Majesco Entertainment Co – ‘10KSB’ for 12/31/00

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

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       50    272K 
 2: EX-10.12    Material Contract                                      6     25K 
 3: EX-10.13    Material Contract                                      8     39K 
 4: EX-10.14    Material Contract                                     15     49K 
 5: EX-21.1     Subsidiaries of the Registrant                         1      4K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

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

 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 -------------------------
 FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
 THE SECURITIES EXCHANGE ACT OF 1934

FOR THE YEAR ENDED DECEMBER 31, 2000          COMMISSION FILE NO. 333-70663   

 -------------------------
 CONNECTIVCORP
(FORMERLY KNOWS AS SPINROCKET.COM, INC.)
 (Exact name of small business issuer as specified in its charter)

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

29 WEST 57TH STREET, 9TH FLOOR       (212) 583-0300               10019         
NEW YORK, NEW YORK                                                              
(Address of Issuer's principal   (Issuer's telephone number,    (Zip Code)      
executive offices)                  including area code)                        

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

 COMMON STOCK, $.001 PAR VALUE
(Title of Class)

  Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such  
shorter period that the registrant was required to file such reports), and (2)  
has been subject to such filing requirements for the past 90 days.              
Yes /X/   No / /                                                                

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

    The issuer's revenues for the year ended December 31, 2000 were $80,000.

      The aggregate market value of the registrant's voting common equity (I.E.,
the Common Stock) held by non-affiliates as of March 30, 2001 was $8,397,540,   
using the closing sale price of $.39 per share on such date, as reported by the 
Nasdaq OTC Bulletin Board.                                                      

   The number of outstanding shares of the registrant's Common Stock as of
March 30, 2000 was 21,532,155.                                                  

Transitional Small Business Disclosure Format.                      

Yes / /  No /X/                                                                 

DOCUMENTS INCORPORATED BY REFERENCE                                             

None.                                                               

      A list of Exhibits to this Annual Report on Form 10-KSB begins on Page 27.
================================================================================

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 TABLE OF CONTENTS

PART I                                                                     PAGE 
Item 1.  Description of Business..............................................1 
Item 2.  Description of Property..............................................9 
Item 3.  Legal Proceedings....................................................9 
Item 4.  Submission of Matters to a Vote of Security Holders..................9 

PART II                                                                         
Item 5.  Market for Common Equity and Related Stockholder Matters............10 
Item 6.  Management's Discussion and Analysis of Financial Condition            
        and Results of Operations...........................................11
Item 7.  Financial Statements................................................15 
Item 8.  Changes In and Disagreements With Accountants on Accounting            
        and Financial Disclosure............................................15

PART III                                                                        
Item 9.   Directors, Executive Officers, Promoters and Control Persons.......16 
Item 10.  Executive Compensation.............................................21 
Item 11.  Security Ownership of Certain Beneficial Owners and Management.....24 
Item 12.  Certain Relationships and Related Transactions.....................26 
Item 13.  Exhibits and Reports on Form 8-K...................................26 

 -----------

 The Company's principal executive offices are located at 29 West 57th
Street, 9th Floor, New York, New York 10019, and the telephone number is (212)  
583-0300.                                                                       

 -----------

FORWARD-LOOKING STATEMENTS                                                      

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

o     anticipated growth strategies, and                            

o     its intention to introduce new products.                      

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

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

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PART I

ITEM 1.  DESCRIPTION OF BUSINESS                                                

INTRODUCTION AND HISTORY                                                        

    ConnectivCorp (or the "Company") is a publicly owned and traded Delaware
corporation whose mission is to facilitate the online connection between        
aggregated, targeted and profiled consumers, and marketers desiring to reach    
those consumers. Operating through its wholly owned subsidiary, ConnectivHealth,
the Company functions as a deep content provider and marketing company that     
facilitates the online connection between healthcare-oriented consumers,        
patients and caregivers, and those healthcare companies desiring to serve their 
healthcare needs.                                                               

ConnectivHealth Corp. ("ConnectivHealth" or "CHC"), a wholly owned  
subsidiary of ConnectivCorp, is a comprehensive deep-level, healthcare provider 
that facilitates various marketing opportunities for pharmaceutical and other   
healthcare oriented companies. ConnectivHealth does this by acting as a         
middleman between segmented, profiled, healthcare-oriented consumers, patients  
and caregivers, and those healthcare companies desiring to serve their          
healthcare needs. This enables these companies to reach their core audience on  
an individualized, targeted, profiled, fully opted-in basis.                    

     ConnectivCorp is a reporting company under the Securities Exchange Act of
1934, as amended, and its stock is traded on the OTC Bulletin Board under the   
symbol "COTV." ConnectivCorp's principal executive offices are located at 29    
West 57th Street, 9th Floor, New York, New York 10019, and its telephone number 
is (212) 583-0300.                                                              

HISTORY                                                                         

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

32 Records LLC ("32 LLC") a wholly owned subsidiary of the Company, 
formerly operated an independent record company called "32 Records" that        
specialized in the catalog, or reissue, segment of the record business. On March
30, 2000, the Company decided to exit the business conducted by 32 LLC by March 
2001 and recharacterized 32 LLC as a discontinued operation for financial       
reporting purposes. During the second quarter of 2000, the Company wrote off the
business of 32 LLC in its consolidated financial statements. On February 2,     
2001, the assets of 32 LLC were transferred to its lender, Entertainment Finance
International, Inc. ("EFI"), pursuant to court order.                           

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

      Cakewalk is wholly owned by 32 LLC, and, until February 2, 2001, owned all
the assets of 32 Records. In 2000, Cakewalk defaulted under an Indenture dated  
June 29, 1999 (the "Indenture") with EFI and entered into negotiations with EFI 
regarding the same. EFI was the secured holder of $5,500,000 principal          
indebtedness issued by Cakewalk and maintained a security interest in all of    
Cakewalk's assets (the "Collateral") pursuant to the Indenture. Cakewalk        
consented to entry of a judgment of foreclosure ("Judgment") upon the Collateral
in connection with the action filed by EFI against Cakewalk in the              

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Supreme Court of the State of New York, County of New York, Index No. 604708/00 
on or about October 30, 2000. On February 2, 2001, judgment was entered by the  
Court approving the foreclosure, thereby transferring all of Cakewalk's assets  
to EFI. On October 18, 2000, the Company and EFI entered into a consulting      
agreement under which the Company agreed to help EFI in the marketing and sale  
of Cakewalk and/or its assets in return for which the Company would be entitled 
to a cash payment upon sale under certain circumstances.                        

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

CONNECTIVHEALTH'S BUSINESS MODEL                                    

      ConnectivHealth's goal is to manage and facilitate the online connectivity
between healthcare marketers and healthcare oriented consumers.                 

    To achieve this, ConnectivHealth seeks to forge strategic alliances with
various online healthcare and other websites - referred to as `hosts' - which   
have already established large constituencies of consumers who share similar    
needs and interests. Through the establishment of a relationship, pursuant to   
which ConnectiveHealth trades its content for access to the host site's traffic,
ConnectivHealth hopes to reach large numbers of consumers and patients without  
spending the large sums usually required to accomplish such acquisition. In     
return for the opportunity to utilize the hosts' already acquired consumer      
population, ConnectivHealth will provide specific, comprehensive healthcare     
content at no cost which will help the hosts maximize their offering to their   
constituencies, and augment their ability to fulfill their primary mission:     
providing services of significant value to their members.                       

  ConnectivHealth will seek to aggregate the consumer populations of its
hosts into a segmentable data pool, enabling marketers to use ConnectivHealth as
a single-source destination to reach large numbers of profiled and segmented    
healthcare-oriented consumers. Given the ability to quickly find and reach large
numbers of patients with specifically identified needs and interests allows     
healthcare marketers to, among other things, facilitate brand advocacy,         
compliance and switch marketing and to recruit candidates for research and      
clinical trial programs in the most effective possible manner.                  

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   ConnectivHealth intends to sell access to its user base to its intended
customers: pharmaceutical and other healthcare companies that have an interest  
in the areas of healthcare covered by ConnectivHealth, such access to be        
provided on a privacy protected, fully opted-in basis.                          

CONNECTIVHEALTH INITIATIVES                                                     

SEXHEALTH.COM WEBSITE                                               

On January 18, 2001, ConnectivHealth launched SexHealth.com         
(www.sexhealth.com), its comprehensive website that is intended to serve as both
a destination website for consumers seeking specific sexual health information, 
and as a health portal venue where the online connection between consumers and  
marketers will be effected.                                                     

Through SexHealth.com, ConnectivHealth seeks to offer comprehensive 
information in the area of sexual health. This overall area subsumes many topics
of particular interest, such as sexual dysfunction, sexually transmitted        
diseases, and hormone replacement therapy. As a subset of the broader area of   
women's health, the Company believes that SexHealth.com appeals to one of the   
most coveted demographic groups, women aged 15-55. The Company believes that    
this has particular appeal to a wide variety of pharmaceutical and other        
healthcare companies.                                                           

CONNECTIVHEALTH CONTENT ON HOST WEBSITES                            

     A key strategy of ConnectivHealth is to utilize already acquired consumer
populations of its host partners, by providing content to its host partners in  
exchange for access to their constituency. Initially, ConnectivHealth will seek 
to establish SexHealth.com as an authoritative source in the area of sexual     
health. In the future, it is the Company's intention to offer other             
subject-specific content, thus expanding its online presence.                   

     Consumers coming to a website that is one of the Company's strategic host
partners will see ConnectivHealth's content. There, they will be encouraged to  
explore that content, including the option to click through into SexHealth's    
website.                                                                        

CONNECTIVHEALTH DESKTOP HEALTH PORTAL APPLICATION                   

The ConnectivHealth Desktop Health Portal is an application that the
Company intends to employ that would lie resident on a consumer's computer and  
which would enable that consumer to access the information services of          
ConnectivHealth at any time, without having to be online. The Desktop Health    
Portal is intended to be a multi-function application that will include such    
features as:                                                                    

            o     Personalized information access and storage, by subject of the
consumer's choosing                         

      o     Instant live and background updating of information (via
  automatic link to the ConnectivHealth website)

           o     Highly targeted and relevant permission-based advertising and
messaging                                   

   o     Instant connectivity to ConnectivHealth website pages
pertinent to each consumer                  

    The Company has no specific timetable for the proposed implementation of
the Desktop Health Portal.                                                      

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SEXUAL HEALTH MAGAZINE                                              

 The Company has obtained the rights to publish Sexual Health Magazine
which previously operated as an authoritative periodic magazine covering the    
area of sexual health. The Company is seeking a strategic partner in the        
magazine publishing field with which to joint venture in this endeavor.         

DISTRIBUTION DEALS                                                              

   To date, ConnectivHealth has entered into Content Agreements with three
major hosts, drkoop, iWon and American Media, Inc., and has signed a letter of  
intent for a Content Agreement with WeMedia. Together, these deals have         
facilitated exposing ConnectivHealth's sexual health content, name and brand to 
over 30 million consumers and potential users. In each instance, the Content    
Agreement provides for the exchange of SexHealth's content for branding, links  
and/or advertising back to SexHealth.com.                                       

With more than 2 million registered users, drkoop.com is a leading  
internet health and wellness network dedicated to providing information and     
guidance to consumers worldwide.                                                

    Launched in October 1999, iWon.com is the 5th most trafficked website on
the Internet (Nielsen//NetRatings, September 2000), with approximately 9 million
unique monthly users. Additionally, iWon ranks as the most loyal website on the 
Web, placing number one in repeat visitation (Media Metrix, September 2000).    
iWon has also been voted #1 in user website and feature satisfaction among the  
leading search engines and portal sites (NPD Search and Portal Tracking Study)  
and #1 in Advanced Search on the Internet (Search Engine Showdown, July 2000).  

      American Media, Inc. is one of the largest media companies in the U.S. The
company publishes 7 of the 15 best selling weekly magazines, including the #1   
and #4 titles, the National Enquirer and Star Magazine, respectively. These     
magazines each have a readership in excess of 10 million consumers a week.      

  WeMedia is one of the leading online portals for the disabled. WeMedia
also publishes WE Magazine, the largest such publication for the disabled       
community. ConnectivHealth anticipates having an exclusive "channel" on         
WeMedia's home page, which will give ConnectivHealth access to WeMedia's online 
users.                                                                          

  ConnectivHealth is in negotiation with several additional hosts and/or
partners, which would increase the number of potential users of SexHealth.com,  
but can make no assurance that it will enter into any definitive Content        
Agreements with such parties. In addition, the Company has acquired             
advicecenter.com, a website featuring information on herpes and HPV, and        
anticipates incorporating this website into SexHealth.com.                      

DATA COLLECTION                                                                 

As ConnectivHealth acquires users and establishes contact with new  
consumers, the Company will endeavor to collect specific data about that        
consumer, their disease or condition, history, interests, and other crucial data
points. This will enable the Company to create an aggregated database of        
consumers, segmentable by many parameters of significant value to healthcare    
companies. This data pool will enable the Company to quickly find patients who  
fit very specific profiles of interest to healthcare companies for              
individualized marketing and communications programs, including for clinical    
trials recruitment.                                                             

      For example, consumers initially clicking through to SexHealth.com will be
asked to provide basic identifying data, such as name, email address and areas  
of interest. With this level of information the Company will be able to identify
the consumers who are interested in each particular subject area (e.g.,         

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herpes). These consumers will then be presented with various connectivity       
options based upon this basic level of segmentation.                            

      At the next level of data collection, interested consumers may be asked to
fill out a simple online questionnaire that more deeply profiles and captures   
their healthcare interests. The questionnaire may be 10-20 questions, and cover 
such areas as existing healthcare conditions, medications being taken, and      
others. In return for providing this deeper level of personal information,      
participating consumers will be provided with more tailored connectivity options
and incentives.                                                                 

   The third, and deepest, level of data collection will involve obtaining
detailed, multi-level information from interested consumers through an extensive
online questionnaire. This type and level of information would be necessary, for
example, in order to facilitate referral into clinical trial programs - where   
many details of a patient's medical condition are required to be known.         

  All information collected from consumers will be pursuant to voluntary
opt-in procedures.                                                              

PRIVACY ISSUES                                                                  

 The Company has adopted a policy that seeks to afford maximum privacy
protection to consumers due to its multi-level opt-in policy. This policy is    
readily accessible to the user on the website and describes how information is  
collected and used by the Company.                                              

SOURCES OF REVENUE GENERATION                                                   

 As noted above, the Company's business model contemplates aggregating
millions of consumers through Content Agreements with online hosts and offline  
partners. The Company believes that by exposing its content to consumers in this
manner, it will be able to convert a percentage of these consumers to users of  
SexHealth.com or will otherwise be able to aggregate these consumers into a     
database. Access to those converted users can then be "sold" to pharmaceutical  
companies and other healthcare providers, which will be able to reach these     
consumers on a segmented, profiled, fully opted-in, interactive basis. This will
enable these healthcare providers to market their products on a very            
individualized basis.                                                           

      The Company's revenue model for SexHealth.com is based upon the assumption
that it will be able to aggregate millions of healthcare-oriented consumers on  
both a general and individual basis. As a website through which the Company     
intends to migrate healthcare consumers, SexHealth.com presents the following   
revenue opportunities:                                                          

1.    FOCUSED CONSUMER SURVEYS/QUESTIONNAIRES                       

o     Quick, efficient market research opportunities    
o     CHC and customer generated subjects               
o     Daily and/or periodic frequency                   
o     Ability to sell the data to multiple end users    
o     CHC can design and implement the surveys          

 2.    DISTRIBUTION OF PRODUCT INFORMATION TO PATIENTS/CONSUMERS/USERS

          o     Follow-up service to content offerings, asking users if they
                want to receive additional information on a particular topic
   o     CHC will email information provided by its healthcare
customers directly to opt-in users          

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          o     Deeper information, coupons and/or over-the-counter products
    can also be emailed or forwarded to opt-in users

3.    ADVERTISING TO GENERAL AND TARGETED AUDIENCES                 

o     General and targeted banner ads                   

4.    CLINICAL TRIALS LISTING AND RECRUITMENT                       

o     Listing of applicable trials                      
        -Individual trials listed through recruitment period
             -All trials by a pharmaceutical company over a given time
period                                    
o     Inclusion and exclusion surveys                   
     o     Listing of potential patients who fit the inclusion and
exclusion criteria                          
o     Patient recruitment                               

5.    UNRESTRICTED EDUCATIONAL GRANTS                               

  o     Purpose: to educate consumers and/or physicians on a
particular topic, disease, specialty, etc.  
      o     Used particularly for non-FDA approved (off-label) usage

6.    DEEP DATA MINING                                              

        o     "Personal Advisor" service will solicit data from users in
   exchange for personalized options and referrals
        o     All information will be privacy protected with appropriate
legal disclaimers, policy statements, etc.  
     o     Opt-in users will be referred to appropriate healthcare
providers for further information, etc.     

7.    FUTURE REVENUE STREAMS                                        

      o     CHC owns the publishing rights to Sexual Health Magazine
            o     CHC ultimately intends to charge hosts and other third parties
for its content                             
      o     Ability to adapt CHC's model to other disease categories
(e.g., arthritis, diabetes)                 

  The Company hopes to develop additional revenue streams from access to
SexHealth.com's user community for pharmaceutical companies including the       
following services which SexHealth.com intends to offer:                        

 1. PHARMACEUTICAL PAVILIONS: Opting-in users of SexHealth.com will be
invited to click through to "pharmaceutical pavilions," both general and company
specific, that will allow pharmaceutical companies to display or present        
complete information on their available products or medications.                

2. REGISTRY PAVILIONS: Several of the major pharmaceutical companies
maintain registries in connection with various diseases for which they have     
major medications or protocols available. SexHealth.com intends to provide      
"registry pavilions" for pharmaceutical companies where they can make           
information available to their registrants, on a 24/7 basis, at a substantially 
reduced cost and with appropriate privacy protections.                          

    3. MEDICINAL PAVILIONS: SexHealth.com intends to offer medicine marts on
the website related to particular topics within sexual health. SexHealth.com    
intends to license or maintain lists of medications                             

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relevant to the website's content and then provide a means by which a consumer  
clicking on a specific medication would be taken to a section of the website    
where the pharmaceutical company manufacturing that medication can present      
complete information and allied marketing information. These sections will be   
organized by topic or by a specific medication.                                 

4. FORUMS: SexHealth.com intends to offer live, interactive programs
chaired by a renowned expert speaker (who would field questions after a         
presentation) suggested by a healthcare provider and sponsored by them. Programs
would be edited down to several shorter segments after live taping and run 24/7 
for the succeeding two week period.                                             

COMPETITION                                                                     

 There are numerous websites on the Internet that offer health-related
information. All of the major Internet portals, such as AOL, Yahoo and Excite,  
offer health-related content. Some of them (e.g., AOL's OnHealth) also contain  
information on sexual health topics. All of these major portals also have       
relationships with various third-party health sites. For example, AOL has       
relationships with Drkoop, Medscape and CBS Healthwatch, while Yahoo has a link 
to the Mayo Clinic. The Company believes that the two websites that are closest 
in orientation to SexHealth.com are Sexualhealth.com and goaskalice.com.        

INTELLECTUAL PROPERTY RIGHTS                                                    

     The Company currently does not have any patents issued to it. In December
1999, the Company filed a Provisional Patent Application with the United States 
Patent office, seeking protection for certain software developed by the Company.
In December 2000, the Company filed a formal patent application with the patent 
office to the same effect. The Company cannot be certain that the current or any
future patent applications will be granted, that any future patent will not be  
challenged, invalidated or circumvented, or that the rights granted under any   
patent that may be issued will provide competitive advantages to it. In         
addition, the Company intends to pursue the registration of certain of its      
trademarks and service marks in the U.S. and in certain other countries.        

REGULATION                                                                      

The Company is currently not subject to direct regulation by any    
governmental agency, other than laws and regulations generally applicable to    
businesses, although rules pertaining to the use of encryption may apply.       

  Due to the increasing popularity and use of the Internet, it is likely
that a number of laws and regulations may be adopted at the federal, state and  
local level, and abroad, with particular applicability to the Internet, covering
issues such as user privacy, freedom of expression, pricing, characteristics and
quality of products and services, taxation, advertising, intellectual property  
rights, information security, access fees and the convergence of traditional    
telecommunications services with Internet communications. In addition, laws and 
regulations may be adopted at the federal, state and local level, and abroad,   
with respect to the disclosure of individual health and medical information. The
adoption of any of these laws or regulations could decrease the demand for the  
Company's services or increase the cost of doing business or in some manner harm
the Company's business, results of operations or financial condition. In        
addition, applicability to the Internet of existing laws governing issues such  
as property ownership, copyrights and other intellectual property issues,       
taxation, libel, obscenity, and personal privacy is uncertain. These laws were  
adopted before the widespread use and commercialization of the Internet and, as 
a result, do not contemplate or address the unique issues of the Internet and   
related technologies.                                                           

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In addition, the Federal Trade Commission (the "FTC") has adopted   
regulations regarding the collection and use of personal identifying information
obtained from children when accessing websites and is considering the adoption  
of other regulations regarding such collection and use with respect to specific 
groups of individuals as well as specific types of information. These           
regulations include a requirement that companies establish procedures to: give  
adequate notice to consumers regarding information collection and disclosure    
practices; provide consumers with the ability to have personal identifying      
information deleted from a company's database; clearly identify affiliations or 
a lack of affiliations with third parties which may collect information or      
sponsor activities on a company's website; and obtain express parental consent  
prior to collecting and using personal identifying information obtained from    
children under 13 years of age.                                                 

   While the Company intends to implement programs designed to comply with
current regulations and to enhance the protection of the privacy of its         
customers, it cannot be certain that such programs will conform with any future 
regulation adopted by the FTC. Moreover, even in the absence of regulation, the 
FTC has begun investigations into the privacy practices of companies that       
collect information on the Internet. One investigation by the FTC has resulted  
in a consent decree in which the Internet company has agreed to establish       
programs to implement the four principles noted above. The Company may become   
subject to an investigation by the FTC, and the FTC's regulatory and enforcement
efforts may adversely affect the Company's ability to collect demographic and   
personal information from members.                                              

     In addition, at the international level, the European Union has adopted a
directive that will impose restrictions on the collection and use of personal   
data. Such directive could affect U.S. companies that collect information over  
the Internet from individuals in European Union member countries, and impose    
restrictions that are more stringent than current Internet privacy standards in 
the United States. We cannot be certain that this directive will not adversely  
affect the activities of entities such as the Company that engage in data       
collection from users in European Union member countries.                       

Due to the global nature of the Internet, it is possible that the   
governments of other states and foreign countries might attempt to regulate     
transmissions or prosecute for violations of their laws even though             
transmissions by the Company over the Internet currently originate primarily in 
Brossard, Quebec. Violations of local laws may be alleged or charged by state or
foreign governments, and the Company may unintentionally violate local laws and 
local laws may be modified, or new laws enacted, in the future. Any of the      
foregoing developments could have a material adverse effect on the Company's    
business, results of operations and financial condition.                        

EMPLOYEES                                                                       

   As of March 15, 2001, the Company had three full-time employees, two of
whom are engaged in executive management. The Company also employs approximately
a dozen independent consultants, including the operating personnel for          
SexHealth.com., as well as Atlantis Equities, Inc. as its financial advisor.    
Robert Ellin of Atlantis is a Co-Chairman of the Company. From time to time, the
Company may employ additional independent contractors to support its            
engineering, marketing, sales and support and administrative organizations. The 
Company believes its relations with its employees are generally good and it has 
no collective bargaining agreements with any labor unions.                      

INTELLECTUAL PROPERTY                                                           

The Company's success depends in part on its ability to protect its 
intellectual property. To protect the Company's rights, the Company intends to  
generally rely on patent, copyright, trademark and trade secret laws,           
confidentiality agreements with employees and third parties, and license        
agreements with consultants, vendors and customers, although the Company has not
signed such agreements in every case.                                           

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Third parties may copy or obtain and use the Company's technologies,
ideas, know-how and other information without authorization or independently    
develop technologies similar or superior to the Company's technologies.         
Competitors may obtain patents or other rights that would prevent, or limit or  
interfere with the Company's ability to make, use or sell the Company's software
or services. If the Company is found to infringe on the rights of others it may 
be required to incur substantial costs to defend any litigation, cease offering 
its products, obtain a license from the holder of the infringed intellectual    
property right or redesign its software and services.                           

 Legal standards relating to the validity, enforceability and scope of
protection of certain rights in Internet-related businesses are uncertain and   
still evolving. The Company cannot assure the future viability or value of any  
of its rights or of similar rights of other companies within this market. The   
Company cannot be certain that the steps taken by it will prevent               
misappropriation or infringement of its information.                            

Any litigation might result in substantial costs and diversion of   
resources and management attention and could have a material adverse effect on  
the Company's business, results of operations and financial condition.          

ITEM 2.  DESCRIPTION OF PROPERTY                                                

     The Company subleases approximately 1,875 square feet of office space for
use as its corporate headquarters at 29 W. 57 St., 9th Floor, New York, N.Y.    
10019. The sublease expires on November 29, 2003. Additional executive office   
space may be required as the Company`s business expands and the Company believes
that it can obtain suitable space as needed. The Company will also likely       
require additional space for technical facilities, including servers. The       
Company does not own any real estate.                                           

ITEM 3.  LEGAL PROCEEDINGS                                                      

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

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

     During the fourth quarter of the year ended December 31, 2000, no matters
were submitted by the Company to a vote of its stockholders.                    

  Stockholders representing approximately 58.32% of the total issued and
outstanding shares of the Company's Common Stock as of March 1, 2000 took action
by written consent to (i) increase the size of the Company's Board of Directors 
and elect new directors, (ii) increase the number of shares that the Company was
authorized to issue from twenty million to fifty million, and (iii) authorize   
the Company for the period ending on April 19, 2001 to effect a reverse split of
the Company's issued and outstanding Common Stock on up to a one-for-three      
basis. On or about March 30, 2000, the Company mailed on                        

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Information Statement to the holders of record of the Company's Common Stock    
setting forth the foregoing.                                                    

 Stockholders representing approximately 51.1% of the total issued and
outstanding shares of the Company's Common Stock as of August 1, 2000 took      
action by written consent to amend the Company's Amended and Restated           
Certificate of Incorporation in order to change the name of the Company from    
"Spinrocket.com, Inc." to "ConnectivCorp." On or about August 21, 2000, the     
Company mailed an Information Statement to the holders of record of the         
Company's Common Stock setting forth the foregoing.                             

 Stockholders representing approximately 53.2% of the total issued and
outstanding shares of the Company's common stock as of March 12, 2001 took      
action by written consent to (i) authorize the Company to effect a reverse split
of the Company's issued and outstanding common stock on up to a one-for-ten     
basis, and (ii) approve the adoption of a stock option plan for up to 5 million 
shares of common stock (which shall be reduced pro rata if the reverse split is 
effectuated). No information statement has yet been mailed to shareholders.     

 PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               

     MARKET INFORMATION. The Company's common stock is currently listed on the
OTC Bulletin Board under the trading symbol "COTV." The Company first listed its
common stock on the OTC Bulletin Board in August 1999. The following table sets 
forth the high and low bid prices of the Company's Common Stock as reported on  
the OTC Bulletin Board for each calendar quarter commencing in the third quarter
of 1999 through March 30, 2001.                                                 

                                                                [Download Table]


                                                 COMMON STOCK                   
                              --------------------------------------------------
                                        2000                     1999           
                              --------------------------------------------------
                                HIGH BID     LOW BID     HIGH BID     LOW BID   
                                --------     -------     --------     -------   
                                                                                
First Quarter                    4.375        2.438         NA           NA     
Second Quarter                   3.500        1.031         NA           NA     
Third Quarter                    2.313        1.125       3.125        1.2500   
Fourth Quarter                   2.313         .875       2.750        1.1875   

      As of March 30, 2001, the closing sale price of the Company's common stock
on the OTC Bulletin Board was $0.39 per share.                                  

HOLDERS                                                                         

   As of March 30, 2001, there were approximately 165 holders of record of
the Company's common stock as determined from the Company's transfer agent's    
list. Such list does not include beneficial owners of securities whose shares   
are held in the names of various dealers and clearing agencies.                 

DIVIDENDS                                                                       

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

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other relevant considerations, including applicable contractual restrictions and
governmental regulations with respect to the payment of dividends.              

RECENT SALES OF UNREGISTERED SECURITIES                                         

PRIVATE PLACEMENT                                                               

  On March 31, 2000, the Company raised approximately $3 million (net of
placement agent fees) through the private placement of 2,661,352 shares of the  
Company's Series D Convertible Preferred Stock (the "Series D Preferred Stock") 
at a price of $1.28 per share (the "Private Placement"). On April 19, 2000, the 
Company converted the Series D Preferred Stock into shares of common stock at a 
ratio of one share of common stock for one share of Series D Preferred Stock and
amended its charter to authorize the issuance of up to 40 million shares of     
common stock. At the second closing on April 28, 2000, the Company received     
approximately $.7 million (net of placement agent fees) and issued 648,128      
shares of common stock. The Company also issued one warrant to purchase one     
share of common stock for each share of preferred or common stock issued in the 
private placement. The warrants have an exercise price of $5 per share and are  
exercisable at any time until April 19, 2002. The Company also granted to Matrix
U.S.A., the placement agent, warrants to purchase 330,948 shares of the         
Company's common stock. The warrants have an exercise price of $1.28 per share  
and are exercisable at any time until April 28, 2005. The issuance of the       
securities in the transactions described above were deemed to be exempt from    
registration under the Securities Act of 1933, as amended, in reliance on       
Section 4(2) of Securities Act and Regulation D promulgated thereunder as       
transactions by an issuer not involving any public offering.                    

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

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

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

MERGER                                                                          

      On November 16, 1999, the Company, through its wholly-owned subsidiary, 32
Records LLC ("32 LLC") entered into a business combination transaction with     
Cakewalk LLC ("Cakewalk") in a transaction accounted for by the purchase method 
wherein Cakewalk LLC was deemed to be the acquiror and the Company the acquiree 
(the "Merger").                                                                 

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  As part of the Merger: (1) Cakewalk contributed and assigned to 32 LLC
substantially all of the assets and liabilities relating to the business of     
Cakewalk in exchange for 8,307,785 shares of the Company's Common Stock, (2)    
Dylan LLC exercised a warrant and paid the Company $900,000 for 7,037,183 shares
of Common Stock, (3) Atlantis Equities, Inc. exercised a warrant and paid the   
Company $100,000 for 781,909 shares of Common Stock, (4) 3,049,424 shares of    
Common Stock held by the then management of the Company were surrendered and (5)
50,000 shares of Class C Preferred Stock were converted into 500,000 shares of  
Common Stock. A portion of the purchase price was allocated to assets acquired  
and liabilities assumed based on the estimated fair market value at the date of 
acquisition and the balance of $4,200,000 was recorded as cost of acquired      
software and is being amortized using the straight-line method over the         
estimated useful life of five years. The $4.2 million valuation is based upon an
independent valuation analysis of the software obtained by the Company.         

UNCERTAINTY                                                                     

The accompanying financial statements have been prepared on a going 
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has a limited      
operating history, and since it's inception in 1998 has incurred substantial    
losses. The Company's accumulated deficit as of December 31, 2000 is            
approximately $13 million. To date, the Company has not generated any revenue   
from its proposed business model, which contemplates selling pharmaceutical and 
other healthcare companies access to the Company's aggregated users. The Company
incurred a loss from continuing operations of approximately $4.9 million and a  
net loss of approximately $6.4 million for the year ended December 31, 2000.    
Additionally, cash used in operations totaled approximately $2.3 million for the
year ended December 31, 2000, while cash and cash equivalents at December 31,   
2000 totaled approximately $1.8 million. These matters raise substantial doubt  
about the Company's ability to continue as a going concern. The Company's       
continued existence is dependent upon several factors including the Company's   
ability to execute its business strategy and/or its ability to raise            
additionally equity.                                                            

The Company's near term operating strategy focuses on the continued 
execution of its business plan. To date, the Company has successfully launched  
SexHealth.com, and entered into Content Agreements with several major hosts,    
thereby exposing the Company's content to millions of potential users, the      
Company has not yet been able to convert a meaningful number of these consumers 
to users of SexHealth.com, either directly or through the various host sites.   
Additionally, the Company has not yet signed any agreements with any            
pharmaceutical or offer healthcare company to use the Company's services. The   
Company has currently evaluated its current operating costs and has undertaken  
measures to reduce these costs, which include the reduction of salaries and     
payments to consultants. It is projected that these cuts will reduce the annual 
cash expenditures by approximately $449,000. The Company is also exploring its  
ability to raise additional equity through a private placement of the Company's 
preferred stock. The Company believes that it will be able to raise additionally
equity capital, and that the capital raised will be sufficient to fund and      
execute its business plan when combined with the Company's current cash         
position.                                                                       

   The Company's ability to operate as a going concern is dependent on its
ability to execute its business plan and/or raise additionally equity. There can
be no assurance that the Company will be able to achieve or sustain any level   
of profitability in the future. Future operating results will depend on a number
of factors, including demand for, and market acceptance of, the Company's       
services and prevailing economic conditions. While the Company has reduced its  
operating expenses, no assurance can be given that the Company can sustain these
operating levels. Moreover, the Company has not yet generated any meaningful    
revenues, and no assurance can be given that it will do so in the future. There 
can be no assurance that the Company will generate sufficient revenues to ever  
achieve profitability or otherwise sustain its profitability in the future.     
While the Company is exploring raising additional equity                        

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capital, there can be no assurance that the additional equity infusion will be  
consummated. However, although no assurances can be given, the Company is       
confident that it will be able to continue operating as a going concern.        

RESULTS OF OPERATIONS                                                           

As discussed in Liquidity and Capital Resources, 32 LLC's operations
have been recorded as discontinued operations in the consolidated financial     
statements.                                                                     

YEAR ENDED DECEMBER 31, 2000                                                    

  The Company reported the following results of operations for the years
ended December 31, 2000 and 1999:                                               

                                                                [Download Table]


                                                    2000            1999   
                                                    ----            ----   
                                                                           
Loss from continuing operations                $  (4,967,021)  $(1,588,577)
Loss from discontinued operations                 (1,412,700)   (1,475,301)
                                               -------------   ----------- 
Net Loss                                       $  (6,379,721)  $(3,063,878)
                                               =============   =========== 

Basic and diluted loss per share:                                          
Loss from continuing operations                $       (0.24)  $     (0.28)
Loss from discontinued operations                      (0.07)        (0.26)
                                               -------------   ----------- 
Net loss per common share - basic and diluted                              
                                               $       (0.31)  $     (0.54)
                                               =============   =========== 

   The Company reported a loss of approximately $5 million from continuing
operations. The Company's operating income for the year ended December 31, 2000 
consisted of consulting fee revenue of $80,000, and other income consisted of   
interest income of approximately $103,000 that was earned on invested funds.    
General and administrative expenses totaled approximately $5.3 million in 2000  
versus $2.2 million in 1999. Included in general and administrative was         
approximately $1.8 million of deferred compensation expense related to options  
granted to consultants and employees; salaries of approximately $727,000;       
approximately $1.3 million for professional and consulting fees and software    
development and amortization expense of approximately $992,000 of acquired      
software and goodwill.                                                          

YEAR ENDED DECEMBER 31, 1999                                                    

The Company had no revenues in 1999.                                

  General and administrative expenses include approximately $500,000 for
professional and consulting fees and software development. Also included is     
compensation expense of $1.4 million associated with stock options granted to   
consultants, employees and directors.                                           

 Depreciation and amortization expense includes approximately $130,000
amortization expense associated with the cost of software acquired in the       
business combination.                                                           

CONNECTIVHEALTH'S BUSINESS MODEL                                                

ConnectivHealth Corp. ("ConnectivHealth" or "CHC"), a wholly owned  
subsidiary of ConnectivCorp, is a comprehensive deep-level, healthcare provider 
that facilitates various marketing opportunities for pharmaceutical and other   
healthcare oriented companies. ConnectivHealth does this by acting as a         
middleman between segmented, profiled, healthcare-oriented consumers, patients  
and caregivers,                                                                 

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and those healthcare companies desiring to serve their healthcare needs. This   
enables these companies to reach their core audience on an individualized,      
targeted, profiled, fully opted-in basis.                                       

    To achieve this, ConnectivHealth seeks to forge strategic alliances with
various online healthcare and other websites - referred to as `hosts' - which   
have already established large constituencies of consumers who share similar    
needs and interests. Through the establishment of a relationship, pursuant to   
which ConnectiveHealth trades its content for access to the host site's traffic,
ConnectivHealth hopes to reach large numbers of consumers and patients without  
spending the large sums usually required to accomplish such acquisition. In     
return for the opportunity to utilize the hosts' already acquired consumer      
population, ConnectivHealth will provide specific, comprehensive healthcare     
content at no cost which will help the hosts maximize their offering to their   
constituencies, and augment their ability to fulfill their primary mission:     
providing services of significant value to their members.                       

  ConnectivHealth will seek to aggregate the consumer populations of its
hosts into a segmentable data pool, enabling marketers to use ConnectivHealth as
a single-source destination to reach large numbers of profiled and segmented    
healthcare-oriented consumers. Given the ability to quickly find and reach large
numbers of patients with specifically identified needs and interests allows     
healthcare marketers to, among other things, facilitate brand advocacy,         
compliance and switch marketing and to recruit candidates for research and      
clinical trial programs in the most effective possible manner.                  

   ConnectivHealth intends to sell access to its user base to its intended
customers: pharmaceutical and other healthcare companies that have an interest  
in the areas of healthcare covered by ConnectivHealth, such access to be        
provided on a privacy protected, fully opted-in basis.                          

CONNECTIVHEALTH INITIATIVES                                                     

SEXHEALTH.COM WEBSITE                                               

On January 18, 2001, ConnectivHealth launched SexHealth.com         
(www.sexhealth.com), its comprehensive website that is intended to serve as both
a destination website for consumers seeking specific sexual health information, 
and as a health portal venue where the online connection between consumers and  
marketers will be effected.                                                     

Through SexHealth.com, ConnectivHealth seeks to offer comprehensive 
information in the area of sexual health. This overall area subsumes many topics
of particular interest, such as sexual dysfunction, sexually transmitted        
diseases, and hormone replacement therapy. As a subset of the broader area of   
women's health, the Company believes that SexHealth.com appeals to one of the   
most coveted demographic groups, women aged 15-55. The Company believes that    
this has particular appeal to a wide variety of pharmaceutical and other        
healthcare companies.                                                           

LIQUIDITY AND CAPITAL RESOURCES                                                 

PRIVATE PLACEMENT                                                               

  On March 31, 2000, the Company raised approximately $3 million (net of
placement agent fees) through the private placement of 2,661,352 shares of the  
Company's Series D Convertible Preferred Stock (the "Series D Preferred Stock") 
at a price of $1.28 per share. On April 19, 2000, the Company converted the     
Series D Preferred Stock into shares of Common Stock at a ratio of one share of 
Common Stock for one share of Series D Preferred Stock and amended its charter  
to authorize the issuance of up to 40 million shares of common stock. At the    
second closing on April 28, 2000, the Company received approximately $.7 million
(net of placement agent fees) and issued 648,128 shares of Common Stock.        

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     The Company also issued one warrant to purchase one share of Common Stock
for each share of Preferred or Common Stock issued in the Private Placement. The
warrants have an exercise price of $5 per share and are exercisable at any time 
until April 19, 2002. The Company also granted Matrix U.S.A., LLC, the placement
agent, warrants to purchase 330,948 shares of the Company's Common Stock. These 
warrants have an exercise price of $1.28 per share and are exercisable at any   
time until April 28, 2005.                                                      

CHANGE IN MANAGEMENT, LOAN DEFAULT AND DISPOSITION OF SUBSIDIARY                

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

ITEM 7.  FINANCIAL STATEMENTS                                                   

 The Company's audited consolidated financial statements for the years
ended December 31, 2000 and 1999, respectively, are set forth at the end of this
Annual Report on Form 10-KSB and begin on page F-1.                             

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

None.                                                               

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PART III

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

DIRECTORS AND EXECUTIVE OFFICERS                                                

     The following table sets forth certain information, as of March 15, 2001,
concerning the Company's directors and executive officers:                      

                                                                [Download Table]


Name                             Age    Position                      
----------------------------------------------------------------------

                                                                      
Elliot Goldman                    65    President, Chief Executive    
                                        Officer, Director             
Robert Ellin                      35    Co-Chairman                   
Robert Miller                     49    Co-Chairman                   
Ivan Berkowitz                    55    Director                      
David Goddard                     45    Director                      
Thomas Cyrana                     52    Observer                      

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

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

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

ROBERT MILLER (CO-CHAIRMAN). Mr. Miller is a nationally recognized  
bankruptcy lawyer and distressed investor. As a lawyer, Mr. Miller played a     
leading role in many of the most prominent corporate restructurings of the 1980s
through the mid-1990s, including Macy's, Trump Taj Mahal, Days                  

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Inns of America, A.H. Robins and Continental Airlines. From 1995 to 1998, Mr.   
Miller was of counsel to Rosenman & Colin LLP. From its inception in 1996 until 
acquired by the Company in 1999, Mr. Miller was President and CEO of Cakewalk   
LLC, now 32 LLC. Since 1999, Mr. Miller has been of counsel to Baer Marks &     
Upham LLP and served as a consultant to Shenkman Capital Management, Inc. until 
December 31, 2000                                                               

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

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

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

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

MANAGEMENT CHANGES                                                              

 As of March 20, 2000, Joel Arberman resigned as director and Internet
Officer of the Company.                                                         

As of August 3, 2000, Marty Marion has terminated as Chief Strategic
Officer of the Company.                                                         

As of November 7, 2000, Alan L. Schaffer resigned as Chief Financial
Officer of the Company.                                                         

      As of January 2001, Peter Crawford resigned as Chief Technology Officer of
the Company.                                                                    

CERTAIN CORPORATE ACTIONS                                                       

  Stockholders representing approximately 58.32% of the total issued and
outstanding shares of the Company's Common Stock as of March 1, 2000 took action
by written consent to (i) increase the size of the Company's Board of Directors 
and elect new directors, (ii) increase the number of shares that the Company was
authorized to issue from twenty million to fifty million, and (iii) authorize   
the Company for the period ending on April 19, 2001 to effect a reverse split of
the Company's issued and outstanding                                            

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Common Stock on up to a one-for-three basis. On or about March 30, 2000, the    
Company mailed on Information Statement to the holders of record of the         
Company's Common Stock setting forth the foregoing.                             

 Stockholders representing approximately 51.1% of the total issued and
outstanding shares of the Company's Common Stock as of August 1, 2000 took      
action by written consent to amend the Company's Amended and Restated           
Certificate of Incorporation in order to change the name of the Company from    
"Spinrocket.com, Inc." to "ConnectivCorp." On or about August 21, 2000, the     
Company mailed an Information Statement to the holders of record of the         
Company's Common Stock setting forth the foregoing.                             

 Stockholders representing approximately 53.2% of the total issued and
outstanding shares of the Company's common stock as of March 12, 2001 took      
action by written consent to (i) authorize the Company to effect a reverse split
of the Company's issued and outstanding common stock on up to a one-for-ten     
basis, and (ii) approve the adoption of a stock option plan for up to 5 million 
shares of common stock (which should be reduced pro rata if the reverse split is
effectuated). No information statement has yet been mailed to shareholders.     

ADVISORY BOARD                                                                  

    The Company has formed an Advisory Board to the Board of Directors which
consists of the following individuals:                                          

MICHAEL E. MEYERS                                                               

   Until October 2000, Mr. Meyers was a Director of Health Care Investment
Banking at Merrill Lynch & Co. in New York. Mr. Meyers was responsible for      
covering the life sciences industry. Prior to joining Merrill Lynch, Mr. Meyers 
was a Vice President of Health Care Investment Banking and Head of the          
Pharmaceutical & Drug Delivery Focus Group, at Cowen & Company in New York.     
Prior to Cowen & Company Mr. Meyers was the Special Assistant to the Chief      
Executive Officer of a large health services organization in New York. Prior to 
this position, Mr. Meyers was a life sciences Research Associate at Hambrecht & 
Quist in New York. Mr. Meyers holds a M.P.H. in Health Policy & Management from 
Columbia University and an A.B. in Biology from Brandeis University.            

      In October 2000, Mr. Meyers became a Managing Director and General Partner
of Global Biomedical Partners, a private equity firm located in Zurich,         
Switzerland and New York. Global Biomedical Partners advises International      
Biomedicine Holdings in respect of life sciences investments. International     
Biomedicine Holdings has investments in 13 biotechnology companies with future  
investments in biotechnology, medical device and other health care companies.   

JOSHUA GRODE                                                                    

Mr. Grode is the President and Chief Operating Officer of Digital   
Boardwalk, a leading internet development firm and interactive agency.          

RALPH SORRENTINO                                                                

Mr. Sorrentino is President and CEO of DC2 Corp., a wholly owned    
subsidiary of Arthur Treacher's Inc. Prior thereto, Mr. Sorrentino served as CFO
of Liberty Digital and its predecessor, TCI Music.                              

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The Company has also formed a Medical Advisory Board of             
ConnectivHealth, which consists of the following individuals:                   

   M. JOYCELYN ELDERS, MD - former U.S. Surgeon General from 1993 to 1994,
earning a reputation for increasing prenatal care for poor women and in-home    
care for the terminally ill, and expanding mammography and HIV testing. Prior to
her appointment by President Clinton, she was Head of the Arkansas Department of
Health and President of the Association of State and Health Officers. One of    
eight children, Dr. Elders served as a physical therapist in the U.S. Army, and 
attended the University of Arkansas under the G.I. Bill. A pediatric            
endocrinologist with expertise in public health and adolescent medicine, Dr.    
Elders is currently a Professor Emeritus of Pediatrics at the University of     
Arkansas School of Medicine.                                                    

PENELOPE HITCHCOCK, DVM, MS - heads the Sexually Transmitted Disease
Branch at the National Institute of Allergy and Infectious Diseases, National   
Institutes of Health (NIH). In this capacity, she administers a research program
combining biomedical, behavioral, clinical and epidemiological approaches to the
prevention of STDs, including HIV. She has training in molecular biology and was
associate professor at the University of Tennessee prior to joining NIH.        

    KING HOLMES, MD, PH.D. - is a professor of medicine at the University of
Washington Medical School. He directs the Center for AIDS and STD Research in   
Seattle and has served as chief of medicine at Harborview Medical Center and    
vice chairman of the Department of Medicine at the University of Washington. He 
is the recipient of many awards in his field and serves as an elected member of 
the National Academy of Science.                                                

ELI COLEMAN, PH.D. - directs the program in human sexuality at the  
University of Minnesota Medical School and serves on the executive committee of 
the International Academy of Sex Research. A past president of the Society for  
the Scientific Study of Sexuality, he is an expert on clinical issues in human  
sexuality, especially those involving homosexuality.                            

    JULIA HEIMAN, PH.D. - is Professor of Psychiatry and Behavioral Sciences
at the University of Washington Medical Center. A well-known expert in the field
of sexual health, she co-directs the Reproductive and Sexual Medicine Clinic of 
the University of Washington Psychiatry and Urology Departments, and is past    
president of The International Academy of Sex Research.                         

DEBRA W. HAFFNER, MPH - the former head of SIECUS, the Sexuality    
Information and Education Council of the United States. Author of numerous      
articles and several books on sexual health topics.                             

    MICHAEL V. REITANO, MD - has forged a unique role as clinical expert and
health educator, pursuing a special interest in women's healthcare and sexual   
health generally. As an outspoken advocate of a more informed dialogue about    
sexuality, Dr. Reitano was the Executive Publisher and Editor-in-Chief of SEXUAL
HEALTH MAGAZINE. Dr. Reitano earned his medical degree at the New York          
University School of Medicine. He is a founder of the Herpes Advice Center, an  
educational outreach program covering a number of sexually transmitted          
infections.                                                                     

 All members of the Company's Advisory Boards have received options to
purchase Common Stock of the Company.                                           

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REVERSE SPLIT                                                                   

GENERAL                                                             

   As of March 12, 2001, stockholders representing 53.2% of the issued and
outstanding shares of the Common Stock of the Company have approved an amendment
to the Company's Amended and Restated Certificate of Incorporation to authorize 
the Company to effect a reverse split (the "Reverse Split") that will cause all 
issued and outstanding Common Stock to be split, on a reverse basis, up to      
one-for-ten. The Reverse Split, as and when it is implemented, will not affect  
the number of authorized shares of the Company's Common Stock. Any such Reverse 
Split will effectively increase the number of available authorized shares of    
Common Stock. As described below, the primary objective of the Board of         
Directors if it were to effect a Reverse Split would be to seek to increase the 
per share market price of the Common Stock. The Company intends to mail an      
Information Statement to the holders of record of the Company's Common Stock    
setting forth the foregoing in April 2001.                                      

EFFECTS OF REVERSE SPLIT                                            

 EFFECT ON MARKET FOR COMMON STOCK. The Company has been attempting to
increase the liquidity of its Common Stock, which currently is traded on the OTC
Bulletin Board. Towards that end, the Company has filed an application to have  
its Common Stock listed on the American Stock Exchange ("AMEX"). The Company has
received one letter of comment from the AMEX in addition to certain informal    
requests, and is pursuing its application. No assurance can be given, however,  
that the Company will be successful in obtaining an AMEX listing or that if such
a listing is obtained, it will result in increased liquidity for the Company's  
Common Stock.                                                                   

      On March 30, 2001, the last reported closing price of the Company's Common
Stock on the OTC Bulletin Board was $0.39 per share. By effecting the Reverse   
Split and decreasing the number of shares of Common Stock otherwise outstanding 
without altering the aggregate economic interest in the Company represented by  
such shares, the Board of Directors believes that the trading price for the     
Common Stock will be increased. However, since there are numerous factors and   
contingencies that could affect the bid price of the Common Stock, there can be 
no assurance that such increase in the price will occur, or if it does occur    
that such higher price will be maintained.                                      

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

     In connection with the foregoing, the Company recently retained Madison &
Wall Worldwide, Inc. as its investor relations firm and Eisenberg Communications
as its public relations firm, in order to help the Company achieve a higher     
profile in the investment community.                                            

    EFFECTS ON NUMBER OF SHARES AVAILABLE FOR ISSUANCE. A Reverse Split will
decrease the number of outstanding shares of Common Stock. Assuming a Reverse   
Split on a one-for-ten basis, the 21,532,155 shares of Common Stock issued and  
outstanding as of the effective date of the Reverse Split would, together with  
the 10,289,552 shares of Common Stock issuable upon and, assuming the exercise  
of, all                                                                         

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outstanding warrants and options, be converted into approximately 3,182,170     
shares of Common Stock. Because the number of shares of Common Stock authorized 
for issuance by the Certificate of Incorporation, as amended, following the     
Reverse Split would remain at 40,000,000 shares, the Reverse Split would result 
in approximately 28,639,537 additional (or post-split) shares of Common Stock   
available for issuance by the Company. In lieu of issuing any fractional shares 
as a result of the Reverse Split, the Company will round the number of shares   
each shareholder is entitled to receive as a result of the Reverse Split to the 
nearest whole number of shares.                                                 

The Board of Directors believes that a Reverse Split can provide    
flexibility for the Company in meeting its possible needs by assisting the      
Company to raise additional capital through the issuance of Common Stock or     
securities convertible into or exercisable for Common Stock, to make additional 
stock awards under the Company's employee benefit plans and/or to employ Common 
Stock as a form of consideration for acquisitions. Other than in connection with
the Company's stock option plan, the Company does not presently intend to issue 
any additional shares for any specific purpose.                                 

    EFFECT ON THE COMPANY'S DERIVATIVE AND CONVERTIBLE SECURITIES. The total
number of shares of Common Stock issuable upon the exercise of options and      
warrants to acquire such shares, and the exercise price thereof, shall be       
proportionally adjusted to reflect any Reverse Split.                           

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

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

      Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and persons who own more than ten   
percent of a registered class of the Company's equity securities to file certain
reports regarding ownership of, and transactions in, the Company's securities   
with the Securities and Exchange Commission (the "SEC"). These officers,        
directors and stockholders are also required by SEC rules to furnish the Company
with copies of all Section 16(a) reports that are filed with the SEC. Based     
solely on a review of copies of such forms received by the Company, and written 
representations received by the Company from certain reporting persons, the     
Company believes that for the year ended December 31, 2000 all Section 16(a)    
reports required to be filed by the Company's executive officers, directors and 
10% stockholders were filed on a timely basis, except as hereinafter set forth. 
Messrs. Goddard and Berkowitz failed to timely file Form 3's upon becoming      
directors of the Company. BankBoston Ventures failed to timely file a Form 3    
upon becoming a 10% stockholder of the Company.                                 

ITEM 10.  EXECUTIVE COMPENSATION                                                

The following summary compensation table sets forth the aggregate   
compensation paid to, or earned by, the Chief Executive Officer and the other   
most highly compensated executive officer for the years ended December 31, 2000 
and 1999 whose total annual salary and bonus exceeded $100,000 for 2000 and 1999
(collectively the "Named Executive Officers").                                  

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SUMMARY COMPENSATION TABLE                                                      

                                                        [Enlarge/Download Table]


                                                                                                             LONG-TERM    
                                                          ANNUAL COMPENSATION                               COMPENSATION  
                                      -------------------------------------------------------------  ---------------------
                                                                                                             SECURITIES   
                                                                                    OTHER ANNUAL             UNDERLYING   
NAME AND PRINCIPAL POSITION             YEAR    SALARY ($)      BONUS ($)          COMPENSATION ($)        OPTIONS/SARS(#)
---------------------------             ----    ----------      ---------          ----------------        ---------------

                                                                                                                          
Robert Miller(1).....................     2000      $200,000        --                 --                        --       
  Co-Chairman                             1999       $34,615        --                 --                        --       
Elliot Goldman(2)....................     2000      $146,154        --                 --                        --       
  President and                           1999            --        --                 --                        --       
  Chief Executive Officer                                                                                                 
Alan L. Schaffer(3)..................     2000      $134,154        --                 --                        --       
  Chief Financial Officer                 1999       $14,019        --                 --                        --       

----------                                                                      
(1)   For the year 2000, Mr. Miller served as the President and Chief Executive 
     Officer. In January 2001, Mr. Miller relinquished these positions and was
    appointed Co-Chairman. For the year 2000 he was paid an annual salary of
    $200,000, subject to such increases or bonuses as the Board of Directors
 shall authorize. As of March 1, 2001, Mr. Miller agreed to reduce his
     salary to $100,000. See "Executive Compensation - Employment Agreements."

(2)   For the year 2000 Mr. Goldman served as Chief Operating Officer. In       
   January 2001 Mr. Goldman was promoted and appointed President and Chief
Executive Officer. For the year 2000 he was paid an annual salary of
    $200,000, subject to such increases or bonuses as the Board of Directors
     shall authorize. From January through February 2001, Mr. Goldman's salary
 was increased to $250,000. As of March 1, 2001, Mr. Goldman agreed to
   reduce his salary to $150,000. See "Executive Compensation - Employment
Agreements."                                                        

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

OPTION GRANTS IN 2000                                                           

      The following table sets forth certain information concerning the grant of
stock options in 2000 to each of the Named Executive Officers.                  

                                                        [Enlarge/Download Table]


                               NUMBER OF                                                          
                               SECURITIES     PERCENTAGE TO TOTAL                                 
                               UNDERLYING     OPTIONS GRANTED TO   EXERCISE PRICE                 
NAME                         OPTIONS GRANTED  EMPLOYEES IN 2000       ($/SHARE)    EXPIRATION DATE
----                         ---------------  -----------------       ---------    ---------------

                                                                                                  
Elliot Goldman..............         500,000        100.00%            (1)              (1)       

----------                                                                      
      (1) Pursuant to his employment agreement with the Company, the Company has
granted Mr. Goldman an option to purchase all or any part of an aggregate of    
500,000 shares of the Company's Common Stock at an exercise price of $1.28 per  
share, of which 125,000 shares are immediately exercisable, one-quarter will be 
exercisable after one year of service, one-quarter after two years of service   
and the final one-quarter will be exercisable after three years of service. Mr. 
Goldman's options shall terminate upon the later to occur of (a) the expiration 
of the term of Mr. Goldman's employment with the Company, or (b) November 10,   
2006. Upon his appointment as President and Chief Executive Officer in January  
2001, the Company granted Mr. Goldman an additional option to purchase all or   
any part of an aggregate of 500,000 shares of the Company's Common Stock at an  
exercise price of $1.50, of which 250,000 are immediately                       

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exercisable and 250,000 shares will be exercisable when and if the Company      
achieves certain revenue levels.                                                

AGGREGATE OPTION EXERCISES IN 2000 AND 2000 YEAR-END OPTION VALUES              

   The following table sets forth certain information concerning the Named
Executive Officers with respect to the number of shares covered by exercisable  
and unexercisable stock options at December 31, 2000 and the aggregate value of 
exercisable and unexercisable "in-the-money" options at December 31, 2000. No   
options were exercised by the Named Executive Officers in 2000.                 

                                                        [Enlarge/Download Table]


NAME                               NUMBER OF SECURITIES      VALUE OF UNEXERCISED    
----                              UNDERLYING UNEXERCISED     IN-THE MONEY OPTIONS    
                                OPTIONS AT FISCAL YEAR-END    AT FISCAL YEAR-END(1)  
                                --------------------------    ---------------------  
                                 EXERCISABLE/UNEXERCISABLE  EXERCISABLE/UNEXERCISABLE
                                 -------------------------  -------------------------
                                                                                     
Robert Miller...................      1,303,833/651,917           $-0-/$-0-          
Elliot Goldman..................        125,000/375,000           $-0-/$-0-          

-----------                                                                     
(1) The value of unexercised "in-the-money" options is equal to the 
difference between the closing bid price of the common stock on the OTC Bulletin
Board as of December 31, 2000 ($0.9375) and the option exercise price per share,
multiplied by the number of shares subject to options.                          

DIRECTOR COMPENSATION                                                           

     The Company's directors do not receive compensation for their services as
directors, but are reimbursed for all reasonable out-of-pocket expenses incurred
in connection with each Board of Directors meeting attended. On April 19, 2000, 
David Goddard and Ivan Berkowitz were granted options to acquire 100,000 shares 
each of the Company's common stock at an exercise price of $2.75. Fifty percent 
of the shares are immediately exercisable, twenty-five percent of the shares    
will be exercisable after one year of service and twenty-five percent of the    
shares will be exercisable after two years of service. The options will         
terminate on April 19, 2005.                                                    

EMPLOYMENT AGREEMENTS                                                           

      The Company has entered into an employment contract, dated as of April 11,
2000, with Elliot Goldman for an initial term of three years. The Agreement was 
amended by Board vote in January 2001. The initial term shall automatically be  
extended by one additional year at the end of the Initial Term and each         
subsequent anniversary thereafter, unless, at least one hundred twenty (120)    
days prior to any such renewal date either Mr. Goldman or the Company shall     
deliver written notice to the other that the term will not be further extended. 
Pursuant to the Employment Agreement, as amended, Mr. Goldman serves as         
President, Chief Executive Officer and as a Director of the Company at an       
initial annual salary of $250,000, subject to such increases or bonuses as the  
Board of Directors of the Company shall authorize. The Company also entered into
an option agreement with Mr. Goldman pursuant to which Mr. Goldman was granted  
an option to purchase all or any part of an aggregate of 500,000 shares of the  
Common Stock of the Company at an exercise price of $1.28 per share. One quarter
of such option shares are currently vested, and an additional one quarter of    
such option shares shall vest on each subsequent anniversary of the agreement   
until all of such option shares are fully vested. All unvested shares shall vest
automatically under certain circumstances. Unless terminated earlier in         
accordance with the terms and conditions of the option agreement, the option    
shall terminate on April 10, 2006. Upon his appointment as President and Chief  
Executive Officer in January 2001, the Company granted Mr. Goldman an additional
option to purchase all or any part of an aggregate of 500,000 shares of the     
Company's Common Stock at an                                                    

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exercise price of $1.50, of which 250,000 are immediately exercisable and       
250,000 shares will be exercisable when and if the Company achieves certain     
revenue levels.                                                                 

     The Company has entered into an employment contract, dated as of November
16, 1999 with Robert Miller for an initial term of three years. This agreement  
was also amended by Board vote in January 2001. The initial term shall          
automatically be extended by one additional year at the end of the initial term 
and each subsequent anniversary thereafter, unless, at least one hundred twenty 
(120) days prior to any such renewal date either Mr. Miller or the Company shall
deliver written notice to the other that the term will not be further extended. 
Pursuant to the employment agreement, as amended, Mr. Miller serves as a        
Director and co-chairman of the Company at an initial annual salary of $200,000,
subject to such increases or bonuses as the Board of Directors of the Company   
shall authorize. The Company also entered into an option agreement with Mr.     
Miller pursuant to which the Company granted to Mr. Miller an option to purchase
all or any part of an aggregate of 1,955,750 shares of the Common Stock of the  
Company, at the following exercise prices: 50% of the Option Shares at $1.30 per
share, 25% at $1.50 per share; and 25% at $1.70 per share. Two-thirds, or       
1,303,899, Option Shares have vested, and the remaining one-third of the option 
shares vest on November 16, 2001. All unvested shares shall vest automatically  
under certain circumstances. Unless terminated earlier in accordance with the   
terms and conditions of the option agreement, the Option shall terminate upon   
the later to occur of (a) the expiration of the term of Mr. Miller's employment 
agreement with the Company, or (b) five years from the original date of grant of
the Option.                                                                     

      Both Messrs. Goldman and Miller have voluntarily reduced their annual cash
compensation to $150,000 and $100,000, respectively, as of March 1, 2001.       

1998 EMPLOYEE STOCK OPTION PLAN                                                 

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

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

    The following table sets forth certain information as of March 31, 2001,
regarding the beneficial ownership of the Company's common stock (assuming the  
sale of the maximum number of Shares that are being offered hereby) by: (i) each
person known by the Company to own beneficially more than 5% of the Company's   
common stock; (ii) each of the Company's directors; (iii) the Company's Chief   
Executive Officer and the other executive officers of the Company whose salary  
and bonus for the fiscal year ended December 31, 2000 exceeded $100,000, and    
(iv) all officers and directors of the Company as a group.                      

                                                                [Download Table]


     NAME AND ADDRESS OF                                 PERCENTAGE 
      BENEFICIAL OWNER(1)         NUMBER OF SHARES(2)     OF CLASS  
----------------------------    ----------------------  ------------
                                                                    
Atlantis Equities, Inc.(3)                                          
750 Lexington Avenue                                                
New York, NY  10022                 5,529,936           24.80%      

BankBoston Ventures, Inc.                                           
100 Federal Street                                                  
Boston, MA  02110                   2,134,499            9.91%      

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                                                                [Download Table]


     NAME AND ADDRESS OF                                 PERCENTAGE  
      BENEFICIAL OWNER(1)         NUMBER OF SHARES(2)     OF CLASS   
-------------------------------  ----------------------  ------------
                                                                     

Robert Miller(4)                                                     
c/o ConnectivCorp.                                                   
29 West 57th Street, 9th Floor                                       
New York, NY  10019                 3,092,391           13.54%       

Elliot Goldman(5)                                                    
c/o ConnectivCorp.                                                   
29 West 57th Street, 9th Floor                                       
New York, NY  10019                   375,000                *       

David Goddard(6)                                                     
c/o ConnectivCorp.                                                   
29 West 57th Street, 9th Floor                                       
New York, NY  10019                    50,000                *       

Ivan Berkowitz(7)                                                    
c/o ConnectivCorp.                                                   
29 West 57th Street, 9th Floor                                       
New York, NY  10019                    50,000                *       

Entertainment Finance                                                
International, LLC(8)                                                
110 East 57th Street                                                 
New York, NY  10019                 1,466,080            6.37%       

Joel Arberman                                                        
8384 Roswell Road, Suite K                                           
Atlanta, GA  30350                  1,142,550            5.30%       

All directors and executive                                          
officers as a group                                                  
(5 persons)(9)                      9,097,327           36.82%       

*less than 2%                                                                   
----------                                                                      

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

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

(3) Includes 762,064 shares issuable upon exercise of options granted to        
Atlantis Equities, Inc. having an exercise price of $2.50 per share and expiring
on December 31, 2002. Robert Ellin, the Co-Chairman of the Company, is a        
principal of Atlantis Equities, Inc.                                            

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(4) Includes 1,303,834 immediately exercisable options that have been granted to
Mr. Miller pursuant to his employment agreement with the Company, but does not  
include 651,916 options that have been granted to Mr. Miller that are not yet   
exercisable.                                                                    

(5) Includes 375,000 immediately exercisable options that have been granted to  
Mr. Goldman pursuant to his employment agreement with the Company, but does not 
include 625,000 options that have been granted to Mr. Goldman that are not yet  
exercisable nor 500,000 additional options granted to Mr. Goldman in January    
2001.                                                                           

(6) Includes 50,000 immediately exercisable options that have been granted to   
Mr. Goddard, but does not include 50,000 options that have been granted to Mr.  
Goddard that are not yet exercisable.                                           

(7) Includes 50,000 immediately exercisable options that have been granted to   
Mr. Berkowitz, but does not include 50,000 options that have been granted to Mr.
Berkowitz that are not yet exercisable.                                         

(8) Consists of warrants issued to Entertainment Finance Ltd., a lender to      
Cakewalk BRE LLC, an indirect wholly owned subsidiary of the Company, having an 
exercise price of $.01 per share and expiring June 29, 2004.                    

(9) Includes (i) 762,064 immediately exercisable options held by Atlantis       
Equities, Inc.; (ii) 1,303,834 immediately exercisable options that have been   
granted to Mr. Miller pursuant to his employment agreement with the Company, but
does not include 651,916 options that have been granted to Mr. Miller that are  
not yet exercisable; (iii) 575,000 immediately exercisable options that have    
been granted to Mr. Goldman pursuant to his employment agreement with the       
Company, but does not include 625,000 options that have been granted to Mr.     
Goldman that are not yet exercisable nor 500,000 additional options granted to  
Mr. Goldman in January 2001; (iv) 50,000 immediately exercisable options that   
have been granted to Mr. Goddard, but does not include 50,000 options that have 
been granted to Mr. Goddard that are not yet exercisable; and (v) 50,000        
immediately exercisable options that have been granted to Mr. Berkowitz, but    
does not include 50,000 options that have been granted to Mr. Berkowitz that are
not yet exercisable.                                                            

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        

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

      Atlantis has voluntarily agreed to reduce its monthly cash compensation to
$6,250 as of March 1, 2001.                                                     

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

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

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

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EXHIBIT                                                                                                                       
 NUMBER                           DESCRIPTION OF DOCUMENT                                                                     
 ------                           -----------------------                                                                     
                                                                                                                              
         2.1 Contribution Agreement, dated as of October 29, 1999 between CDbeat.com, Inc. and Cakewalk LLC                (C)
             Amendment Agreement, dated as of November 16, 1999 by and among Atlantis Equities, Inc., Dylan LLC,              
         2.2 CDbeat.com, Inc., Cakewalk LLC and 32 Records LLC                                                             (C)
         3.1 Articles of Incorporation and By-laws                                                                         (A)
        10.1 Warrant Agreement, dated September 23, 1999 between the Company and Atlantis Equities, Inc.                   (B)
        10.2 Employment Agreement, dated as of November 16, 1999 between CDBeat.com, Inc. and Robert Miller                (C)
        10.3 Stock Option Plan                                                                                             (A)
        10.4 Engagement Letter, dated October 29, 1999 between Atlantis Equities, Inc. and the Company                     (F)
             Warrant Amendment Agreement, dated as of November 16, 1999 by and among Atlantis Equities, Inc. Dylan LLC        
        10.5 and the Company                                                                                               (F)
        10.6 Employment Agreement, dated as of April 11, 2000 between CDbeat.com, Inc. and Elliot Goldman                  (F)
        10.7 Stock Option Agreement, dated as of April 11, 2000 between CDbeat.com, Inc. and Elliot Goldman                   
             Indenture, dated as of June 29, 1999 by and among Cakewalk BRE LLC, Entertainment Finance International, LLC     
        10.8 and RZ0 Corporate Administration, Inc.                                                                        (F)
             Servicing Agreement, dated as of June 29, 1999 by and among Cakewalk BRE, Entertainment Finance                  
        10.9 International, LLC and RZ0 Corporate Administration, Inc.                                                     (F)
       10.10 Management Agreement, dated as of June 29, 1999 by and among Cakewalk LLC, Cakewalk BRE LLC and                  
             Entertainment Finance International, LLC                                                                      (F)
       10.11 Capital Contribution Agreement, dated as of June 29, 1999 between Cakewalk LLC and Cakewalk BRE LLC           (F)
       10.12 Consulting Agreement, dated as of October 18, 2000 by and between ConnectivCorp and Entertainment Finance        
             International LLC                                                                                              * 
       10.13 Content Agreement, dated as of November 27, 2000 between ConnectivCorp and iWon, Inc.                          * 
       10.14 License and Distribution Agreement, dated as of March 29, 2001 by and between ConnectivHealth and                
             drkoop.com, Inc.                                                                                               * 
        21.1 Subsidiaries of the Company                                                                                    * 

         (A) Incorporated by reference to the Company's Registration Statement                                                
             on Form SB-2 (File No. 333-70663)                                                                                
         (B) Incorporated by reference to the Company's Report on Form 8-K                                                    
             filed with the Commission on October 8, 1999                                                                     
         (C) Incorporated by reference to the Company's Report on Form 8-K                                                    
             filed with the Commission on December 1, 1999                                                                    
         (D) Incorporated by reference to the Company's Report on Form 8-K                                                    
             filed with the Commission on January 31, 2000                                                                    
         (E) Incorporated by reference to the Company's Report on Form 8-K/A                                                  
             filed with the Commission on January 31, 2000                                                                    

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EXHIBIT                                                                      
 NUMBER                           DESCRIPTION OF DOCUMENT                    
 ------                           -----------------------                    
                                                                             

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

*     Filed herewith.                                                           

  (b) The Company did not file any reports on Form 8-K during the fourth
quarter of 2000. During the first quarter of 2001, the Company filed a Form 8-K 
on January 17, 2001.                                                            

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SIGNATURES

    In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by  
the undersigned, thereunto duly authorized, on April 16, 2001.                  

      CONNECTIVCORP.

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

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

SIGNATURE                          TITLE                        DATE

/s/ Elliot Goldman      President, Director and Chief          April 16, 2001 
-------------------      Executive Officer                                      
Elliot Goldman        (Principal Executive Officer)                       

/s/ Robert Miller        Co-chairman                            April 16, 2001  
-----------------                                                               
Robert Miller                                                           

/s/ Robert Ellin         Co-chairman                            April 16, 2001  
----------------                                                                
Robert Ellin                                                            

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 EXHIBIT INDEX

                                                                [Download Table]


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

                                                                                
10.12          Consulting Agreement, dated as of October 18, 2000 by and between
               ConnectivCorp and Entertainment Finance International LLC        
10.13          Content Agreement, dated as of November 27, 2000 between         
               ConnectivCorp and iWon, Inc.                                     
10.14          License and Distribution Agreement, dated as of March 29, 2001 by
               and between ConnectivHealth and drkoop.com, Inc.                 
21.1           Subsidiaries of the Company                                      

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 INDEX TO FINANCIAL STATEMENTS

                                                    PAGE

Report of Independent Public Accountants                        F-2             
Consolidated Balance Sheet                                      F-3             
Consolidated Statements of Operations                           F-4             
Consolidated Statements of Shareholders' Equity                 F-5             
Consolidated Statements of Cash Flows                           F-6             
Notes to Consolidated Financial Statements                      F-7             

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To The Shareholders of ConnectivCorp:                                           

We have audited the accompanying consolidated balance sheet of      
ConnectivCorp and subsidiaries (a Delaware Corporation) as of December 31, 2000,
and the related consolidated statements of operations, changes in shareholders' 
equity and cash flows for the years ended December 31, 2000 and 1999. These     
consolidated financial statements are the responsibility of the Company's       
management. Our responsibility is to express an opinion on these consolidated   
financial statements based on our audits.                                       

   We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 audits provide a reasonable basis   
for our opinion.                                                                

   In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of             
ConnectivCorp and subsidiaries as of December 31, 2000 and the results of its   
operations and its cash flows for the years ended December 31, 2000 and 1999, in
conformity with accounting principles generally accepted in the United States.  

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

                           /s/ Arthur Andersen LLP

New York, New York                                                              
March 21, 2001                                                                  

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CONSOLIDATED BALANCE SHEET
 DECEMBER 31, 2000

                                                                [Download Table]
                                                                       
ASSETS                                                                 

CURRENT ASSETS:                                                        
Cash and cash equivalents                                 $  1,818,631 
Prepaid expenses                                                42,781 
                                                          ------------ 
Total Current Assets                                         1,861,412 
                                                          ------------ 
EQUIPMENT:                                                             
Equipment, net of accumulated depreciation of $2,921             8,785 
                                                          ------------ 

OTHER ASSETS:                                                          
Cost of acquired software, net of accumulated                          
amortization of $980,000                                     3,220,000 
Goodwill, net of accumulated amortization of $139,800          559,200 
Cost of publications acquired, net of                                  
    accumulated amortization of $2,375                          92,625 
Other assets                                                    18,850 
                                                          ------------ 
Total Other Assets                                           3,890,675 
                                                          ------------ 
Total Assets                                              $  5,760,872 
                                                          ============ 

LIABILITIES AND SHAREHOLDERS' EQUITY                                   

CURRENT LIABILITIES:                                                   
Accounts payable and accrued expenses                     $    314,411 
                                                          ------------ 
Total Current Liabilities                                      314,411 
                                                          ------------ 

COMMITMENTS AND CONTINGENCIES                                          

SHAREHOLDERS' EQUITY:                                                  
Preferred Stock, $.001 par value                                       
10,000,000 shares authorized, Series D                              -- 
Common Stock, $.001 per value                                          
40,000,000 shares authorized, 21,532,155                               
issued and outstanding                                          21,532 
Paid in capital                                             19,595,726 
Deferred compensation                                         (855,609)
Accumulated deficit                                        (13,315,188)
                                                          ------------ 
Total Shareholders' Equity                                   5,446,461 
                                                          ------------ 
Total Liabilities and Shareholders' Equity                $  5,760,872 
                                                          ============ 

The accompanying notes are an integral part of these consolidated statements

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 CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                                [Download Table]


                                                   2000             1999    
                                                ------------   ------------ 
                                                                            
Revenue                                                                     
Consulting fees                                 $     80,000   $         -- 

General and administrative expenses                5,265,695      2,171,577 
                                                ------------   ------------ 

Operating loss                                    (5,185,695)    (2,171,577)

Interest income                                      102,674             -- 
                                                ------------   ------------ 

Loss from continuing operations before                                      
 income tax benefit                               (5,083,021)    (2,171,577)
Income tax benefit                                   116,000        583,000 
                                                ------------   ------------ 
Loss from continuing operations                   (4,967,021)    (1,588,577)
Loss from discontinued operations,                                          
after income taxes ($0)                           (1,412,700)    (1,475,301)
                                                ------------   ------------ 
Net loss                                                                    
                                                $ (6,379,721)  $ (3,063,878)
                                                ============   ============ 

 Net loss per common share- basic and diluted:                              
 Loss from continuing operations                      $(0.24)        $(0.28)
 Loss from discontinued operations                     (0.07)         (0.26)
                                                ------------   ------------ 
 Net loss per common share- basic and diluted         $(0.31)        $(0.54)
                                                ============   ============ 

Weighted average shares outstanding:                                        
basic and diluted                                 20,600,339      5,664,617 
                                                ============   ============ 

The accompanying notes are an integral part of these consolidated statements

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 CONNECTIVCORP
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999

                                                        [Enlarge/Download Table]


                                                CLASS A       CLASS B        WARRANT      PREFERRED      COMMON       PAID IN   
                                                 UNITS         UNITS        VALUATIONS      STOCK         STOCK       CAPITAL   
                                             -----------------------------------------------------------------------------------

                                                                                                                                
BALANCE, December 31, 1998                   $  2,609,678  $  2,208,853  $     67,925  $         --  $         -- $         --  

Issuance of warrants in conjunction with                                                                                        
  long-term debt, at fair value                        --            --     1,851,473            --            --           --  
Conversion of Cakewalk LLC Capital Accounts    (2,609,678)   (2,208,853)   (1,919,398)           --            --    6,737,929  
Acquisition of CDBeat common stock                     --            --            --            --         1,955    1,097,448  
Acquisition of CDBeat accumulated deficit              --            --            --            --            --   (1,148,428) 
Acquisition of CDBeat software                         --            --            --            --         8,308    3,901,238  
Issuance of options for consulting services            --            --            --            --            --      911,093  
Recognition of deferred compensation                   --            --            --            --            --    1,080,965  
Amortization of deferred compensation             497,426            --       497,426                                           
Issuance of common stock to Atlantis                                                                                            
Equities/Dylan Inc.                                    --            --            --            --         7,819      992,181  
Net loss                                               --            --            --            --            --           --  
                                             -----------------------------------------------------------------------------------

BALANCE, December 31, 1999                             --            --            --            --        18,082   13,572,426  

Adjustment of cost of acquired software                --            --            --            --            --      290,454  
Issuance of 121,494 shares with respect to                                                                                      
  1999 business combination of ConnectivCorp                                                                                    
  and Cakewalk LLC as an adjustment to                                                                                          
  purchase price                                       --            --            --            --           121         (121) 
Placement fee paid with respect to 1999                                                                                         
  business combination of ConnectivCorp and                                                                                     
  Cakewalk LLC                                         --            --            --            --            --      (90,000) 
Issuance of 2,661,352 shares of Series D                                                                                        
Preferred Stock in Private Placement                   --            --            --         2,661            --    2,995,076  
Issuance of 648,128 shares of                                                                                                   
  Common Stock in Private Placement                    --            --            --            --           648      729,400  

Conversion of shares of preferred                                                                                               
  stock to common stock                                --            --            --        (2,661)        2,661           --  

Issuance of 19,531 shares in satisfaction                                                                                       
  of liability to shareholder                          --            --            --            --            20       24,980  
Issuance of stock options for                                                                                                   
  consulting services                                  --            --            --            --            --    1,493,261  
Issuance of stock options to an officer                --            --            --            --            --      580,250  
Amortization of deferred compensation                  --            --            --            --            --           --  
Net loss                                               --            --            --            --            --           --  
                                             -----------------------------------------------------------------------------------

BALANCE, December 31, 2000                   $         --  $         --  $         --  $         --  $     21,532 $ 19,595,726  
                                             ===================================================================================



                                                                             TOTAL                                              
                                               DEFERRED     ACCUMULATED   SHAREHOLDERS'                                         
                                             COMPENSATION     DEFICIT        EQUITY                                             
                                             ------------------------------------------                                         

                                                                                                                                
BALANCE, December 31, 1998                   $         --  $ (3,871,589) $  1,014,867                                           

Issuance of warrants in conjunction with                                                                                        
  long-term debt, at fair value                        --            --     1,851,473                                           
Conversion of Cakewalk LLC Capital Accounts            --            --            --                                           
Acquisition of CDBeat common stock                     --            --     1,099,403                                           
Acquisition of CDBeat accumulated deficit              --            --    (1,148,428)                                          
Acquisition of CDBeat software                         --            --     3,909,546                                           
Issuance of options for consulting services            --            --       911,093                                           
Recognition of deferred compensation           (1,080,965)           --            --                                           
Amortization of deferred compensation                                                                                           
Issuance of common stock to Atlantis                                                                                            
Equities/Dylan Inc.                                    --            --     1,000,000                                           
Net loss                                               --    (3,063,878)   (3,063,878)                                          
                                             ----------------------------------------                                           

BALANCE, December 31, 1999                       (583,539)   (6,935,467)    6,071,502                                           

Adjustment of cost of acquired software                --            --       290,454                                           
Issuance of 121,494 shares with respect to                                                                                      
  1999 business combination of ConnectivCorp                                                                                    
  and Cakewalk LLC as an adjustment to                                                                                          
  purchase price                                       --            --            --                                           
Placement fee paid with respect to 1999                                                                                         
  business combination of ConnectivCorp and                                                                                     
  Cakewalk LLC                                         --            --       (90,000)                                          
Issuance of 2,661,352 shares of Series D                                                                                        
Preferred Stock in Private Placement                   --            --     2,997,737                                           
Issuance of 648,128 shares of                                                                                                   
  Common Stock in Private Placement                    --            --       730,048                                           

Conversion of shares of preferred                                                                                               
  stock to common stock                                --            --            --                                           

Issuance of 19,531 shares in satisfaction                                                                                       
  of liability to shareholder                          --            --        25,000                                           
Issuance of stock options for                                                                                                   
  consulting services                          (1,493,261)           --            --                                           
Issuance of stock options to an officer          (580,250)           --            --                                           
Amortization of deferred compensation           1,801,441            --     1,801,441                                           
Net loss                                               --    (6,379,721)   (6,379,721)                                          
                                             ----------------------------------------                                           

BALANCE, December 31, 2000                   $   (855,609) $(13,315,188) $  5,446,461                                           
                                             ========================================                                           

The accompanying notes are an integral part of these consolidated statements

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

                                                        [Enlarge/Download Table]


                                                                                       2000           1999    
                                                                                    -----------   ----------- 
                                                                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:                                                                         
  Net loss                                                                          $(6,379,721)  $(3,063,878)
  Adjustments to reconcile net loss                                                                           
     to net cash used in operating activities:                                                                

      Depreciation and amortization                                                     995,458       130,772 
      Compensation cost associated with issuance of common stock                             --       497,426 
      Consulting expenses associated with issuance of common stock                           --       911,093 
      Loss on disposal of equipment                                                      10,740            -- 
      Non-cash compensation expense                                                   1,801,441            -- 
      Income tax benefit                                                               (116,000)           -- 
      Loss from discontinued operations                                               1,412,700     1,475,301 
      Changes in assets and liabilities:                                                                      
        Prepaid expenses                                                                (19,270)           -- 
        Other assets                                                                     (3,611)      (38,750)
        Accounts payable and accrued expenses                                            22,364      (239,284)
                                                                                    -----------   ----------- 
          Net cash used in operating activities                                      (2,275,899)     (327,320)
          Net cash provided by discontinued operations                                       --       194,338 
                                                                                    -----------   ----------- 
          Net cash used in operations                                                (2,275,899)     (132,982)
                                                                                    -----------   ----------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                         
  Acquisitions of equipment                                                              (5,054)      (12,102)
  Acquisitions of publications                                                          (95,000)           -- 
  Cash acquired through acquisition                                                          --        23,834 
                                                                                    -----------   ----------- 
          Net cash (used in) provided by investing activities                          (100,054)       11,732 
          Net cash used in discontinued operations                                           --        (2,888)
                                                                                    -----------   ----------- 
          Net cash (used in) provided by investing activities                          (100,054)        8,844 
                                                                                    -----------   ----------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                         
  Proceeds from issuance of common stock                                                     --     1,000,000 
  Cash received from Private Placement (net of issuance costs)                        3,637,785            -- 
                                                                                    -----------   ----------- 
          Net cash provided by financing activities before discontinued operations    3,637,785     1,000,000 
          Net cash used in discontinued operations                                           --      (319,063)
                                                                                    -----------   ----------- 
          Net cash provided by financing activities after discontinued operations     3,637,785       680,937 
                                                                                    -----------   ----------- 
NET INCREASE IN CASH AND CASH EQUIVALENTS                                             1,261,832       556,799 
CASH AND CASH EQUIVALENTS, beginning of year                                            556,799            -- 
                                                                                    -----------   ----------- 
CASH AND CASH EQUIVALENTS, end of year                                              $ 1,818,631   $   556,799 
                                                                                    ===========   =========== 

NON-CASH INVESTING AND FINANCING ACTIVITIES                                                                   

Conversion of Preferred to Common Stock                                             $ 2,997,737               
                                                                                    ===========               
Fair value of warrants to purchase Common Stock issued in                                                     
  conjunction with Private Placement                                                  9,764,458               
                                                                                    ===========               

Fair value of warrants issued to Placement Agent                                    $ 1,146,880               
                                                                                    ===========               
Increase in cost of acquired software                                               $   290,454               
                                                                                    ===========               

The accompanying notes are an integral part of these consolidated statements

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES             

ORGANIZATION                                                                    

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

ConnectivCorp's mission is to facilitate the online connection between          
aggregated, targeted and profiled consumers, and marketers desiring to reach    
those consumers. Operating through its subsidiary, ConnectivHealth, the Company 
functions as a deep content provider and marketing company that facilitates the 
online connection between healthcare-oriented consumers, patients and           
caregivers, and those health care companies desiring to serve their healthcare  
needs.                                                                          

On March 30, 2000, the Company decided to exit the business conducted by 32     
LLC by March 2001 and recharacterized 32 LLC as a discontinued operation for    
financial reporting purposes. Since March 30, 2000, 32 LLC has been operating   
the business and has sought to sell the business or assets. During the second   
quarter of 2000, the Company wrote off the business of 32 LLC in its            
consolidated financial statements. On February 2, 2001, the net assets of 32    
LLC were surrendered to Entertainment Finance International, Inc. ("EFI")       
under a default of the loan agreement. There was no other business conducted    
related to the discontinued operation after the surrender.                      

UNCERTAINTY                                                                     

The accompanying financial statements have been prepared on a going concern     
basis, which contemplates the realization of assets and the satisfaction of     
liabilities in the normal course of business. The Company has a limited         
operating history, and since it's inception in 1998 has incurred substantial    
losses. The Company's accumulated deficit as of December 31, 2000 is            
approximately $13 million. To date, the Company has not generated any revenue   
from its proposed business model, which contemplates selling pharmaceutical and 
other healthcare companies access to the Company's aggregated users. The Company
incurred a loss from continuing operations of approximately $4.9 million and a  
net loss of approximately $6.4 million for the year ended December 31, 2000.    
Additionally, cash used in operations totaled approximately $2.3 million for the
year ended December 31, 2000, while cash and cash equivalents at December 31,   
2000 totaled approximately $1.8 million. These matters raise substantial doubt  
about the Company's ability to continue as a going concern. The Company's       
continued existence is dependent upon several factors including the Company's   
ability to execute its business strategy and/or its ability to raise            
additionally equity.                                                            

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

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

UNCERTAINTY (CONTINUED)                                                         

The Company's near term operating strategy focuses on the continued execution of
its business plan. To date, the Company has successfully launched SexHealth.com,
and entered into Content Agreements with several major hosts, thereby exposing  
the Company's content to millions of potential users, the Company has not yet   
been able to convert a meaningful number of these consumers to users of         
SexHealth.com, either directly or through the various host sites. Additionally, 
the Company has not yet signed any agreements with any pharmaceutical or offer  
healthcare company to use the Company's services. The Company has currently     
evaluated its current operating costs and has undertaken measures to reduce     
these costs, which include the reduction of salaries and payments to            
consultants. It is projected that these cuts will reduce the annual cash        
expenditures by approximately $449,000. The Company is also exploring its       
ability to raise additional equity through a private placement of the Company's 
preferred stock. The Company believes that it will be able to raise additionally
equity capital, and that the capital raised will be sufficient to fund and      
execute its business plan when combined with the Company's current cash         
position.                                                                       

The Company's ability to operate as a going concern is dependent on its ability 
to execute its business plan and/or raise additionally equity. There can be no  
assurance that the Company will be able to achieve or sustain any level of      
profitability in the future. Future operating results will depend on a number of
factors, including demand for, and market acceptance of, the Company's services 
and prevailing economic conditions. While the Company has reduced its operating 
expenses, no assurance can be given that the Company can sustain these operating
levels. Moreover, the Company has not yet generated any meaningful revenues, and
no assurance can be given that it will do so in the future. There can be no     
assurance that the Company will generate sufficient revenues to ever achieve    
profitability or otherwise sustain its profitability in the future. While the   
Company is exploring raising additional equity capital, there can be no         
assurance that the additional equity infusion will be consummated. However,     
although no assurances can be given, the Company is confident that it will be   
able to continue operating as a going concern.                                  

PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION                           

The consolidated balance sheet includes the accounts of ConnectivCorp and its   
wholly-owned subsidiaries. The consolidated statements of operations, cash flows
and changes in shareholders' equity includes the results of operations of       
Cakewalk for the years ended December 31, 2000 and 1999 and the results of      
operations of ConnectivCorp since the date of the Merger.                       

USE OF ESTIMATES                                                                

The preparation of financial statements in conformity with generally accepted   
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of         
contingent assets and liabilities at the date of the financial statements and   
the reported amounts of revenue and expense during the reporting period. Actual 
results could differ from those estimates.                                      

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

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

CASH AND CASH EQUIVALENTS                                                       

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

EQUIPMENT AND ACCUMULATED DEPRECIATION                                          

Equipment is carried at cost, less accumulated depreciation. Depreciation is    
recognized using the straight-line method over the estimated useful lives of the
assets, which approximates three years.                                         

SOFTWARE DEVELOPMENT COSTS                                                      

Software development costs represent the estimated value of the software owned  
by the Company at the time of the Business Combination with 32 LLC. These       
costs are being amortized using the straight-line method over the estimated     
useful life of five years. The Company recorded $849,028 and $130,318 for       
amortization for the years ended December 31, 2000 and 1999, respectively. The  
software will be incorporated into the Company's business model facilitating the
ability of visitors to the Company's website to directly access sponsor provided
information.                                                                    

GOODWILL                                                                        

Goodwill represents costs in excess of fair values assigned to underlying net   
assets acquired in the Business Combination and is being amortized over five    
years. The Company recorded amortization expense of $139,800 in the year ended  
December 31, 2000.                                                              

COSTS OF PUBLICATIONS ACQUIRED                                                  

The Company purchased sexual health publications in 2000. The publications      
provide content for the Company's website. The publications are being amortized 
using the straight-line method over five years. The Company recorded            
amortization expense of $2,375 in the year ended December 31, 2000.             

LONG-LIVED INTANGIBLE ASSETS                                                    

The Company's policy is to record long-lived assets at cost, amortizing these   
costs over the expected useful lives of the related assets. In accordance with  
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for       
Long-Lived Assets to Be Disposed of," these assets are reviewed on a periodic   
basis for impairment whenever events or changes in circumstances indicate the   
carrying amounts of the assets may not be realizable. Furthermore, the assets   
are evaluated for continuing value and proper useful lives by comparison to     
expected future cash flows. For the years ended December 31, 2000 and 1999,     
there was no material impairment of the long-lived assets of the Company.       

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

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

REVENUE RECOGNITION                                                             

The Company recognizes consulting revenues for technology services when the     
services are provided.                                                          

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

INCOME TAXES                                                                    

Until November 16, 1999, 32 LLC, as a limited liability company, was taxed      
as a partnership for federal and state income tax purposes, and, as a result,   
its earnings were taxable directly to its members. Since the Business           
Combination, the Company has been taxed as a corporation and recognized losses  
for both financial and tax reporting purposes.                                  

FAIR VALUE OF FINANCIAL INSTRUMENTS                                             

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

STOCK-BASED COMPENSATION                                                        

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

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

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

NEW ACCOUNTING PRONOUNCEMENTS                                                   

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative          
Instruments and Hedging Activities," which establishes accounting and reporting 
standards for derivative instruments, including certain derivative instruments  
embedded in other contracts, and for hedging activities. In June 1999, the FASB 
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging         
Activities - Deferral of the Effective Date of FASB Statement No. 133," which   
deferred the effective date of SFAS No. 133 for one year to fiscal years        
beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138,      
"Accounting for Certain Derivative Instruments and Certain Hedging Activities - 
an amendment of FASB Statement No. 133." The adoption of SFAS No. 133, as       
amended by SFAS No. 138, effective January 1, 2001did not have a material impact
on the Company's financial statements.                                          

In March 2000, the Financial Accounting Standards Board issued Interpretation   
No. 44 (FIN. 44), "Accounting for Certain transactions Involving Stock          
Compensation, and Interpretation of APB Opinion No. 25." FIN. 44 is intended to 
clarify certain problems that have arisen in practice since the issuance of APB 
No. 25, "Accounting for Stock Issued to Employees." The effective date of the   
interpretation was July 1, 2000. The provisions of the interpretation apply     
prospectively, but they will also cover certain events occurring after December 
15, 1998 and after January 12, 2000. The adoption of FIN. 44 did not have a     
material adverse effect on the Company's current or historical consolidated     
financial statements, but may affect future accounting regarding stock option   
transactions.                                                                   

NOTE 2: LOSS PER COMMON SHARE                                                   

Loss per share was calculated as follows:                                       

                                                                [Download Table]


                                                   2000               1999    
                                               ------------      ------------ 
                                                                              
Loss from continuing operations                $ (4,967,021)     $ (1,588,577)
Loss from discontinued operations                (1,412,700)       (1,475,301)
                                               ------------      ------------ 
Net loss                                       $ (6,379,721)     $ (3,063,878)
                                               ============      ============ 

Weighted average shares outstanding              20,600,339         5,664,617 
                                               ============      ============ 

Basic and diluted loss per common share:                                      
         Loss from continuing operations       $       (.24)     $       (.28)
         Loss from discontinued operations             (.07)             (.26)
                                               ------------      ------------ 
Net loss per common share                      $       (.31)     $       (.54)
                                               ============      ============ 

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 3: EQUIPMENT                                                               

Equipment as of December 31, 2000, is comprised of the following:               

                                                                [Download Table]


                              2000  
                             -------

                                    
Equipment                    $11,706
Less- Accumulated                   
   depreciation                2,921
                             -------
Equipment, net               $ 8,785
                             =======

For the year ended December 31, 2000, depreciation expense amounted to $2,921.  

NOTE 4: INCOME TAXES                                                            

Until November 16, 1999, Cakewalk, a limited liability company, was taxed as a  
partnership for federal and state income tax purposes, and, as a result, its    
earnings were taxable directly to its members. Since the Business Combination,  
the Company has been taxed as a corporation and recognized losses for both      
financial and tax reporting purposes. The significant components of the deferred
tax asset as of December 31, 2000, are as follows:                              

                                                                [Download Table]
                                                      
Net operating loss                        $ 1,979,418 
Intangibles                                   645,677 
Non-cash compensation expense               1,283,984 
Other                                         834,259 
                                          ----------- 
Total deferred tax asset                    4,743,338 
Liabilities                                (1,288,000)
                                          ----------- 
Net                                         3,455,338 
Less valuation allowance                   (3,455,338)
                                          ----------- 
Total deferred income tax asset - net     $        -- 
                                          =========== 

The Company established a valuation allowance to fully offset the deferred      
income tax asset as of December 31, 2000 due to the uncertainty of the Company's
future realization of the tax assets.                                           

The $116,000 deferred tax benefit results from the timing difference on the     
revaluation of software costs acquired in 1999. Subsequent to the Merger in     
1999, the Company utilized $583,000 of deferred tax asset to offset a           
pre-acquisition deferred tax liability.                                         

At December 31, 2000 the Company had a net operating loss carryforward of       
approximately $5 million for income tax purposes. The carryforwards expire      
through the year 2020 and are subject to limitations due to the ownership       
change.                                                                         

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 5: STOCK OPTIONS                                                           

During 2000 and 1999, the Company granted options and warrants to purchase      
5,737,435 and 5,010,828 shares of common stock which were outstanding as of     
December 31, 2000 and 1999, respectively. These options and warrants were       
granted to employees, consultants and others at exercise prices ranging from    
$.01 to $5.00, per share and are exercisable through 2010. As of December 31,   
2000 and 1999, 8,589,297 and 3,497,125 options and warrants were exercisable at 
a weighted average exercise price of $2.67 and $.99 per share, respectively.    

In 2000 and 1999, respectively, the Company recorded compensation expense in the
amount of $1,801,441 and $1,408,519 under the requirement of Accounting         
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" for 
options issued to employees and directors lower than fair market value of the   
Company's stock on the date of issuance. Had compensation cost been determined  
in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation" the  
Company would have reported additional losses as follows:                       

                                                        [Enlarge/Download Table]


                                                              YEAR ENDED DECEMBER 31,       
                                                --------------------------------------------
                                                            2000                  1999      
                                                --------------------------------------------
                                                                                            
Loss from continuing operations    As reported          $ (4,967,021)          $(1,588,577) 
                                   Pro forma              (7,005,971)           (2,696,690) 

Loss from discontinued operations  As reported            (1,412,700)           (1,475,301) 
                                   Pro forma              (1,412,700)           (1,475,301) 

Net loss                           As reported            (6,379,721)           (3,063,878) 
                                   Pro forma              (8,418,671)           (4,171,991) 

Basic and diluted loss per share:                                                           
From continuing operations         As reported          $      (0.24)          $     (0.28) 
                                   Pro forma                   (0.34)                (0.48) 

Loss from discontinued operations  As reported                 (0.07)                (0.26) 
                                   Pro forma                   (0.07)                (0.26) 

Net loss                           As reported                 (0.31)                (0.54) 
                                   Pro forma                   (0.41)                (0.74) 

Under SFAS No. 123, the fair value of each option is estimated on the date of   
grant using the Black-Scholes option-pricing model with the following           
weighted-average share assumptions used for grants in 2000; (1) expected life of
options 1.5 - 4 years; (2) No dividend yield; (3) expected volatility of 148%;  
(4) risk-free interest rate of 5%, and in 1999: (1) expected life of the option 
5 years; (2) no dividend yield; (3) expected volatility 209%; (4) risk free     
interest rate of 6%.                                                            

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 5: STOCK OPTIONS (CONTINUED)                                               

The following summarizes stock options activity:                                

                                                        [Enlarge/Download Table]


                                                     YEAR ENDED DECEMBER 31,                    
                                 ---------------------------------------------------------------
                                             2000                            1999               
                                 ------------------------------- -------------------------------
                                                  WEIGHTED                        WEIGHTED      
                                                   AVERAGE                         AVERAGE      
                                   SHARES       EXERCISE PRICE      SHARES      EXERCISE PRICE  
                                 ------------ ------------------ ------------ ------------------
                                                                                                
Outstanding - beginning of year    2,782,683         $   1.38              --        $     --   
Granted                            1,858,325             1.83       2,782,683            1.38   
Exercised                                 --               --              --              --   
Forfeited                           (463,719)           (1.62)             --              --   
                                  ----------         --------      ----------        --------   

Outstanding - end of year          4,177,289         $   1.55       2,782,683        $   1.38   
                                  ==========         ========      ==========        ========   

Number of shares exercisable       2,482,043         $   1.42       1,268,981        $   1.22   
                                  ==========         ========      ==========        ========   
Weighted average fair value of                                                                  
  options granted during period                      $   1.83                        $   1.90   
                                                     ========                        ========   

NOTE 6 - SHARHEOLDERS' EQUITY                                                   

On March 31, 2000, the Company raised approximately $3 million (net of Placement
Agent fees) through the private placement of 2,661,352 shares of the Company's  
Series D Convertible Preferred Stock (the "Series D Preferred Stock") at a price
of $1.28 per share (the "Private Placement"). On April 19, 2000, the Company    
converted the Series D Preferred Stock into shares of common stock at a ratio of
one share of common stock for one share of Series D Preferred Stock after the   
amendment of its charter to authorize the issuance of up to 40 million shares of
common stock. At the second closing on April 28, 2000, the Company received     
approximately $.7 million (net of placement agent fees) and issued 648,128      
shares of common stock. The Company also issued one warrant to purchase one     
share of common stock for each share of preferred or common stock issued in the 
private placement. The warrants have an exercise price of $5 per share and are  
exercisable at any time until April 19, 2002. The warrants were assigned a fair 
value of $9.8 million, using the Black Scholes pricing model. The Company also  
granted to the Placement Agent warrants to purchase 330,948 shares of the       
Company's common stock. The warrants have an exercise price of $1.28 per share  
and are exercisable at any time until April 28, 2005. The warrants were assigned
a fair value of $1.1 million, using the Black Scholes pricing model.            

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 7: DISPOSITION OF SUBSIDIARY                                               

In March 2000, the Label Manager and Creative Director of 32 LLC resigned       
their positions. The resignation of the Creative Director constituted a default 
under the Management Agreement among 32 Records LLC, Cakewalk BRE LLC ("BRE")   
and Entertainment Finance International, Inc. ("EFI"). As a result of these     
defaults EFI, as holder of $5,500,000 principal amount of indebtedness issued by
BRE, accelerated the maturity date of such indebtedness and commenced           
foreclosure proceedings. At the time the loan was granted in June 1999, EFI     
required the establishment of a new subsidiary, BRE, into which all assets of 32
LLC were transferred as security for EFI. Accordingly, EFI does not have        
recourse to the Company's assets not included in the BRE.                       

On March 30, 2000, the Company decided that it will exit the business conducted 
by 32 LLC by March 2001 and recharacterized 32 LLC as a discontinued            
operation for financial reporting purposes. Since March 30, 2000, 32 LLC has    
been operating the business and has sought to sell the business or assets.      
During the second quarter of 2000, the Company wrote off the business of 32     
LLC in its consolidated financial statements. There was no other business       
conducted related to the discontinued operation after the surrender.            

On February 2, 2001, the net assets of 32 LLC were surrendered to               
Entertainment Finance International, Inc. ("EFI") under a default of the loan   
agreement.                                                                      

NOTE 8: BUSINESS COMBINATION                                                    

UNAUDITED PRO FORMA NET LOSS PER COMMON SHARE                                   

The Company's historical capital structure is not indicative of its prospective 
structure due to the conversion of the Class A Units and Class B Units          
(collectively, the "Cakewalk Units") of Cakewalk into common stock of the       
Company concurrent with the consummation of the Merger.                         

Pro forma basic loss per share is computed by dividing the net loss available to
common stockholders for the year by the pro forma basic weighted average number 
of shares outstanding during the year. Pro forma diluted loss per share is      
computed by dividing the net loss for the year by the pro forma diluted weighted
average number of shares outstanding during the year, which includes the effect 
of dilutive common stock equivalents.                                           

The unaudited pro forma basic net loss per common share data presented on the   
consolidated statement of operations is computed using the weighted average     
number of shares outstanding assuming conversion of the Cakewalk Units into     
common stock as of the date of issuance of the Cakewalk Units. The unaudited pro
forma diluted net loss per common share is the same as the unaudited pro forma  
basic net loss per common share, as the effect of all common stock equivalents  
is antidilutive.                                                                

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 8: BUSINESS COMBINATION (CONTINUED)                                        

PRO FORMA FINANCIAL DATA                                                        

As a result of the Merger, (1) Cakewalk contributed and assigned to 32 LLC      
substantially all of the assets and liabilities relating to the business of     
Cakewalk in exchange for 8,307,785 shares of the Company's Common Stock, (2)    
Dylan LLC exercised a warrant and paid the Company $900,000 for 7,037,183 shares
of Common Stock, (3) Atlantis Equities, Inc. exercised a warrant and paid the   
Company $100,000 for 781,909 shares of Common Stock, (4) 3,049,424 shares of    
Common Stock held by management of the Company were surrendered and (5) 50,000  
shares of Class C Preferred Stock were converted into 500,000 shares of Common  
Stock. A portion of the purchase price has been allocated to assets acquired and
liabilities assumed based on the estimated fair market value at the date of     
acquisition and the balance of $4,200,000 was recorded as cost of acquired      
software and is being amortized over a five-year period on a straight-line      
basis. The $4.2 million valuation is based upon an independent valuation        
analysis of the software obtained by the Company.                               

The table below reflects unaudited pro forma income statement data for the year 
ended December 31, 1999 as if the Merger had occurred at the beginning of the   
year.                                                                           

                                                                [Download Table]
                                                    
Loss from continuing operations       $  (3,418,844)

Loss from discontinued operations        (1,475,301)
                                      ------------- 
Net loss                              $  (4,894,145)
                                      ============= 

Basic and diluted loss per share-                   
     from continuing operations       $       (0.19)
     from discontinued operations             (0.08)
                                      ------------- 
Net loss                              $       (0.27)
                                      ============= 

NOTE 9: RELATED PARTY TRANSACTION                                               

The Company has retained Atlantis Equities, Inc. ("Atlantis"), a private        
merchant banking and advisory firm that primarily assist emerging growth        
companies, to act as its financial advisor. Robert Ellin, the Co-chairman of the
Company, is a principal of Atlantis. In consideration for services rendered     
during 2000, Atlantis was paid $150,000. The Company also granted Atlantis a    
warrant to acquire up to 762,064 shares of the Company's common stock at an     
exercise price of $2.50 per share which expires on December 31, 2002. The       
warrant was assigned a fair value of $1,522,909, using the Black Scholes pricing
model.                                                                          

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CONNECTIVCORP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 10: COMMITMENTS                                                            

LEASE COMMITMENTS                                                               

The Company leases office space under an operating lease which expires in 2003. 
Rental expense under the lease was $70,357 in 2000. The future minimum lease    
payments due under the non-cancelable lease at December 31, 2000 are:           

                                                                [Download Table]
                    
2001        $ 75,000
2002          75,000
2003          68,750
            --------
Total       $218,750
            ========

EMPLOYMENT AGREEMENTS                                                           

The Company has entered into an employment contract, dated as of April 11, 2000,
with Elliot Goldman for an initial term of three years. The Agreement was       
amended by Board vote in January 2001. The initial term shall automatically be  
extended by one additional year at the end of the Initial Term and each         
subsequent anniversary thereafter, unless, at least one hundred twenty (120)    
days prior to any such renewal date either Mr. Goldman or the Company shall     
deliver written notice to the other that the term will not be further extended. 
Pursuant to the Employment Agreement, as amended, Mr. Goldman serves as         
President, Chief Executive Officer and as a Director of the Company at an       
initial annual salary of $250,000, subject to such increases or bonuses as the  
Board of Directors of the Company shall authorize. The Company also entered into
an option agreement with Mr. Goldman pursuant to which Mr. Goldman was granted  
an option to purchase all or any part of an aggregate of 500,000 shares of the  
Common Stock of the Company at an exercise price of $1.28 per share. One quarter
of such option shares are currently vested, and an additional one quarter of    
such option shares shall vest on each subsequent anniversary of the agreement   
until all of such option shares are fully vested. All unvested shares shall vest
automatically under certain circumstances. Unless terminated earlier in         
accordance with the terms and conditions of the option agreement, the option    
shall terminate on April 10, 2006. In January 2001, upon his appointment as     
President and Chief Executive Officer, the Company granted Mr. Goldman an       
additional option to purchase all or any part of an aggregate of 500,000 shares 
of the Company's Common Stock at an exercise price of $1.50, of which 250,000   
are immediately exercisable and 250,000 shares will be exercisable when and if  
the Company achieves certain revenue levels.                                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2000 AND 1999

NOTE 10: COMMITMENTS (CONTINUED)                                                

EMPLOYMENT AGREEMENTS (CONTINUED)                                               

The Company has entered into an employment contract, dated as of November 16,   
1999 with Robert Miller for an initial term of three years. This agreement was  
also amended by Board vote in January 2001. The initial term shall automatically
be extended by one additional year at the end of the initial term and each      
subsequent anniversary thereafter, unless, at least one hundred twenty (120)    
days prior to any such renewal date either Mr. Miller or the Company shall      
deliver written notice to the other that the term will not be further extended. 
Pursuant to the employment agreement, as amended, Mr. Miller serves as a        
Director and co-chairman of the Company at an initial annual salary of $200,000,
subject to such increases or bonuses as the Board of Directors of the Company   
shall authorize. The Company also entered into an option agreement with Mr.     
Miller pursuant to which the Company granted to Mr. Miller an option to purchase
all or any part of an aggregate of 1,955,750 shares of the Common Stock of the  
Company, at the following exercise prices: 50% of the Option Shares at $1.30 per
share, 25% at $1.50 per share; and 25% at $1.75 per share. Two-thirds, or       
1,303,899, Option Shares have vested, and the remaining one-third of the option 
shares vest on November 16, 2001. All unvested shares shall vest automatically  
under certain circumstances. Unless terminated earlier in accordance with the   
terms and conditions of the option agreement, the Option shall terminate upon   
the later to occur of (a) the expiration of the term of Mr. Miller's employment 
agreement with the Company, or (b) five years from the original date of grant of
the Option.                                                                     

Both Messrs. Goldman and Miller have voluntarily reduced their annual cash      
compensation to $150,000 and $100,000, respectively, as of March 1, 2001.       

CONSULTING AGREEMENT.                                                           

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

Atlantis has voluntarily agreed to reduce its monthly cash compensation to      
$6,250 as of March 1, 2001.                                                     

F-18

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		11/10/06		24
		4/10/06		25		49
		4/28/05		13		46
		4/19/05		25
		6/29/04		28
		11/29/03		11
		12/31/02		27		50			10KSB,  NT 10-K
		4/19/02		13		46			8-K
		11/16/01		26		50
		4/19/01		11		19
Filed on:		4/16/01		31
		3/31/01		26					10QSB,  NT 10-Q
		3/30/01		1		22			NT 10-K
		3/29/01		29		32
		3/21/01		34
		3/15/01		10		18
		3/12/01		12		22
		3/1/01		24		50
		2/2/01		3		47
		1/18/01		5		16
		1/17/01		30
		1/1/01		28		50
For Period End:		12/31/00		1		50			NT 10-K
		11/27/00		4		32			4
		11/7/00		19
		10/30/00		4		17
		10/18/00		4		32
		9/11/00		3		39			DEF 14C
		8/21/00		12		20			10QSB,  DEF 14C
		8/3/00		19
		8/1/00		12		20
		7/1/00		43
		6/15/00		43
		4/28/00		13		46
		4/19/00		13		46
		4/14/00		30					10KSB
		4/11/00		25		49
		3/31/00		13		46			10QSB,  DEF 14C,  NT 10-K,  NT 10-Q
		3/30/00		1		47			DEF 14C,  NT 10-K
		3/20/00		19
		3/1/00		11		19
		1/31/00		29					8-K,  8-K/A
		1/12/00		43
		12/31/99		15		50			10KSB,  NT 10-K
		12/1/99		29					8-K
		11/16/99		4		50			3,  8-K,  8-K/A
		10/29/99		28		50
		10/8/99		29					3,  8-K,  SC 13D
		9/23/99		4		29			3,  8-K
		6/29/99		3		29
		12/31/98		37
		12/15/98		43
		10/15/98		26
		5/8/98		3		39
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