RELIANT INTERACTIVE MEDIA CORP, 10KSB, 2000-04-14

RELIANT INTERACTIVE MEDIA CORP
10KSB, 2000-04-14
BUSINESS SERVICES, NEC

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FORM 10-K-SB

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

[X] ANNUAL REPORT PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934)

Commission File Number: 0-26699

Reliant Interactive Media Corp.

formerly Reliant Corporation

Nevada 87-0411941
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)

2701 N. Rocky Point Dr., Suite 200, Tampa, Florida 33607
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (813) 282-1717

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

Securities registered pursuant to Section 12(g) of the Act: 6,310,271

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

[] (Indicate by check mark whether if disclosure of delinquent filers
('229.405) is not and will not to the best of Registrant's knowledge be
contained herein, in definitive proxy or information statements incorporated
herein by reference or any amendment hereto.)

As of 12/31/99

the aggregate number of shares held by non-affiliates was approximately
5,948,170 shares.

the number of shares outstanding of the Registrant's Common Stock was
6,310,271
Exhibit Index is found on page 38

<PAGE>

PART I

INTRODUCTION

This Report contains "forward-looking" statements regarding potential
future events and developments affecting the business of the Company. Such
statements relate to, among other things, (i) competition for customers for its
products and services; (ii) the uncertainty of developing or obtaining rights to
new products that will be accepted by the market and the timing of the
introduction of new products into the market; (iii) the limited market life of
the Company's products; and (iv) other statements about the Company or the
direct response industry.

The Company's ability to predict results or the effects of any pending
events on the Company's operating results is inherently subject to various risks
and uncertainties, including competition for products, customers and media
access; the risks of doing business abroad; the uncertainty of developing or
obtaining rights to new products that will be accepted by the market; the
limited market life of the Company's products; and the effects of government
regulations. See Management's Discussion and Analysis or Plan of Operation.

Our 1934 Securities and Exchange Act Registration, on Form 10-SB-A4, is our
initial public financial report filing with the Securities and Exchange
Commission.

ITEM 1. DESCRIPTION OF BUSINESS.

(A) HISTORICAL INFORMATION. This Corporation Reliant Interactive Media Corp.
(of Nevada) ("the Registrant")(also "We" "Us" and "Our") was first incorporated
in Utah on July 30, 1984, as Reliant Corporation for the purpose of creating a
vehicle to obtain capital and seek out, investigate and acquire interests in
products and businesses with the potential for profit. On or about July 15, 1998
we acquired our present name, Reliant Interactive Media Corp. On or about March
18, 1999, we moved our place of incorporation from Utah to Nevada without other
changes in its corporate organization.

Our common stock has experienced two reverse-splits, each time, five shares
becoming one share. The numbers we will use are those which give effect to both.
See Item 4, of Part II, Recent Sales of Unregistered Securities for more
information.

BEFORE 1998

In July of 1984, we issued 400,000 shares to the then officers and
directors for cash, at $0.005 per share. In July of 1895, we became a public
company by completing an offering of 2,000,000 shares of common stock, at $0.01,
for $20,000.00, net of offering costs of $5,975, pursuant to Rule 504 of
Regulation D. Our original operating business is somewhat different from its
present business. In June of 1991 we purchased a one-half interest in certain
physical fitness video tapes and a related production contract in exchange for
9,600,000 share of common stock. The video tape venture proved unsuccessful and
was terminated in 1993. Then, we sought other potential profitable programs, in
the same general industrial area, namely audio-visual marketing, and/or
marketing of audio-visual products.

We ceased business operations and had no significant revenues from business
operations for the period beginning in early 1993 through December of 1998. We
had some slight revenues in 1998, as a carry-over from business operations
unrelated to our current business and products.

In an effort to provide working capital, we engaged in certain limited
offerings and/or private placements of its common stock, selling 300,000 shares
<PAGE>

at $0.10, and selling 1,960,000 for $196,000.00, in 1995. The result of these
transactions was a total issued and outstanding 14,260,000, before giving effect
to two successive reverse-splits. Giving effect to those two reverses, that
amount is now recapitalized at 570,400, and is so identified in our financial
statements.

1998

During the second quarter of 1998, we issued 11,848,000 shares (giving
effect to the first 5 to 1 reverse) for the acquisition of both Kevin Harrington
Enterprises, Inc., a Florida corporation ("Harrington Enterprises"), and Cigar
Television Network ("Cigar TV"), a Florida corporation, both becoming
wholly-owned subsidiaries, and changed our corporate name to Reliant Interactive
Media Corp. These two acquisitions were related-party transactions, by which the
Kevin Harrington and Tim Harrington, brothers, acquired control of his
Registrant Corporation. For more information see Item 7 of this Part I, Certain
Relationships and Related Transactions.

These two acquisitions were as wholly-owned subsidiaries, and not by
merger, such that all three corporations are surviving legal entities. The two
Harrington companies acquired as (2) and (3) above were under common control
when acquired. Giving effect to the second 5 to 1 reverse split, the 11,848,000
became 2,369,600.

We also placed 570,400 shares for cash, at $1.56, and we issued 103,800 for
services valued at $1.25 per share, in 1998.

1999

On or about February 23, 1999, we placed an additional 1,000,000 new
investment shares of common stock to six highly sophisticated investors, for
$330,000.00. These investors received certain special royalty rights in addition
to their stock. These special royalty rights are described in Item 2 of this
Part, Management's Discussion and Analysis.

On March 23, 1999, certain actions were taken by a Majority of
Shareholders, which action was ratified by all shareholders at a meeting called
and held May 5, 1999:

1) Approved and empowered the Board of Directors to effect the second
reverse split of the issuer's common stock, every five shares to become one
share;

2) Approved an Agreement and Plan of Reorganization whereby the Company
would acquire TPH Marketing, Inc., in a tax-free exchange, for the issuance of
1,500,000 [post-reverse] shares of the Company's common stock. The Shares have
been issued to the two shareholders of TPH Marketing, Inc., Tim Harrington
having received 800,000 shares, and Kevin Harrington having received 700,000
shares.

3) Approved a Qualified Shareholder Option Plan for 24 months for 500,000
[post-reverse] shares at $2.50 to $7.50 per share, based on a formula and terms
to be determined by the Board of Directors, for key employees, consultants and
other key people;

4) Approved the Issuance [post-reverse] to each of the following, based
upon 100,000 shares for each $10,000,000.00 in gross revenues, received by the
Company and determined in accordance with Regulation SX accounting standards; no
more than 1/6 of the shares shall be vested in any 6 month period: up to
1,000,000 shares for Mel Arthur; up to 3,000,000 shares to Kevin Harrington; and
up to 2,000,000 shares for Tim Harrington;

5) Approved issuance of the following stock [post-reverse] for services in
connection with financing obtained for the company within the next 24 months,
for each of the following: Intrepid International S.A. and N&R Ltd. Group, Inc.
as follows: 100,000 shares per $1,000,000.00 for up to $10,000,000.00 raised;
50,000 shares per $1,000,000.00 for the next $20,000.00 raised; 20,000 shares
per $1,000,000.00 for over $30,000,000.00 raised. The number of "dollars raised"
shall be the gross dollars received before payment of commissions, fees and
other expenses directly connected to raising these funds.
<PAGE>

6) Approved the sale of corporate debentures for a total issuance of not
less than $6,000,000 in denominations of $1,000 and bearing interest at the
market rate, of 8% or less, due in 5 years from issuance. Debentures shall be
convertible to shares of common stock of the company at a conversion rate of
$7.50 per share.

7) Confirmed, Elected and/or re-elected four directors, Kevin Harrington,
Tim Harrington, Mel Arthur, and Karl Rodriguez, to serve until the next meeting
of shareholders.

In 1999, we placed 1,098,000 shares of common stock for cash at an average
price of $0.86 per share; 43,700 shares for services, valued at $1.15 per share;
100,000 shares for services valued at $0.50 per share; 20,000 shares for
investment in Tony Little Web site at $0.50; and 1,500,000 shares for
acquisition of TPH Marketing Inc., valued at $0.50 per share. We issued 1 share
as a technical adjustment for fractional shares, in connection with our most
recent reverse split.

About March 23, 1999, we acquired TPH Marketing, Inc., in a tax-free
exchange, for the issuance of 1,500,000 [post-reverse] shares of the Company's
common stock. The Shares have been issued to the two shareholders of TPH
Marketing, Inc., Tim Harrington having received 800,000 shares, and Kevin
Harrington having received 700,000 shares. The shares were valued at the most
recent cash price of the stock which was $0.50 per share. There were no
operations by TPH Marketing Inc., prior to the acquisition, the Company was
mainly purchasing the services of the President and that is why the excess of
the purchase price over the net book value of the TPH is being charged to
operation expense, as compensation to those Officers. The business acquired in
1999, TPH Marketing, Inc., does not qualify as a "significant subsidiary"
because it had no revenues or assets prior to acquisition. Shares issued for
acquisition were issued pursuant to Rule 145, and Section 4(2) of the Securities
Act of 1933.

On or about April 1, 1999, the Issuer compensated Lifestyle Marketing with
40,000 shares of common stock, pursuant to Section 4(2) of the 1933 Act, for the
acquisition of production services valued at $1.00 per share. On or about April
1, 1999, and before the effective changes to Rule 504, three highly
sophisticated investors purchased 600,000 additional shares of common stock, for
cash totalling $300,000. On or about April 28, 1999, 4,000 new investment shares
of common stock were issued to Coffin Communications for public relations and
investor services valued at $1.00 per share. On or about April 28, 1999,
1,000 new investment shares of common stock were issued to Buzz Nofal for Y2K
infomercial services valued at $1.00 per share. On or about April 28, 1999, 500
new investment shares of common stock were issued for miscellaneous Y2K
infomercial services valued at $1.00 per share. On December 9, we issued 25,000
restricted common shares to Bruce Dworsky, as additional compensation, and
100,000 restricted common shares, valued at $0.50 per share, to Member Services
of America as consideration for customer referrals. On December 14, 1999, we
issued 50,000 restricted common shares to Eddie Mishan for services rendered
relating to the steam iron project.

All of the foregoing "New Investment Shares" were issued pursuant to
Section 4(2) as restricted securities.

(B) THE BUSINESS OF REGISTRANT AND ITS SUBSIDIARIES. We engage in the business
of Electronic & Multi Media Retailing (print, radio, television and the
internet). Reliant Interactive Media Corp. is engaged in direct response
transactional television programming (known as "infomercials"), to market
consumer products. Reliant, with its focus on global markets and products of
global marketability, expects to bring its products into more than 370 million
households in 70 countries worldwide, primarily through television and the
Internet.

<PAGE>
BACKGROUND

The infomercial industry was first developed in the United States after the
FCC rescinded its limitations on advertising minutes per hour in 1984, thereby
permitting 30-minute blocks of television advertising. In fact, Kevin
Harrington, the Issuer's CEO produced his first infomercial in 1985, and then
founded Quantum Marketing International, one of the pioneers in the
international infomercial industry's development, commencing operations in 1988.
The deregulation of the cable television industry and the resulting
proliferation of cable channels increased the available media time and led to
the growth of the United States infomercial industry. Producers of infomercials
combined direct response marketing and retailing principles within a television
talk show-type format and purchased media time from cable channels to air their
infomercials. After an initial growth period, the industry consolidated through
the end of the 1980's. At the same time, increased attention from the FTC and
the federal and state consumer protection agencies led to greater regulation of
the industry and to the development of the National Infomercial Marketing
Association as a self-regulatory organization. By the early 1990's, infomercials
and home shopping cable channels had become a more accepted forum for obtaining
information about products and services and making purchases from home. As the
infomercial industry has matured, the variety of products marketed through
infomercials has steadily increased. Today, offerings as diverse as car care
products and computers are marketed through infomercials.

INDUSTRY OVERVIEW

The development of the international infomercial industry began in Western
Europe following the initial industry development in the United States. Quantum
Marketing International, which had been founded by Reliant's chairman, Kevin
Harrington, was acquired by National Media in 1991. Following that acquisition,
Kevin Harrington, who had owned 100% of Quantum International Marketing
International, retained an insignificant amount of stock in the acquired entity.
No affiliate of this Issuer has or maintained any relationship with Quantum
Marketing International.

The industry expanded throughout Europe and then into non-European markets
through the early 1990's and continues to expand into other worldwide markets
today. Whereas domestically, distribution of products through infomercials is
viewed as an alternative to retail, mail order and other means of distribution,
in many international markets distribution through traditional channels is not
readily accessible to many consumers. As a result of these factors, the Company
believes that it has an opportunity to be one of the primary distributors of
innovative consumer products in the international marketplace.

Prior to 1984, the maximum allowable minutes of television per hour was
limited (16 minutes of commercial messages per hour) by the Federal
Communications Commission ("FCC"), making the television infomercial an
impossibility. In 1984, the FCC rescinded its limitations, permitting the sale
of blocks of advertising and the television infomercial was born. Currently, the
electronic retailing industry, which includes infomercials and short-form
commercials, television shopping channels and multimedia marketing, has
estimated annual sales of $8.6 billion. Management estimates that approximately
thirteen million adults in the United States (about 6% of the adult population)
bought at least at one item from a TV offer in 1997 versus in 1995, when
approximately nine million bought merchandise. Many electronic retailers are now
approaching cyberspace and the world of e-commerce as their next frontier. A
U.S. Commerce Department study shows that 100 million consumers are now online.
Internet traffic is doubling every 100 days. The "digital economy" is growing
twice as fast the economy overall. 10 million Internet users made online
purchases by the end of 1997, up from 4.7 million six months earlier.

<PAGE>

COMPANY STRATEGY

Reliant's goal is to be recognized as a worldwide leader in direct
marketing. Through direct response transactional television programming and
integrated consumer marketing techniques, the Company is pursuing a business
strategy focusing on: (i) increasing the utilization of its global relationship,
(ii) developing and marketing innovative consumer products to develop its
library of infomercial programs and (iii) engineering an efficient business
model for the conduct of its worldwide direct response business. The Company is
revving up its efforts to create a position as a worldwide leader in infomercial
programming. Through its global contracts, and media access, the Company will
have the ability to deliver infomercial programming and products to over 370
million households worldwide. The Company intends to continue to explore new
ways to effectively utilize and leverage this worldwide distribution, reach and
capability. In addition, the Company intends to aggressively utilize its assets
such as its customer lists in order to realize the true value thereof.

DEVELOP AND MARKET INNOVATIVE PRODUCTS TO
DEVELOP A LIBRARY OF INFOMERCIAL PROGRAMS

The Company continually seeks out innovative consumer products which it can
market and distribute profitably. The Company has an in-house product
development/marketing capability responsible for researching, developing and
analyzing products and product ideas. The Company augments its product
development activities through relationships with third party product
developers, from time to time, whose products may appear to management to
present profitable infomercial marketing potential. The Company may develop or
acquire product lines, or may engage in marketing agreements for marketing of
product lines owned by others. As a practical matter, the difference between
acquired product lines, and marketing arrangements for products which may be
owned by third persons is deemed to be technical, but otherwise not
substantially different; in as much as, acquired products or acquired marketing
rights are acquired, with royalty and other arrangements which may amount to the
same essential financial impact upon costs, revenues and profitability See the
unnumbered subtitle below "Current Products".

We have 30 infomercial programs in our library. There are an additional 7
programs in various stages of development.

While the Company incurs certain initial and ongoing costs in connection
with adapting a product and infomercial for specific markets, the primary
expenses are incurred when the product/infomercial is first developed for its
initial target market. Thus, as the Company decides to introduce a product into
additional markets, it can do so quickly, efficiently and relatively
inexpensively. The Company believes that by further expanding its coverage into
other parts of the world it will be able to further leverage its library of
infomercial programs and associated products by extending the time period during
which each product generates revenues and, therefore, the total worldwide
revenues for a particular product. Management reports that the normal range of
costs for a marketing program is $50,000.00 to $250,000.00, with the exceptional
project rarely extending to as much as $500,000.00.

ENGINEERING THE MOST EFFICIENT BUSINESS MODEL FOR THE COMPANY

The Company continues to explore methods to better control each step in the
development and life cycle of a product/infomercial and develop its expertise
in, and refine its systems with regards to, product sourcing, in-bound
telemarketing, production, order fulfillment and customer service. Reliant
believes that its current competitive advantages of fully-integrated program
production, sourcing, as well as the development of new marketing partners,
provide it with a strong base from which it can lower its costs and engineer a
business model which is the most efficient for a worldwide direct response
business.
<PAGE>

The Company will utilize its executive managements' proven expertise in the
direct response transactional television (DRTV) arena, known as infomercials, to
market consumer products. By combining television's proven ability to drive
product sales with the global informational and access capabilities of the
Internet, the Company is a true multi-media marketing company. Print, radio and
direct mail are the other key components of the Company's strategy. The mix of
expenses and revenues for television to other media is heavily weighted to
television, about 95%. Other media expenses are expected to exceed 5% of project
advertising rarely, if ever.

In 1998, this Issuer was a "Development Stage Company", as described in the
Company's financial statements for the years so ended. During the three months
ended June 30, 1999, revenues exceeded expenses; such that this formerly
"Development Stage Company" is now considered by management to be an "Operating
Company." The term "Development Stage Company" is a cautionary term used to
refer to a company whose principal business activity is organization and capital
formation in order to pursue or launch its business plan. While issues of
capital augmentation may arise in the course of the affairs of an "Operating
Company", by such term, the Issuer means that it has launched its business plan,
and is now generating revenues which reasonably appear to be increasing. It is
therefore expected that increasing revenues will fund continuing operations in
substantial part, supplemented by normal commercial borrowing, such that capital
formation or augmentation would be secondary considerations in relation to
Issuer's ability to sustain itself as a going concern.

The Company is a Corporate Member of the Association of Internet
Professionals ("AIP"). AIP's web site can be found at www.association.org. The
AIP is the premier professional association for internet professionals
worldwide. AIP, founded in 1994, is the largest and fastest growing professional
association in the industry. The Company is also a member of the Electronics
Retailing Association, the trade association for the infomercial industry.

The Company's initial focus will be to market consumer products through the
infomercial vehicle. Reliant has chosen products that offer sales continuity,
and Reliant endeavors to own the full product rights, the name, manufacturing
and the product itself. The Company has full product rights for in excess of 50%
of the products to which it has rights. The specific products and rights are
disclosed in more detail in the following discussion. In product sales,
television creates interest: a broader, multi-media approach ensures maximum
profits. The Company plans to use its infomercial programming to develop a
worldwide presence in e-commerce markets.

Reliant will use segments of its TV infomercial programs to drive consumers
to its web sites, www.lifestylesmall.com, www.cigarnow.com, www.rimc.com. Web
site activities are presently operational. We are now displaying our web site
address in all new infomercials produced, in an effort to attract users to the
www.rimc.com site. There users will be able to order products via the Internet,
and would also be exposed to our other products being offered. This concept is
in its early implementation stage. We are just beginning to employ it, and for
that reason, we have no results or statistical information to report or disclose
other than the following.

Revenues from web site activities were insignificant in 1999, and for that
reason no statistical information was formulated for the limited period that web
sites have been operational, other than provided in the following table. For
year the 2000, we will have more detailed statistical information concerning web
site sales of products as well as the information presented as follows:

The Remainder of this Page is Intentionally left Blank

<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
lifestylemall.com cigar.com rimc.com
- ------------------------------------------------------------
Users/6 months 19,545 8,875 133,348
Average Users Daily 107 48 732
Hits/6 months 187,086 120,005 1,404,238
Average Hits Daily 1,031 659 7,715
=================== ================= ========= =========
</TABLE>

The Cigar Television Network is a wholly-owned subsidiary of Reliant. This
subsidiary has transferred its two primary business activities to us to operate.
We are now responsible for the marketing and sales of a line of cigar lighters
and the CigarNow.com web site. We are now selling a line of Cobee lighters/cigar
cutters, including dual-flame and triple-flame lighters. CigarNow.com was our
first web-based e-commerce venture and features over 550 premium cigars, plus
accessories and upscale lifestyle products. CigarNow.com will also serve as the
electronic cigar vendor on several high-profile, high-traffic partner sites.

Reliant entered into a Web Site Purchase Agreement on May 26, 1999 to
purchase from Tony Little the Tony Little Web Site. Tony Little is one of the
most recognized fitness personalities on television and is often referred to as
"America's Fitness Guru." This web site currently offers a variety of
health-related products promoted by Tony Little. The Company is responsible for
the operating expenses of the web site and will receive one-half of the net
revenues. The consideration for the purchase was $10,000 and 100,000 shares of
the Company's common stock to be issued subject to the exemption provided by
section 4(2) of the Securities Act of 1933.

PRODUCT DEVELOPMENT

The Company's product development/marketing department is the most vital
component of the Company. Kevin and Tim Harrington, along with Mel Arthur,
actively participate on a daily basis in the ongoing effort to research and
develop new products that may be suited for direct response television marketing
and subsequent marketing through non-infomercial distribution channels. This
group develops new product ideas from a variety of sources, including inventors,
suppliers, trade shows, industry conferences, strategic alliances with
manufacturing and consumer product companies and the Company's ongoing review of
new developments within its targeted product categories. As a result of
management's prominence in the infomercial and retail television industry, it
also receives unsolicited new product proposals from independent third parties.
During the evaluation phase of product development, the Company evaluates the
suitability of the product for television demonstration and explanation as well
as the anticipated perceived value of the product to consumers, determines
whether an adequate and timely supply of the product can be obtained and
analyzes whether the estimated profitability of the product satisfies the
Company's criteria.

The Company is devoting attention to the development and products
specifically targeted at markets outside of North America. The Company will
review its infomercial inventory on an ongoing basis to select those products
which it believes will be successful in Europe and/or Asia and/or its other
international markets. When a product which was initially sold domestically is
selected for international distribution, the infomercial is dubbed and product
literature is created in the appropriate foreign languages. In addition, a
review of the product's and the infomercial's compliance with the local laws is
completed. The Company's licensed distributor then begins airing the infomercial
internationally. The Company also airs shows and distributes products of other
independent domestic infomercial companies. 2% of expenses are targeted for
<PAGE>

foreign markets. Presently revenues from foreign markets are 1% of total
revenues. It should be anticipated, in the opinion of management, that in the
future, 5% of expenses for foreign markets will ripen into 10% of revenues. The
reasoning upon which this expectation is based is that once the United States
marketing has been put in place, the only significant additional expense, for
foreign distribution would be dubbing into the appropriate foreign language.

The Company obtains the rights to new products created by third parties
through various licensing arrangements generally involving royalties related to
sales of the product. The amount of the royalty is negotiated and generally
depends upon the level of involvement of the third party in the development and
marketing of the product. The Company generally pays the smallest royalty to a
third party that only provides a product concept. A somewhat higher royalty to a
third party that has fully developed and manufactured a product. The Company
also obtains the rights to sell products which have already been developed,
manufactured and marketed through infomercials produced by other companies. In
such cases, the Company generally pays a higher royalty rate to the third party
because of the relatively small amount of the Company's resources required to
develop the product. The Company generally seeks exclusive worldwide rights to
all products in all means of distribution. In some cases, the Company does not
obtain all marketing and distribution rights, but seeks to receive a royalty on
sales made by the licensor pursuant to the rights retained by the licensor.

INFOMERCIAL DEVELOPMENT AND TEST MARKETING

Once the Company decides to bring a product to market, it arranges for the
production of a 30-minute infomercial that will provide in-depth demonstrations
and explanations of the product. The Company attempts to present a product in an
entertaining and informative manner utilizing a variety of program formats. The
Company's infomercials are currently produced in-house by contracting with
established independent experienced producers who work under Reliant's
direction. The cost of producing an infomercial generally ranges from $25,000 to
$350,000. In addition, producers, hosts and spokespersons generally receive fees
based upon sales of the products.

Following completion of the production of an infomercial, the program is
then tested in the United States in specific time slots on both national cable
networks and targeted broadcast stations. If a show achieves acceptable results
in the market tests, it is generally aired on a rapidly increasing schedule on
cable networks and broadcast channels. During this initial phase, the Company
may modify the creative presentation of the infomercial and/or the retail
pricing, depending upon viewer response. After the initial marketing phase, the
Company may adjust the frequency of a program's airing to achieve a schedule of
programs that it believes maximizes the profitability of all of the Company's
products being marketed through infomercial programming at a given time.

MEDIA ACCESS

An important part of the Company's ability to successfully market products
is its access to media time. The Company's infomercial programming will be
available through licensed distributors to more than 370 million households in
70 countries worldwide, including Argentina, Australia, Austria, Belarus, the
Benelux countries, Brazil, China, Denmark, Ecuador, most Eastern European
countries, Finland, France, Germany, Greece, Ireland, Italy, Japan, Mexico, most
Middle Eastern countries, New Zealand, Norway, Peru, Portugal, Russia, Spain,
most South American countries, Sweden, Switzerland, Taiwan, Turkey, Ukraine and
the United Kingdom.

Internationally, the Company's infomercials are aired on one or more of
three technologies by its licensed distributors: (i) satellite transmission
direct to home with satellite reception dishes; (ii) cable operators who
retransmit satellite broadcasts to cable-ready homes and (iii) terrestrial
broadcast television.
<PAGE>

Domestically, the Company purchases most of its cable television time
directly from cable networks and their respective media representatives. In
addition to domestic air time purchased on cable networks, the Company also
purchases broadcast television time from network affiliates and independent
stations. Broadcast television time segments are purchased primarily in
30-minute spots. The Company believes that there is currently more than an
adequate supply of broadcast television time available from these sources in the
United States to satisfy the Company's needs. The Company is dependent on having
access to media time to televise its infomercials on cable networks, satellite
networks, network affiliates and local stations.

SOURCING AND MANUFACTURING

The Company intends to develop sources in the United States and several
countries in Europe and Asia to manufacture products sold through its
infomercials if it deems it to be economically advantageous. There are no
commitments or established relationships in place at this time.

In general, before the Company takes any sizable inventory position in a
product, the Company test markets the product. The Company would then purchase
additional inventory for roll-out of the product. The skill of management is
extremely important in the area of building inventory to anticipate sales. This
is more important in direct response marketing than in elsewhere, for the reason
that delivery time is critical to customer acceptance, and further by virtue of
the dependance on credit card payment, for charges cannot attach until the
product is shipped out of the fulfillment house. The process begins with a
Asmall test@. The amount of initial inventory will vary based upon the
management's best projections of the quality and appeal of the product, the
sales price of the product, and the delivery time projected for the product. A
normal small test will involve the investment of about $30,000.00 dollars in
initial inventory. Although there can never be any guaranty of resulting demand,
management's experience is that about half, and sometimes more, of the initial
inventory will be sold, even if the program is not deemed successful. Skillful
management should not allow the accumulation of excessive inventory.
Management's general policy is to build inventory of a successful product
against one month's anticipated sales, on the basis of continuing evaluation of
current sales and known trends, by which every successful marketing program and
product have a cycle of increasing demand, eventually peak, and ultimately
decline to marginal significance. A typical product/marketing cycle, in any
given market may range from three months to six months, but every program and
product is unique, and its marketing cycle may exceed or fail to match normative
expectations.

IN-BOUND TELEMARKETING

The Company strives to create a problem-free fulfillment process for its
customers. This process consists of in-bound telemarketing, order fulfillment
and customer service. The first step in this process is the order-taking
function known as in-bound telemarketing. Customers may order products marketed
through infomercials during or after the infomercial by calling a telephone
number (toll-free in the United States), which is shown periodically on the
television screen during the broadcast.

The Company anticipates normal subcontracting of its telemarketing function
to one of various third parties that provide this service for a fee-based
principally on the number of telephone calls answered. In all instances
domestically, in-bound telemarketers electronically transmit orders to the
Company's order fulfillment contractors where the product is packaged and
shipped. In certain cases, at the time of purchase, the in-bound telemarketers
also promote, cross-sell and upsell complementary and/or additional products
relating to the product for which the inquiry is received. Such sales efforts
are orchestrated by the Company's marketing personnel who script the sales
approaches of the telemarketing personnel. Currently, the Company has no
international subcontractor. Domestically, the Company's telemarketing
subcontractor is West Telemarketing, 9910 Maple Street, Omaha NE 68134; and also
Aftermarket Company, 5260 West Phelts, Suite 8B, Glendale AZ 85306, for computer
sales only.
<PAGE>

The majority of customer payments in the United States are made by credit
cards over the telephone with the remainder paid by check.

ORDER FULFILLMENT

The Company anticipates contracting with one or more fulfillment centers.
Activities at these facilities include receiving merchandise from manufacturers,
inspecting merchandise for damages or defects, storing and assembling product
for later delivery, packaging and shipping of products and processing of
customer returns. They primarily use bulk shippers to deliver products to
customers in the United States. In certain instances, the manufacturer of the
product ships orders directly to the customer. Each customer is charged a
shopping handling fee, which varies among products. Currently, the Company's
fulfillment centers are BWL Distributors, and Reliant Fulfillment, both at 17250
Dallas Parkway, Dallas TX 75248. There is no other relationship between this
Issuer and its fulfillment center, and the similarity of name is purely
co-incidental. Management reports that Reliant Fulfillment has conducted
business by that name before the first contacts between it and this Issuer.

CUSTOMER SERVICE

An important aspect of the Company's marketing strategy is to maintain and
improve the quality of customer service and to respond to customer inquires,
provide product information to customers and process product returns. The
average rate of return, of 8% to 15%, has been consistent in the experience of
the Issuer, and in the previous experience of its management in association with
other direct response companies in the past. Customer service is provided on a
contract basis through third parties who operations are monitored by the
Company. The Company generally offers an unconditional 30-day money back return
policy to purchasers of any of its products. In addition, products are generally
covered by warranties offered by the manufacturer for defective products. The
terms of such warranties vary depending upon the product and the manufacturer.
The Company believes that its return rates will be within the customary range
for direct marketing businesses.

NON-INFOMERCIAL MARKETING

Based on the success of certain of its products in traditional retail
markets and the evolution of its business, the Company believes that its
transactional television programming is effective in building consumer awareness
of its products, as well as positioning the Company to act as the media
marketing partner for manufacturers of consumer products. The Company's
attempting to capitalize on its ability to create product awareness and its
ability to act as a media marketing partner to extend the sales life of its
products by shifting products from traditional infomercial programming to
non-infomercial marketing channels such as retail distribution, catalogs, direct
mail, direct response print ads, television home shopping programs, credit card
statement inserts and other channels resulting from the development of strategic
partnerships. The Company believes that established manufacturers are
increasingly regarding infomercials as a desirable vehicle to showcase their
products to create and build brand awareness and generate follow-up product
sales through traditional retail outlets.

The Company intends to pursue expansion of its retail operations in order
to capitalize on the consumer brand-awareness created by the Company's
infomercials and reinforced by the "As Seen On TV" in-store signage. The Company
believes that the product exposure created by the Company's transactional
television programming enables the Company and its partners to utilize
traditional retail distribution channels without incurring any of the additional
advertisement costs that other consumer product companies may incur. In this
manner, the Company believes that it will be able to market products to
consumers who view its programming, but do not traditionally purchase products
through direct response marketing.

<PAGE>
CURRENT PRODUCTS

The Company markets consumer products in a wide variety of categories,
i.e.: health fitness, beauty, weight loss, business opportunities, household
appliances, etc. The Company will be dependent, in significant part, upon its
ability to develop or obtain rights to new products to supplement and replace
existing products as they mature through their product life cycles. The
Company's expansion into international markets reduces somewhat its dependency
on new shows by lengthening the potential duration of the life cycle of programs
that will comprise the Company's infomercial library. Historically, the majority
of the industry's products generate their most significant domestic revenues in
the first 6 months following initial airing of the product's infomercial.
Internationally, however, products typically generate revenues more evenly over
a longer period. The Company has not had enough operating history to determine
if it is following the historical trends of its industry. We have 30 infomercial
programs in our library. There are an additional 7 programs in various stages of
development.

The Company enters into agreements for the sale of a number of products.
If the products are successfully tested and deemed to have sufficient commercial
marketability, they are then "rolled-out" in a Nation-wide media effort. The
following products have been rolled-out:

PURE PROTEIN BAR. The Company has an International Marketing and
Distribution Agreement with Worldwide Sports Nutrition, Inc. for television
sales only of the high protein, low carbohydrate, low fat Pure Protein Bar. The
program will be rolled-out on November 15, 1999.

BIOFLEX THERAPEUTIC MAGNET PRODUCT LINE. The Company has an International
Marketing and Distribution Agreement with BWL Distributors, Ltd. to market the
Sobakawa BIOflex therapeutic magnet product line through direct response
infomercials. Sobakawa Magnetic insoles are ultra thin, cushioned insoles
containing the patented Bioflex Magnets. These specific insoles have a moisture
resistant feature intended to prevent germs and odors. The roll-out date of this
product was February 27, 1999. Sales of this product currently account for 43%
of the revenues of the Company. The Company does not have full product rights.

TRASH OR TREASURE. The Company has a contract with Dr. Tony Hyman for his
Trash or Treasure program that shows how money can be earned from items that are
often considered as "trash". Through this informative and educational program,
Dr. Hyman shows others how to find the items collectors are scouring the country
to find: salt & pepper shakers, thimbles, maps, and toys, just to name a few.
Many of these items are sitting in garages, buried in attics or sold at flea
markets for next to nothing! The book includes over 2,200 product categories and
the names, addresses, phone numbers, and e-mail addresses of over 1,200 buyers
that will purchase these items. The rollout date of this product was January 30,
1999. Sales of this product currently accounts for 29% of the revenues of the
Company. The Company does not have full product rights.

PEST OFFENSE. Pest Offense is a safe, effective way to control pests around
your home or business without the use of any dangerous chemicals or pesticides.
This environmentally safe device plugs into a wall a creates an intermittent
signal in the wiring that drive pests out. It will not affect electrical
equipment, has no smell or fumes, cover 2,500 square feet, and is safe for all
household pets. This product was rolled out on May 1, 1999 and accounts for 15%
of the Company's revenues. The Company has full product rights.

WONDER STEAMER. The Company has a talent agreement with Sandy Bradley to
promote a light-weight steam iron for pressing clothes while they hang, or it
steams and presses like a flat iron. Steams in less than one minute and is
designed to not burn, scorch, melt, or shine the clothes. The Wonder Steamer is
lightweight, easy for travel and safe for use on delicate fabrics. The product
was rolled out on June 26, 1999 and represents 4% of the revenues of the
Company. The Company has full product rights.
<PAGE>

ENDURO BITS. Enduro Bits utilize a high-tech metallurgical fusion comprised
of a combination of carbide, titanium, and carbon, making it practically
indestructible. The Enduro Bit cuts wood, steel, aluminum, glass, plastic,
ceramic tile, and even granite without having to change a bit. This product was
rolled out on September 11 1999, and has generated insignificant income at this
time. The Company does not have full product rights.

SYSTEM MAX COMPUTERS. The Company has full product rights for the sale of
the 500mz System Max computer system with monitor, printer, and an assortment of
popular software titles. An Infomercial aired at the end of the 3rd quarter of
1999, generated orders for in excess of $1,000,000.00; but these revenues have
not been realized yet due to shipping delays attributed to the manufacturer's
having been affected by the recent earthquakes in Taiwan. The Product is now
being shipped and the Company expects to fulfill these orders. Management
believes that future computer sales from infomercials and the internet may
account for a significant percentage of its revenues in the near future.

ETERNAL ENERGY PRODUCTS. The Company has an International Marketing and
Distribution Agreement with Golden Pride, Inc., which manufactures a proprietary
line of vitamin and energy supplement products. The Agreement provides for
television rights only for selling a starter kit of various products and
inviting viewers to join "Tony Little's Eternal Energy" multi-level marketing
program. The show will be run monthly, and at this time Revenues from this
program are not material.

GOVERNMENT REGULATION

Various aspects of the Company's business are subject to regulation and
ongoing review by a variety of federal, state, and local agencies, including the
FTC, the United States Post Office, the CPSC, the FCC, FDA, various States'
Attorneys General and other state and local consumer protection and health
agencies. The statutes, rules and regulations applicable to the Company's
operations, and to various products marketed by it, are numerous, complex and
subject to change.

The Company collects and remits sales tax in the states in which it has a
physical presence. The Company is prepared to collect sales taxes for other
states, if laws are passed requiring such collection. The Company does not
believe that a change in the tax laws requiring the collecting of sales tax will
have a material adverse effect on the Company's financial condition or results
of operations.

COMPETITIVE BUSINESS CONDITIONS AND
OUR COMPETITIVE POSITION IN THE INDUSTRY.

Competition in the Electronic Retailing Industry is intense and may be
expected to intensify. There are other, larger and well-established electronic
retailers, with whom this company must compete. The Company competes directly
with several companies which generate sales from infomercials. The Company also
competes with a large number of consumer product companies and retailers which
have substantially greater financial, marketing and other resources than the
Company, some of which have recently commenced, or indicated their intent to
conduct, direct response marketing. The Company also competes with companies
that make imitations of the Company's products at substantially lower prices.
Products similar to the Company's products may be sold in department stores,
pharmacies, general merchandise stores and through magazines, newspapers, direct
mail advertising and catalogs. It is management's opinion that all of its major
competitors are better and longer established, better financed and with enhanced
borrowing credit based on historical operations, and enjoy substantially higher
revenues than the Issuer does currently. As a new entrant into this marketing
industry, the Issuer relies on the skill, experience and innovative discernment
of management in the hope that superior judgment will provide its only
competitive advantage. This Company's major competitors are now listed: Thane
International, Inc.; Fitness Quest, Inc.; Telebrands Advertising Corporation;
Media Group Incorporated; e4L, Inc.; Guthy Renker Corp.; Media Enterprises, Inc.
<PAGE>

(D) GOVERNMENT REGULATION. There are no issues of government regulation unique
to this Registrant or its business.

(E) COMPETITION. Our business is a highly competitive field. Many competitors,
some older and better capitalized firms engage in our business. Market share in
our business fluctuates constantly. No one has or can claim any stable market
share.

(F) PLANNED ACQUISITIONS. There are no planned acquisitions.

(G) EMPLOYEES. See Item 2, following.

ITEM 2. DESCRIPTION OF PROPERTY.

Our principal offices and rent are described in Item 3 of this Part. are
located at 2701 N. Rocky Point Drive, Suite 200, Tampa, Florida, 33607
Telephone: (813) 282-1717 Facsimile: (813) 282-0045. The Company currently
leases approximately four thousand (4,000) square feet of office space pursuant
to a year lease for its Clearwater, Florida, principal executive offices. The
lease, which commenced in 1999, provides for monthly rent of $6,750.42 or annual
rent payments of $81,005.04. The facility encompasses 25 separate offices and a
board room. We have 7 full-time employees and 3 contract employees, i.e.
producers, technical and artistic talent. None of the Company's employees are
covered by collective bargaining agreements and management considers relations
with its employees to be good.

We had leased initially approximately four thousand (4,000) square feet of
office space pursuant to a year lease for our Clearwater, Florida, principal
executive offices. The lease, which commenced in 1999, provided for monthly rent
of $6,750.42, or annual rent payments of $81,005.04 The facility encompassed 25
separate offices and a board room. Some additional space was later taken at a
monthly rent of $16,400.00, which annualized to $196,800.00. We have entered
into a new lease for Suite 200, Island Center, 2701 N. Rocky Point Drive, Tampa
Florida 33607, dated January 13, 2000, and commenced February 25, 2000. The
premises leased constitutes 5,923 square feet on the second floor, and an
additional 1,080 square feet of unallocated space in the building. We estimate
that rent expenses will be about $40,000 per quarter, for the next year and
increase approximately 4% per year over the five year term of the lease, net of
subleases, and will continue to decrease as a percentage of sales.

ITEM 3. LEGAL PROCEEDINGS.

There are no proceedings, legal, enforcement or administrative, pending,
threatened or anticipated involving or affecting this Issuer, except as
disclosed herein. The Registrant has been named as a defendant in California
state court action seeking damages for rent based upon an oral lease/agreement.
Management has cross-complained against certain third parties believed to be
responsible. Management intends to defend this action vigorously and does not
consider this action to be meritorious, as against it, or a significant
financial exposure to it in any case.

<PAGE>

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

None.

The Remainder of this Page is Intentionally left Blank

<PAGE>
PART II

ITEM 5. MARKET FOR COMMON EQUITY AND STOCKHOLDER MATTERS.

(A) MARKET INFORMATION. The Company, has one class of securities, Common
Voting Equity Shares ("Common Stock"). The Company's Securities may be quoted in
the over-the-counter market on the OTCBB, but there is a young, sporadic and
potentially volatile trading market for them. Quotations for, and transactions
in the Securities, and transactions are capable of rapid fluctuations, resulting
from the influence of supply and demand on relatively thin volume. There may be
buyers at a time when there are no sellers, and sellers when there are no
buyers, resulting in significant variations of bid and ask quotations by
market-making dealers, attempting to adjust changes in demand and supply. A
young market is also particularly vulnerable to short selling, sell orders by
persons owning no shares of stock, but intending to drive down the market price
so as to purchase the shares to be delivered at a price below the price at which
the shares were sold short. There was no substantial market activity before
December 1998. Based upon standard reporting sources, the following information
is provided:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
period high bid low bid period high bid low bid
- ------------------------------------------------------------
1st 1998 0.44 0.22 1st 1999 1.69 0.72
2nd 1998 0.56 0.19 2nd 1999 (1) 10.00 5.50
3rd 1998 1.75 0.63 3rd 1999 (1) 7.50 2.00
4th 1998 1.68 0.60 4th 1999 5.875 2.75
======== ======== ======= ============ ======== =======
</TABLE>

(1) These last two figures have been adjusted, for comparative purposes, as if
the most recent 5 to 1 Reverse had not taken place.

The foregoing price information is based upon inter-dealer prices without
retail mark-up, mark-down or commissions and may not reflect actual
transactions.

(B) HOLDERS. 128

(C) DIVIDENDS. No dividends have been paid by the Company on its Common Stock
or other Stock and no such payment is anticipated in the foreseeable future.

(D) SALES OF UNREGISTERED COMMON STOCK 1999.

In January of 1999, the company issued 236,000 shares of common stock for
cash and services as follows: Fortune Marketing, 105,000 shares, for public
relations services; Michael Barclay, 100,000 shares for consulting services;
Coffin Communications, 20,000 shares, for consulting services; Tony Hyman, 5,000
shares, for talent services; and David Gray, 100,000 shares, for $25,000.00
cash. The issuances for services were valued at $1.00 per share. Mr. Gray is a
sophisticated investors with pre-existing relationships with the Company, having
access, by virtue of those relationships to the kind of information which
registration would have provided.

On or about February 23, 1999, the Company received $330,000.00, from six
highly sophisticated investors, specifically targeted to infomercial production.
In consideration of this investment, the investors received an aggregate of
1,000,000 shares of restricted common stock of the Company. In addition,
addition to acquiring those shares, the investors will receive certain special
royalties described in Management's Discussion and Analysis. The circumstances
<PAGE>

of the special investment are described as follows. Kevin Harrington, the
President of this Registrant, knowing of the Registrant's need for funds
approached the former President, Kent Rainey, as one somewhat familiar with the
Registrant Company, to provide information about the Registrants current plan
and operations, and to solicit his interest in interesting a small group of
investors to help out. The other five investors were introduced by Kent Rainey.
Three of the investors were already non-affiliate shareholders of the
Registrant. The Registrant is aware of no facts to suggest that these investors
are affiliates of each other in any material way, other than as mentioned.

The Company made an agreement in April with Oasis Entertainment's Fourth
Movie Project, Inc. (a related party transaction) to provide funding in the
amount of $250,000.00 for use in the production of three additional
infomercials. Oasis is to receive 250,000 shares of common stock upon completion
of the funding in April, plus a royalty of 2% of the adjusted gross revenues
derived on all products designated in the agreement until Oasis has been paid
$625,000.00, and thereafter 1% thereof in perpetuity. This transaction is deemed
to be a related party for the reason that, and only for the reason that, Karl
Rodriguez is the fourth Director of this registering Company and is also
Secretary and a Director of Oasis Entertainment's Fourth Movie Project, Inc. The
right to receive these shares has vested, these shares have not been issued as
of this date.

On or about February 18, 1999, the Issuer compensated Concept TV
Productions with 15,000 shares of common stock, pursuant to '4(2) of the 1933
Act, for production services valued at $1.00 per share.

On or about March 10, 1999, Earl Greenberg, a sophisticated investor and
the president of the Electronics Retailers Association, a trade group for
infomercial companies, purchased 100,000 new investment shares of common stock,
pursuant to '4(2) of the 1933 Act, for $25,000.00. Kevin Harrington having been
associated with that association, the purchaser had a pre-existing relationship
with the Company, and had access, by virtue of that relationship to the kind of
information which registration would have provided.

On or about March 10, 1999, Lee Robinson, a sophisticated investor and the
owner of Robinson Realty of Cincinnati, Ohio, as a personal friend of Kevin
Harrington, purchased 40,000 new investment shares of common stock, pursuant to
'4(2) of the 1933 Act, for $25,000.00. The purchaser had a pre-existing
relationship with the Company, and had access, by virtue of that relationship to
the kind of information which registration would have provided.

About March 23, 1999, we acquired TPH Marketing, Inc., in a tax-free
exchange, for the issuance of 1,500,000 [post-reverse] shares of the Company's
common stock. The Shares have been issued to the two shareholders of TPH
Marketing, Inc., Tim Harrington having received 800,000 shares, and Kevin
Harrington having received 700,000 shares. The shares were valued at the most
recent cash price of the stock which was $0.50 per share. There were no
operations by TPH Marketing Inc., prior to the acquisition, the Company was
mainly purchasing the services of the President and that is why the excess of
the purchase price over the net book value of the TPH is being charged to
operation expense. The business acquired in 1999, TPH Marketing, Inc., does not
qualify as a Asignificant subsidiary@ because it had no revenues or assets prior
to acquisition. Shares issued for acquisition were issued pursuant to Rule 145,
and '4(2) of the Securities Act of 1933; however we have since determined to
treat the issuance of these shares as compensation to our officers.

On or about April 1, 1999, and before the effective changes to Rule 504,
three highly sophisticated investors purchased 600,000 additional shares of
common stock, for cash totalling $300,000. These investors had pre-existing
relationships with the Company, and had access, by virtue of those relationships
to the kind of information which registration would have provided.
<PAGE>

On or about April 28, 1999, 4,000 new investment shares of common stock
were issued to Coffin Communications for public relations and investor services
valued at $1.00 per share.

On or about April 28, 1999, 1,000 new investment shares of common stock
were issued to Buzz Nofal for Y2K infomercial services valued at $1.00 per
share.

On or about April 28, 1999, 500 new investment shares of common stock were
issued for miscellaneous Y2K infomercial services valued at $1.00 per share.

On December 9, 1999, we issued 25,000 restricted common shares to Bruce
Dworsky, an employee, as additional compensation.

Also on December 9, 1999, we issued 100,000 restricted common shares,
valued at $0.50 per share, to Member Services of America as consideration for a
referral program to its discount buyer's club for the referrals of our customers
made to the buyer's club. We generated revenues of $1,000,000 by reason of these
referrals.

On December 14, 1999, we issued 50,000 restricted common shares to Eddie
Mishan for services rendered relating to the steam iron project.

All of the foregoing "New Investment Shares" were issued pursuant to
Section 4(2) as restricted securities.

<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

(A) PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS.

CASH REQUIREMENTS AND OF NEED FOR ADDITIONAL FUNDS.

We are "a development stage Company" and have only limited capital
resources. While revenues are increasing significantly, it is necessary for the
Company to seek additional capital over time to optimize the accomplishment of
its business plan. The following disclosure treats our interim funding for the
year now past, and our plans and arrangements for future funding.

On or about February 23, 1999, the Company received $330,000.00 for the
sale of 1,000,000 new investment shares of common stock (before the second
reverse split) from six highly sophisticated investors. For information about
these investors, please refer to Item 4 of Part II, Recent Sales of Unregistered
Securities. This special investment program was specifically targeted to
infomercial production, by means of a special royalty arrangement with the
investors: the investors will receive an aggregate of 5% of the gross revenues
(as defined by agreement) from sales generated by four specified infomercials
produced, until 120% of the investment has been returned to the investors.
Thereafter, the percentage received by these investors will be reduced to an
aggregate of 4%. The price was arrived at in arms-length negotiations in the
context of the entire transaction. The Company expects to value the 1,000,000
shares at the investment price of $330,000.00 and to treat royalty payments to
investors as expenses, in the same manner as if royalty payments were not
connected with the purchase of shares.

These 1,000,000 shares are included in the earnings per share analysis,
found in the financial statements of this Registrant.

About March 23, 1999, we acquired TPH Marketing, Inc., in a tax-free
exchange, for the issuance of 1,500,000 [post-reverse] shares of the Company's
common stock. The Shares have been issued to the two shareholders of TPH
Marketing, Inc., Tim Harrington having received 800,000 shares, and Kevin
Harrington having received 700,000 shares. The shares were valued at the most
recent cash price of the stock which was $0.50 per share. The business acquired
in 1999, TPH Marketing, Inc., does not qualify as a "significant subsidiary"
because it had no revenues or assets prior to acquisition. There were no
operations by TPH Marketing Inc., prior to the acquisition, the Company was
mainly purchasing the services of the President. For that reason, the excess of
the purchase price over the net book value of the TPH is being charged to
operation expense, as compensation to those Officers. This was an extraordinary
charge against income is not a recurring or normal expense.

On or about March 24, 1999, the Company made an agreement with Oasis
Entertainment's Fourth Movie Project, Inc. (a related party transaction) to
provide funding in the amount of $250,000.00 for use specifically in the
production of three additional infomercials. Oasis received 250,000 shares
(after the second reverse-split) of common stock upon completion of the funding
in April, plus a royalty of 2% of the adjusted gross revenues derived on all
products designated in the agreement until Oasis has been paid $625,000.00, and
thereafter 1% thereof in perpetuity. This transaction is deemed to be a related
party for the reason that, and only for the reason that, Karl Rodriguez is the
fourth Director of this registering Company and is also Secretary and a Director
of Oasis Entertainment's Fourth Movie Project, Inc. These 250,000 shares were
authorized in March and issued in May of 1999, with all legal rights, but, due
to inadvertence and oversight only, the printing and delivery of the certificate
<PAGE>

were delayed. These shares are included in our income per share calculations.
The Company expects to value the shares at $250,000.00. We will treat royalty
payments to investors as expenses, in the same manner as if royalty payments
were not related to purchase of shares.

Although Mr. Rodriguez is a director of both our corporation and Oasis
Entertainment's Fourth Movie Project, Inc., and although the transaction is
deemed a related-party transaction for that reason, Mr. Rodriguez has no
financial interest in the Oasis funding arrangement and is not a shareholder of
Oasis. He serves as its Secretary and General Counsel only.

We were able to generate enough sales revenues to satisfy our cash
requirements through the end of 1999. Our evaluation of the next twelve months
is different.

Without regard to whether current revenues might be sufficient to maintain
liquidity, new projects must be undertaken to generate future revenues. Every
media-marketing project has a useful life, some longer or shorter than others,
but all eventually run their course. We do not consider it prudent to be passive
about generating new projects, and we have determined that significant new funds
are highly desirable, and possibly necessary to aggressively approach operations
in year 2000.

The Registrant has entered into two letter agreements with Institutional
Equity Corporation ("IEC"):

First, an engagement letter for IEC to conduct a private placement for us,
to raise a minimum of $500,000 and a maximum of $2,000,000 (to be in reliance on
Regulation D, Rule 506, and section 4(2) of the Securities Act of 1933). Units
consisting of 10,000 shares each are to be sold for $20,000 each. This placement
has been opened and was to be completed by March 31, 2000, but has been extended
by a maximum of 90 additional days. IEC is to be paid a fee equal to 10% of the
proceeds and has the right to acquire up to 100,000 shares of common stock, at
$3.00 per share, for every million dollars raised, or a proportional fractional
adjustment. This right to acquire shares lasts until 18 months from the closing
of the placement. The placement is on a best efforts basis. There is no guaranty
that any shares will be placed.

Second, a firm commitment has been received from IEC to raise $10,000,000
in a registered offering of securities. The structure of this offering has not
been determined. Gross underwriting discounts of approximately 10% of the
offering price and a 2% non-accountable expense allowance is to be paid to IEC
from these offering proceeds. A $50,000 fee has been paid towards an advance of
$100,000 to be applied against the gross underwriting commissions. This $50,000
fee was funded by a loan of that amount for Reliant from Oasis Entertainment's
Fourth Movie Project, Inc., a shareholder of Reliant. The loan is payable in six
months from December 1, 1999, and bears 10% interest per annum. The expenses of
IEC in connection with this offering will also be reimbursed from the offering
proceeds and are estimated to be $650,000. IEC will also receive warrants for
10% of the securities purchased by underwriters, good for four years, at an
exercise price of 120% of the offering price.

Third, as of the date of this filing, the private placement is still open,
and at this date a total of $360,000.00 has been placed in escrow. A minimum of
$500,000.00 must be raised in order to satisfy the escrow and release funds. The
Reliant has no control over the escrow, and no shares are sold or placed, or can
be sold or placed until the minimum is reached. If the minimum is not reached,
there will be no placement. For the reason that no final transactions have taken
place, the tentative deposits in escrow are not deemed to be assets of or
capital of Reliant and are not reflected in our financial statements.

While there is no guaranty that funding plans will materialize as expected,
we believe that our present arrangements will provide sufficient working capital
to optimize operations for the next twelve months.

<PAGE>

SUMMARY OF PRODUCT RESEARCH AND DEVELOPMENT

The Company is devoting attention to the development and products
specifically targeted at markets outside of North America. The Company will
review its infomercial library on an ongoing basis to select those products
which it believes will be successful in Europe and/or Asia and/or its other
international markets. When a product which was initially sold domestically is
selected for international distribution, the infomercial is dubbed and product
literature is created in the appropriate foreign languages. In addition, a
review of the product's and the infomercial's compliance with the local laws
completed. The Company's licensed distributor then begins airing the infomercial
internationally. The Company also airs shows and distributes products of other
independent domestic infomercial companies.

EXPECTED PURCHASE OR SALE OF PLANT AND SIGNIFICANT EQUIPMENT. None.

EXPECTED SIGNIFICANT CHANGE IN THE NUMBER OF EMPLOYEES. None.

(B) DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

DEVELOPMENT STAGE/GOING CONCERN. There are two material thresholds in the
transition of this Company, from Development Stage to Going Concern. The first
is the commencement of limited operations, during 1998, and the first quarter of
1999. The second is the achievement of substantial revenues and the dawn of
profitability, corresponding to the second quarter of 1999, with continued
improvement throughout that year. While the Harringtons began some limited
operations in 1998, their two companies were not acquired as subsidiaries until
August of that year. The Harringtons honored certain non-compete agreements,
with HSN Direct, a division of Home Shopping Network, which expired in December
of 1998. During the interim period, the Harringtons located, developed and
prepared for production and rollout of various products. For that reason,
full-fledged operations were not launched until April of 1999. While the affairs
of the Company improved consistently, from 1998, the second quarter of 1999 was
the first profitable quarter, and is the first quarter of unlimited operations.
For these reasons, management refers to this Company as in its Development Stage
for 1998, and for the first quarter of 1999, and as an operating company and a
going concern during the second quarter of 1999.

In 1998, the company closed the year with a loss, with minimal revenues, in
pre-launch development mode, but these results are not deemed to reflect true
business operations. In 1998, the company had significant expenses that resulted
in a loss for the year. Revenues increased significantly in 1999; however such
increase should not be considered dramatic, for 1999 was the first real year of
operation under our present business plan. The first quarter was one in which
the Harringtons put in place personnel and selected the first products to
produce.

The second quarter was one in which we aired two successful shows (Trash or
Treasure and Sobakawa Insoles). We also aired other shows which were not so
successful in that quarter. It is not to be expected that every project would be
a stellar success, and two successes in a single quarter is considered a good
result by us.

During the third quarter, we increased staff with a producer and associate
producer for our infomercials, to have better continuity and control of the
details of our production activities. These are two new salaried individuals.
Several other shows were tested during this period. Two of them became
successful (Wonder Steamer and Pest Offense). We also developed our successful
computer infomercial.

During the final quarter of 1999, sales continued to grow from projects in
place, led by those developed in the previous quarters and the new computer
infomercial. Management believes that revenues and growth will continue to
increase, but to achieve the continued growth of the Company's business,
advertising, promotional and production expenses will remain significant. While
the upside potential from successful infomercial marketing is tremendous, the
risk of failure is always present. Some of the projects may fail, or all may
fail. If some are successful, the success may offset the losses from others
significantly or may not. Accordingly, there can be no assurance that
substantial profitability will be sustained in the next twelve months in
proportion to the rate of growth achieved in 1999.

REVENUES ARE INCREASING. There were no revenues in 1997. Sales in 1998 were
$120,234. In 1998, costs of sales were 66,664, and gross profit was 53,580.
Annual and quarterly comparison of 1999 and 1998 show the following
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
Net Sales 21,442,009 120,234
Cost of Sales -15,666,658 -66,654
Gross Profit 5,775,351 53,580
============= =========== =======
</TABLE>

The Remainder of this Page is Intentionally left Blank

<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Quarter 1999 1998
- ------------------------------------------------
March 31 Net Sales 352,477 30,059
Cost of Sales -284,523 -16,664
Gross Profit 67,954 13,359
June 30 Net Sales 2,885,013 30,059
Cost of Sales -1,602,622 -16,664
Gross Profit 1,282,391 13,395
September 30 Net Sales 5,918,342 31,125
Cost of Sales -3,818,734 -17,223
Gross Profit 2,099,608 13,902
December 31 Net Sales 12,286,177 28,991
Cost of Sales -9,958,780 -14,105
Gross Profit 2,327,397 14,886
============= ========== =======
</TABLE>

Our Sales continue to improve along with our Gross Profit from Sales, after
Cost of Sales. This improvement is largely due to the difference between
limited operations, and the economy and efficiency of unlimited operations,
beginning in 1999, and especially in April of 1999. It is also attributable to
the marketing of different products from those currently offered by the Company.
1998 operations have been characterized as limited. They consisted of the sale
of cigarette lighters and the marketing of a single non-infomercial television
show. Our business in 1998 was not the same as our business beginning in 1999.
Revenues have improved in every quarter of operations in 1999. We expect them to
continue to improve in the next twelve months. Certain expenses, such as
production and media costs are related to revenue creation and would be expected
to rise in some proportion to revenues.

We have new products to sell each period, in additions to others, so that
the number of products increase from period to period. For the first quarter
there were 5, for the second 8, the third 8, and the fourth 10 products for
sale. We just recently initiated marketing of products on the QVC home shopping
channel. On QVC we are beginning to sell some products in the traditional
short-form live segments that are seen on television shopping networks. These
new revenues are insubstantial as of the end of 1999, but are expected to become
a significant component of total revenues as more products are sold and exposure
increases on the shopping network.

Product sales are expected to increase in direct proportion to our ability
to acquire media time to promote them. Promotional advertising drives sales in
our business. It is for this reason that increasing revenues do not provide
assurance that markets have been saturated with as much advertising as would be
productive. For this reason, additional capital, whether or not necessary for
fundamental survival, is desired and important for optimum growth.

Cost of goods sold included the total cost of acquiring actual products
acquired for resale and costs and expenses related to sales. Returns and
allowances are deducted from sales. The largest single segment and most material
factor is infomercial production and media costs. These operations are not only
the major area of expense, but it is these activities which drive sales. It is
generally reliable in this industry that higher media costs are required for
increased sales.
<PAGE>

OPERATING EXPENSES would be expected to increase with increasing
operations. Expenses in 1998 were attributable to the marketing of different
products than those which form the core of the Company's current business. In
general, expenses have decreased as a percentage of sales. These figures reflect
a continuing improvement in this relationship, due to expanding operations,
additional products and customers. These expenses do not rise proportionally as
revenues increase.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Quarter 1999 1998
March 31 Operating Expenses 699,101 228,027
Operating Income/(Loss) (631,147) (214,632)
June 30 Operating Expenses 1,907,567 228,027
Operating Income/(Loss) (625,170) (214,632)
September 30 Operating Expenses 1,690,604 326,102
Operating Income/(Loss) 409,004 (312,200)
December 31 Operating Expenses 2,775,036 446,558
Operating Income/(Loss) (449,644) (433,670)
Annual Operating Expenses 7,072,308 1,228,714
December 31 Operating Income/(Loss) (1,296,957) (1,175,134)
============ ======================= =========== ===========
</TABLE>

Total operating expenses are declining as a percentage of sales, even as
total expenses are increasing with expanded operations. In 1999 operating
expenses were 33% of gross sales, while in 1998, they were more than 1000%. A
more meaningful comparison by quarters of 1999 shows the following.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Quarter 1999 1998
- ----------------------------------------------------------------
March 31 Operating Expenses as % of sales 198.34 758.60
June 30 Operating Expenses as % of sales 66.12 758.60
September 30 Operating Expenses as % of sales 28.57 1,047.72
December 31 Operating Expenses as % of sales 22.59 1,540.33
Annual Operating Expenses as % of sales 32.98 1,021.94
============ ================================ ====== ========
</TABLE>

We achieved marginal profitability in the third quarter, but certain
expenses incurred in the fourth quarter have offset our profitability for that
quarter and the year 1999. In the fourth quarter we incurred Royalty expenses of
$287,724. No Royalty expenses were incurred in the previous three quarters. In
addition, cost of sales increased disproportionately in the fourth quarter, due
to two principal factors. We incurred costs of sales in the fourth quarter for
projects to marketed in the following quarter. It is chiefly our investment in
media costs for the next quarter which we feel accounts for our fourth quarter
total profitability decrease from the third quarter. We would expect to profit
in year 2000 from our increased productivity in this most recent quarter. Of
course, there can be assurance that our new projects will achieve the
<PAGE>

anticipated results. We do not and cannot expect success in every project.
During the fourth quarter some of our projects have not shown the success hoped
for, even as our total sales and gross profit increased in gross amounts.

There are other expenses that are not expected to rise proportionally.
General and administrative expenses would not rise proportionally as projects
increase and revenues improve. We are able to generate increasing revenues
without significant increase in employees, as production and fulfillment
activities are generally out-sourced. General & Administrative expenses include
the following: fulfillment costs; automobile expense; banking fees; consulting
fees; insurance; office supplies; postage & delivery; professional fees;
salaries and wages; telephone; and travel & entertainment.

Research and Development is trending downward as a decreasing percentage of
sales. Research and Development costs should remain constant as they represent
costs associated with development of new infomercial promotional projects,
rather than new technologies. It does not include royalties on rights acquired.
It does not include the cost of acquiring products for resale. It does not
include production and media costs or marketing. It involves searching for new
products, obtaining rights to sell them, and possible refinement in the
products, to achieve more economic manufacture and resale at attractive pricing.
At any given time, there would normally be at least one or two products/projects
under development. At the present time, however, there are seven infomercials in
various stages of development. The number in development will decrease, while
the number in media, producing revenues will increase. While the costs are
expected to remain substantially constant, they would be expected to decrease as
a percentage of sales.

Production and Media Costs expenses were not a factor in 1998, due to the
differing nature of products marketed. These expenses reflect an improvement in
the ratio of these expenses to sales, even as total costs increase with
expanding operations. Production and media costs, consisting of the cost of
producing media productions and the costs of buying media slots, are estimated
to settle in the range of 40% to 50% of sales, overall. This average allows for
less successful or unsuccessful projects. Media expenses for successful projects
will be between 35% and 46% of sales, proportionally.

Marketing costs reflect an improvement in the ratio of these expenses to
sales, even as total costs increase with expanding operations. Marketing,
consisting of consumer relations and internet promotion is expected to decrease,
as a percent of sales over time. Marketing includes participation in various
trade shows, telemarketing expenses, other marketing expenses and prepaid
advertising. It does not include media buys in direct infomercial advertising
for immediate product fulfillment. Those items are production and media expenses
which are a part of the Cost of Sales.

additional 1,080 square feet of unallocated space in the building. We estimate
that rent expenses will be about $40,000 per quarter, for the next year and
increase approximately 4% per year over the five year term of the lease, net of
subleases, and will continue to decrease as a percentage of sales.

PROFITABILITY, as indicated previously, appeared in the third quarter of
1999. It is expected to continue to improve, notwithstanding our increased
investment during the fourth quarter. The achievement of marginal profitability
in the third quarter does not guaranty that the trend to increasing
profitability will follow. However, it appears to management that operations are
<PAGE>

expanding in an orderly and promising manner, and that expenses are being
managed appropriately. Gross Profit has improved with sales. As most other costs
remain constant, or decrease, as percent of sales, total profitability, as such
a percentage, will fluctuate inversely with the cost of goods sold. Product
costs, as distinguished from infomercial production and media costs, must be
kept under control to maintain real profitability. While higher media profile
and quality of infomercial production tend to increase sales, increased cost of
products sold would have a depressing effect upon profitability. On the one
hand, Infomercial products need to be attractively priced. On the other, the
cost of producing the products must be controlled and managed well.

BALANCE SHEET. As previously stated the dramatic increase in corporate
financial condition during 1999, as compared to 1998, is not considered
instructive. The 1999 activities should be viewed as the start-up of a new mode
of business activity in 1999, with some apparent success and improvement in the
financial condition of the Registrant, due particularly to increasingly
successful operations. Fortunes may change, however, and no assurance ever
exists that profitable trends will continue, or that the future will be like the
past. A company's initial growth may not be indicative of a sustainable rate of
continued growth. While the Registrant has not yet achieved its potential, there
can be no certain prediction at what level its growth may slow, or when, if at
all, it may reach an optimum level of operations.

INTEREST INCOME AND EXPENSE reflected on the Company's financial statements
refer to the company's ownership of a certificate of deposit, pledged against a
loan. The interest income from the CD is shown. The interest expense for the
loan is shown.

CONCLUSION. While this Company is presently able to manage its present
phase of development, for an indefinite interim, it cannot regard its financial
condition as optimal. Unless events in the future are favorable, both in terms
of profit from operations now being undertaken, and also favorable in attracting
investor interest, the Company may not be able to sustain a stable growth
pattern for the Company. These remarks should be understood in context,
discussed elsewhere, that increasing revenues are expected to provide
substantially all of the requirements for continued operations at present levels
and for some possible growth. This company must grow to reach its full
potential. For this reason, stability at its present levels is not considered
optimal for long-term growth. Additional infusion of capital is a factor of
importance in managing our growth optimally.

ITEM 7. FINANCIAL STATEMENTS.

Please see the Exhibit Index found on page 34 of this Report. The financial
statements listed therein, attached hereto and filed herewith are incorporated
herein by this reference as though fully set forth herein.

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

None.

<PAGE>
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<PAGE>
PART III

ITEM 9.
DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

The following persons are the Directors of Registrant, having taken office
from the inception of the issuer, to serve until their successors might be
elected or appointed. The time of the next meeting of shareholders has not been
determined. Kevin Harrington and Tim Harrington took office August 7, 1998. Mel
Arthur took office January 20, 1999. The present four Directors were
elected/reelected by Majority Shareholder Action, on or about March 23, 1999,
and were confirmed and reelected at a regular meeting of Shareholders held on
May 3, 1999.

Kevin Harrington, 43, prior to his current tenure as Chairman and CEO of
Reliant Interactive Media, Kevin Harrington helped pioneer the growth and
acceptance of televised direct-response marketing, or what our culture more
commonly calls "infomercials." In fact, Harrington produced his first
infomercial in 1985, and then founded Quantum International, one of the most
successful companies in direct response history. Limited to a three-person staff
(which included his brother, Tim), Harrington turned a $25,000 investment into
sales of more $140 million in the company's first two years of operation. While
at the helm of Quantum, Harrington launched a string of highly-profitable shows
featuring such universally popular products as The Great Wok of China, Wolfman
Jack's Solid Gold Rock 'n Roll Hits (the first ever music infomercial), The
JetStream Oven, The Daily Mixer, Ginsu/The Blade Knives, Kevin Trudeau's Mega
Memory and The Flying Lure (the industry's first fishing lure show). In 1989,
Harrington started the expansion of direct-response television into more than 30
foreign markets. In 1991, Quantum was sold to industry giant National Media. As
a result of this transaction, Harrington ascended to the presidency of National,
where he presided over the launch of another string of a blockbuster shows,
including Bruce Jenner's Stair Climber, Bruce Jenner's Super Step, Bruce
Jenner's Powerwalk, Blue Coral's Autofoam and Regal Royal Diamond Cookware. In
July, 1994, Harrington left National Media to form joint venture company with
The Home Shopping Network. Called HSN Direct International, the aim of the
venture was to develop an infomercial company that could take products that had
performed successfully on HSN and roll them out into traditional infomercial
formats for broadcast around the world. The high-profile domestic and foreign
successes of HSN Direct include shows such as Tony Little's Ab Isolator; Sweet
Simplicity, a hair removal product; and Kathy Smith's AirTech Glider. HSN Direct
also forged a number of ground-breaking alliance with international marketers in
countries throughout Europe, Latin America, Asia and the Middle East.
Eventually, the company saw its shows broadcast in some 70 countries around the
world. In August of 1998, Harrington was appointed Chairman and CEO of Reliant
Interactive Media Corp., (OTC BB: RIMC). Kevin Harrington is a founding Board
member Electronic Retailing Association, an industry association.

Tim Harrington, 34, prior to his current tenure as President and COO of
Reliant Interactive Media, Tim Harrington worked in close concert with his
brother pioneering the growth of the infomercial industry into an accepted means
of driving both direct and retail sales. Through his primary focus on the
details of legal, contractual and production matters. He continued in that role
as the executive vice-president of National Media, also picking up executive
responsibility for the firm's marketing and sales departments. As the co-founder
and executive vice-president of HSN Direct International, Tim exercised
executive control and leadership over product development and marketing groups
that generated approximately $30 million in annual sales. HSN Direct's solid
production values and media-buying savvy are directly attributed to his
leadership of those two key areas. In his current role as president of Reliant,
Tim is more involved than ever in over-seeing the infomercial production and
product development activities for the Company.
<PAGE>

Mel Arthur, 56, prior to his current tenure as Executive Vice President and
Director of Reliant Interactive Media, Mr. Arthur was the "Top Producing show
host," producing approximately a billion dollars in revenues while on the air
during his eight-year career with Home Shopping Network, and was acknowledged in
the industry as one of the most versatile hosts on the air. His expertise ranges
from computers, fine jewelry, oriental rugs, exercise equipment, home
electronics, vitamins, health and fitness to collectibles and more. Mr. Arthur
achieved record sales, including almost 3 million dollars sold in computers, in
less than 30 minutes. He has appeared with some of the top celebrities on
television and in sports, such as Vanna White, Barbara Mandrel, Ed McMahon,
Mickey Mantle, Ted Williams, Willie Mays, and Jim Brown, just to name a few. His
business experience is highlighted by a six-year career as a sportscaster and
color announcer for the USFL, NASL, the Jacksonville University Basketball Team,
and he was the force behind the first half hour magazine shows emanating from
PGA Tour Headquarters and The Tournament Player's Championship. Mel was voted
Jacksonville's Most Popular radio personality. Mr. Arthur was President of his
own insurance agency for three years; was a leader in the telecommunications
industry for eight years between 1972 and 1980 as a pioneer in the telephone
interconnect industry; and between 1970 and 1972 he was one of the top sales
producers for Honeywell's EDP division, marketing large scale,
multimillion-dollar mainframe computers. From 1962 through 1970, Mel starred all
over the United States, Canada, Europe and the Caribbean as a stand-up comedian,
as well as writing for other stand-up comedians such as Jackie Mason and Gabe
Kaplan.

Karl E. Rodriguez, 52, the Company's Secretary, received his Juris Doctor
degree in 1972 from Louisiana State University Law School. He has practiced
business and corporate law since 1972, emphasizing securities and entertainment
matters, and has been self-employed in that capacity for the past five years. He
has served as a director of Oasis Entertainment's Fourth Movie Project, Inc.,
since April 1998. During his law practice he has also been involved in a variety
of dynamic business experiences. From 1975 to 1982, he was active in real estate
development in the Baton Rouge, Louisiana area. From 1980 until 1985, he
specialized in the sale of businesses and franchises as the owner and operator
of VR Business Brokers. In 1986, he became the Project Manager for Bluffs
Limited Partnership, where he structured the development of an Arnold Palmer
Design Golf Course and in 1992, Mr. Rodriguez was the Managing Director for
MedAmerica, LLC., medicine clinics for children. From 1993 through 1998, he was
the Director, Corporate Secretary and General Counsel for Telco Communications,
Inc., which is a long distance reseller company. From 1992 until 1996, he was
the President of Healthcare Financial and Management Services, Inc., providing
billing services to three Louisiana hospitals.

COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. Based solely upon a review of
Forms 3, 4 and 5 furnished to the Company, the Company is not aware of any
person who at any time during the fiscal year ended December 31, 1999 was a
director, officer, or beneficial owner of more than ten percent of the Common
Stock of the Company, and who failed to file, on a timely basis, reports
required by Section 16(a) of the Securities Exchange Act of 1934 during such
fiscal year.

ITEM 10. EXECUTIVE COMPENSATION.

The Company has entered into Employment Agreements with Kevin Harrington
and Tim Harrington for 5 years and with Mel Arthur for 3 years. The Company's
Officers and Directors serve with the following elements of compensation at this
time.

SUMMARY COMPENSATION, TABLE A. the disclosure of Executive compensation is
now provided in the tabular form required by the Securities and Exchange
Commission, pursuant to Regulation ' 228.402.

The Remainder of this Page is Intentionally left Blank

<PAGE>

<S> <C> <C> <C> <C> <C> <C> <C> <C>
Long Term Compensation
Annual Compensation Awards Payouts
a b c d e f g h i
Securi-
Restric- ties
Name Other ted Under- All Other
and Salary Bonus Annual Stock lying LTIP Compen-
Principal Year ($) ($) Compen- Awards Options Payouts sation
Position sation ($) ($) SARs (#) ($) ($)
Kevin Harrington 1999 120,000 (d)(1) 0 (f)(1) (g)(1) (h)(1) 0
CEO (1)
1998 10,000 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
Tim Harrington 1999 96,000 (d)(2) 0 (f)(2) (g)(2) (h)(2) 0
COO (2)
1998 8,000 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
Mel Arthur 1999 41,500 0 0 175.000 100,000 (h)(3) 0
(f)(3) (g)(3)
VP (3)
1998 0 0 0 0 0 0 0
1997 0 0 0 0 0 0 0
==== ==================== ======================= ========== ========= ======== ======== ==========
</TABLE>

NOTES TO TABLE A:

(d)(1)(2)(3) Bonuses are based on 0.009% (Kevin Harrington), 0.006% (Tim
Harrington) and none (Mel Arthur), all of Adjusted Gross Revenues for 1999.
These year end figures have not yet been calculated. The amount of bonuses is
expected to take Tim Harrington (2) over $100,000. It is not expected to take
Mel Arthur (3) to that level. Information respecting Mr. Arthur is included
voluntarily for the reason that these three are the only highly compensated
employees expected to remain so in the future.

(f)(1)(2)(3) / (g)(1)(2)(3) / (h)(1)(2)(3) Again, these restricted stock awards
for 1999 cannot be determined until completion of 1999 audit. Mel Arthur was
awarded restricted stock in advance, but may be entitled to further award, based
on final 1999 results.

ADDITIONAL DISCUSSION.

Kevin Harrington is scheduled to receive $10,000.00 monthly (which is
$120,000.00 annually), and Tim Harrington is scheduled to receive $8,000.00,
monthly (which is $96,000.00 annually), respectively, as a base, with overrides
of 9/10 of 1% for Kevin Harrington and 6/10 of 1% for Tim Harrington of
AADJUSTED GROSS REVENUES@ as hereinafter defined. Mel Arthur is scheduled to
receive $3,500 per month.

Officers have deferred and are deferring a substantial portion of their
accrued compensation pending increased corporate liquidity and profitability.
The Company pays 100% of a medical insurance plan for the three officers above
mentioned, and life insurance for Kevin Harrington. Karl Rodriguez, serves
without compensation from the Issuer.

No other executive officer has received or is entitled to receive
compensation for any service to this Small Business Issuer, during 1997, 1998 or
1999.
<PAGE>

<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 through Dec 31 Accrued $ Paid $ Deferred $
Kevin Harrington 120,000.00 0 120,000.00
Tim Harrington 96,000.00 5,000 91,000.00
Mel Arthur 41,500.00 8,125 33,375.00
Karl Rodriguez 0 0 0
=================== ========== ====== ==========
</TABLE>

As previously indicated, certain unexercised options and bonuses, are
disclosed in detail in Tables.
TABLES B AND C
OPTIONS, AWARDS AND BENEFITS

The Company has provided certain additional bonuses, incentives and
benefits for Kevin Harrington, Tim Harrington and Mel Arthur, all pursuant to
'4(2) of the 1933 Securities Act, as follows. First the compensatory option
plan. No options have been exercised.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Optionee DateofGrant Date Exercisable Expiration Date Exercise Price NumberofOptions
Kevin Harrington 60,000
Tim Harrington 30 June 99 30 Dec 99 30 June 04 $ 2.50 40,000
Mel Arthur 5,000
Kevin Harrington 60,000
Tim Harrington 30 June 99 30 June 00 30 June 04 $ 4.00 40,000
Mel Arthur 5,000
Kevin Harrington 60,000
Tim Harrington 30 June 99 30 Dec 00 30 June 04 $ 6.00 40,000
Mel Arthur 5,000
Kevin Harrington 60,000
Tim Harrington 30 June 99 30 June 01 30 June 04 $ 7.50 40,000
Mel Arthur 5,000
================ ===============
</TABLE>

" The Remainder of this Page is Intentionally left Blank

<PAGE>

The foregoing options are carried in the
following table as "Compensatory Option Plan".

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Additional Kevin Harrington Tim Harrington Mel Arthur
Bonuses,
Incentives/Benefits
COMPENSATORY STOCK 6 months: 60,000 6 months: 40,000 6 months: 5,000
OPTION PLAN shares @ $2.50 shares @ $2.50 shares @ $2.50
(SEE PREVIOUS TABLE)
12 months: 60,000 12 months: 40,000 12 months: 5,000
shares @ $4.00 shares @ $4.00 shares @ $4.00
18 months: 60,000 18 months: 40,000 18 months: 5,000
shares @ $6.00 shares @ $6.00 shares @ $6.00
24 months: 60,000 24 months: 40,000 24 months: 5,000
shares @ $7.50 shares @ $7.50 shares @ $7.50
REVENUE PERFORMANCE For each $10,000,000 For each $10,000,000 For each $10,000,000
STOCK BONUS in gross revenues, in gross revenues, in gross revenues,
issuance of 100,000 issuance of 100,000 issuance of 100,000
shares up to a total of shares up to a total of shares up to a total of
3,000,000 shares (no 2,000,000 shares (no 900,000 shares (no
more than 1/6 of total more than 1/6 of total more than 1/6 of total
to vest in any 6 month to vest in any 6 month to vest in any 6 month
period) period) period)
STOCK TRADING Purchase 144,000 Purchase 100,000 Purchase 12,500 shares
shares if trading at $15; shares if trading at $15; if trading at $15;
PERFORMANCE STOCK 144,000 shares if 100,000 shares if 12,500 shares if trading
OPTIONS @ $7.50 PER trading at $20; 192,000 trading at $20; 120,000 at $20; 15,000 shares if
SHARE shares if trading at $25. shares if trading at $25. trading at $25.
LIFE, HEALTH & Yes Yes Yes
DISABILITY INSURANCE
AUTOMOBILE $ 1,000/month $ 750/month $ 500/month
===================== =========================== =========================== ==========================
</TABLE>

The first group of Options exercisable December 31, 1999 have vested. None
of the options have been exercised. Revenue Performance Stock Bonuses are
believed to have been earned or will be earned in early 2000. No Stock Trading
Performance Options have been earned, or are likely to be earned in the next six
months; however options based on market performance are speculative and subject
to uncontrollable market forces. No one can predict nor should predict how the
market will respond to our common stock.

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

(A) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. To the best of
Registrant's knowledge and belief the following disclosure presents the total
security ownership of all persons, entities and groups, known to or discoverable
by Registrant, to be the beneficial owner or owners of more than five percent of
any voting class of Registrant's stock. More than one person, entity or group
could be beneficially interested in the same securities, so that the total of
all percentages may accordingly exceed one hundred percent of some or any
classes. Please refer to explanatory notes if any, for clarification or
additional information.
<PAGE>

(B) SECURITY OWNERSHIP OF MANAGEMENT. To the best of Registrant's knowledge
and belief the following disclosure presents the total beneficial security
ownership of all Directors and Nominees, naming them, and by all Officers and
Directors as a group, without naming them, of Registrant, known to or
discoverable by Registrant. More than one person, entity or group could be
beneficially interested in the same securities, so that the total of all
percentages may accordingly exceed one hundred percent of some or any classes.
Please refer to explanatory notes if any, for clarification or additional
information. Table D following discloses the share ownership actually issued and
outstanding.

Table B following Table A and its notes, discloses the existence and the
effect of certain management options, as if exercised, on the share ownership of
management and affiliates. Please refer to Executive Compensation, Item 10 of
this Part, for details as to entitlement, terms of exercise and prices for the
Options disclosed.

The Remainder of this Page is Intentionally left Blank

<PAGE>
TABLE D
COMMON STOCK
OFFICERS AND DIRECTORS AND OWNERS OF 5% OR MORE
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Address of Beneficial Owner Actual
Ownership %
Kevin Harrington Chairman and CEO 2,156,101 34.17
80 Gulf Blvd
Belleair Beach FL 33786
Tim Harrington President and COO 1,100,000 17.43
531 Rafael Blvd NE
St. Petersburg FL 33704
Mel Arthur, Executive Vice President 105,000 1.66
12001 9th St N #2509
St. Petersburg FL 33716
Karl Rodriguez Secretary 1,000 0.02
23592 Windsong #19E
Aliso Viejo CA 92656
All Officers and Directors as a Group 3,362,101 53.28
Total Shares Issued and Outstanding 6,310,271 100.00
===================================== ========= =======
</TABLE>

As more fully developed, discussed and disclosed hereinafter, the following
discloses the amount of shares which each beneficial owner shown in Table D has
the right to acquire within 60 days, from options, warrants, rights, conversion
privileges or similar obligations: (1) Kevin Harrington-160,000 shares; (2) Tim
Harrington-140,000 shares; and (3) Mel Arthur-105,000 shares.

The following table, and its notes, discloses the existence and the effect
of all of certain management options, as if exercised, on the share ownership of
management and affiliates. These Options were granted June 30, 1999. The terms
of the vesting of the various options are somewhat complex. Please refer to
Executive Compensation, Item 10 of this Part, for details as to entitlement,
terms of exercise and prices for the Options disclosed.

TABLE E
60 day Exercisable Option/Bonus Rights
- --------------------------------------------------------------------------------
Compensatory Stock Option Plan (See Exhibit 6.2):
Kevin Harrington - 6 months: 60,000 shares @ $2.50
Tim Harrington - 6 months: 40,000 shares @ $2.50
Mel Arthur - 6 months: 5,000 shares @ $2.50

Revenue Performance Stock Bonus
- --------------------------------------------------------------------------------
Kevin Harrington - For each $10,000,000 in gross revenues, issuance of 100,000
shares up to a total of 3,000,000 shares (no more than 1/6 of
total to vest in any 6 month period).
- --------------------------------------------------------------------------------
Tim Harrington - For each $10,000,000 in gross revenues, issuance of 100,000
shares up to a total of 2,000,000 shares (no more than 1/6 of
total to vest in any 6 month period).
- --------------------------------------------------------------------------------
Mel Arthur - For each $10,000,000 in gross revenues, issuance of 100,000
shares up to a total of 900,000 shares (no more than 1/6 of
total to vest in any 6 month period).
===============================================================================
<PAGE>

These Compensatory Stock Options were granted June 30, 1999, are vested,
and exercisable January 1, 1999. These Revenue Performance Stock Bonuses are
dependent upon gross revenues. It is deemed likely that the $10,000,000.00
threshold will be reached within 60 days.

The following Table F discloses the effect of share ownership as if all of
the those 60 vestings and rights were exercised. As more fully developed,
discussed and disclosed hereinafter, the following discloses the amount of
shares which each beneficial owner shown in Table A has the right to acquire
within 60 days, from options, warrants, rights, conversion privileges or similar
obligations: (1) Kevin Harrington-160,000 shares; (2) Tim Harrington-140,000
shares; and (3) Mel Arthur-105,000 shares.

TABLE F
EFFECT OF OPTION EXERCISE ON SHARE OWNERSHIP
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Shares Actual and as Attributed
Options Total if
Option Owner % and awards Options %
Exercised
- ----------------------------------------------------------------------------------------------
Kevin Harrington 2,156,101 34.17 160,000 2,316,101 34.49
Tim Harrington 1,100,000 17.43 140,000 1,240,000 18.47
Mel Arthur 105,000 1.66 105,000 210,000 3.13
Total Shares/Options 6,310,271 100.00 405,000 6,715,271 100.00
Outstanding
==============================================================================================
</TABLE>

(C) CHANGES IN CONTROL/REVERSE ACQUISITION. There are no arrangements known to
Registrant, including any pledge by any persons, of securities of Registrant,
which may at a subsequent date result in a change of control of the Issuer. A
Areverse acquisition@ is the acquisition of a private company by a public
company, by which the private company's shareholders acquired control of the
public company. This Issuer is presently committed to the development of its
infomercial business. While this Issuer is continuously interested in
opportunities for direct acquisition of products, projects, assets and possible
businesses, which may have some synergy with its core business, this Issuer may
not be used as a vehicle for a reverse acquisition.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Kevin and Tim Harrington are brothers and officers and directors of our
Company. Both of them are the owners of business interests acquired by this
Company; namely, Kevin Harrington Enterprises (Kevin Harrington), and Cigar
Television Network (Tim Harrington).

We acquired TPH Marketing, Inc., in a tax-free exchange, for the issuance
of 1,500,000 [post-reverse] shares of this Company's common stock. The Shares
have been issued to the two shareholders of TPH Marketing, Inc., Tim Harrington
having received 800,000 shares, and Kevin Harrington having received 700,000
shares.

Karl Rodriguez serves as secretary and general counsel of Oasis Fourth
Movie Project, Inc., engaged in business with the Company, in the film and video
tape production industry. The Ownership and Management of Oasis is otherwise
unrelated to the ownership and management of this Issuer.

<PAGE>

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

(A) FINANCIAL STATEMENTS.
FINANCIAL STATEMENTS PAGE
- --------------------------------------------------------------------------------
F-1 Audited Financial Statements: for the
Years Ended December 31, 1999 and 1998 34
================================================================================

(B) FORM 8-K REPORTS. None.

<PAGE>
SIGNATURES

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

RELIANT INTERACTIVE MEDIA CORP

formerly Reliant Corporation

<S> <C>

/s/ /s/
Kevin Harrington Tim Harrington
chairman and ceo/director president and coo/director

/s/ /s/
Mel Arthur Karl E. Rodriguez
executive vice president/director secretary/director
- --------------------------------- --------------------------
</TABLE>

<PAGE>

- --------------------------------------------------------------------------------
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
<PAGE>

C O N T E N T S

Independent Auditors Report 39

Consolidated Balance Sheet 40

Consolidated Statements of Operations 42

Consolidated Statements of Stockholders Equity 43

Consolidated Statements of Cash Flows 44

Notes to the Consolidated Financial Statements 45

<PAGE>

- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS REPORT
- --------------------------------------------------------------------------------

Board of Directors
Reliant Interactive Media Corporation
and Subsidiaries
Tampa, Florida

We have audited the accompanying consolidated balance sheet of Reliant
Interactive Media Corporation and Subsidiaries at December 31, 1999 and the
related consolidated statements of operations, stockholders equity and cash
flows for the years ended December 31, 1999 and 1998. 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 generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our 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 consolidated financial position of Reliant
Interactive Media Corporation and Subsidiaries as of December 31, 1999 and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1999 and 1998 in conformity with generally accepted
accounting principles.

__________/s/____________
Jones, Jensen & Company
Salt Lake City, Utah
April 7, 2000

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheet

ASSETS
December 31,
1999
- --------------------------------------------------------------------------------
CURRENT ASSETS
Cash and cash equivalents (Note 1) $ 26,404
Restricted cash (Note 1) 983,795
Receivables - other (Note 4) 800,076
Inventory (Note 1) 57,762
Employee advances 10,923
Prepaid expenses 229,128
Total Current Assets 2,108,088
PROPERTY AND EQUIPMENT (Note 1)
Machinery and equipment 36,625
Office furniture and equipment 45,292
Total Property and Equipment 81,917
Less: Accumulated depreciation (24,092)
Net Property and Equipment 57,825
OTHER ASSETS
Deferred stock offering costs (Note 1) 50,000
Deposits 12,773
Prepaid advertising (Note 1) 607,166
Patent costs (Note 1) 26,668
Total Other Assets 696,607
TOTAL ASSETS $ 2,862,520
================================================================================

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

<PAGE>

RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheet (Continued)

LIABILITIES AND STOCKHOLDERS EQUITY
December 31,
1999
- --------------------------------------------------------------------------------
CURRENT LIABILITIES
Accounts payable $ 944,926
Accrued expenses 166,793
Allowance for sales returns (Note 1) 462,677
Notes payable - current portion (Note 7) 112,439
Notes payable - related parties (Note 6) 360,156
Line of credit (Note 8) 132,148
Total Liabilities 2,179,139
COMMITMENTS AND CONTINGENCIES (Note 3 and 11)
STOCKHOLDERS EQUITY
Common stock: 50,000,000 shares authorized
of $0.001 par value,
6,310,271 shares issued and outstanding 6,310
Additional paid-in capital 3,245,049
Accumulated deficit (2,567,978)
Total Stockholders Equity 683,381
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY $ 2,862,520
================================================================================

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

<PAGE>

RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations

For the Years Ended
December 31,
- --------------------------------------------------------------------------------

1999 1998
NET SALES $ 21,442,009 $ 120,234
COST OF SALES 15,666,658 66,654
GROSS PROFIT 5,775,351 53,580
OPERATING EXPENSES
Depreciation 13,834 6,629
Bad debt expense 64,967 0
General and administrative 4,536,760 833,982
Selling and marketing 2,083,433 339,877
Royalties 287,724 0
Rent 85,590 48,226
Total Operating Expenses 7,072,308 1,228,714
OPERATING LOSS (1,296,957) (1,175,134)
OTHER INCOME (EXPENSES)
Interest expense (37,377) (9,033)
Interest income 491 296
Other income 33 48,958
Total Other Income (Expenses) (36,853) 40,221
LOSS BEFORE INCOME TAXES (1,333,810) (1,134,913)
INCOME TAXES 0 0
NET LOSS $ (1,333,810) $ (1,134,913)
BASIC LOSS PER SHARE (Note 1) $ (0.25) $ (0.42)
================================================================================

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

<PAGE>

RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations

For the Years Ended
December 31,
1999 1998
- --------------------------------------------------------------------------------
NET SALES $ 21,442,009 $ 120,234
COST OF SALES 15,666,658 66,654
GROSS PROFIT 5,775,351 53,580
OPERATING EXPENSES
Depreciation 13,834 6,629
Bad debt expense 64,967 0
General and administrative 4,536,760 833,982
Selling and marketing 2,083,433 339,877
Royalties 287,724 0
Rent 85,590 48,226
Total Operating Expenses 7,072,308 1,228,714
OPERATING LOSS (1,296,957) (1,175,134)
OTHER INCOME (EXPENSES)
Interest expense (37,377) (9,033)
Interest income 491 296
Other income 33 48,958
Total Other Income (Expenses) (36,853) 40,221
LOSS BEFORE INCOME TAXES (1,333,810) (1,134,913)
INCOME TAXES 0- 0
NET LOSS $ (1,333,810) $ (1,134,913)
BASIC LOSS PER SHARE (Note 1) $ (0.25) $ (0.42)
================================================================================

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

<PAGE>

RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Stockholders Equity

Additional
Common Stock Paid-in Accumulated
Shares Amount Capital Deficit
- --------------------------------------------------------------------------------
Balance, December 31,
1997 2,369,600 $2,370 $377,719 $(99,255)
Capital contributions 0 0 340,020 0
Common stock issued to acquire
Reliant Corporation 570,400 570 (570) 0
Common stock
issued for cash 329,770 330 513,170 0
Common stock
issued for services 103,800 104 129,646 0
Net loss for the year ended
December 31, 1998 0 0 0 (1,134,913)
Balance, December 31,
1998 3,373,570 3,374 1,359,985 (1,234,168)
Common stock issued
for cash 1,098,000 1,098 938,902 0
Common stock issued
for services 338,700 338 197,662 0
Fractional shares issued in the
reverse stock split 1 0 0 0
Common stock issued for
acquisition of TPH
Marketing, Inc. 1,500,000 1,500 748,500 0
Net loss for the year ended
December 31, 1999 0 0 0 (1,333,810)
Balance, December 31,
1999 6,310,271 $ 6,310 $3,245,049 $(2,567,978)
================================================================================

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

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows

For the Years Ended
December 31,
1999 1998
- --------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,333,810) $ (1,134,913)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation 13,834 6,629
Amortization of prepaid advertising 458,934 11,651
Bad debt expense 64,967 0
Allowance for sales returns 462,677 0
Loss on purchase of subsidiary 750,000 0
Common stock issued for services 198,000 129,750
Changes in assets and liabilities:
Restricted cash (983,795) 0
Accounts receivable (64,967) 0
Accounts receivable - other (800,076) 0
Inventory (30,420) (27,342)
Deposits 0 19,727
Prepaids and advances (290,051) 15,331
Prepaid advertising (980,798) (96,952)
Accounts payable 871,734 73,159
Accrued expenses 161,375 5,318
Net Cash Used in Operating Activities (1,502,396) (997,642)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment (10,700) (51,343)
Patent and trademark costs 0 (19,783)
Net Cash Used in Investing Activities (10,700) (71,126)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable
- - related parties 475,000 87,500
Payments on notes payable - related parties (202,344) 0
Proceeds from notes payable 200,000 40,000
Payments on notes payable (127,561) 0
Proceeds from the line of credit 142,825 0
Payments on line of credit (10,677) 0
Proceeds from issuance of common stock 940,000 513,500
Proceeds from additional capital contribution 0 340,020
Net Cash Provided by Financing Activities $1,417,243 $ 981,020
================================================================================

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

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)

For the Years Ended
December 31,
1999 1998
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS $(95,853) $(87,748)
CASH AND CASH EQUIVALENTS, BEGINNING
OF YEAR 122,257 210,005
CASH AND CASH EQUIVALENTS, END OF YEAR $26,404 $122,257
Cash payments for:
Income taxes $ 0 $ 0
Interest $22,439 $ 3,615
Non-cash financing activities:
Common stock issued for services $198,000 $129,750
Common stock issued for subsidiary $750,000 $0
================================================================================

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

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Reliant Interactive Media Corporation (formerly Reliant Corporation) (the
Company) was organized under the laws of the State of Utah on July 30, 1984.
The Company subsequently ceased its original business activity in 1993 and was
not engaged in any business activity but was seeking potential investments or
business acquisitions and consequently was considered a development stage
company as defined in SFAS No. 7 until January 1, 1999. At the time of the
acquisition, the Company was a non-operating public shell with nominal assets.
The Company changed its name from Reliant Corporation to Reliant Interactive
Media Corporation (Reliant) in August 7, 1998.

Kevin Harrington Enterprises, Inc. (KHE) was organized under the laws of the
State of Florida on June 15, 1995. The Company is currently developing a dual
flame lighter/cutter cigar product.

Cigar Television Network, Inc. (Cigar TV) was organized under the laws of the
State of Florida on April 1, 1998. The Company was formed to create a cigar
related television show that will air monthly on a national television network
as well as being on the Internet. Cigar TV in conjunction with major magazines
will operate its TV show in conjunction with an Internet site currently under
development called CigarNow.com.

On July 21, 1998, the Company completed an agreement and plan of reorganization
whereby Reliant issued 11,848,000 shares of its common stock in exchange for all
of the outstanding common stock of KHE and Cigar TV. Kevin Harrington, Chairman
and CEO of the Company, was the controlling shareholder of both KHE and Cigar TV
at the time of the reorganization. Immediately prior to the agreement and plan
of reorganization, the Company had 2,852,000 shares of common stock issued and
outstanding. The reorganization was accounted for as a recapitalization of KHE
and Cigar TV because the shareholders of KHE and Cigar TV controlled the Company
immediately after the acquisition. Therefore, KHE and Cigar TV are treated as
the acquiring entities. Accordingly, there was no adjustment to the carrying
value of the assets or liabilities of KHE and Cigar TV. Reliant is the
acquiring entity for legal purposes and KHE and Cigar TV are the surviving
entities for accounting purposes. On August 7, 1998, the shareholders of the
Company authorized a reverse stock split of 1-for-5 prior to the agreement and
plan of reorganization. All references to shares of common stock have been
retroactively restated.

New Accounting Pronouncement
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities which requires companies to record
derivatives as assets and liabilities, measured at fair market value. Gains or
losses resulting from changes in the values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting. The key criterion for hedge accounting is that the
hedging relationship must be highly effective in achieving offsetting changes in
fair value or cash flows. SFAS No. 133 is effective for all fiscal quarters of
fiscal years beginning after June 15, 1999. The adoption of this statement had
no material impact on the Company s financial statements.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basic Loss Per Share
The computation of basic loss per share of common stock is based on the weighted
average number of shares outstanding during the period of the financial
statements as follows:
Loss Shares Per Share
(Numerator) (Denominator) Amount
- --------------------------------------------------------------------------------
For the year ended
December 31, 1999 $ (1,333,810) 5,418,627 $(0.25)
For the year ended
December 31, 1998 $ (1,134,913) 2,673,410 $(0.42)

Fully diluted earnings (loss) per share is not presented, as any common stock
equivalents are antidilutive in nature.

Accounting Method
The Company s financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year end.

Cash and Cash Equivalents
For purposes of financial statement presentation, the Company considers all
highly liquid investments with a maturity of three months or less, from the date
of purchase, to be cash equivalents.

Inventory
Inventory is stated at the lower of cost determined by the first-in, first-out
method or market. Inventory is made up of finished goods held for sale by the
Company.

Property and Equipment
Property and equipment are stated at cost less accumulated depreciation.
Expenditures for small tools, ordinary maintenance and repairs are charged to
operations as incurred. Major additions and improvements are capitalized.
Depreciation is computed using the straight-line method over estimated useful
lives as follows:

Office furniture and equipment 5 to 7 years
Machinery and equipment 5 to 7 years

Depreciation expense for the year ended December 31, 1999 was $13,834.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Patent Costs
These costs will be amortized on the straight-line method over their remaining
lives beginning when the patents are received in 2000.

Prepaid Advertising
Prepaid advertising consisted of the following at December 31, 1999:

Production costs of infomercials $810,979
Production costs of tv shows 52,430
Subtotal 863,404
Less: accumulated amortization (256,243)
Net prepaid advertising $607,166

These advertising costs are amortized over the useful life of the infomercials
and tv shows which is estimated at 18 months. The production costs begin
amortizing when they begin broadcasting. Each product that has production costs
is evaluated at year end for the recoverability of those costs. Production
costs of products that are no longer being sold are fully expensed in the year
that sales cease. Amortization expense relating to prepaid advertising was
$458,934 for the year ended December 31, 1999 and is included in selling and
marketing expense.

Credit Risks
The Company maintains its cash accounts primarily in one bank in Florida. The
Federal Deposit Insurance Corporation insures accounts to $100,000. The Company
s accounts occasionally exceed the insured amount.

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 revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Principles of Consolidation
The consolidated financial statements include the accounts of Reliant
Interactive Media Corporation (Reliant), Kevin Harrington Enterprises, Inc.
(KHE) (a wholly-owed subsidiary), TPH Marketing, Inc. (TPH) (a wholly-owned
subsidiary), and Cigar Television Network, Inc. (Cigar TV) (a wholly-owned
subsidiary). All significant intercompany accounts and transactions have been
eliminated in the consolidation.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Income Taxes
Under the provisions of SFAS No. 109, the Company s policy is to provide
deferred income taxes related to property and equipment, inventories, net
operating losses and other items that result in differences between the
financial reporting and tax basis of assets and liabilities.

No provision for federal income taxes has been made at December 31, 1999 due to
accumulated operating losses. The Company has accumulated approximately
$2,100,000 of net operating losses as of December 31, 1999, which may be used to
reduce taxable income and income taxes in future years. The use of these losses
to reduce future income taxes will depend on the generation of sufficient
taxable income prior to the expiration of the net operation loss carryforwards.
Accordingly, a valuation allowance has been provided for the net operating
losses in full. The carryforwards expire in 2019. KHE and Cigar TV operated as
S corporations prior to their acquisition in 1998. The results of their
operations since acquisition have been included in the net operating loss at
December 31, 1999 and 1998.

Revenue Recognition
Revenue is recognized upon shipment of goods to the customer. The Company has
adopted a returns policy whereby the customer can return any goods received
within 30 days of receipt for a full refund. The Company makes an allowance for
returns based on past history and experience. At December 31, 1999, the
allowance was $462,677.

Restricted Cash
The Company uses the services of an independent fulfillment center (the Center)
to receive and process orders for the Company. The Center collects payments
from charge cards or checks. The Center has set up a cash reserve for potential
charge card chargebacks and returns of product for refund. The chargeback
reserve is 3% of all charge card sales and any chargebacks are credited out of
this reserve. The reserve for returns is 7% on all sales and any returns are
refunded out of this reserve. The total cash reserved at December 31, 1999 was
$983,795 and has been classified as restricted cash.

Deferred Stock Offering Costs
Deferred stock offering costs are recorded at cost. The costs will be charged
to paid-in capital upon completion of the offering.

NOTE 2 - REVERSE STOCK SPLIT

On March 23, 1999, the Company completed a reverse stock split on a 1 share for
5 share basis. No shareholder was reduced to less than 100 shares. All
references to shares issued and outstanding have been restated to reflect the
reverse stock split.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Employment Agreements
The Company has entered into an employment agreement with Kevin Harrington, CEO
of the Company. Mr. Harrington will receive an annual salary of $120,000 and it
will increase by $12,000 each year over the life of the agreement. In addition,
Mr. Harrington shall receive 100,000 shares of the Company s common stock for
each $10,000,000 in gross revenues of the Company with a maximum of 3,000,000
shares to be issued. No shares have been issued at December 31, 1999 as a
result of this revenue performance bonus. The employment agreement ends on
December 1, 2003.

The Company has entered into an employment agreement with Tim Harrington,
President of the Company. Mr. Harrington will receive an annual salary of
$96,000 and it will increase by $12,000 each year over the life of the
agreement. In addition, Mr. Harrington shall receive 100,000 shares of the
Company s common stock for each $10,000,000 in gross revenues of the Company
with a maximum of 2,000,000 shares to be issued. No shares have been issued at
December 31, 1999 as a result of this revenue performance bonus. The employment
agreement ends on December 1, 2003.

The Company has entered into an employment agreement with Mel Arthur, Executive
Vice President of the Company. Mr. Arthur will receive an annual salary of
$42,000. In addition, Mr. Arthur shall receive 100,000 shares of the Company s
common stock for each $10,000,000 in gross revenues of the Company with a
maximum of 900,000 shares to be issued. No shares have been issued at December
31, 1999 as a result of this revenue performance bonus. The employment
agreement ends on December 31, 2003.

Operating Leases
The Company leases its office space in Clearwater, Florida on a month-to-month
basis. The lease obligation was $9,406 per month. Subsequent to year end, the
Company moved to a new office located in Tampa, Florida (see Note 11).

NOTE 4 - RECEIVABLES - OTHER

The Company uses the services of a fulfillment center (Center) located in
Dallas, Texas. The Center receives, processes and ships orders on behalf of the
Company. The Center also collects payment on the products it sells for the
Company. At December 31, 1999, the Center owed the Company $800,076 resulting
from payments received less amounts due the Center for the services it rendered
to the Company.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 5 - COMMON STOCK TRANSACTIONS

During 1998, the Company sold 329,770 shares of its common stock for $513,500 or
an average price of $1.56 per share. The Company also issued 103,800 shares of
its common stock for services rendered, valued at $129,750 or $1.25 per share.

During the first quarter of 1999, the Company sold 248,000 post-split shares of
its common stock for $390,000 or an average price of $1.57 per share. The
Company also issued 38,200 post-split shares of its common stock for services
rendered, valued at $47,750 or $1.25 per share. The shares were valued at the
market price of the stock at the time of issuance.

During the second quarter of 1999, the Company sold 600,000 shares of its common
stock for $300,000 or $0.50 per share. In addition, the Company sold 250,000
shares of its common stock to a related company for $250,000 or $1.00 per share.
The Company also issued 25,500 shares of its common stock for services rendered,
valued at $12,750 or $0.50 per share, the market price of the stock at the time
of issuance.

During the third quarter of 1999, the Company issued 100,000 shares of its
common stock for services rendered, valued at $50,000 or $0.50 per share, the
market price of the stock at the time of issuance.

During the fourth quarter of 1999, the Company issued 175,000 shares of its
common stock for services rendered, valued at $87,500 or $0.50 per share, the
market price of the stock at the time of issuance.

On May 3, 1999, the Company acquired TPH Marketing, Inc. (TPH). TPH s two (2)
shareholders are the Company s CEO and his brother, making this a related party
transaction. The Company acquired 100% of TPH and TPH became a wholly-owned
subsidiary. The Company issued 1,500,000 post-split shares of its common stock
in the acquisition. The shares were valued at $750,000 or $0.50 per share, the
market price of the stock at the time of the acquisition. TPH had no financial
statements or assets and liabilities at the time of acquisition. The essence of
the arrangement was to provide Kevin Harrington and Tim Harrington additional
compensation in the form of common stock through the purchase of TPH. As a
result, the shares are being shown as issued for compensation expense with a
charge to operating expenses in the amount of $750,000.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 6 - NOTES PAYABLE - RELATED PARTIES

Notes payable - related parties consisted of the following:
December 31,
1999
- --------------------------------------------------------------------------------

Note payable to a shareholder, unsecured, interest
at 8.0%, interest payments due quarterly beginning
March 31, 1999, principal balance due December 31, 2000. $ 35,156

Note payable to a shareholder, unsecured, interest
at 8.0%, interest payments due quarterly beginning
March 31, 1999, principal balance due December 31, 2000. 50,000

Note payable to a related company, unsecured,
interest at 10%, principal and interest balance
due on demand. 125,000

Note payable to a related company, unsecured,
interest at 10%, principal and interest balance
due on demand. 100,000

Note payable to a related company, unsecured,
interest at 10%, principal and interest balance
due June 1, 2000. 50,000
================================================================================
Total notes payable - related parties 360,156

Less: current portion (360,156)
Long-term notes payable - related parties $ 0

Maturities of notes payable - related parties are as follows:

Year Ending
December 31,
2000 $360,156
Thereafter 0
Total $360,156

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 7 - NOTES PAYABLE

Notes payable consisted of the following:

December 31,
1999
- --------------------------------------------------------------------------------

Note payable to Nations Bank, secured by stock,
interest at 10%, interest payments due monthly,
principal balance due on demand. $ 39,724

Note payable to a company, unsecured, interest
at 8.0%, interest payments due monthly, principal
balance due July 8, 2000. 72,715

Total notes payable 112,439

Less: current portion (112,439)

Long-term notes payable $ 0

Maturities of notes payable are as follows:

Year Ending
December 31,

2000 $ 112,439
Thereafter 0

Total $ 112,439

NOTE 8 - LINE OF CREDIT

The Company has a line of credit with Nations Bank of $150,000. As of December
31, 1999, the balance owed was $132,148. Borrowings under the line of credit
are guaranteed by the Company and bear interest at 9.5%.

NOTE 9 - FINANCIAL INSTRUMENTS

Statement of Financial Accounting Standards No. 107 (SFAS 107), Disclosures
About Fair Value of Financial Instruments requires disclosure of the fair value
of financial instruments held by the Company. SFAS 107 defines the fair value
of a financial instruments as the amount at which the instrument could be
exchanged in a current transaction between willing parties. The following
methods and assumptions were used to estimate fair value:

The carrying amount of cash equivalents, accounts receivable and accounts
payable approximate fair value due to their short-term nature. The carrying
amount of long-term debt approximates fair value based on the borrowing rate
(10.0%) currently held by the Company for a bank loan.

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 10 - OUTSTANDING STOCK OPTIONS

The Company applies Accounting Principles Board ( APB ) Option 25, Accounting
for Stock Issued to Employees, and related Interpretations in accounting for
all stock option plans. Under APB Option 25, compensation cost is recognized
for stock options granted to employees when the option price is less than the
market price of the underlying common stock on the date of grant.

FASB Statement 123, Accounting for Stock-Based Compensation ( SFAS No. 123 ),
requires the Company to provide proforma information regarding net income and
net income per share as if compensation costs for the Company s stock option
plans and other stock awards had been determined in accordance with the fair
value based method prescribed in SFAS No. 123. The Company estimates the fair
value of each stock award at the grant date by using the Black-Scholes option
pricing model with the following weighted average assumptions used for grants,
respectively; dividend yield of zero percent for all years; expected volatility
of 32 percent for all years; risk-free interest rates of 10.0 percent and
expected lives of 4.5 years.

Under the accounting provisions of SFAS No. 123, the Company s net loss would
have been increased by the pro forma amounts indicated below:

1999 1998
Net loss:
As reported $ (1,333,810) $ (1,134,913)
Pro forma (1,496,455) (1,134,913)
Net loss per share:
As reported $ (0.25) $ (0.42)
Pro forma (0.28) (0.42)

During the initial phase-in period of SFAS 123, the effect on pro forma results
are not likely to be representative of the effects on pro forma results in
future years since options vest over several years and additional awards could
be made each year.

A summary of the status of the Company s stock option plans as of December 31,
1999 and changes during the year is presented below:
December 31,
1999
Weighted
Average
Exercise
Shares Price

Outstanding, beginning of period 0 $ 0
Granted 420,000 5.00
Canceled 0 0
Exercised 0 0

Outstanding, end of period 420,000 $ 5.00

Exercisable, end of period 105,000 $ 2.50

Weighted average fair value of options and warrants
granted during the year $2.12

<PAGE>
RELIANT INTERACTIVE MEDIA CORPORATION
AND SUBSIDIARIES
Notes to the Consolidated Financial Statements
December 31, 1999

NOTE 10 - OUTSTANDING STOCK OPTIONS (Continued)

Outstanding Exercisable
Weighted
Average Weighted Weighted
Number Remaining Average Number Average
Outstanding Contractual Exercise Exercisable Exercise
Exercise Prices at 12/31/99 Life Price at 12/31/99 Price
$2.50 105,000 4.50 $2.50 105,000 $2.50
4.00 105,000 4.50 4.00 0 0
6.00 105,000 4.50 6.00 0 0
7.50 105,000 4.50 7.50 0 0
$2.50 - 7.50 420,000 4.50 $5.00 105,000 $2.50

The options were granted as compensation and additional bonuses to certain
officers of the Company. These options were issued with an exercise price above
the market value of the stock at the date of issuance.

Additional stock options are available to Kevin Harrington, Tim Harrington and
Mel Arthur based on the stock trading performance of the Company s common stock.
If the Company s shares are trading at a price of $15.00 per share, 256,500
options will be granted at an exercise price of $7.50 per share. If the Company
s shares are trading at a price of $20.00 per share, 256,500 options will be
granted at an exercise price of $7.50 per share. If the Company s shares are
trading at a price of $25.00 per share, 327,000 options will be granted at an
exercise price of $7.50 per share. As of December 31, 1999, the Company s
common stock has not reached any of the performance measurements mentioned
above.

NOTE 11 - SUBSEQUENT EVENTS

Office Lease
The Company entered into a five (5) year non-cancelable office lease beginning
March 1, 2000. Payments are currently $13,422 per month through August 2000 and
increase to $14,902 in September 2000. Future minimum lease payments under the
lease are as follows:
Year ending Operating
December 31, Lease
2000 $140,143
2001 185,304
2002 193,079
2003 200,854
2004 208,629
2005 and thereafter 34,988
Total lease payments $962,997

<PAGE>