Phoenix Interests Inc · 10KSB · For 12/31/01

Filed On 4/2/02   ·   SEC File 0-30949   ·   Accession Number 1157523-2-220

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

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Thoroughbred Interests, Inc. 10KSB                    30    137K 

Document Table of Contents

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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 FISCAL YEAR ENDED DECEMBER 31, 2001

 COMMISSION FILE NUMBER: 000-30949

THOROUGHBRED INTERESTS, INC.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

127 SOUTH 6TH STREET, LOUISVILLE, KENTUCKY 40202

 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)

(502-584-4434)

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

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

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

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

Registrant's revenues for its most recent fiscal year (ended December 31, 2001):
$883,179                                                                        

Aggregate market value of voting stock held by non-affiliates: N/A              

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

26,661,000 common shares were outstanding as of December 31, 2001.              

 FORM 10-KSB

 THOROUGHBRED INTEREST, INC.
 FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001

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 TABLE OF CONTENTS

PART I.                                                                         

ITEM 1.  DESCRIPTION OF BUSINESS AND RISK FACTORS                      3        
   Company Overview                                            3
   Historical Background of Our Company                        4
   Summary of Sold Horses                                      7
   Inventory of Our Horses                                     8
   Risk Factors                                                9
ITEM 2.  DESCRIPTION OF PROPERTY.                                     13        
ITEM 3.  LEGAL PROCEEDINGS                                            13        
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.         13        

PART II.                                                                        

ITEM 5.  MARKET FOR COMMON EQUITY AND                                           
 RELATED STOCKHOLDER MATTERS.                                 14
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS.               14
ITEM 7.  FINANCIAL STATEMENTS.                                        15        
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.               15        

PART III.                                                                       

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

SIGNATURES                                                           S-1        
FINANCIAL STATEMENTS                                                 F-1        

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 2
 PART I.

ITEM 1. DESCRIPTION OF BUSINESS.                                                

COMPANY OVERVIEW                                                                

We were organized as a business corporation under the laws of the State of      
Nevada on March 25, 1999. We were formed to engage in "pinhooking" and racing of
thoroughbred horses. "Pinhooking" involves the purchase of a yearling, that is, 
a horse which is between one and two years old, with a view towards training and
then reselling that horse as a two-year old. Those horses that we are unable to 
pinhook at an acceptable profit we plan to enter in races because we expect that
if a horse is successful at racing, its value will increase. "Pinhooking" also  
involves the purchase of a weanling, that is, a horse which is less than one    
year old and reselling as a yearling. The Company acquired six thoroughbred     
weanlings and 50% ownership interest in another weanling in November 2001 to    
pinhook at the 2002 yearling sales. As of March 31, 2002 we held full title to  
15 thoroughbreds and ownership interests, ranging from 33% to 50%, in three     
thoroughbreds. We purchase most of our thoroughbreds from non-affiliated        
breeders of thoroughbred yearlings through non-affiliated industry auction      
houses, such as Fasig-Tipton, Keeneland and Ocala Breeders Sales Company.       

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

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

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

We also expect to incur mortality and surgical insurance expense. This insurance
will cost approximately 2.5% of the purchase price of each horse. Additionally, 
for each thoroughbred we sell at auction, we expect to pay a fee of 5% of the   
sale price to the auction house.                                                

 3
HISTORICAL BACKGROUND OF OUR COMPANY                                            

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

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

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

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

(d)                March 1999: Mr. Tilton formed the Company. The Company issued
            2,050,000 shares of its Common Stock to 5 investors in
                   exchange for services. The Company subsequently issued 43,000
                  shares of its Common Stock at $.10 per share to 43 investors
                  for a total capital raise of $4,300. The Company relied upon
                  the exemption afforded by Section 4(2) of the Securities Act
           of 1933,as amended, for the issuance of these shares.

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

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

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

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

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

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

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

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

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

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

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

(p) August 2000-                                                                
October        2000: We purchased five horses at the Keeneland September
                   sale, 6 horses at the Fasig Tipton Midatlantic sale, 3 horses
                at the Fasig Tipton Kentucky sale, and one horse through a
                  private transaction. We borrowed $300,000 from Mr. Tilton as
                 partial payment for the horses and in consideration thereof
                   gave Mr. Tilton a security interest in certain of our horses.
                   The entire loan is convertible, at the sole discretion of Mr.
             Tilton, into shares of our Common Stock (the "Converted
              Shares") at $.10 per share and warrants exercisable into
                one-half the number of Converted Shares at $.15 per share.

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

(r) December 2000-                                                              
   January        2001 We sold one of our horses at Gulfstream Park and sold a
          50% ownership interest in another horse in a private
                ransaction. We also purchased 5 horses at the Fasig Tipton
December mixed Sales.                     

(s) July 2001: We sold a yearling purchased for $36,000 in December 2000 for    
$50,000 at the Fasig Tipton July Sale before expenses.                          

(t) September 2001: We sold two yearlings purchased for $80,000 in December 2000
for $200,000 at the Keeneland September Sale before expenses.                   

(u) October 2001: We sold USS Tinosa who was originally purchased for $40,000 in
October 2000 for $225,000 before expenses and after the horse had earned the    
Company nearly $115,000 on the track.                                           

(v) January 2002: We sold privately a Siphon Colt for $200,000 before expenses. 
The Colt was originally purchased for $40,000 in September 2001. We also sold   
Lawn Mower privately, a Green Dancer Colt, for $105,000 before expenses. Lawn   
Mower was originally acquired in September 2000 for $48,000 and earned the      
Company nearly $25,000 before being sold.                                       

(w) February 2002: We sold privately a Forest Wildcat Colt for $107,500 before  
expenses which was originally purchased at the Keeneland September 2001 Yearling
sale for $70,000. We also sold an Indian Charlie Colt at the Fasig Tipton Calder
Two-Year-Olds in Training Sale for $175,000 before expenses. The horse was also 
originally purchased at the Keeneland September 2001 Yearling Sale for $40,000. 
(x) March 2002: We sold a Storm Boot Colt for $45,000 before expenses at the    
Ocala Breeders                                                                  

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Ocala Breeders Sales March Two-Year-Olds in Training Sale. The Colt was         
originally purchased in September 2001 at Keeneland Yearling Sale for $7,500.   

                                                        [Enlarge/Download Table]


SUMMARY OF SOLD HORSES                                                                          

The following is a summary of the horses we sold prior to March 30, 2001:                       

                                                                          AFFILIATION           
                           DATE           DATE         SELLER/PLACE           TO       SOURCE OF
  NAME OF HORSE          PURCHASED        SOLD         OF PURCHASE         PURCHASER   FINANCING
                                                                                                
Lord at War/Sa Marche      07/99          02/00        Fasig Tipton          None         (1)   
Belong to Me/Viva's Lady   08/99          02/00        Fasig Tipton          None         (1)   
Saint Damien - 75%         10/99          02/00        Fasig Tipton          None         (2)   
Go for Gin/Bright Omen     10/99          03/00        Fasig Tipton          None         (2)   
Cozzene/Sheergo            10/99          04/00        Fasig Tipton          None         (2)   
Two Punch/Truth            10/99          04/00        Fasig Tipton          None         (2)   
  and Beauty                                                                                    
Belong to Me/Cavcat        08/99          05/00        Fasig Tipton          None         (1)   
Afternoon Delites - 65%    05/00          06/00        Fasig Tipton          None         (3)   
Defending Honor - 40%      04/00          06/00        OBS Sales             None         (3)   
French Deputy - 40%        09/99          06/00        Keeneland             None         (1)   
Given to Fly/Bean          10/99          01/01        Fasig Tipton          None         (2)   
Nicholas/Weekend                                                                                
  Delight - 50%            10/00          12/00        White Oak Farm        None         (3)   

Allen's Prospect/Goldfinch 10/00          05/01        Fasig Tipton          None         (2)   
Party Manners/Bid to the                                                                        
  Mint                     09/00          06/01        Keeneland             None         (3)   
Glitterman/Willing Partner 09/00          06/01        Keeneland             None         (3)   
35% - Wooglin              05/00          07/01        Fasig Tipton          None         (3)   
Devil's Bag/Star Cloud     12/00          07/01        Fasig Tipton          None         (3)   
60% - Defending Honor      04/00          09/01        OBS Sales             None         (3)   
Not For Love/Weather Vane  12/00          09/01        Fasig Tipton          None         (3)   
Not For Love/God Given     12/00          09/01        Fasig Tipton          None         (3)   
20% - Saint Damien         10/99          10/01        Fasig Tipton          None         (3)   
USS Tinosa                 10/00         10/01 & 11/01 Fasig Tipton          None         (3)   
Devil's Sword              10/00          12/01        Fasig Tipton          None         (3)   
50% - Weekend Lover        10/00          12/01        White Oak Farm        None         (3)   
Wild Ballad                12/00          12/01        Fasig Tipton          None         (3)   
60% - Graham Point         09/99          01/02        Keeneland             None         (3)   
Lawn Mower                 09/00          01/02        Keeneland             None         (3)   
Wild Zone/Galleria         10/00          01/02        Fasig Tipton          None         (3)   
Allen's Prospect/                                                                               
 Hallow Wean               10/00          03/02        Fasig Tipton          None         (3)   
Siphon/Little by Little    09/01          01/02        Keeneland             None         (3)   
Rinka Das/Public Band      12/00          02/02        Fasig Tipton          None         (3)   
Forest Wildcat/Silver Rum  09/00          02/02        Keeneland             None         (3)   
Indian Charlie/Ruby Silver 09/00          02/02        Keeneland             None         (3)   
Storm Boor/Raria           09/00          02/02        Keeneland             None         (3)   
10% - Two Punch/Why Walk   11/01          02/02        Keeneland             None         (3)   
10% - Maria's Mon/                                                                              
 Double Doubleville        11/01          02/02        Keeneland             None         (3)   
10% - Silver Charm/Liz Cee 11/01          02/02        Keeneland             None         (3)   
5% - Stravinsky/Slide By   11/01          02/02        Keeneland             None         (3)   
10% - Clever Trick/                                                                             
 Southern Musical          11/01          02/02        Keeneland             None         (3)   
10% - Maria's Mon/                                                                              
 I Love Green              11/01          02/02        Keeneland             None         (3)   


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

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

(3) Purchase financed from funds remaining from loans made to Thoroughbred      
Interests, Inc. in 1999 from the Augustine Fund, L.P., Mr. Tilton and Mr. Dyer  
and additional monies lent to the Company in 2000 by Mr. Tilton and Mr. Dyer and
in 2001 by Mr. Tilton. Also, sale proceeds have been reinvested when available. 

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                                                        [Enlarge/Download Table]


                                      INVENTORY OF OUR HORSES                                                        

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

                                                                      SELLER/PLACE  AFFILIATION                      
            NAME OF HORSE             TYPE             DATE ACQUIRED  OF PURCHASE   TO PURCHASER  SOURCE OF FINANCING
                                                                                                                     
Miss Punch                            Filly 3-yr          09/00       Fasig Tipton      None             (3)         
Bootleg and Susy                      Filly 3-yr          10/00       fasig Titpon      None             (3)         
Gulfport                              Colt 3-yr           10/00       Fasig Tipton      None             (3)         
MelodyforMorgan                       Filly 3-yr          10/00       Fasig Tipton      None             (3)         
Miss Kayleigh                         Filly 3-yr          10/00       Fasig Tipton      None             (3)         
33% of Maria's Mon/Full Retreat       Colt 2-yr           09/01       Keeneland         None             (3)         
Unbridleds Song/Mz. Mazuma            Colt 2-yr           09/01       Keeneland         None             (3)         
American Boundary                     Colt 2-yr           09/01       Keeneland         None             (3)         
Deputy Commander/Kelly Amber          Filly 2-yr          09/01       Keeneland         None             (3)         
End Sweep/Personal Line               Filly 2-yr          10/01       Fasig Tipton      None             (3)         
50% of Tinner's Way/Magical Avie      Colt 2-yr           10/01       Fasig Tipton      None             (3)         
90% of Two Punch/why Walk             Colt Yearling       11/01       Keeneland         None             (3)         
90% of Maria's Mon/Double Doubleville Colt Yearling       11/01       Keeneland         None             (3)         
90% of Silver Charm/Liz Cee           Colt Yearling       11/01       Keeneland         None             (3)         
90% of Siphon/Really Nifty            Colt Yearling       11/01       Keeneland         None             (3)         
45% of Stravinsky/Slide By            Colt Yearling       11/01       Keeneland         None             (3)         
90% of Clever Trick/Southern Musical  Colt Yearling       11/01       Keeneland         None             (3)         
90% of Maria's Mon/I Love Green       Filly Yearling      11/01       Keeneland         None             (3)         


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

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

(3) Purchase financed from funds remaining from loans made to Thoroughbred      
Interests, Inc. in 1999 from the Augustine Fund, L.P., Mr. Tilton, and Mr. Dyer,
and additional monies lent to Thoroughbred Interests, Inc. in 2000 by Mr. Tilton
and Mr. Dyer and in 2001 by Mr. Tilton. Also, sales proceeds when available have
been reinvested.                                                                

RISK FACTORS

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

We have incurred losses from inception and just started generating profits.     

We have only been incorporated since 1999 and we are still structuring and      
developing our management and operations. Our operations are subject to all of  
the risks inherent in the establishment of a new business enterprise, including 
the lack of significant operating history. There can be no assurance that future
operations will continue to be profitable. Revenues and profits, if any, will   
depend upon various factors, including our ability to acquire horses suitable   
for pinhooking, to adequately train such horses in order that they achieve their
potential, the expertise of our management, the market acceptance of the        
products offered, costs and general economic conditions. There can be no        
assurance that we will achieve our projected goals or accomplish our business   
plans; and such failure could have a material adverse effect on us and the value
and price of our securities.                                                    

Because of the limited experience of management in pinhooking and racing of     
thoroughbred horses our business could suffer.                                  

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

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

We may be required to seek additional funds and to raise additional capital from
public or private equity or debt sources in order to fund our general and       
administrative costs and expenses, pay off startup loans, support further       
expansion, meet competitive pressures, or respond to unanticipated requirements.

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

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

We depend on key personnel and may not be able to retain them.                  

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

If we are unable to effectively manage our anticipated growth, our business,    
financial results and financial condition will be materially and adversely      
affected.                                                                       

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

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We may not be able to comply with all current and future government regulation. 

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

If we are unable to compete effectively with our competitors, we will not be    
able to increase revenues or generate profits.                                  

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

ITEM 2. DESCRIPTION OF PROPERTY.                                                

Our executive and administrative office is located at 127 South 6th Street,     
Louisville, Kentucky 40202. We lease this facility from a non-affiliated party. 
It has approximately 1865 square feet of office space consisting of three       
separate offices, a library, a conference room, an kitchen and a bathroom. The  
monthly rent is $2,360 of which Thoroughbred Interests, Inc. pays 50% with the  
other 50% paid by TuneIn Media, Inc., of which Mr. Tilton our President is      
paying as TuneInMedia, Inc. presently has insufficient funds to pay.            
Thoroughbred Interests, Inc. and TuneIn Media, Inc. together own the office     
equipment and furniture. Management believes that this facility is adequate for 
us for at least the next 24-36 months.                                          

ITEM 3. LEGAL PROCEEDINGS.                                                      

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

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

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

PART II.

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

(a) Market Information                                                          

A limited public market for the Company's Common Stock exists on the NASDAQ     
Bulletin Board under the symbol "TBIN."                                         

The following table sets forth the range of high and low closing prices for the 
Company's Common Stock for each quarterly period indicated, as reported by      
brokers and dealers making a market in the capital stock. Such quotations       
reflect inter-dealer prices without retail markup, markdown or commission, and  
may not necessarily represent actual transactions.                              

Quarter Ended              High            Low                                  
December 31, 2001          $.20            $.15                                 
March 31, 2002             $.26            $.06                                 

* The Company's Common Stock commenced tradingon November 30, 2001.             

As of March 31, 2002, htere were approximately 75 record holders of the         
Company's Common Stock.                                                         

The Company has not paid any cash or other dividends on its Common Stock since  
its inception and does not anticipate paying any such dividends in the          
foreseeable future.  The Company intends to retain any earnings for use in the  
Company's operations and to finance the expansion of its business.              

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

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

PLAN OF OPERATIONS FOR THE NEXT 12 MONTHS                                       

We have developed a plan of operations reflecting our objectives and anticipated
growth for the next 12 months and beyond. In our plan, we identify our cash     
requirements, our anticipated purchases of new horses, and our required staffing
and additional funding requirements to fulfill our business objectives.         

Cash Requirements                                                               

We estimate that we require a minimum of approximately $500,000 and a maximum of
approximately $875,000 to operate for the next 12 months. The minimum of        
$500,000 is required for operating expenses. The maximum will be required,      
however, if the Augustine Fund does not convert their promissory notes into     
Common Stock of the Company. This estimate of required funds includes the       
$375,000 due and payable to the Augustine Fund as of January 1, 2003 and        
$500,000 in estimated operating expenses including office rent, boarding,       
training and/or racing our horses. Mr. Andrew Dyer converted his $100,000       
promissory note into 1,238,350 common shares of stock on March 21,2002.         

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

Additionally, as of March 31, 2001, we held full title to 15 thoroughbreds and  
ownership interests, ranging from 33% to 50% in three thoroughbreds. We expect  
to generate approximately $1,000,000 to $1,250,000 in revenue from the sales of 
these horses. This projection is based upon our historical performance to date. 
Specifically, we have pinhooked approximately 35 horses since the inception of  
the Company.                                                                    

To the extent we are unable to meet our operating expenses or matured notes     
payable, we may borrow funds from our president Mr. Tilton or others, or we may 
attempt to raise capital from large institutional investment equity funds. Any  
funds generated from sales of horses or from equity investments, if any, in our 
company that exceeds our operating expenses and debt repayments will be used to 
purchase additional thoroughbred horses.                                        

Change in Number of Employees                                                   

We may hire up to three additional employees in 2002, finances permitted, in the
areas of marketing and sales.                                                   

ITEM 7. FINANCIAL STATEMENTS.                                                   

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

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.                          

None.                                                                           

 PART III.

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

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

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

NAME                  AGE    POSITION                             
----                  ---    --------                             
James D. Tilton, Jr.          41    Chairman of the Board, Chief Executive      
                           Officer, President, and Secretary

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

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

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                         

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

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                                                        [Enlarge/Download Table]


ITEM 10. EXECUTIVE COMPENSATION.                                                           

EXECUTIVE COMPENSATION                                                                     

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

                           SUMMARY COMPENSATION TABLE                                      

                                                                     Long Term             
                                                                     Compensation          
Name and                                                             Awards-               
Principal                                          Other Annual      Securities            
Position         Year    Salary($)    Bonus($)     Compensation      Underlying Options-(#)
--------         ----    ---------    --------     ------------      ----------------------
                                                                                           
James D.         1999    0            0            0                                       
Tilton, Jr.                                                                                
Chairman of      2000    $90,000(1)   0            0                 3,000,000(2)          
the Board,                                                                                 
Chief                                                                                      
Executive                                                                                  
Officer and                                                                                
President                                                                                  


(1) Mr. Tilton has agreed to defer his salary indefinitely.                     
(2) On January 3, 2000, Mr. Tilton was granted 3,000,000 incentive stock options
pursuant to our Millennium Stock Option Plan at an exercise price of $0.11.     

EMPLOYMENT AND CONSULTING AGREEMENT                                             

We have an Employment Agreement with James D. Tilton which ends on December 31, 
2002. The Agreement provides for the payment of an annual base salary of $90,000
for calendar year 2000, $120,000 for calendar year 2001 and $180,000 for        
calendar year 2002. The Agreement also provides for an annual incentive bonus   
equal based on our annual earnings before income taxes, depreciation and        
amortization. The Agreement provides for the one-time grant pursuant to our     
Millennium Stock Option Plan on 3,000,000 incentive stock options to Mr. Tilton 
at 110% of the fair market value of our Common stock on the date of the grant.  
The options are vested and exercisable immediately. The Agreement further       
provides for the payment of Mr. Tilton upon the discharge of Mr. Tilton without 
cause or the resignation of Mr. Tilton for "good cause", or as defined in the   
Agreement of a lump sum equal to his annual base salary and bonus.              

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

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

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The following table sets forth, as of the date of this Report, the number and   
percentage of shares of outstanding Common Stock owned by each person owning at 
least 5% of the Company's Common Stock, each officer and director owning stock, 
and all officers and directors as a group:                                      

#                                                                               
NAME AND ADDRESS OF            NUMBER OF SHARES OF            PERCENTAGE        
BENEFICIAL OWNER               BENEFICIALLY OWNED             OF CLASS (1)      
----------------               ------------------             ------------      
James D. Tilton, Jr.            29,816,000 (2)(3)(4)             91.32%         
8702 Twin Ridge Road                                                            
Louisville, KY  40242                                                           

All Officers and Directors as   29,816,000                       91.32%         
a Group (1 Person)                                                              

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

(1) Based upon 26,661,000 shares issued and outstanding                         

(2) Includes 6,000,000 shares being held in escrow by H. Glen Bagwell as        
security for the loan made by The Augustine Fund, L.P. (the "Augustine Fund") to
the Company and will be returned to James D. Tilton upon repayment to the       
Augustine Fund of the loan or the conversion by the Augustine Fund of the amount
owing into Common Stock of the Company. Mr. Tilton has sole voting and          
investment power in all 24,000,000 shares.                                      

(3) Includes 3,000,000 options to purchase 3,000,000 shares of the Company's    
Common Stock pursuant to the Company's Millennium Stock Option Plan. All of the 
options are vested.                                                             

(4) Includes 3,000,000 shares of common stock and 1,500,000 shares of Company's 
Common Stock underlying warrants issuable pursuant to a convertible Secured     
Promissory Note dated October 31, 2000, as amended.                             

17
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.                        

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

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

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

In connection with our purchase of several thoroughbreds in September and       
October of 2000, pursuant to a written promissory note dated October 31, 2000   
(the "Note"), Mr. Tilton loaned the company $300,000 to pay for the horses. In  
consideration for the Note, pursuant to a Pledge and Security Agreement dated   
October 31, 2000, we gave Mr. Tilton a security interest in some of its horses. 
The entire loan is convertible at the sole discretion of Mr. Tilton, into shares
of our common stock (the "Converted Shares") at $.10 per share and warrants     
exercisable into one-half the number of Converted Shares at $.15 per share.     
Additional funds have been advanced since by Mr. Tilton. The funds are          
considered a loan repayable when funds are available.                           

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

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

No. Description of Exhibit                                                      

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3.1      Articles of Incorporation of Thoroughbred Interests, Inc., dated       
March 25, 1999*                                               

3.2      By-Laws of Thoroughbred Interests, Inc.*                               

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

10.4     Thoroughbred Interests, Inc. Millennium Stock Option Plan*             

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

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

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

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

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

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 Note Extension dated February 11, 2002 by the Augustine Fund.

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

** Filed herewith.                                                              

REPORTS ON FORM 8-K: NONE                                                       

SIGNATURES

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

THOROUGHBRED INTERESTS, INC.

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

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

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

/s/ James D. Tilton                                               
-----------------------------------------------------         April 01, 2002    
Name:  James D. Tilton                                                          
Title: Chairman, President, Secretary                                           
and Chief Executive Officer                                       
(Principal Executive Officer and                                  
Principal Financial and Accounting Officer)                       

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THOROUGHBRED INTERESTS, INC.

 INDEX

                                                                    Page

INDEPENDENT AUDITORS' REPORT                                             F-2    

FINANCIAL STATEMENTS                                                            

Balance Sheets as of December 31, 2001 and 2000                          F-3    

Statements of Operations                                                        

 Years ended December 31, 2001 and 2000                              F-4

Statement of Changes in Stockholders' Equity                                    

 Years ended December 31, 2001 and 2000                              F-5

Statement of Cash Flows                                                         

 Years ended December 31, 2001 and 2000                              F-6

Notes to Financial Statements                                            F-7    

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BAUM & COMPANY, P.A.
Certified Public Accountants
 1515 University Drive - Suite 209
Coral Springs, Florida 33071

INDEPENDENT AUDITORS' REPORT

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

We have audited the accompanying balance sheet of Thoroughbred Interests, Inc.  
as of December 31, 2001and 2000 and the related statement of income, changes in 
stockholders' equity and cash flows for the years then. These financial         
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these financial statements based on  
our audit.                                                                      

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

In our opinion, the financial statements present fairly, in all material        
respects, the financial position of Thoroughbred Interests, Inc. at December 31,
2001 and 2000 and the statement of income, changes in stockholders' equity and  
cash flows for the years then ended. in conformity with generally accepted      
accounting principles.                                                          

/s/ Baum & Company, P.A.                                                        
------------------------------                                                  
Baum & Company, P.A.                                                    

Coral Springs, Florida                                                          
March 18, 2002                                                                  
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THOROUGHBRED INTERESTS, INC.
 (A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS
DECEMBER 31, 2000 AND 1999

ASSETS

                                                        [Enlarge/Download Table]


                                                               2001          2000      
                                                            -----------   -----------  
                                                                                       
Current Assets                                                                         
    Cash in bank                                               $  8,979       $ 3,411  
    Investment in thoroughbred horses (note 1)                1,184,343       832,496  
                                                               --------      --------  
                                                              1,193,322       835,908  
Other assets                                                                           
      Deferred registration costs (note 1)                      160,853        39,348  
                                                               --------      --------  
         Total assets                                        $1,354,175      $875,256  
                                                               ========      ========  

                      LIABILITIES AND STOCKHOLDERS' EQUITY                             

Current liabilities                                                                    

    Note payable (note 5)                                    $  400,000      $ 400,000 
    Accounts payable and accrued expenses                       758,446        463,417 
    Accrued compensation - related party                         90,000         90,000 
                                                            -----------     ---------- 

         Total current liabilities                            1,248,446        953,417 

Other liabilities                                                                      

      Loan payable - stockholder (note 2)                       635,511        301,989 
                                                            -----------     ---------- 

            Total liabilities                                 1,883,957      1,255,406 
                                                             ----------     ---------- 
 Stockholders equity                                                                   

      Preferred stock, par value $ .001, 10,000                                        
           shares authorized; no shares issued                 -  0 -           - 0 -  
    Common stock, par value  $.001,                                                    
         100,000,000 shares authorized;                                                
        26,661,000 and 26,411,000 shares issued and                                    
          outstanding in 2001 and 2000 respectively              26,411         26,386 
         Additional paid in capital                              17,789          2,475 
       Accumulated deficit                                     (574,232)      (409,036)

                                                             ----------      --------- 
                                                               (529,782)     (380,150) 
                                                             ----------      --------- 

         Total liabilities & stockholders equity             $ 1,354,175     $ 875,256 
                                                              ==========      =========

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THOROUGHBRED INTERESTS, INC.
STATEMENTS OF INCOME
 FOR THE YEAR ENDED DECEMBER 31, 2001 AND 2000

                                                        [Enlarge/Download Table]


                                                            2001            2000     
                                                      --------------  -------------- 
                                                                                     
Revenues                                                $   883,179       $ 703,015  
Cost of Horses Sold                                         409,165         463,053  
                                                        -----------       -----------
Gross Profit                                                474,014         239,962  

Operating Expenses                                          451,851         174,649  
     General & administrative                               147,509         288,473  
                                                        -----------       -----------
     Total operating expenses                               599,360         460,522  
                                                        -----------       -----------
Net income (loss) before other income and expense          (125,346)       (223,160) 

Other income and expense                                                             
      Interest income                                         - 0 -           4,491  
      Interest expense                                      (12,000)        (45,900) 
      Interest expense - related party                      (27,850)        (10,300) 
                                                        -----------       -----------
                                                            (39,850)        (51,709) 
                                                        -----------       ---------  

Net income (loss) before provision for income taxes        (165,196)       (274,869) 

Provision for income taxes                                    - 0 -           - 0 -  
                                                        -----------      ----------- 
Net income (loss)                                       $  (165,196)     $ (274,869) 
                                                        ===========      =========== 
Net (loss) per common share-development stage           $      0.01       $    0.00  
                                                        ===========      =========== 
Weighted average number of common shares outstanding     26,661,000      26,390,175  
                                                        ===========      =========== 


F-4 

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THOROUGHBRED INTERESTS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                        [Enlarge/Download Table]

                                         Common stock             Additional paid      Accumulated   
                                    Shares           Amount         in capital            Deficit    
                                -------------------------------  ------------------   ---------------

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

                                                                                                     
Balance - December 31, 1999         26,386,000           26,386          3,064         (134,167)     

Stock issued for domain name                                                                         
    November 2000                       25,000               25          2,475            - 0 -      

Net (loss) December 31, 2000             - 0 -            - 0 -          - 0 -         (274,869)     

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

Balance - December 31, 2000         26,411,000          26,411           5,539        (409,036)      

Stock issued for services              250,000             250          12,250           - 0 -       

Net ( loss ) December 31, 2001          - 0 -             - 0 -          - 0 -        (165,196)      
                                    ----------      -----------    -----------       ----------      

Balance - December 31 2001          26,661,000      $    26,661          - 0 -       $ (574,232)     
                                    ==========      ===========    ===========       ==========      


See accompanying notes to the financial statements.                             

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See accompanying notes to the financial statements                              

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THOROUGHBRED INTERESTS, INC.
 STATEMENT OF CASH FLOWS
YEARS ENDED DECEMBER 31, 2001 AND 2000

                                                                [Download Table]


                                                                2001       2000   
                                                            ----------  --------- 
                                                                                  
Cash flows from operations:                                                       
    Net income (loss)                                     $ (165,196)   $(274,869)
    Adjustments to reconciliate net income (loss) to net                          
         cash provided by operating activities:                                   
    Common stock issued for domain name                        - 0 -        2,500 
    Common stock issued for services                          12,500        - 0 - 
 Changes in operating assets and liabilities:                                     
      (Decrease) in investment in thoroughbred horses       (351,847)    (391,389)
    (Decrease) in accounts payable and accrued expenses      295,029      451,182 
                                                           ----------    ---------
Net cash provided (used) from operations                    (209,514)     212,576 
                                                           ----------    ---------

Cash flows from financing activities:                                             

    (Increase) in deferred registration costs               (121,505)     (33,963)
    Increase (decrease) in stockholder loan                  336,587      188,477 
    Proceeds of note payable                                   - 0 -       50,000 
    (Increase) in subscriptions receivable                     - 0 -          125 
                                                          ----------    --------- 
Net cash provided (used) from financing activities           215,082      204,639 
                                                          ----------    --------- 
Net increase (decrease) in cash                                5,568      (7,937) 

Cash  - beginning                                              3,411     (11,348) 
                                                           ---------    --------- 
Cash - ending                                              $   8,979    $   3,411 
                                                           =========    ========= 
Supplemental disclosures:                                                         
      Interest expense                                     $  12,000    $  10,300 
                                                           =========    ========= 

See accompanying notes to the financial statements.                             

 F-6

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THOROUGHBRED INTERESTS, INC.
 NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                

BUSINESS AND ORGANIZATION                                                       

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

ORGANIZATION COSTS                                                              

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

REVENUE RECOGNITION                                                             

Revenue is recognized when thoroughbred horses are purchased for cash or        
approved credit and title is transferred to the purchaser. The purchaser is     
responsible for delivery and ultmate possession of the horses acquired.         

DEFERRED REGISTRATION COSTS                                                     

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

INVESTMENT IN THOROUGHBRED HORSES                                               

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

MANAGEMENT ESTIMATES                                                            

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

 F-7

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THOROUGHBRED INTERESTS, INC.
 NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -              
CONTINUED                                                                       

NET LOSS PER COMMON SHARE                                                       

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

                                                        [Enlarge/Download Table]


                                                                            December 31         

                                                                       2001               2000  
                                                                      -------            -------

                                                                                                
Options outstanding under the company's stock option plan             3,000,000           - 0 - 

Common stock issuable upon conversion of stockholder's  note payable  3,000,000           - 0 - 

Warrants issued in conjunction with stockholder's note payable        1,500,000           - 0 - 

Common stock issuable upon conversion of notes payable                4,750,000           - 0 - 

Warrants issued in conjunction with notes payable                     2,375,000           - 0 - 


NOTE 2 - RELATED PARTY TRANSACTIONS                                             

The Company has issued 24,000,000 shares of common stock to its founder at a par
value of $ .001 for his time and effort in establishing the Company. An         
substantial amount of these shares will be subject to a restriction against     
transfer for a period of at least one year pursuant to SEC rule 144.            

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

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

 F-8

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THOROUGHBRED INTERESTS, INC.
 NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

NOTE 2 - RELATED PARTY TRANSACTIONS  - continued                                

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

The CEO has advanced funds as a interest bearing at 6% per annum,secured loan   
pursuant to a written                                                           

Agreement and secured by certain horses held in inventory. The loan is          
convertible into common stock ("Converted Shares") of the Company at $.10 per   
share and warrants exercisable into one-half the number of Converted Shares at  
$.15 per share. Based on an note balance at December 31, 2001 of $ 300,000 of   
principal only, the converted shares will be 6,000,000 0f common stock an an    
additional 1,500,000 0f common stock upon the exercise of stock warrants for a  
total of 4,5000,000 issued shares. As of December 31, 2001 and 2000, all accrued
interest on the note balance has been added to the loan principal balance. The  
stock warrants expire at the end of five years from the date of conversion of   
"converted shares". The Company used the Black-Scholes model to determine the   
fair market value of these benefits which is $ - 0 - . There is no expense      
recognized for the conversion feature of the loan payable due to the conversion 
price being equal to the fair value of the Company's common stock. Additional   
funds have been loaned to the Company payable when funds are sufficient.        

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

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

NOTE 3 - CAPITAL TRANSACTIONS                                                   

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

b.) The Company at its inception issued 2,300,000 shares to individuals for     
services rendered. These services were valued at the par value of the stock     
issued and expenses as startup costs.                                           

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

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

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

f.) The Company issued 250,000 shares of restricted common stock to for         
consulting serices on August 24, 2001 valued at $ .05.                          

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 F-9

THOROUGHBRED INTERESTS, INC.
 NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

NOTE 4 - STOCK OPTION PLAN                                                      

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

A summary of the status of the Company's stock option plan as yearend.          

                                                                Weighted Average
                                                    Shares     Exercise  Price
                                                     ------     ----------------
         Outstanding at beginning of year       3,000,000              $ .10
           Granted                                      - 0 -              - 0 -
           Exercised                                    - 0 -              - 0 -
           Forfeited                                    - 0 -              - 0 -
                                                 ----------              -----
         Outstanding at end of year              3,000,000             $  10
                                                 ----------              -----
         Options exercisable at year-end         3,000,000             $ .10
                                                 ----------             ------

The Company has adopted only the disclosure provisions of SFAS No. 123,         
"Accounting for Stock-Based Compensation." It applies Accounting Principles     
Bulletin ("APB") Opinion No. 25. "Accounting for Stock Issued to Employees," and
related interpertations in accounting for its Stock Option Plan and does not    
recognize compensation expense for its Stock Option Plan other than for         
restricted stock and options issued to outside third parties. The weighted      
average remaining contractual life of options outstanding issued under the Stock
Option Plan is 9.75 years at December 31, 2001. No compensation expense was     
recognized as a result of the issuance of stock options during the years ended  
December 31,2001 and 2000. For options granted during the year ended December   
31, 2000 where the exercise price equaled the stock price at the date of the    
grant, the weighted-average fair value of such options was $0.11 and the        
weighted-average exercise price of such options was $0.10. No options were      
granted during the year ended December 31, 2001 where the exercise price was    
greater than the stock price at the date of grant or where the exercise price   
was less than the stock price at the date of the grant.                         

NOTE 5 - NOTES PAYABLE                                                          

On September 30, 1999 pursuant to a written promissory note the Company was     
loaned $300,000 from Augustine Fund, L.P. The note has no stated interest but   
calls for the payment of $375,000 in (180) one hundred eighty days from         
September 30, 1999. The Augustine Fund L.P. has the right to convert all or any 
portion of the $375,000 into shares of common stock (the "Converted Shares") at 
$.10 per share and warrants exercisable into one-half the number of Converted   
Shares at $.15 per share. As security for t                                     

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THOROUGHBRED INTERESTS, INC.
 NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000

NOTE 5 - NOTES PAYABLE - continued                                              

his loan, the President of the company has placed in escrow 6,000,000 restricted
shares of common stock. The Augustine Fund, L.P. granted the company an         
extension to January 1, 2003 for satisfaction of the note.                      

On December 15, 1999, pursuant to convertible promissory note the Company was   
loaned$50,000 from an individual. The note is unsecured and bears interest at   
12% per annum payable including interest on or before August 13, 2000. On       
February 10, 2000 the Company received an additional $50,000 under the same     
terms. The promissory notes are both convertible into fifty shares of common    
stock (the "Converted Shares") at $.10 per share and warrants exercisable into  
one-half the number of Converted Shares at $.15 per share. The due date of the  
notes plus accrued interest has been extended to January 1, 2002. Mr. Dyer      
converted his note on March 21, 2002 into 1,238,350 shares of common stock.     

NOTE 6 - INCOME TAXES                                                           

The Company accounts for income taxes using the asset and liability method.     
Under this method, deferred tax assets and liabilities are recognized for the   
future tax consequences attributable to differences between the financial       
statement carrying amounts of existing assets and liabilities and their         
respective tax bases and operating loss and tax credit carryforwards. Deferred  
tax assets and liabilities are measured using currently enacted tax rates. The  
effect on deferred tax assets and liabilities of a change in the tax rates is   
recognized in results of operations in the period that includes the enactment   
date. Because of the uncertainty regarding the Company's future profitability,  
the future tax benefit of its losses have been fully reserved for. Therefore, no
benefit for the net operating loss has been recorded in the accompanying        
financial statements. The net operating losses of $ $575,000 can be carried     
forward fifteen years through 2016 to be offset against net income.             

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F-10

 EXHIBIT 4.5

THOROUGHBRED INTERESTS, INC.
127 South 6th Street
Louisville, Kentucky 40202
February11, 2002

The Augustine Fund, L.P.                                                        
141 West Jackson Street                                                         
Suite 2182                                                                      
Chicago, Illinois 60604                                                         

Ladies and Gentlemen:                                                           

As you are aware, Thoroughbred Interests, Inc. and The Augustine Fund, L.P.     
entered into a promissory note as of September 30, 1999, as amended, in the     
amount of $375,000 (the "Note") and that the Note matured on January 1, 2002.   

Per our previous conversations, and for $10 and other good and valuable         
consideration, the receipt and sufficiency of which is hereby acknowledged, I   
hereby request that the Due Date, as defined in the Note and earlier extended,  
be extended again to January 1, 2003.                                           

All other provisions of the Note, as well as the Stock Escrow Agreement attached
as Exhibit A to the Note, the Pledge and Security Agreement attached as Exhibit 
B to the Note and the Guaranty Agreement attached as Exhibit C to the Note,     
remain unchanged and in full force and effect.                                  

If you are in agreement with this amendment to the Note, kindly acknowledge your
agreement by signing below.                                                     

Sincerely,                                                                      

                                       /s/ James D. Tilton
                                               ---------------------------
                                   James D. Tilton
                                           Chief Executive Officer
                                                Thoroughbred Interests, Inc.

/s/ Augustine Fund, L.P.                                                        
---------------------------                                                     
The Augustine Fund, L.P.                                                        

By:     /s/ Thomas F. Duszynski                                                 
Title:  CFO                                                                     
Date:   February 11, 2002                                                       

Dates Referenced Herein   and   Documents Incorporated By Reference

				Referenced-On Page
This 10KSB Filing		Date		First		Last			Other Filings
		1/31/99		12
		3/25/99		3		25
		7/23/99		27
		9/27/99		16
		9/30/99		5		30
		10/11/99		5
		11/11/99		16
		12/15/99		5		29
		12/31/99		20
		1/3/00		13		28
		1/31/00		5		16
		2/10/00		29
		3/22/00		5		16
		3/28/00		5
		5/29/00		5
		7/5/00		17					10SB12G
		8/13/00		5		29
		9/30/00		16					10QSB
		10/3/00		5		16
		10/11/00		16
		10/31/00		14		27
		11/21/00		16
		12/31/00		12		29			NT 10-K, 10KSB40/A, 10KSB
		3/30/01		7
		3/31/01		5		16			NT 10-Q, 10QSB, 10QSB/A
		4/12/01		5		16
		8/24/01		27
		11/30/01		10
For The Period Ended		12/31/01		1		29			5
		1/1/02		5		30
		2/11/02		17		30
		3/18/02		19
		3/21/02		29
		3/31/02		3		10			4, 10QSB
		4/1/02		17
Filed On / Filed As Of		4/2/02
		12/31/02		13		26			10KSB/A, NT 10-K, 10KSB
		1/1/03		11		30
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