutical and consumer product companies. 

         ConnectivCorp  was organized in the State of Delaware on May 8, 1998 as
SMD Group,  Inc.  In January  1999,  the name was  changed to  CDBeat.com,  Inc.
Following the Company's business combination with Cakewalk LLC in November 1999,
the name was again changed to  "Spinrocket.com,  Inc." On September 11, 2000, in
order to better reflect and describe the Company's then strategic direction, the
name was changed to "ConnectivCorp."                                            

         ConnectivCorp is a reporting company under the Securities  Exchange Act
of 1934, as amended, and its stock is traded on the OTC Bulletin Board under the
symbol "CTTV."  ConnectivCorp's  principal  executive offices are located at 750
Lexington Avenue, 24th Floor, New York, New York 10022, and its telephone number
is (212) 750-5858.                                                              

HISTORY                                                                         

         The Company was  incorporated in Delaware on May 8, 1998 under the name
"SMD  Group,   Inc."  which  was  subsequently   changed  in  January  1999,  to
"CDbeat.com,   Inc."  In  April   2000,   the   Company   changed  its  name  to
"Spinrocket.com,  Inc." On September 11, 2000  Spinrocket.com,  Inc. changed its
name to  "ConnectivCorp"  because that new name better  described  the Company's
then strategic direction.                                                       

         In November 1999, 32 Records acquired  substantially  all of the assets
and  liabilities  relating  to the  business  of Cakewalk  LLC  ("Cakewalk")  in
exchange for 8,307,785  shares of the Common Stock of the Company,  which number
of shares equaled  approximately  46% of the then issued and outstanding  Common
Stock of the Company (the "Cakewalk  Transaction").  As a result of the Cakewalk
Transaction, the business formerly operated by Cakewalk was being operated by 32
Records.                                                                        

         Cakewalk  BRE LLC  ("Cakewalk")  was a wholly  owned  subsidiary  of 32
Records LLC (the entity known as 32 Records was, at one time,  known as Cakewalk
LLC, d/b/a 32 Records LLC). Cakewalk defaulted under an Indenture dated June 29,
1999 (the "Indenture") and entered into negotiations with Entertainment  Finance
International,  Inc.  ("EFI") in order to consensually  turn over assets to EFI.
EFI was the  secured  holder  of  $5,500,000  principal  indebtedness  issued by
Cakewalk and  maintained a security  interest in all of  Cakewalk's  assets (the
"Collateral")  pursuant  to the  Indenture.  Cakewalk  consented  to  entry of a
judgment of foreclosure  ("Judgment") upon the Collateral in connection with the
action  filed by EFI against  Cakewalk in the Supreme  Court of the State of New
York,  County of New York,  Index No. 604708/00 on or about October 30, 2000. On
February 2, 2001,  judgment was entered by the Court approving the  foreclosure,
thereby  transferring all of Cakewalk's  assets to EFI. On October 18, 2000, the
Company  and EFI entered  into a  consulting  agreement  under which the Company
agreed to help EFI in the  marketing  and sale of Cakewalk  and/or its assets in
return for which the Company would be entitled to a cash payment upon sale under
certain circumstances.                                                          

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         In addition to the  Cakewalk  Transaction  described  above,  a certain
Stock Purchase Warrant held by Atlantis Equities, Inc. ("Atlantis"), dated as of
September 23, 1999 (the "Atlantis  Warrant"),  was amended pursuant to a certain
Warrant Amendment  Agreement,  dated as of November 16, 1999, among the Company,
Atlantis  and Dylan LLC,  an  affiliate  of  Atlantis  ("Dylan")  (the  "Warrant
Amendment Agreement").  The Atlantis Warrant gave Atlantis the right to purchase
eighty (80%) percent of the issued and  outstanding  Common Stock of the Company
and options to purchase 762,064 shares of the Company's  Common Stock.  Pursuant
to the Warrant  Amendment  Agreement,  the  Atlantis  Warrant was split into two
warrants,  one of which was  assigned  to Dylan (the "Dylan  Warrant"),  and the
other of which was  retained  by  Atlantis  (the  "Revised  Atlantis  Warrant").
Concurrently with the closing of the Cakewalk  Transaction,  (i) Dylan exercised
the Dylan Warrant and paid the Company  $900,000 for 7,037,183  shares of Common
Stock  issuable  upon  exercise of such  warrant (the "Dylan  Stock"),  and (ii)
Atlantis  exercised the Revised  Atlantis  Warrant and paid the Company $100,000
for  781,909  shares of Company  Stock  issuable  upon  exercise  of the Revised
Atlantis  Warrant (the "Atlantis  Stock") and received  762,064 options from the
Company  which  were  exercisable  at $2.50 each until  December  31,  2000 (the
"Options")(collectively,  the "Atlantis Transaction"). Together, the Dylan Stock
and  the  Atlantis  Stock  equaled  approximately  43% of the  then  issued  and
outstanding  Common Stock of the Company  (after  giving  effect to the Cakewalk
Transaction  and  the  Atlantis  Transaction).  In  light  of  the  transfer  of
approximately  89% of the issued and  outstanding  Common  Stock of the Company,
collectively,   to  Cakewalk,  Dylan  and  Atlantis  pursuant  to  the  Cakewalk
Transaction  and the  Atlantis  Transaction,  a change in control in the Company
occurred. On November 27, 2000, Dylan made a pro rata distribution to all of its
members of all shares of the Dylan  Stock it  received  in  connection  with the
transactions described above.                                                   

OVERVIEW                                                                        

         2002  was a year in  which  the  Company  actively  pursued  merger  or
acquisition partners.                                                           

         The Company  made a decision to  restructure  in late 2001.  It reduced
existing   trade   payables  by  the  issuance  of   restricted   common  stock.
Additionally,  management is seeking appropriate merger or acquisition  partners
in the medical information or other unrelated fields. Management also effected a
one for ten reverse split of the Company's common stock on March 12, 2002.      

            During 2002, the Company  executed two agreements for the purpose of
acquiring Aqua Development Corp., a California corporation ("Aqua").  Management
expended the majority of its resources and efforts to attempt to consummate  the
acquisition.  Despite  management's  best  efforts,  they  will  not be  able to
consummate the agreement  with Aqua and have  terminated its efforts to complete
the acquisition.                                                                

INTELLECTUAL PROPERTY RIGHTS                                                    

         The  Company  currently  does not have any  patents  issued  to it.  In
December  1999,  the Company filed a  Provisional  Patent  Application  with the
United States Patent office,  seeking  protection for certain software developed
by the Company.  In December 2000, the Company filed a formal patent application
with the patent  office to the same effect.  The Company  cannot be certain that
the current or any future patent  applications will be granted,  that any future
patent will not be challenged,  invalidated or circumvented,  or that the rights
granted under any patent that may be issued will provide competitive  advantages
to it.                                                                          

REGULATION                                                                      

         The  Company  is  currently  not  subject to direct  regulation  by any
governmental  agency,  other than laws and regulations  generally  applicable to
businesses.                                                                     

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EMPLOYEES                                                                       

         As of April 11, 2003, the Company has two  employees,  both of whom are
engaged in executive management.                                                

ITEM 2.  DESCRIPTION OF PROPERTY                                                

            On January 1, 2002,  the Company  entered into a sublease for office
space located at 750 Lexington Avenue, New York, New York. The lease term is for
the period from January 1, 2002 through  December 31, 2002,  with a monthly rent
of $2,500.  The office  space is being leased from an entity in which the father
of Robert Ellin,  Chairman of the Company,  is a partner.  The Company is in the
process of  negotiating  an extension to the sublease.  It is  anticipated  that
there will be no changes in the lease agreement.                                

ITEM 3.  LEGAL PROCEEDINGS                                                      

      The Company is not currently subject to any legal proceedings.

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

         During the year ended  December 31, 2002, no matters were  submitted by
the Company to a vote of its stockholders.                                      

 PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               

         Market  Information.  The Company's common stock is currently listed on
the OTC Bulletin Board under the trading symbol "CTTV." The Company first listed
its common stock on the OTC Bulletin Board in August 1999.  The following  table
sets forth the high and low bid prices of the Company's Common Stock as reported
on the OTC Bulletin Board for each calendar  quarter  commencing in January 2001
through December 31, 2002.                                                      

                                                                [Download Table]

                                          COMMON STOCK                        
                      ------------------------------------------------------- 
                              2002                            2001            
                      ------------------------------------------------------- 
                      HIGH BID         LOW BID        HIGH BID         LOW BID
                      --------         -------        --------         -------
                                                                              
First Quarter          $ 0.90          $ 0.11         $ 11.25          $ 3.75 
Second Quarter           0.85            0.25            3.50            0.80 
Third Quarter            0.30            0.15            4.20            2.00 
Fourth Quarter           0.60            0.15            1.80            0.70 

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         As of April 11, 2003,  the closing sale price of the  Company's  common
stock on the OTC Bulletin Board was $0.40 per share.                            

HOLDERS                                                                         

         As of April 11, 2003 there were  approximately 351 holders of record of
the Company's common stock as determined by the Company's  transfer agent.  Such
list does not include  beneficial  owners of securities whose shares are held in
the names of various dealers and clearing agencies.                             

DIVIDENDS                                                                       

         The  Company  has never  declared  nor paid any cash  dividends  on its
common stock and does not anticipate  paying  dividends in respect of its common
stock in the  foreseeable  future.  Any payment of cash  dividends in the future
will be at the  discretion of the  Company's  Board of Directors and will depend
upon,  among other  things,  its earnings (if any),  financial  condition,  cash
flows,  capital  requirements  and  other  relevant  considerations,   including
applicable contractual restrictions and governmental regulations with respect to
the payment of dividends.                                                       

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

         THE FOLLOWING  DISCUSSION  AND ANALYSIS  SHOULD BE READ IN  CONJUNCTION
WITH  THE  COMPANY'S  FINANCIAL  STATEMENTS  AND  THE  NOTES  THERETO  APPEARING
ELSEWHERE  IN THIS  REPORT  AS ITEM 7. THIS  REPORT  CONTAINS  STATEMENTS  WHICH
CONSTITUTE   FORWARD-LOOKING  STATEMENTS  WITHIN  THE  MEANING  OF  THE  PRIVATE
SECURITIES   LITIGATION   REFORM  ACT  OF  1995.   THE  COMPANY   CAUTIONS  THAT
FORWARD-LOOKING  STATEMENTS ARE NOT GUARANTEES OF FUTURE PERFORMANCE AND INVOLVE
RISKS AND  UNCERTAINTIES,  AND THAT ACTUAL  RESULTS MAY DIFFER  MATERIALLY  FROM
THOSE IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS.         

         The Company was  incorporated in Delaware on May 8, 1998 under the name
"SMD Group,  Inc." In January 1999, the Company changed its name to "CDbeat.com,
Inc." On April 19,  2000,  the  Company's  name was changed to  "Spinrocket.com,
Inc." On September 11, 2000, the Company  changed its name from  Spinrocket.com,
Inc. to  "ConnectivCorp"  because this new name better  described  the Company's
then  strategic  direction.  The Company's  business model was to facilitate the
online connection between targeted, profiled consumers and marketers desiring to
reach  those  consumers.  As  its  initial  focus,  the  Company  formed  a  new
wholly-owned   subsidiary,   ConnectivHealth,   in  order  to   facilitate   its
connectivity model in the healthcare field.                                     

UNCERTAINTY                                                                     

         The  accompanying  financial  statements  have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal  course of  business.  The  Company has a limited
operating  history,  and since its  inception in 1998 has  incurred  substantial
losses.  The  Company's   accumulated   deficit  as  of  December  31,  2002  is
approximately  $20 million.  To date,  the Company has not generated any revenue
from  previously   proposed   business   model,   which   contemplated   selling
pharmaceutical and other healthcare companies access to the Company's aggregated
users. The Company  incurred a net loss of approximately  $873 thousand and $5.8
million for the years ended December 31, 2002 and 2001, respectively, while cash
and cash equivalents at December 31, 2002 totaled approximately  $18,000.  These
matters raise  substantial  doubt about the  Company's  ability to continue as a

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going  concern.  The  Company's  continued  existence is dependent  upon several
factors  including the Company's  ability to raise additional equity or locate a
merger or business partner.                                                     

         The Company made a decision to restructure its  operations.  Management
issued  restricted  common stock to satisfy existing trade payables.  Management
has effected a one for ten reverse stock split of the Company's  common stock as
of March 12, 2002.                                                              

         During  December 2002 and in March 2003, the Company  obtained loans of
$25,000 and  $150,000,  respectively.  The loans are  convertible  under certain
conditions  into common stock of the Company at $0.10 per share.  The Company is
in the  process of  continuing  to raise  capital  either  through  the  private
placement of equity or debt.                                                    

          While the Company has reduced its operating expenses, no assurance can
be given that the Company can sustain  these  operating  levels.  Moreover,  the
Company has not yet generated any meaningful  revenues,  and no assurance can be
given that it will do so in the future.                                         

AQUA AGREEMENTS                                                                 

            During 2002, the Company  executed two agreements for the purpose of
acquiring Aqua Development Corp., a California corporation ("Aqua").  Management
expended the majority of its resources and efforts to attempt to consummate  the
acquisition.  Despite  management's  best  efforts,  they  will  not be  able to
consummate the agreement  with Aqua and have  terminated its efforts to complete
the acquisition.                                                                

RESULTS OF OPERATIONS                                                           

2002 compared to 2001                                         

         The Company reported the following  results of operations for the years
ended December 31, 2002 and 2001:                                               

                                                                [Download Table]

                                                                            
Net loss                                        $   (872,567)  $ (5,756,777)
                                                ============   ============ 

Net loss per common share- basic and diluted    $      (0.10)  $      (2.66)
                                                ============   ============ 

Weighted average shares outstanding:                                        

Basic and diluted                                  9,117,802      2,163,537 
                                                ============   ============ 

         The Company reported a loss of  approximately  $873,000 from operations
in 2002 versus a loss from operations of approximately $5.8 million in 2001. The
Company's  other  income for the year  ended  December  31,  2002  consisted  of
interest income that was earned on invested funds was  approximately  $6,000 and
other income of $3,500 in 2002 versus  approximately  $41,000 of interest income
in 2001. The decrease of approximately  $35,000 in interest income resulted from
the decrease in cash and cash equivalents available to be invested.  General and
administrative  expenses  totaled  approximately  $882,000  in 2002  versus $5.8
million  in  2001.   Included  in  general  and   administrative   in  2002  was
approximately  $88,000 of stock based  compensation  expense  related to options
granted  to  consultants  and  employees  salaries  of  approximately  $308,000;
approximately  $184,000 for  professional  and consulting                       

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fees; rent expense of $30,000,  insurance expense of approximately  $34,000; and
general operating expenses of approximately $141,000.                           

         Deferred compensation expense related to options granted to consultants
and employees was approximately $64,000 in 2002 versus approximately $202,000 in
2001.  The decrease is a result of the lower  number of options  granted in 2002
and the elimination of most  outstanding  options.  Salaries totaled $240,000 in
2002 verses  $337,000 in 2001. The decrease was a result in lower salaries taken
by management  and a reduction of employees in 2002.  Approximately  $257,000 of
expense  was  recognized  for  professional  and  consulting  fees and  software
development in 2002 verses  $917,000 in 2001. The decrease of $660,000  resulted
from management's program to reduce costs and the restructuring of the Company's
operations.  There was no amortization expense of acquired software and goodwill
was in 2002 versus  $999,000 in 2001. The decrease was a result of the fact that
during the fourth  quarter of 2001  approximately  $2.9  million of expense  was
recognized  for the  impairment of acquired  software,  goodwill,  equipment and
costs of publications acquired.                                                 

2001 compared to 2000                                                           

The Company  reported the following  results of  operations  for the years ended
December 31, 2001 and 2000:                                                     

                                                                [Download Table]

                                               2001           2000     
                                           ------------   ------------ 
                                                                       
Loss from continuing operations            $ (5,756,777)  $ (4,967,021)

Loss from discontinued operations                    --     (1,412,700)
                                           ------------   ------------ 

Net loss                                   $ (5,756,777)  $ (6,379,721)
                                           ============   ============ 

Basic and diluted loss per common share:                               

Loss from continuing operations            $      (2.66)  $      (2.40)

Loss from discontinued operations                    --          (0.70)
                                           ------------   ------------ 
Net loss per common share                  $      (2.66)  $      (3.10)
                                           ============   ============ 

         The  Company  reported  a  loss  of  approximately  $5.8  million  from
continuing  operations  in 2001  versus a loss  from  continuing  operations  of
approximately  $5 million in 2000. The Company's other income for the year ended
December 31, 2001 consisted of interest income that was earned on invested funds
was  approximately  $41,000 in 2001  versus  approximately  $103,000 of interest
income and $80,000 of consulting  revenue in 2000. The decrease of approximately
$62,000  in  interest  income  resulted  from  the  decrease  in cash  and  cash
equivalents  available  to be  invested,  while the  Company  did not obtain any
consulting  engagements in 2001.  General and  administrative  expenses  totaled
approximately  $5.8  million in 2001  versus $5.3  million in 2000.  Included in
general and administrative was approximately  $202,000 of deferred  compensation
expense  related to options  granted to  consultants  and employees  salaries of
approximately  $337,000;  approximately $917,000 for professional and consulting
fees and software development; amortization expense of approximately $999,000 of
acquired  software  and  goodwill  and                                          

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approximately $2.9 million of expenses  recognized in the fourth quarter of 2001
for the  impairment  of  acquired  software,  goodwill,  equipment  and costs of
publications acquired.                                                          

         Deferred compensation expense related to options granted to consultants
and  employees  was  approximately  $202,000 in 2001 versus  approximately  $1.8
million in 2000. The decrease is a result of the lower number of options granted
in 2001. Salaries totaled $337,000 in 2001 verses $727,000 in 2000. The decrease
was a result in lower  salaries taken by management and a reduction of employees
in 2001.  Approximately  $917,000 of expense was recognized for professional and
consulting  fees and software  development  in 2001 verses $1.3 million in 2000.
The decrease of $383,000  resulted  from  management's  program to reduce costs.
Amortization  expense  of  acquired  software  and  goodwill  was  approximately
$999,000 in 2001  versus  $992,000  in 2000.  During the fourth  quarter of 2001
approximately  $2.9  million of expense was  recognized  for the  impairment  of
acquired software, goodwill, equipment and costs of publications acquired.      

ACCOUNTING POLICIES                                                             

         The following  accounting policies are important to an understanding of
the  operating  results  and  financial  condition  of the Company and should be
considered  as  an  integral  part  of  the  financial  review.  For  additional
accounting  policies,  see  note 1 to  the  consolidated  financial  statements,
"Significant Accounting Policies."                                              

Estimates and Assumptions                                                       

         In preparing the financial information, the Company used some estimates
and assumptions that may affect reported amounts and disclosures.  Estimates are
used when accounting for  depreciation,  amortization,  impairment of assets and
asset valuation allowances.  We are also subject to risks and uncertainties that
may cause actual results to differ from estimated results,  such as legislation,
regulation  and the  ability to obtain  financing.  Certain  of these  risks and
uncertainties   are  discussed  under  the  heading  entitled   "Forward-Looking
Statements."                                                                    

ITEM 7.  FINANCIAL STATEMENTS                                                   

         The Company's  consolidated  financial  statements  for the years ended
December  31,  2002 and  2001,  respectively,  are set  forth at the end of this
Annual Report on Form 10-KSB and begin on page F-1.                             

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
FINANCIAL DISCLOSURE                                          

         On April 15, 2002,  the Company  engaged  Patrusky Mintz & Semel as its
independent  accountants for the year ending December 31, 2001 and dismissed the
former independent  accountants,  Arthur Andersen LLP. The reports of the former
accountants  for the past two years did not  contain  an  adverse  opinion  or a
disclaimer of opinion and was not qualified or modified as to uncertainty, audit
scope, or accounting principles.                                                

         During the two most recent  fiscal years and to the date hereof,  there
have been no disagreements  between the Registrant and the former accountants on
any  matter  of  accounting   principles  or  practices,   financial   statement
disclosure,  or  auditing  scope  or  procedure,  which if not  resolved  to the
satisfaction of the former  accountant would have caused it to make reference to
the subject matter of the disagreement in connection with its report.           

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         On  April 4,  2003,  Patrusky  Mintz & Semel  resigned  as  independent
certified public accountants of the Company due to its merger with another firm.
On April 4, 2003, the Company  appointed  Israeloff,  Trattner & Co. P.C. as its
independent certified public accountants.                                       

         During the most recent  fiscal year and to the date hereof,  there have
been no disagreements  between the Registrant and the former  accountants on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedure,  which if not resolved to the  satisfaction  of the
former  accountant  would have caused it to make reference to the subject matter
of the disagreement in connection with its report.                              

PART III

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

DIRECTORS AND EXECUTIVE OFFICERS                                                

         The  following  table sets forth certain  information,  as of March 28,
2002, concerning the Company's directors and executive officers:                

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

                                                                [Download Table]

Name                    Age      Position                                    
-----------------------------------------------------------------------------
                                                                             
Elliot Goldman           67      President, Chief Executive Officer, Director

Robert Ellin             38      Chairman                                    

Ivan Berkowitz           57      Director                                    

David Goddard            47      Director                                    

Jeffrey Kuhr             44      Director                                    

Thomas Cyrana            54      Observer                                    

         The  business  experience  of each of the persons  listed  above for at
least the last five years is as follows:                                        

         Elliot Goldman (President,  Chief Executive Officer and Director).  Mr.
Goldman's   executive  and  operational   career  spans  three  decades  in  the
entertainment  industry  including  his role as  President  and Chief  Executive
Officer of BMG Music and senior  executive posts at Warner  Communications  Inc.
(now AOL Time Warner),  CBS Records (now Sony Music) and Arista Records.  In all
of these instances he had primary  responsibility for managing content companies
and maximizing the net income generated.  Most recently he has been President of
his own consulting firm specializing in operational and deal assistance to major
and independent music companies. At BMG Music, Mr. Goldman was President and CEO
of worldwide music operations  encompassing RCA Records,  Arista Record, RCA Red
Seal and the RCA Record  Club.  Before that,  he was a Senior Vice  President of
Warner  Communications (now AOL Time Warner), with responsibility for the Warner
Music Group's worldwide recorded music and music publishing  activities.  Before
joining AOL Time Warner,  Mr.  Goldman was Executive  Vice President and General
Manager of Arista Records, from its founding, with direct responsibility for all
areas of its business  operations.  Mr.  Goldman began his career at CBS Records
(now Sony Music) as Director of Business Affairs and rose to Administrative Vice
President of that company.                                                      

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         Robert Ellin (Chairman). Mr. Ellin is a principal of Atlantis Equities,
Inc.  ("Atlantis"),  Dylan LLC and Trinad  Partners  ("Trinad").  Atlantis  is a
private  merchant  banking and  advisory  firm  specializing  in equity and debt
finance,  primarily  assisting  emerging growth  companies under $100 million in
sales.  Through Atlantis,  Mr. Ellin has spearheaded  merger and acquisition and
business development projects for private and public companies such as THQ, Inc.
(OTC:THQI),  Grand Toys (OTC: GRIN), and Forward  Industries,  Inc. (OTC: FORD).
Trinad  is  a  leveraged  buyout  firm  that  bought,  and  recently  sold,  S&S
Industries,  Inc., the largest manufacturer of apparel-related  underwire. Dylan
LLC was originally a stockholder of the Company.                                

         Ivan  Berkowitz  (Director).  Since 1989,  Mr.  Berkowitz  has been the
President of Great Court Holdings  Corporation and, since 1993, he has served as
the  Managing  General  Partner  of Steib &  Company.  From  1995 to  1997,  Mr.
Berkowitz served as the Chief Executive Officer of PolyVision Corporation, where
he continues to serve as a board member.  Mr.  Berkowitz is also a member of the
Board of Directors  of the  following  public  companies:  Migdalei  Shekel (Tel
Aviv), Propierre (Paris), HMG WorldWide and IAT Resources. Mr. Berkowitz is also
the Chairman of the Advisory Board of THCG Inc.                                 

         David Goddard (Director).  Mr. Goddard is a Senior Managing Director in
the  Equity  Capital  Markets  Department  of  Bear  Stearns  &  Co.,  Inc.,  an
international  investment  banking firm.  Mr. Goddard has been with Bear Stearns
since  November  1998.  From 1996 to 1998,  Mr.  Goddard  served  as a  Managing
Director - Associate  Director  Private  Capital Group at  BancBoston  Robertson
Stephens,  Inc.  Prior to that,  Mr.  Goddard  was  Managing  Director - Private
Placement  Group at Chase  Securities,  Inc.  from  1994-1996.  Mr.  Goddard has
extensive  corporate finance and capital markets experience  specializing in the
placement of debt and equity securities in the private capital markets.         

         Jeffrey Kuhr  (Director).  Mr. Kuhr is the managing partner of West End
Capital  Partners LLC ("WECP"),  a merchant banking firm based in New York City.
Prior to  forming  WECP,  he was a founder  and  managing  director  of Peter J.
Solomon Company ("PJSC"), a leading independent  investment banking firm. During
his  tenure at PJSC from 1989 to 1999,  Mr.  Kuhr  advised  public  and  private
companies on mergers and acquisitions, financing and restructuring transactions.
While a managing  director at PJSC,  Mr. Kuhr founded  RS1W,  Inc.  with Russell
Simmons  (Def Jam Records,  Phat Farm  apparel) and a group of investors to be a
leading online  entertainment  destination.  RS1W was sold to BET.com in October
2000. From 1987 to 1989, Mr. Kuhr financed leveraged buyouts at GE Capital Inc.,
providing economic and strategic  consulting  services to Fortune 100 companies.
Mr. Kuhr received his Masters in Business Administration from Wharton School and
his Bachelor of Arts from Oberlin College.                                      

         Thomas  Cyrana  (Observer).  Mr.  Cyrana  is  a  Managing  Director  of
Rascoff/Zysblat  Organization  ("RZO"),  a division of American  Express Tax and
Business  Services.  Mr.  Cyrana has been with RZO since 1995.  Mr.  Cyrana also
serves  as a  principal  of the  managing  member  of EFI,  a  venture  with The
Structured  Finance  High  Yield  Fund,  LLC,  which is  managed  by  Prudential
Investments.                                                                    

         All  directors  of the Company  serve until the next annual  meeting of
stockholders  or until their  successors  are duly  elected and  qualified.  All
officers  of the  Company  serve at the  discretion  of the Board of  Directors,
subject to rights,  if any, under contracts of employment with the Company.  See
"Executive   Compensation  -  Employment   Agreements."   There  are  no  family
relationships among the directors and executive officers.                       

MANAGEMENT CHANGES                                                              

         As of January 24,  2002,  Robert  Miller  resigned as  Co-Chairman  and
Director of the Company to pursue  other  business  interests,  and Robert Ellin
became sole chairman.                                                           

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CERTAIN CORPORATE ACTIONS                                                       

            Stockholders  representing  approximately  53.2% of the total issued
and outstanding  shares of the Company's  common stock as of March 12, 2001 took
action by written consent to (i) authorize the Company to effect a reverse split
of the  Company's  issued  and  outstanding  common  stock  on not  more  than a
one-for-ten  basis,  and (ii) approve the adoption of a stock option plan for up
to 5 million shares of common stock (reduced pro rata upon the reverse split).  

REVERSE SPLIT                                                                   

General                                                       

         On March 12, 2001,  stockholders  representing  53.2% of the issued and
outstanding  shares of the Common Stock of the Company  approved an amendment to
the Company's Amended and Restated Certificate of Incorporation to authorize the
Company, for a period of up to one year, to effect a reverse split (the "Reverse
Split") that will cause all issued and outstanding  Common Stock to be split, on
a reverse basis, up to one-for-ten.  On March 12, 2002, the one-for-ten  Reverse
Split was  effected.  The Reverse Split does not affect the number of authorized
shares of the Company's  Common Stock. The Reverse Split  effectively  increases
the number of available  authorized  shares of Common Stock. As described below,
the primary  objective  of the Board of  Directors  is to increase the per share
market price of the Common Stock.                                               

Effects of Reverse Split                                      

         Effect on Market for Common Stock. The Board of Directors believes that
the  Reverse  Split  should,  although  there can be no  assurance,  enhance the
acceptability  of the  Company's  Common Stock by the  financial  community  and
investing public.  The reduction in the number of issued and outstanding  shares
of Common Stock caused by the Reverse Split is anticipated initially to increase
proportionately  the per share market value of the Company's  Common Stock.  The
Board of Directors  also believes that the Reverse Split may result in a broader
market for the  Company's  Common Stock than that which  currently  exists.  The
expected  increase price level may encourage  interest and trading in the Common
Stock and possibly  promote  greater  liquidity for the Company's  stockholders,
although such  liquidity  could be adversely  affected by the reduced  number of
shares of Common Stock outstanding after the effectiveness of the Reverse Split.

         Effects on Number of Shares  Available for Issuance.  The Reverse Split
decreased  the number of  outstanding  shares of Common  Stock.  Therefore,  the
21,588,870  shares of Common Stock issued and  outstanding  as of the  effective
date of the Reverse  Split,  together  with  10,289,552  shares of Common Stock,
assuming the exercise of, all outstanding  warrants and options,  were converted
into  approximately  3,187,842  shares of Common  Stock.  Because  the number of
shares  of  Common  Stock   authorized  for  issuance  by  the   Certificate  of
Incorporation,  as amended,  following  the Reverse  Split remains at 40,000,000
shares,  the Reverse Split results in  approximately  36,812,158  additional (or
post-split)  shares of Common Stock  available  for issuance by the Company.  In
lieu of issuing  any  fractional  shares as a result of the Reverse  Split,  the
Company rounded the number of shares each  stockholder is entitled to receive as
a result of the Reverse Split to the nearest whole number of shares.            

         The Board of  Directors  believes  that the  Reverse  Split may provide
flexibility  for the Company in meeting its possible needs by enabling the Board
to raise  additional  capital through the issuance of Common Stock or securities
convertible  into or  exercisable  for Common Stock,  to make  additional  stock

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awards under the Company's  employee benefit plans and/or to employ Common Stock
as a form of consideration for acquisitions.                                    

         Effect on the Company's  Derivative  and  Convertible  Securities.  The
total number of shares of Common Stock issuable upon the exercise of options and
warrants  to acquire  such  shares,  and the  exercise  price  thereof  shall be
proportionally adjusted to reflect any Reverse Split.                           

         Changes in Stockholders'  Equity.  As an additional result of a Reverse
Split, the Company's  stated capital,  which consists of the par value per share
of the Common Stock and Preferred Stock multiplied,  respectively, by the number
of shares outstanding,  was reduced.  Although the par value of the Common Stock
remains at $.001 per share following a Reverse Split,  stated capital  decreased
because  the number of shares  outstanding  was  reduced.  Correspondingly,  the
Company's  additional paid-in capital,  which consists of the difference between
the Company's  stated capital and the aggregate  amount paid to the Company upon
the issuance by the Company of all then  outstanding  shares of Common Stock and
Preferred Stock, was increased.                                                 

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934            

         Section  16(a) of the  Securities  Exchange  Act of 1934,  as  amended,
requires the Company's  executive  officers,  directors and persons who own more
than ten percent of a registered  class of the  Company's  equity  securities to
file certain reports regarding  ownership of, and transactions in, the Company's
securities with the Securities and Exchange  Commission  (SEC).  These officers,
directors and stockholders are also required by SEC rules to furnish the Company
with  copies of all Section  16(a)  reports  that are filed with the SEC.  Based
solely on a review of copies of such forms received by the Company,  and written
representations  received by the Company from  certain  reporting  persons,  the
Company  believes  that for the year ended  December 31, 2001 all Section  16(a)
reports required to be filed by the Company's executive officers,  directors and
10% stockholders were filed on a timely basis.                                  

ITEM 10.  EXECUTIVE COMPENSATION                                                

         The  following  summary  compensation  table sets  forth the  aggregate
compensation  paid to, or earned by, the Chief  Executive  Officer and the other
most highly compensated executive officer for the years ended December 31, 2002,
2001  and  2000  whose total annual salary and bonus exceeded $100,000 for 2002,
2001  and  2000  (collectively  the  "Named  Executive  Officers").             

SUMMARY COMPENSATION TABLE                                                      

                                                        [Enlarge/Download Table]

                                                                                   LONG TERM     
                                          ANNUAL COMPENSATION                    COMPENSATION    
                             -------------------------------------------------  -----------------
                                                                                   SECURITIES    
                                                             OTHER ANNUAL         UNDERLYING     
NAME AND PRINCIPAL POSITION   YEAR  SALARY ($)  BONUS ($)   COMPENSATION ($)     OPTIONS/SARS(#) 
---------------------------   ----  ----------  ---------   ----------------     --------------- 
                                                                                                 
Robert Miller (1)             2002         --       --             --                   --       
   Co-Chairman                2001     $61,058      --             --                   --       
                              2000    $200,000      --             --                   --       

Robert Ellin (2)              2002    $118,750      --           $10,000                --       
   Co-Chairman                2001      $5,200      --             --                   --       
                              2000          --      --             --                   --       

Elliot Goldman (3)            2002    $118,750      --            $9,654                --       
   President and              2001     $86,059      --             --                   --       
   Chief Executive Officer    2000    $146,154      --             --                   --       

Alan Schaffer                                                                                    
Chief Financial               2002          --      --             --                   --       
Officer                       2001          --      --             --                   --       
                              2000    $134,154      --             --                   --       

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

(1)      Mr.  Miller,  who  was  President  and  Chief  Executive  Officer,  was
         appointed  Co-Chairman  in January 2001 and resigned  that  position in
         January 2002.  He was being paid an annual salary of $200,000,  subject
         to  such  increases  or  bonuses,  as  the  Board  of  Directors  shall
         authorize.  Mr. Miller voluntarily reduced his annual cash compensation
         to $100,000 as of March 1, 2001 and to $75,000 as of May 1, 2001. As of
         July 1, 2001, Mr. Miller voluntarily waived receipt of any further cash
     compensation. See "Executive Compensation - Employment Agreements."

(2)      Mr.  Ellin,  who was Chairman in 2000,  was  appointed  Co-Chairman  in
        January  2001  and  on  January  24, 2002, Mr. Ellin again became sole
        Chairman.  In  2001,  he  was  being paid an annual salary of $10,400,
        subject  to such increases or bonuses, as the Board of Directors shall
        authorize. As of July 1, 2001, Mr. Ellin voluntarily waived receipt of
        any  further cash compensation. Commencing in March 2002, Mr Ellin was
        paid  an  annual  salary  of $150,000. However, the compensation shall
        accrue  and  no  more than $200 per week will be paid. In addition Mr.
        Ellin  received  500,000 shares of common stock valued at $10,000. See
"Executive  Compensation  -  Employment  Agreements."         

(3)      In January 2001 Mr.  Goldman was promoted and  appointed  President and
         Chief  Executive  Officer.  From January  through  February  2001,  Mr.
         Goldman's  salary was increased to $250,000.  As of March 1, 2001,  Mr.
         Goldman agreed to reduce his salary to $150,000,  and to $125,000 as of
         May 1, 2001. As of July 1, 2001, Mr. Goldman voluntarily waived receipt
         of any further cash  compensation.  During 2000 Mr.  Goldman  served as
         Chief  Operating  Officer,  for which he was paid an  annual  salary of
         $200,000,  subject  to such  increases  or  bonuses,  as the  Board  of
        Director  shall  authorize.  Commencing  in March 2002, Mr Goldman was
        paid  an  annual  salary  of $150,000. However, the compensation shall
        accrue  and  no  more than $200 per week will be paid. In addition Mr.
        Goldman  received  500,000  shares of common stock in exchange for his
        existing  options  valued  at  $9,654  . See "Executive Compensation -
Employment  Agreements."                                      

(4)      Mr. Schaffer was appointed Chief Financial Officer of the Company in   
   November 1999 and resigned in November 2000. He was being paid an
   annual salary of $135,000 plus a minimum annual bonus of $10,000.

OPTION GRANTS IN 2002                                                           

         There were no options  granted during 2002 to any Executive  Officer of
the Company.                                                                    

2002 AGGREGATE OPTION EXERCISES AND YEAR-END OPTION VALUES                      

         There  are no  options  outstanding  to any  Executive  Officers  as of
December 31, 2002.  No options were  exercised by Executive  Officers in 2002 or
2001.                                                                           

DIRECTOR COMPENSATION                                                           

         The  Company's  directors  do not receive cash  compensation  for their
services as  directors,  but are  reimbursed  for all  reasonable  out-of-pocket
expenses incurred in connection with each Board of Directors meeting attended.  

EMPLOYMENT AGREEMENTS                                                           

         On March 18, 2002, the Company entered into  employment  contracts with
Elliot  Goldman and Robert  Ellin for an initial term of one year.  Mr.  Goldman
serves as President,  Chief  Executive  Officer and as a Director of the Company
and Mr.  Ellin serves as Chairman of the Company.  Mr.  Goldman and Mr.  Ellin's
each  receive an annual  salary of $150,000.  However,  the  compensation  shall
accrue and no more than $200 per week shall be paid to each Mr.  Goldman and Mr.
Ellin  until  such time as the  Company  has  received  at least $1  million  in
proceeds  from new debt  and/or  equity  investment  subsequent  the date of the
agreement. Management is in the process of extending these agreements.          

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1998 EMPLOYEE STOCK OPTION PLAN                                                 

         The Company's 1998 stock  incentive plan (the "Stock  Incentive  Plan")
was  originally   adopted  by  the  Board  of  Directors  and  approved  by  the
stockholders  on October 15, 1998.  The Stock  Incentive  Plan  provides for the
grant of stock  options for up to a total of 1,000,000  shares of the  Company's
Common Stock to the Company's employees,  officers,  directors,  consultants and
advisors.                                                                       

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

         The  following  table sets forth  certain  information  as of March 31,
2003, regarding the beneficial ownership of the Company's common stock (assuming
the sale of the maximum number of Shares that are being offered  hereby) by: (i)
each  person  known  by the  Company  to own  beneficially  more  than 5% of the
Company's  common  stock;  (ii)  each  of the  Company's  directors;  (iii)  the
Company's  Chief  Executive  Officer  and the other  executive  officers  of the
Company  whose  salary and bonus for the fiscal  year ended  December  31,  2002
exceeded  $100,000,  and (iv) all  officers  and  directors  of the Company as a
group.                                                                          

                                                        [Enlarge/Download Table]

   NAME AND ADDRESS OF BENEFICIAL OWNER(1)  NUMBER OF SHARES (2)  PERCENTAGE OF CLASS
   --------------------------------------   --------------------  -------------------
                                                                                     
Robert Ellin(3)                                  3,476,787                31.39%     
750 Lexington Avenue                                                                 
New York, NY  10022                                                                  

Elliot Goldman(4)                                1,000,000                 9.03%     
c/o ConnectivCorp.                                                                   
750 Lexington Avenue                                                                 
New York, NY  10022                                                                  

David Goddard(5)                                    40,000                    *      
c/o ConnectivCorp.                                                                   
750 Lexington Avenue                                                                 
New York, NY  10022                                                                  

Ivan Berkowitz(6)                                  350,000                 3.16%     
c/o ConnectivCorp.                                                                   
750 Lexington Avenue                                                                 
New York, NY  10022                                                                  

Jeffrey Kuhr(7)                                    800,000                 7.22%     
c/o ConnectivCorp.                                                                   
750 Lexington Avenue                                                                 
New York, NY  10022                                                                  


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                                                                [Download Table]

                                                            
All directors and executive officers as a                   
group (5 persons)(3)                       5,666,787  51.16%

*less than 2%                                                                   

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

(1) Except as indicated in these notes and subject to  community  property  laws
where applicable, the persons named in the table have sole voting and investment
power with respect to all shares of common stock shown as beneficially  owned by
them.                                                                           

(2)  Calculated  pursuant to Rule  13d-3(d) of the Exchange Act. As used in this
table,  a beneficial  owner of a security  includes any person who,  directly or
indirectly,  through  contract,  arrangement,  understanding,   relationship  or
otherwise  has or shares (i) the power to vote,  or direct  the voting of,  such
security or (ii)  investing  power which  includes  the power to dispose,  or to
direct the disposition of, such security.  In addition, a person is deemed to be
the  beneficial  owner of a  security  if that  person  has the right to acquire
beneficial ownership of such security within 60 days of the date shown above.   

(3) Includes 2.5 million  common  shares issued in  cancellation  of any and all
existing unexercised options and cancellation of any and all indebtedness and/or
obligations  between Mr.  Ellin and  ConnectivCorp;  and 500,000  common  shares
purchased in March 2002.                                                        

(4)  Includes  500,000  common  shares  issued  in  cancellation  of any and all
existing unexercised options and cancellation of any and all indebtedness and/or
obligations  between Mr.  Goldman and  ConnectivCorp;  and 500,000 common shares
purchased in March 2002.                                                        

(5)  Includes  100,000  common  shares  issued  in  cancellation  of any and all
existing unexercised options and cancellation of any and all indebtedness and/or
obligations  between  Mr.  Goddard  and  ConnectivCorp.                         

(6) Includes 40,000 common shares issued in cancellation of any and all existing
unexercised  options  and  cancellation  of  any  and  all  indebtedness  and/or
obligations  between Mr. Berkowitz and ConnectivCorp;  and 250,000 common shares
purchased in March 2002.                                                        

(7) Includes 760,000 common shares issued to West End Capital  Partners,  LLC of
which Mr. Kuhr is the managing partner.                                         

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

         The  Company   retained  the  services  of  Atlantis   Equities,   Inc.
("Atlantis"),  a private  merchant  banking  and  advisory  firm that  primarily
assists emerging growth  companies,  to act as its financial advisor pursuant to
an Engagement Letter dated October 29, 1999, as amended on January 1, 2001, (the
"Engagement Letter").  Robert Ellin, the Chairman of the Company, is a principal
of Atlantis.  In consideration for the services to be provided by Atlantis under
the  Engagement  Letter,  Atlantis  was  paid a  monthly  fee of  $12,500  (plus
reimbursement of reasonable and actual out-of-pocket  expenses). The term of the
Engagement Letter is three years, and shall  automatically  renew for successive
one year terms  (subject to the right of any party to terminate  the  engagement
upon 90 days' written  notice before the end of any such term).  The Company has
also granted Atlantis an option to acquire up to 762,064 shares of the Company's
Common Stock at an exercise  price of $2.50 per share which  expires on December
31, 2002,  which was cancelled in March 2002. This agreement was also amended by
the Board of Directors in January 2001 and  Atlantis'  monthly fee was increased
to $16,666.                                                                     

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         Atlantis has voluntarily agreed to reduce its monthly cash compensation
to  $8,333 as of March 1, 2001 and to $6,250 as of May 1, 2001 and as of July 1,
2001, Atlantis has voluntarily waived receipt of any further cash compensation. 

         On March 18, 2002, the Company  executed a new  Engagement  letter with
Atlantis  for a term of one year  from  March 18,  2002 and  ending on March 18,
2003.  Consideration  for the services to be provided by  Atlantis,  if the Aqua
transactions  had been  consummated,  would have been the issuance shares of its
common stock so that Atlantis  will own that number of shares which  constitutes
up to 4.0% of the common stock then outstanding.  Additionally,  Atlantis was to
receive cash compensation of $250,000. Management is in the process of extending
this agreement.                                                                 

         In addition, Atlantis subscribed to purchase 500,000 shares of which  a
subscription  receivable  for  400,000  shares  remains  outstanding            

         The Company is also a party to certain employment arrangements with its
executive officers. See "Executive Compensation."                               

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

         (a) Unless  otherwise  indicated,  the  following is a list of Exhibits
filed as a part of this Annual Report on Form 10-KSB:                           

                                                                [Download Table]


EXHIBIT                                                                      
NUMBER                        DESCRIPTION OF DOCUMENT                        
------                        -----------------------                        
                                                                             
   2.1    Contribution  Agreement,  dated as of October 29, 1999 between  (C)
          CDbeat.com, Inc. and Cakewalk LLC                                  

   2.2    Amendment  Agreement,  dated as of  November  16,  1999 by and  (C)
          among Atlantis Equities,  Inc., Dylan LLC,  CDbeat.com,  Inc.,     
          Cakewalk LLC and 32 Records LLC                                    

   3.1    Articles of Incorporation and By-laws                           (A)

   10.1   Warrant  Agreement,  dated  September  23,  1999  between  the  (B)
          Company and Atlantis Equities, Inc.                                

   10.2   Employment  Agreement,  dated as of November  16, 1999 between  (C)
          CDBeat.com, Inc. and Robert Miller                                 

   10.3   Stock Option Plan                                               (A)

   10.4   Engagement  Letter,  dated  October 29, 1999 between  Atlantis  (F)
          Equities, Inc. and the Company                                     

   10.5   Warrant Amendment Agreement,  dated as of November 16, 1999 by  (F)
          and among Atlantis Equities, Inc. Dylan LLC and the Company        

   10.6   Employment  Agreement,  dated as of  April  11,  2000  between  (F)
          CDbeat.com, Inc. and Elliot Goldman                                

   10.7   Stock  Option  Agreement,  dated as of April 11, 2000  between     
          CDbeat.com, Inc. and Elliot Goldman                                

   10.8   Indenture, dated as of June 29, 1999 by and among Cakewalk BRE  (F)
          LLC,   Entertainment  Finance   International,   LLC  and  RZ0     
          Corporate Administration, Inc.                                     

   10.9   Servicing  Agreement,  dated as of June 29,  1999 by and among  (F)
          Cakewalk BRE, Entertainment Finance International, LLC and RZ0     
          Corporate Administration, Inc.                                     

   10.1   Management  Agreement,  dated as of June 29, 1999 by and among  (F)
          Cakewalk  LLC,  Cakewalk  BRE  LLC and  Entertainment  Finance     
          International, LLC                                                 

   10.11  Capital  Contribution  Agreement,  dated as of June  29,  1999  (F)
          between Cakewalk LLC and Cakewalk BRE LLC                          

   10.12  Consulting  Agreement,  dated as of  October  18,  2000 by and  (G)
          between  ConnectivCorp and Entertainment Finance International     
          LLC                                                                

   10.13  Asset Purchase Agreement, dated as of October 19, 2000, by and  (G)
          among ConnectivCorp, Neil p. Phillips, Esq., as Conservator of     
          the Person and Estate of Michael  Reitano  re:  Herpes  Advice     
          Center                                                             

   10.14  Asset Purchase Agreement, dated as of October 19, 2000, by and  (G)
          among ConnectivCorp, Neil p. Phillips, Esq., as Conservator of     
          the Person and Estate of Michael  Reitano  re:  Sexual  Health     
          Magazine, Inc.                                                     

   10.15  Consulting  Agreement,  dated as of October  1,  2000,  by and  (G)
          between  ConnectivHealth  Corp.  and Sexual Health  Solutions,     
          Inc.                                                               

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                                                                [Download Table]

                                                                          
10.16  Stock Option  Agreement,  dated as of October 1, 2000,  by and  (G)
       between ConnectivCorp and Sexual Health Solutions, Inc.            

10.17  [Agreement with American Media Inc.]                            (G)

10.18  [Agreement with iWon]                                           (G)

21.1   Subsidiaries of the Company                                     (G)

        (A) Incorporated by reference to the Company's Registration Statement on
Form SB-2 (File No. 333-70663)                          

        (B) Incorporated by reference to the Company's  Report on Form 8-K filed
with the Commission on October 8, 1999                  

        (C) Incorporated by reference to the Company's  Report on Form 8-K filed
with the Commission on December 1, 1999                 

        (D) Incorporated by reference to the Company's  Report on Form 8-K filed
with the Commission on January 31, 2000                 

        (E) Incorporated  by  reference  to the  Company's  Report on Form 8-K/A
filed with the Commission on January 31, 2000           

        (F) Incorporated  by reference to the  Company's  Annual  Report on Form
10-K/SB filed with the Commission on April 14, 2000.    

        (G) Incorporated  by reference to the  Company's  Annual  Report on Form
10-K/SB filed with the Commission on April 16, 2001.    

(b)      Reports on Form 8-K                                                    

1.       On March 18, 2002,  the Company  filed a report on Form 8-K regarding a
         shareholder-approved  charter  amendment which authorized a one-for-ten
reverse stock split of the Company's common stock.            

2.       On April 15, 2002, the Company filed a report on Form 8-K regarding the
         appointment  of  Patrusky  Mintz & Semel as its  independent  certified
public accountants and the dismissal of Arthur Andersen LLP.  

3.       On October 16, 2002,  the Company  filed a report on Form 8-K regarding
         the announcement of the execution a contribution agreement with certain
shareholders of Aqua.                                         

4.       On April 11, 2003, the Company filed a report on Form 8-K regarding the
         appointment  of  Israeloff,  Trattner  & Co.  P.C.  as its  independent
         certified public  accountants for the resignation of Patrusky,  Mintz &
Semel.                                                        

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SIGNATURES

         In accordance  with Section 13 or 15(d) of the Securities  Exchange Act
of 1934,  the  Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on April 15, 2003.               

            CONNECTIVCORP.

                    By: /s/ Elliot Goldman
                                           -------------------------------------
                    Elliot Goldman
                                           President and Chief Executive Officer

         In accordance with the Securities Exchange Act of 1934, this report has
been signed below by the following  persons on behalf of the  Registrant  and in
the capacities indicated.                                                       

                                                                [Download Table]


     SIGNATURE                      TITLE               DATE     
     ---------                      -----               ----     
                                                                 
/s/ Elliot Goldman  President, Director and Chief  April 15, 2003
------------------  Executive Officer                            
  Elliot Goldman    (Principal Executive Officer)                

 /s/ Robert Ellin   Chairman                       April 15, 2003
 ----------------                                                
   Robert Ellin                                                  

I, Elliot Goldman, certify that:                                                

1. I have reviewed this annual report on Form 10-K of ConnectivCorp;  

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

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

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:           

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

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

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

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation,  to the registrant's  auditors registrant's board of
directors (or persons performing the equivalent function):                      

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

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

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

Date:  April 15, 2003                                                           

/s/ Elliot Goldman                                                              
------------------                                                              
Elliot Goldman                                                                  
President and Chief Operating Officer                                           

I, Robert Ellin, certify that:                                                  

1. I have reviewed this annual report on Form 10-K of ConnectivCorp;  

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

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

     4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:           

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

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

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

     5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation,  to the registrant's  auditors registrant's board of
directors (or persons performing the equivalent function):                      

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

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

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

Date:  April 15, 2003                                                           

/s/ Robert Ellin                                                                
----------------                                                                
Robert Ellin                                                                    
Chairman                                                                        

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 EXHIBIT INDEX

EXHIBIT                                                                         
NUMBER                  DESCRIPTION                                             
------                  -----------                                             

21.1              Subsidiaries of the Company                                   

Name                                 State of Organization                      

ConnectivHealth Corp.                Delaware                                   
32 Records LLC                       Delaware                                   

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 INDEX TO FINANCIAL STATEMENTS

                                                                    PAGE
                                                                    ----

Report of Independent Certified Public Accountants/Successor            F-2     
Report of Independent Certified Public Accountants/Predecessor          F-3     
Consolidated Balance Sheet                                              F-4     
Consolidated Statements of Operations                                   F-5     
Consolidated Statements of Stockholders' Equity (Deficit)               F-6     
Consolidated Statements of Cash Flows                                   F-7     
Notes to Consolidated Financial Statements                              F-8     

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

BOARD OF DIRECTORS AND STOCKHOLDERS                                             

CONNECTIVCORP                                                                   

         We  have  audited  the  accompanying   consolidated  balance  sheet  of
ConnectivCorp  and  subsidiaries  as of  December  31,  2002,  and  the  related
consolidated statements of operations, changes in stockholders' deficit and cash
flows  for the year  ended  December  31,  2002.  These  consolidated  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based on our audit.  The  consolidated  financial  statements of the
Company  for the year ended  December  31, 2001 were  audited by other  auditors
whose report  dated May 17, 2002,  on those  consolidated  financial  statements
included an explanatory  paragraph describing conditions that raised substantial
doubt about the Company's ability to continue as a going concern.               

         We conducted our audit in accordance with auditing standards  generally
accepted in the United States.  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 2002 consolidated  financial statements referred to
above present  fairly,  in all material  respects,  the  consolidated  financial
position of  ConnectivCorp  and  subsidiaries  as of December 31, 2002,  and the
consolidated  results  of its  operations  and its cash flows for the year ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United States.                                                              

         The accompanying  consolidated  financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial  statements,  the Company has suffered  recurring losses from
operations and has not generated  revenues from its proposed business model that
raises  substantial  doubt about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.                                    

                                    /s/ Israeloff, Trattner & Co. P.C.

April 11, 2003                                                                  
New York, New York                                                              

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

BOARD OF DIRECTORS AND STOCKHOLDERS                                             

CONNECTIVCORP                                                                   

         We have audited the accompanying consolidated statements of operations,
changes  in  stockholders'  equity  (deficit)  and cash flows for the year ended
December  31,   2001.   These   consolidated   financial   statements   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these consolidated financial statements based on our audit.          

         We conducted our audit in accordance with auditing standards  generally
accepted in the United States.  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 consolidated financial statements referred to above
present  fairly,  in all  material  respects,  the  consolidated  results of its
operations and its cash flows for the year ended December 31, 2001 in conformity
with accounting principles generally accepted in the United States.             

         The accompanying  consolidated  financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
1 to the financial  statements,  the Company has suffered  recurring losses from
operations and has not generated  revenues from its proposed business model that
raises  substantial  doubt about its  ability to  continue  as a going  concern.
Management's  plans in regard to these matters are also described in Note 1. The
consolidated  financial  statements  do not include any  adjustments  that might
result from the outcome of this uncertainty.                                    

                             /s/ PATRUSKY, MINTZ & SEMEL

New York, New York                                                              
May 17, 2002                                                                    

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 CONNECTIVCORP
CONSOLIDATED BALANCE SHEET
 DECEMBER 31, 2002

                                                                [Download Table]

                                                                                 
                                ASSETS                                           

CURRENT ASSETS:                                                                  
   Cash and cash equivalents                                        $     18,243 
                                                                    ------------ 

        Total Assets                                                $     18,243 
                                                                    ============ 

                  LIABILITIES AND STOCKHOLDERS' DEFICIT                          

CURRENT LIABILITIES:                                                             
   Accounts payable and accrued expenses                            $    368,070 
   Loan payable                                                           25,000 
                                                                    ------------ 

     Total Current Liabilities                                           393,070 
                                                                    ------------ 

COMMITMENTS AND CONTINGENCIES                                                    
STOCKHOLDERS' DEFICIT:                                                           
   Preferred Stock, $.001 par value                                              
   10,000,000 shares authorized, Series D, none issued                        -- 
   Common Stock, $.001 per value                                                 
   40,000,000 shares authorized, 11,077,061 issued and outstanding        11,077 
   Additional paid in capital                                         19,598,628 
   Accumulated deficit                                               (19,944,532)
                                                                    ------------ 

                                                                        (334,827)
   Less: stock subscription receivable                                   (40,000)
                                                                    ------------ 

        Total Stockholders' Deficit                                     (374,827)
                                                                    ------------ 

        Total Liabilities and Stockholders' Deficit                 $     18,243 
                                                                    ============ 

The accompanying notes are an integral part of these consolidated statements.   

All share and per share  amounts  have been  adjusted  to  reflect  the 1 for 10
reverse stock split in March 2002.                                              

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CONNECTIVCORP.

 CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31,

                                                                [Download Table]

                                                   2002           2001     
                                                -----------    ----------- 
                                                                           
Revenues                                        $     3,500    $        -- 

General and administrative expenses                (882,490)    (5,797,920)
                                                -----------    ----------- 

Operating loss                                     (878,990)    (5,797,920)

Interest income                                       6,423         41,143 
                                                -----------    ----------- 

Net loss                                        $  (872,567)   $(5,756,777)
                                                ===========    =========== 

Net loss per common share- basic and diluted    $     (0.10)   $     (2.66)
                                                ===========    =========== 

Weighted average shares outstanding:                                       

Basic and diluted                                 9,117,802      2,163,537 
                                                ===========    =========== 

The accompanying  notes are an integral part of these  consolidated  statements.

All share and per share  amounts  have been  adjusted  to  reflect  the 1 for 10
reverse stock split in March 2002.                                              

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 CONNECTIVCORP
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                        [Enlarge/Download Table]

                              Preferred      Common       Paid in       Deferred     Accumulated      Subscription        Equity   
                                Stock        Stock        Capital     Compensation      Deficit         Receivable     (Deficiency)
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   
BALANCE, January 1, 2001            --     $  2,153   $ 19,615,105    $   (855,609)   $(13,315,188)             --       5,446,461 

Issuance of stock for                                                                                                              
legal services                      --           28         96,222              --              --              --          96,250 

Issuance of options for                                                                                                            
consulting services                 --           --         26,382         (26,382)             --              --              -- 

Revaluation of unvested                                                                                                            
options                             --           --       (615,147)        268,743              --              --        (346,404)

Amortization of deferred                                                                                                           
compensation                        --           --             --         548,744              --              --         548,744 

Net loss                            --           --             --              --      (5,756,777)             --      (5,756,777)
                            -------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2001          --        2,181     19,122,562         (64,504)    (19,071,965)             --         (11,726)

Common stock issued                 --        3,475        344,025              --              --         (40,000)        307,500 

Issuance of common stock                                                                                                           
in exchange for options                                                                                                            
and warrants and amounts                                                                                                           
payable                             --        1,196         53,669              --              --              --          54,865 

Issuance of common stock                                                                                                           
to officers and directors           --        1,265         22,410             --              --              --          23,675  

Issuance of common stock                                                                                                           
to consultants                      --        2,960         55,962              --              --              --          58,922 

Amortization of deferred                                                                                                           
compensation                        --           --             --          64,504              --              --          64,504 

Net loss                            --           --             --              --        (872,567)             --        (872,567)
                            -------------------------------------------------------------------------------------------------------

BALANCE, December 31, 2002     $    --     $ 11,077     19,598,628              --    $(19,944,532)   $    (40,000)   $   (374,827)
                            =======================================================================================================

The accompanying  notes are an integral part of these  consolidated  statements.
All share and per share  amounts  have been  adjusted  to  reflect  the 1 for 10
reverse stock split in March 2002.                                              

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 CONNECTIVCORP
 CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,

                                                        [Enlarge/Download Table]

                                                               2002           2001    
                                                            -----------   ----------- 
                                                                                      
CASH FLOWS FROM OPERATING ACTIVITIES:                                                 
    Net loss                                                $  (872,567)  $(5,756,777)
    Adjustments to reconcile net loss                                                 
        to net cash used in operating activities:                                     

          Depreciation and amortization                              --     1,002,700 
          Stock-based compensation                              159,674       202,340 

          Shares issued for legal services                           --        96,250 

          Loss on writedown of impaired assets                       --     2,896,759 
          Changes in assets and liabilities:                                          

              Prepaid expenses                                       --        42,781 
              Accounts payable and accrued expenses             308,775      (212,823)
                                                            -----------   ----------- 

                 Net cash used in operating activities         (404,118)   (1,728,770)
                                                            -----------   ----------- 

CASH FLOWS FROM FINANCING ACTIVITIES:                                                 

    Proceeds from note payable                                   25,000            -- 

    Proceeds from issuance of common stock                      307,500            -- 
                                                            -----------   ----------- 

                 Net cash provided by financing activities      332,500            -- 
                                                            -----------   ----------- 

NET CHANGE IN CASH AND CASH EQUIVALENTS                         (71,618)   (1,728,770)
CASH AND CASH EQUIVALENTS, beginning of period                   89,861     1,818,631 
                                                            -----------   ----------- 

CASH AND CASH EQUIVALENTS, end of period                    $    18,243   $    89,861 
                                                            ===========   =========== 

NON-CASH INVESTING AND FINANCING ACTIVITIES                                           
Stock issued in satisfaction of accounts payable            $    42,292   $    96,250 
                                                            ===========   =========== 

The accompanying  notes are an integral part of these  consolidated  statements.

All share and per share  amounts  have been  adjusted  to  reflect  the 1 for 10
reverse stock split in March 2002.                                              

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES            

ORGANIZATION                                                                    

         ConnectivCorp (the "Company") was incorporated on May 8, 1998 under the
name SMD  Group,  Inc.,  which was  subsequently  changed  to  CDBeat.com,  Inc.
Following the  Company's  business  combination  with Cakewalk LLC, the name was
changed to  Spinrocket.com,  Inc.  On  September  11,  2000,  in order to better
reflect and describe the Company's  current  strategic  direction,  the name was
changed to  ConnectivCorp.  On  November  16,  1999,  the  Company,  through its
wholly-owned  subsidiary,  32 Records LLC ("32 LLC")  merged with  Cakewalk  LLC
("Cakewalk")  in a  transaction  accounted  for by the purchase  method  wherein
Cakewalk LLC was deemed to be the acquiror and  ConnectivCorp  the acquiree (the
"Merger").                                                                      

         ConnectivCorp,  during late 2001 decided to restructure  its operations
and as a result exited the business that it was in. The Company's management has
been  pursuing  appropriate  merger  and  acquisition  partners.  Prior  to  its
restructuring, the Company was a medical communications network with publishing,
Internet and marketing  services  divisions that connect targeted  consumers and
professionals with pharmaceutical and consumer product companies.               

         The Company has devoted its efforts in 2002 to seek merger partners. As
of December  31,  2002,  the Company is without an  operating  business and will
continue to seek  merger  with other  companies  and raise  capital  through the
issuance of stock and convertible debt.                                         

         On March 30, 2000,  the Board of  Directors  voted to exit the business
conducted  by  32  LLC  within  one  year,  and  recharacterized  32  LLC  as  a
discontinued  operation for financial  reporting  purposes.  32 LLC continued to
operate the business  while seeking a buyer.  During the second quarter of 2000,
the  Company  wrote  off the net  assets  of 32 LLC and  recorded  a loss in its
consolidated  financial  statements.  On February 2, 2001,  the assets of 32 LLC
were surrendered to Entertainment  Finance  International,  Inc. ("EFI") under a
default of the loan agreement.                                                  

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION                           

         The  consolidated  balance sheet includes the accounts of ConnectivCorp
and  its  wholly-owned   subsidiaries   ConnectivHealth   and  32  Records  LLC.
Significant intercompany transactions have been eliminated in consolidation.    

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

UNCERTAINTY                                                                     

         The  accompanying  financial  statements  have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of  liabilities  in the normal  course of  business.  The  Company has a limited
operating  history,  and since its  inception in 1998 has  incurred  substantial
losses.  The  Company's   accumulated   deficit  as  of  December  31,  2002  is
approximately  $20 million.  To date,  the Company has not generated any revenue
from  previously   proposed   business   model,   which   contemplated   selling
pharmaceutical and other healthcare companies access to the Company's aggregated
users. The Company  incurred a net loss of approximately  $873 thousand and $5.8
million for the years ended December 31, 2002 and 2001, respectively, while cash
and cash equivalents at December 31, 2002 totaled approximately  $18,000.  These
matters raise  substantial  doubt about the  Company's  ability to continue as a
going  concern.  The  Company's  continued  existence is dependent  upon several
factors  including the Company's  ability to raise additional equity or locate a
merger or business partner.                                                     

         The Company made a decision to restructure its  operations.  Management
issued  restricted  common  stock to satisfy  existing  trade  payables  and the
Company is seeking  appropriate  merger or  acquisition  partners in the medical
information  or other  unrelated  fields.  Management has effected a one for ten
reverse stock split of the Company's common stock as of March 12, 2002.         

USE OF 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
disclosure of  contingent  assets and  liabilities  at the date of the financial
statements and the reported  amounts of revenue and expense during the reporting
period. Actual results could differ from those estimates.                       

CASH AND CASH EQUIVALENTS                                                       

         All highly liquid investments with original  maturities of three months
or less are considered to be cash equivalents.                                  

LONG-LIVED ASSETS                                                               

         The Company's policy is to record long-lived assets at cost, amortizing
these costs over the expected useful lives of the related assets.  In accordance
with SFAS No. 121,  "Accounting for the Impairment of Long-Lived  Assets and for
Long-Lived  Assets to Be Disposed  of," these  assets are reviewed on a periodic
basis for impairment  whenever events or changes in  circumstances  indicate the
carrying  amounts of the assets may not be realizable.  Furthermore,  the assets
are  evaluated  for  continuing  value and proper  useful lives by comparison to
expected  future  cash  flows.  Accordingly,   certain  long-lived  assets  were
considered impaired during 2001, as further discussed in Note 2.                

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS                                             

         The Company's  current financial  instruments,  including cash and cash
equivalents and accounts payable are carried at cost, which  approximates  their
fair value due to the short-term maturity of these instruments.                 

STOCK-BASED COMPENSATION                                                        

         In  October  1995,  the  FASB  issued  SFAS  No.123,   "Accounting  for
Stock-Based  Compensation." This statement establishes a fair market value based
method of  accounting  for an  employee  stock  option but allows  companies  to
continue to measure  compensation cost for those plans using the intrinsic value
based method  prescribed by APB Opinion No. 25  "Accounting  for Stock Issued to
Employees."  Companies  electing  to  continue  using the  accounting  under APB
Opinion  No. 25 must,  however,  make pro forma  disclosure  of net  income  and
earnings per share as if the fair value based method of  accounting  in SFAS No.
123 had been  applied.  The  Company  has elected to continue to account for its
stock-based  compensation awards to employees and directors under the accounting
prescribed  by APB  Opinion  No.  25,  and to provide  the  necessary  pro forma
disclosures as if the fair value method had been applied.                       

REVENUE RECOGNITION                                                             

         It is anticipated  that future  revenues will be recognized as services
are delivered under terms of future contracts.                                  

NEW ACCOUNTING PRONOUNCEMENTS                                                   

       In  April  2002,  the  FASB  issued  SFAS No.  145,  "Rescission  of FASB
Statements No. 4, 44, and 64,  Amendment of FASB Statement No. 13, and Technical
Corrections." For most companies,  SFAS No. 145 will require gains and losses on
extinguishments  of debt to be  classified  as income  or loss  from  continuing
operations,  rather  than  as an  extraordinary  item  as  previously  required.
Extraordinary treatment will be required for certain extinguishments as provided
in APB Opinion  No. 30.  SFAS No. 145 also  amends  SFAS No. 13 to require  that
certain  modifications to capital leases be treated as a sale-leaseback,  and to
modify  the  accounting  for  sub-leases  when the  original  lessee  remains  a
secondary  obligor.  The Company is required to adopt the provisions of SFAS No.
145 in the first  quarter of 2003.  Any gain or loss on  extinguishment  of debt
that was  classified as an  extraordinary  item in prior periods  presented that
does not meet the  criteria  in APB  Opinion  No.  30 for  classification  as an
extraordinary item shall be reclassified. Early application of the provisions of
this  Statement  related  to  the  rescission  of  SFAS  No.  4  is  encouraged.
Accordingly,  the satisfaction of liabilities in 2002 of  approximately  $26,000
has been accounted for in accordance with SFAS No. 145.                         

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

       In June  2002,  the FASB  issued  SFAS No.  146,  "Accounting  for  Costs
Associated  with  Exit  or  Disposal   Activities,"  which  addresses  financial
accounting and reporting for costs associated with exit or disposal  activities,
and nullifies Emerging Issues Task Force Issue No. 94-3, "Liability  Recognition
for Certain  Employee  Termination  Benefits and Other Costs to Exit an Activity
(including  Certain Costs Incurred in a  Restructuring)."  SFAS No. 146 requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the  liability is incurred.  The  requirements  of SFAS No. 146
apply  prospectively  to activities  that are initiated  after December 31, 2002
and, as a result, the Company cannot reasonably  estimate the impact of adopting
these new rules until and unless it  undertakes  relevant  activities  in future
periods.                                                                        

       In  November  2002,  the  FASB  issued  Interpretation   ("FIN")  No.  45
"Guarantor's  Accounting and Disclosure  Requirements for Guarantees,  Including
Indirect  Guarantees of  Indebtedness  of Others," which  clarifies the required
disclosures  to be made by a guarantor  in their  interim  and annual  financial
statements  about its obligations  under certain  guarantees that it has issued.
FIN No. 45 also  requires a guarantor  to  recognize,  at the  inception  of the
guarantee,  a liability  for the fair value of the  obligation  undertaken.  The
Company  is  required  to adopt the  disclosure  requirements  of FIN No. 45 for
financial  statements ending December 31, 2002. The Company is required to adopt
and  accordingly  has  adopted   prospectively   the  initial   recognition  and
measurement  provisions  of FIN No.45 for  guarantees  issued or modified  after
December 31, 2002 and, as a result,  the Company cannot reasonable  estimate the
impact of  adopting  these new rules  until and  unless it  undertakes  relevant
activities in future periods.                                                   

       In  December  2002,  the  FASB  issued  SFAS  No.  148,  "Accounting  for
Stock-Based  Compensation - Transition and Disclosure - an amendment of SFAS No.
123."  This  Statement   amends  SFAS  No.  123,   "Accounting  for  Stock-Based
Compensation",  to provide  alternative  methods of  transition  for a voluntary
change to the fair value based method of  accounting  for  stock-based  employee
compensation.  In addition, this Statement amends the disclosure requirements of
SFAS No.  123 to  require  prominent  disclosures  in both  annual  and  interim
financial  statements  about the method of accounting for  stock-based  employee
compensation and the effect of the method used on reported results. The adoption
of SFAS No.  148 is not  expected  to have a  material  impact on the  Company's
financial position or results of operations.                                    

       In January 2003, the FASB issued FIN No. 46,  "Consolidation  of Variable
Interest  Entities,"  which  clarifies the  application  of Accounting  Research
Bulletin No. 51, "Consolidated  Financial Statements," relating to consolidation
of  certain  entities.  First,  FIN No. 46 will  require  identification  of the
Company's  participation  in variable  interests  entities  ("VIEs"),  which are
defined as entities  with a level of invested  equity that is not  sufficient to
fund future  activities  to permit them to operate on a stand  alone  basis,  or
whose equity  holders lack certain  characteristics  of a controlling  financial
interest.  For  entities  identified  as VIEs,  FIN No. 46 sets forth a model to
evaluate  potential  consolidation  based on an assessment of which party to the
VIE, if any, bears a majority of the exposure to its expected losses,  or stands
to gain from a  majority  of its  expected  returns.  FIN No. 46 also sets forth
certain  disclosures  regarding  interests in VIEs that are deemed  significant,
even if  consolidation  is not required.  As the Company does not participate in
VIEs,  it does not  anticipate  that the  provisions  of FIN No.  46 will have a
material impact on its financial position or results of operations.             

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - IMPAIRMENT OF ASSETS                                                   

         During the fourth  quarter of the year ended  December  31,  2001,  the
Company performed a review to ascertain the realizability of long-lived tangible
and  intangible  assets.  Based upon the  uncertainty  related to the  Company's
current business model, it was determined that the current carrying value of the
assets may not be able to be realized. As a result of the review, equipment with
a net book value of $4,885,  software development costs with a net book value of
$2,380,000, the net unamortized carrying value of goodwill of $419,400 and costs
of publications  acquired with a net book value of $73,625 were determined to be
impaired.  A total of  $2,877,910  was  charged  to general  and  administrative
expense.                                                                        

         During 2002 and 2001, the Company recorded  depreciation  expense of $0
and $3,900 on equipment,  respectively,  amortization expense of $0 and $840,000
on  software  development  costs,  respectively,  $0 and  $19,000  on  costs  of
publications   acquired,   respectively,   and  $0  and  $139,800  on  goodwill,
respectively.                                                                   

NOTE 3 - LOAN PAYABLE                                                           

         In December 2002 the Company entered into a loan agreement for $25,000.
The  loan  bears  interest  at  6%  and  is convertible into common stock of the
Company  under  certain  conditions  at  $0.10  per  share.                     

NOTE 4 - INCOME TAXES                                                           

         The significant components of the deferred tax asset as of December 31,
2002, assuming an effective income tax rate of 40%, are as follows:             

                                                                [Download Table]

                                                         
Net operating loss                         $   4,502,873 
Other                                             30,000 
                                           --------------
Total deferred tax asset                       4,532,873 
Liabilities                                          --  
                                           --------------
Net                                            4,532,873 
Less valuation allowance                      (4,532,873)
                                           --------------
Total deferred income tax asset - net      $         --  
                                           ==============

         The Company  established  a  valuation  allowance  to fully  offset the
deferred  income tax asset as of  December  31, 2001 as the  realization  of the
asset did not meet the  required  asset  recognition  standard  of SFAS No.  109
"Accounting  for Income  Taxes." The  decrease  in the  Company's  deferred  tax
valuation allowance was approximately $1,145,000 during 2002.                   

         At December 31, 2002, the Company had net operating loss  carryforwards
of approximately $11.6million for federal income tax purposes. The carryforwards
expire  through  the year  2020 and may be  subject  to  limitations  due to the
ownership change, as further discussed in Note 10.                              

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - LOSS PER COMMON SHARE                                                  

Loss per common share was calculated as follows:        

                                                                [Download Table]

                                                                           
Net loss                                        $   (872,567)  $(5,756,777)
                                                ============   =========== 

 Net loss per common share- basic and diluted   $      (0.10)  $     (2.66)
                                                ============   =========== 

Weighted average shares outstanding:                                       

Basic and diluted                                  9,117,802     2,163,537 
                                                ============   =========== 

            Stock  options and warrants  issuable  representing  equivalents  of
6,999 shares of common stock during 2002 and  10,597,874  shares of common stock
during  2001 had  exercise  prices  greater  than the  average  market  price of
ConnectivCorp  common stock.  These common stock  equivalents  were  outstanding
during  2002 and 2001,  but were not  included  in the  computation  of  diluted
earnings per share for those years  because  their  inclusion  would have had an
antidilutive effect.                                                            

NOTE 5 - COMMITMENTS                                                            

LEASE COMMITMENTS                                                               

            On January 1, 2002,  the Company  entered into a sublease for office
space located at 750 Lexington Avenue, New York, New York. The lease term is for
the period from January 1, 2002 through  December 31, 2002,  with a monthly rent
of $2,500.  The office  space is being leased from an entity in which the father
of Robert Ellin,  Chairman of the Company,  is a partner.  The Company is in the
process of  negotiating  an extension to the sublease.  It is  anticipated  that
there will be no changes in the lease agreement.                                

            Rent  expense  totaled  $30,000  and  $69,959  for the  years  ended
December 31, 2002 and 2001, respectively.                                       

EMPLOYMENT AGREEMENTS                                                           

            On March 18, 2002,  the Company  entered into  employment  contracts
with  Elliot  Goldman  and  Robert  Ellin for an initial  term of one year.  Mr.
Goldman serves as President,  Chief  Executive  Officer and as a Director of the
Company and Mr.  Ellin serves as Chairman of the  Company.  Mr.  Goldman and Mr.
Ellin each receive an annual salary of $150,000. However, the compensation shall
accrue  and no more than $200 per week shall be paid to each Mr. Goldman and Mr.
Ellin  until  such  time  as  the  Company  has  received at least $1 million in
proceeds  from  new  debt  and/or  equity  investment subsequent the date of the
agreement.  As  of  December  31,  2002, accrued salaries under these agreements
amounted  to  $209,050.  Management  is  in  the  progress  of  extending  these
agreements.                                                                     

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - COMMITMENTS (CONTINUED)                                                

CONSULTING AGREEMENT                                                            

            On March 18, 2002, the Company executed a new Engagement letter with
Atlantis  for a term of one year  from  March 18,  2002 and  ending on March 18,
2003.  Consideration  for the services to be provided by  Atlantis,  if the Aqua
transactions  had been  consummated,  would have been the issuance shares of its
common stock so that Atlantis  will own that number of shares which  constitutes
up to 4.0% of the common stock then outstanding.  Additionally,  Atlantis was to
receive cash compensation of $250,000.  During the year ended December 31, 2002,
Atlantis received 2,000,000 shares of common stock valued at $40,000. Management
is in the process of extending this agreement.                                  

NOTE 6 - STOCK OPTIONS                                                          

         During  2002 and 2001 the  Company  granted  options  and  warrants  to
purchase  0  and  65,000  shares  of  common  stock,  respectively,  which  were
outstanding  as of December 31, 2002 and 2001,  respectively.  These options and
warrants were granted to employees,  consultants  and others at exercise  prices
ranging from $0.10 to $31.25, per share; and are exercisable through 2010. As of
December  31,  2002 and 2001  155,606  and 979,787  options  and  warrants  were
exercisable at a weighted  average exercise price of $1.07 and $25.50 per share,
respectively.                                                                   

         In 2002 and 2001,  the  Company  recorded  compensation  expense in the
amount of $64,504 and $258,559 under the  requirement  of Accounting  Principles
Board  Opinion  No.  25,   "Accounting  for  Stock  Issued  to  Employees."  Had
compensation  cost been determined in accordance with SFAS No. 123,  "Accounting
for Stock-Based  Compensation" the Company would have reported additional losses
as follows:                                                                     

                                                                [Download Table]

                                                             2002         2001    
                                                       ---------------------------
                                                                                  
Net loss                                  As reported      (872,567)  (5,756,777) 
                                          Proforma         (877,666)  (6,721,681) 

Basic and diluted loss per common share:                                          

Net loss per common share                 As reported         (0.10)       (2.66) 
                                          Proforma            (0.10)       (3.11) 

Weighted Average Outstanding Shares                        9,117,802    2,163,537 

Under SFAS No. 123,  the fair value of each option is  estimated  on the date of
grant   using   Black-Scholes    option-pricing   model   with   the   following
weighted-average share assumptions used for grants in 2000; (1) expected life of
options 4 years;  (2) no dividend  yield;  (3)  expected  volatility  148%;  (4)
risk-free  interest  rate 5%,  and in 1999:  (1)  expected  life of the option 5
years;  (2) no dividend  yield;  (3)  expected  volatility  209%;  (4) risk free
interest rate 5%.                                                               

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - STOCK OPTIONS (CONTINUED)                                              

The following summarizes stock option activity:               

                                                        [Enlarge/Download Table]

                                    YEAR ENDED DECEMBER 31, 2002       YEAR ENDED DECEMBER 31, 2001    
                                 ----------------------------------  ----------------------------------
                                                        WEIGHTED                            WEIGHTED   
                                                        AVERAGE                             AVERAGE    
                                    SHARES           EXERCISE PRICE      SHARES         EXERCISE PRICE 
                                 -------------       --------------  --------------     ---------------
                                                                                                       
Outstanding - beginning of year       449,062        $      16.60          417,729      $        26.00 
Granted                                    --                  --           65,000               15.60 
Exercised                                  --                  --               --                  -- 
Forfeited                            (447,063)             (12.92)         (33,667)             (19.00)
                                                     ------------    -------------      -------------- 

Outstanding - end of year               1,999        $      18.44          449,062      $        16.60 
                                                     ============    =============      ============== 

Number of shares exercisable at                                                                        
December 31,                            1,999               18.44          394,062               15.10 
                                                     ============    =============      ============== 
Weighted average fair value of                                                                         
options granted during period                                        $          --      $        15.60 
                                                                     =============      ============== 

================                                                                

The following table summarizes  information about stock options  outstanding and
exercisable as of December 31, 2002:                                            

                                                        [Enlarge/Download Table]

                                       Options Outstanding                         Options Exercisable       
                        ---------------------------------------------------  --------------------------------
                                              Weighted-       Weighted-                         Weighted-    
                                               Average         Average                           Average     
       Range of                               Remaining        Exercise                          Exercise    
   Exercise Prices         Outstanding     Contractual Life     Price          Exercisable        Price      
----------------------- ------------------ ---------------- ---------------  ---------------- ---------------
                                                                                                             
   $16.875 - $17.50                   999         8               $  17.13               999        $  17.13 
   $18.75 - $21.25                  1,000         8               $  20.00             1,000        $  20.00 

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 - STOCK OPTIONS (CONTINUED)                                              

As discussed in Note 1, in December  2002,  the FASB issued SFAS No. 148,  which
provides  alternative  methods of transition  for  voluntary  change to the fair
value based method of  accounting  for  stock-based  employee  compensation.  In
addition,  SFAS No. 148 amends the  disclosure  requirements  of SFAS No. 123 to
require prominent  disclosures in both annual and interim  financial  statements
about the method of accounting for  stock-based  employee  compensation  and the
effect of the method used on  reported  results.  The  Company is  adopting  the
provisions of SFAS No. 148 prospectively from January 1, 2003.                  

NOTE 7 - STOCKHOLDERS' DEFICIT                                                  

         On March 12, 2002, the Company effected a one-for -ten reverse split of
its common stock.                                                               

         The Company  issued  approximately  889,095  shares of common  stock to
creditors,  307,250 to employees and consultants and 1,265,000  shares of common
stock to officers  and  directors in  settlement  of unpaid  liabilities  and in
exchange for options issued or authorized.                                      

         In March  2002,  Atlantis  Equities  and  Messers.  Ellin  and  Goldman
received  respectively 2 million and 500,000 and 500,000 shares of the Company's
common stock in exchange for cancellation of unexercised options and obligations
and to retain their services.                                                   

         In March 2002,  40,000  common  shares were issued to Jeffrey Kuhr upon
his joining the Board of  Directors.  Additionally,  760,000  common shares were
issued to West End Capital  Partners,  LLC in settlement  of investment  banking
services of approximately  $16,000. Mr. Kuhr is the managing partner of West End
Capital Partners, LLC.                                                          

         Further, the Company raised approximately  $307,500 through the sale of
3,075,000 shares of common stock at $0.10 per share.                            

NOTE 8 - RELATED PARTY TRANSACTIONS                                             

     During 1999, the Company retained Atlantis Equities,  Inc. ("Atlantis"),  a
private  merchant  banking and advisory  firm that  primarily  assists  emerging
growth companies, to act as its financial advisor. Robert Ellin, the Chairman of
the Company, is a principal of Atlantis.  In consideration for services rendered
during  2002 and  2001,  Atlantis  was paid $0 and  $52,566,  respectively.  The
Company  also  granted  Atlantis  options to acquire up to 76,206  shares of the
Company's  common  stock at an  exercise  price of $25.00  per share  which were
cancelled in March 2002 in return for the issuance of 2,000,000  share of common
stock valued at $40,000 of which $39,722 were charged to expense for  consulting
work.                                                                           

     In addition,  Atlantis  subscribed  to purchase  500,000  shares of which a
subscription receivable for 400,000 shares remains outstanding.                 

     The Company has retained an  accounting  firm in which the father of Robert
Ellin, the Chairman of the Company,  is a partner to perform internal accounting
work. For the years ended December 31, 2002 and 2001  accounting fees of $22,728
and $21,430 were charged. The fees for                                          

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CONNECTIVCORP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - RELATED PARTY TRANSACTIONS (CONTINUED)                                 

2001 were paid in 2002 in cash of $12,500 and  through  the  issuance of 200,000
shares of common  stock.  The fees for 2002 of  $22,728  remain  outstanding  at
December 31, 2002.                                                              

NOTE 9 - AQUA AGREEMENTS                                                        

            During 2002, the Company  executed two agreements for the purpose of
acquiring Aqua Development Corp., a California corporation ("Aqua").  Management
expended the majority of its resources and efforts to attempt to consummate  the
acquisition.  Despite  management's  best  efforts,  they  will  not be  able to
consummate the agreement  with Aqua and have  terminated its efforts to complete
the acquisition.                                                                

NOTE 9 - SUBSEQUENT EVENT                                                       

During  March  2003,  the Company entered into a loan agreement of $150,000. The
loan is convertible under certain conditions into common stock of the Company at
$0.10  per  share.  The Company is in the process of continuing to raise capital
either  through  the  private  placement  of  equity  or  debt.                 

F-17

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
Filed on:		4/15/03		20		22
		4/11/03		1		25
		4/4/03		10
		3/31/03		15					10QSB,  10QSB/A,  NT 10-K
		3/18/03		17		37
		1/1/03		39
For Period End:		12/31/02		1		40			NT 10-K
		10/16/02		19					8-K
		5/17/02		25		26
		4/15/02		9		19			8-K/A
		3/28/02		10
		3/18/02		14		37			8-K
		3/12/02		1		39
		1/24/02		11		14
		1/1/02		5		36
		12/31/01		6		39			10-K/A,  10KSB,  NT 10-K
		7/1/01		14		17
		5/1/01		14		17
		4/16/01		19					10KSB
		3/12/01		12
		3/1/01		14		17
		2/2/01		3		31
		1/1/01		16		29
		12/31/00		4		13			10KSB,  NT 10-K
		11/27/00		4					4
		10/30/00		3
		10/19/00		18
		10/18/00		3		18
		10/1/00		18		19
		9/11/00		3		31			DEF 14C
		4/19/00		6
		4/14/00		19					10KSB
		4/11/00		18
		3/30/00		31					DEF 14C,  NT 10-K
		1/31/00		19					8-K,  8-K/A
		12/1/99		19					8-K
		11/16/99		4		31			3,  8-K,  8-K/A
		10/29/99		16		18
		10/8/99		19					3,  8-K,  SC 13D
		9/23/99		4		18			3,  8-K
		6/29/99		3		18
		10/15/98		15
		5/8/98		3		31
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