ENTERTECH MEDIA GROUP INC, 10SB12G/A, 2000-06-19

ENTERTECH MEDIA GROUP INC
10SB12G/A, 2000-06-19
MOTION PICTURE & VIDEO TAPE PRODUCTION

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

AMENDED FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS

Under Section 12(b) or (g)
of the Securities Exchange Act of 1934

ENTERTECH MEDIA GROUP, INC.
----------------------------------------------
(Name of Small Business Issuer in its Charter)

Nevada 88-036858
---------------------------- --------------------
(State of other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)

50 West Liberty Street, Suite 880
Reno, Nevada 89501
------------------------------------------------ --------------
(Address of principal executive offices) (Zip Code)

Issuer's Telephone number: (775)324-6655

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

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, Par Value $0.001 Per Share
----------------------------------------
(Title of Class)

<PAGE>

PART I

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ITEM 1. DESCRIPTION OF BUSINESS
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(a) Business Development

EnterTech Media Group, Inc. (the "Company" or the "Registrant" ) is a
Nevada corporation which was originally incorporated on November 17, 1986 under
the name of Stones Stores, Inc. The Company is filing a registration statement
for its issued and outstanding shares of common stock on a voluntary basis. It
is the Company's understanding that such registration is required in order for a
price for the Company's shares to be quoted on the NASDAQ over-the-counter
Bulletin Board system. Most of the Company's records prior to 1995 have been
lost or destroyed. The information in this section on business development which
relates to time periods before 1995 is taken from surviving minutes of
shareholder and directors meetings and from public records such as Articles of
Incorporation and amendments to such articles on file with the State of Nevada.
The Company's transfer agent also has records relating to stock ownership and
transfers. The Company anticipates no adverse consequences as a result of the
loss of business records prior to 1995 as the Company intends to engage in
business unrelated to any business in which the Company was involved.

The Company was originally incorporated with one class of stock. The
Company had 50,000,000 shares of capital stock with a par value of $0.001 per
share authorized. The Company was incorporated to engage in the business of the
retail and wholesale sales of men's and women's furnishings and related
products.

In February of 1987, the Company made a public offering of its
securities pursuant to the provisions of Rule 504 adopted under the Securities
Act of 1933, as amended. The Company sold 500,000 shares at $0.10 per share for
a total of $50,000. The organizers of the Company purchased 100,000 shares at
$5,000. Thus, at the conclusion of the offering there were issued and
outstanding 600,000 shares of common stock with a par value $0.001 per share.

On March 30, 1987, the shareholders approved the acquisition of all of
the issued and outstanding shares of stock of PFI, Inc., a Washington
corporation engaged in the business of financial planning. As a result of the
corporate reorganization, on May 1, 1987, the Company changed its name to Stone
International, Inc. and effected a five (5) to one (1) forward split of the
stock and increased the par value to $0.005 per share. The Company's 600,000
shares of outstanding stock with the five (5) to one (1) forward split became
3,000,000 shares outstanding with a par value of $0.005. The Company then issued
12, 789,474 shares of it common stock for of all of the issued and outstanding
stock of PFI, Inc. The Company then had 15,789,474 shares of its common stock
issued and outstanding. There was no change in the Company's management as a
result of this transaction.

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<PAGE>

On May 1, 1990, the Company underwent another corporate reorganization.
The Company's named was change to Armas Intl. Mfg. Co., Inc. and a reverse split
of the issued and outstanding shares at the rate of twenty (20) to one (1) was
effected. From September 4, 1990 through March 9, 1993, the Company acquired
assets in exchange for stock. It issued 1,852,749 shares to acquire property,
cash and services. Current management assumes that any assets so acquired were
lost as part of the failure of the Company's past business operations.

At some point after 1993, the Company became inactive and remained
inactive until new management took over operations. Current management became
involved with the Company in the fall of 1998 when it inquired of surviving past
management of the availability of the Company for operation of a new business.
At that point in time the Company basically was a "shell" corporation.

In October of 1998, current management reorganized the Company once
again. On October 23, 1998, the Company's name was changed to Inter-Link
Communications Group, Inc. and the Company's issued and outstanding shares
underwent a six (6) for one (1) reverse split. The Company's articles also were
amended to authorize the Company to issue 100,000,000 shares of common stock
with a par value of $0.001 per share.

In late 1998, Management entered into acquisition agreements with two
entities for the acquisition of assets. The parties contracting with the Company
breached those agreements and as a result no assets were acquired pursuant to
those agreements. The circumstances surrounded those agreement were the subject
of litigation commenced by the Company in the State of Nevada and in Great
Britain. This litigation has been settled as detailed in Item 3 below.

During April of 1999, management entered into an Exchange Agreement
with a Nevada corporation named EnterTech Limited. Under the terms of that
Exchange Agreement, the Company was obligated to issue a minimum of 11,500,000
shares and a maximum of 15,000,000 shares of it common stock in exchange for all
the issued and outstanding shares of EnterTech Limited. The transaction with
EnterTech Limited was not arms length. No fairness opinion was obtained. The
transaction was framed to be a tax free exchange whereby stockholders of
EnterTech Limited would have obtained 92% of the issued stock of the Company. At
the time of the Exchange Agreement, EnterTech Limited had 10,000,000 shares of
common stock issued and outstanding. EnterTech Limited also was in the process
of offering a minimum of 1,500,000 shares and a maximum of 5,000,000 shares of
its common stock pursuant to a private placement memorandum. Because the Company
was obligated to issue a minimum of 11,500,000 pursuant to the Exchange
Agreement, it issued 11,500,000 shares of its common stock to an exchange agent
who was charged under the terms of the Exchange Agreement with assuring that the
appropriate number of the Company's shares were issued to the shareholders of
EnterTech Limited once EnterTech Limited's private placement was complete.
10,000,000 of these initial 11,500,000 shares were issued for the 10,000,000
shares of EnterTech Limited issued and outstanding apart from the private
placement offering, and the remain 1,500,000 shares were issued for the exchange
of the minimum number of shares EnterTech Limited was offering pursuant to its
private placement memorandum.

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<PAGE>

Since the filing of the Company's Form 10-SB in June of 1999, the
private placement of EnterTech Limited's shares has been terminated with no
funds raised. Accordingly, the 1,500,000 shares issued as part of this
transaction have been returned to the Company. As described in Item 2 of this
Part I, management will fund the activities of business using capital
contributions by management and existing shareholders. Because no consideration
was paid for these 1,500,000 shares, their issuance and return are not reflected
on the Company's financial statements, though the issuance and return of these
shares do appear on the Company's stock transfer records.

EnterTech Limited owns 100% of the issued and outstanding shares of two
subsidiaries, EnterTech Picture Corporation and EnterTech Releasing Corporation,
also Nevada corporations. EnterTech Releasing Corporation was incorporated on
December 18, 1998 and EnterTech Picture Corporation and EnterTech Limited were
incorporated on December 31, 1998. Mark Tolner, the President of the Company, is
the only officer and director of EnterTech Picture Corporation and EnterTech
Releasing Corporation. Mr. Tolner also is the sole director and officer of
EnterTech Limited. The Company is the sole owner of all of the issued and
outstanding stock of each of these corporations, having purchased 1,000 shares
in EnterTech Limited for $1,000, 1,000 shares in EnterTech Releasing Corporation
for $1,000 and 500 shares in EnterTech Picture Corporation for $500. Thus, each
of these three corporations is a wholly-owned subsidiary of the Company. All of
the subsidiaries will operate out of the Company's offices.

On April 22, 1999, as part of its transaction with EnterTech Limited,
the Company's board of director approved the changed of the Company's name to
EnterTech Media Group, Inc. Now operating as EnterTech Media Group, Inc., the
business shall be the business EnterTech Limited, as described below.

As of June 15, 2000, 11,030,000 shares of the Company's 100,000,000
authorized shares of common stock were issued and outstanding.

The Company has not been subject to bankruptcy, receivership or any
similar proceedings, nor have any of its subsidiaries.

(b) Business of the Issuer

(1) Principal Products and Services and Their Markets

The business of EnterTech Limited is now being operated as the business
of EnterTech Media Group, Inc. Accordingly, hereafter the business of EnterTech
Media Group, Inc. and that of EnterTech Limited shall be described as the
business of "EnterTech."

EnterTech operates as a film production and distribution company. The
Company utilizes technology such as High Definition Digital Video ("HDDV") to
reduce the cost of film making in order to make, produce and distribute its
films. The Company also intends to acquire other independent films that will
provide the Company with a growing film library.

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<PAGE>

Management has observed the current trends in the film industry whereby
feature films are being made at huge costs often in excess of sixty million
dollars with an additional sum for marketing that makes each major film's total
cost an average of around one hundred million dollars plus. The Company believes
that this is excessive and in most cases unprofitable and therefore has decided
to focus its time and energy on creating films that have been recorded on a new
format, High Definition Digital Video ("HDDV"). The intention is to then
transfer each film onto 35 mm and release them theatrically. Subsequently the
Company will distribute its films in all other formats i.e. Video, DVD, Cable
and Television.

The cost of filming on HDDV is attractive for a variety of economical
reasons. The savings derive from many different areas including a much shorter
production schedule which therefore requires talent for a period shorter than
the norm, set-up times, small crews and the cost of film itself and the
associated processing and delivery costs.

The Company has formed a subsidiary called EnterTech Picture
Corporation ("EPC") to make an ultimate target of six feature films per annum
with budgets of under one million dollars per film. Each film will use the HDDV
format.

The Company's overall philosophy will be to produce programming with a
heavy emphasis being placed on the youth market with music playing a key role in
the finished films. The market is there to be addressed and the Company's
challenge is to provide it with carefully targeted productions and soundtracks.

(2) Distribution Methods

The Board of EnterTech has formed a domestic distribution company
called EnterTech Releasing Corporation, and has secured the services of Peter
Marai to oversee its growth. Mr. Marai works for the Company on a film-by-film
basis on mutually acceptable terms. Such terms vary from film to film. From 1998
to the present, Mr. Marai has been the Domestic Distribution Vice President of
Cinequanon Pictures International where he has worked on releasing foreign
language and independent films in the United States. From 1988 through 1997, Mr.
Marai was the President of Connoisseur Video Collection, a company which he
founded to release foreign language films on video. While at Connoisseur Video,
Mr. Marai acquired and distributed over 100 titles, including Francoise
Truffant's "Shoot the Piano Player" and "The Bolshoi at the Bolshoi-Sleeping
Beauty." Films will be produced and or acquired for release in all formats.
Initially theatrically and then on Video, DVD, Cable and Television and
eventually the Internet.

The Company also intends to form a unique and specialized DVD label
which will develop an associated brand name for DVD releasing. This business may
seek to establish a "DVD of the week or month Club" style of operation in order
to develop customer loyalty.

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<PAGE>

Production, Prints and Advertising

The Company's policy with regard to the necessary funding of
productions and associated promotion, releasing and distribution costs will be
to make use of any "off balance sheet financing." Generally speaking, "off
balance sheet financing" refers to the use of funds from venture partners or
from subsidies from third parties. By using such financing, the Company does not
intend to use its own funds for the production of the films it produces. It will
use established methods of film financing to avoid as far as possible any
financial risk or burden to its shareholders in relation to such costs. For
example, it is common practice in the film industry to bring in joint venture
partners who provide the necessary production funds in return for a profit
participation in the film. Additionally, the Company intends to make use of any
appropriate tax subsidies and grants that are available for film making in
various parts of the world.

The Company has entered into a joint venture agreement with The Polan
Group under the terms of which the Company and Polan Group agree to jointly
finance and produce a feature length digital video film tentatively entitled
"Level 9." This film has a production budget of $75,000, of with the Company has
agreed to provide $37,500. The Company and the Polan Group agree to split net
profits from this venture on a 50-50 basis. Production on the film has started
and the Company has developed a website promoting the film,
www.level9themovie.com.

(3) Status of Publicly Announced New Products or Services

The Company has issued press releases which describe its agreements
with Intra Films and Le Studio Canal Plus for the acquisition of rights to the
Films "not of the This World" and "It All Starts Today."

On May 25, 1999, the Company entered into an agreement with Le Studio
Canal Plus under the terms of which the Company gained distribution rights in
the United States for the film "Ca Commence Aujourd'Hui" ("It All Starts
Today"). Under the agreement, Le Studio Canal Plus granted the Company
theatrical, Non-theatrical, public video, home video, commercial video, pay TV
and free TV distribution rights to this film. Airline, Ship and Hotel
distribution rights were not granted under the agreement. The agreement runs for
a period of 10 years.

On October 26, 1999, the Company entered into an agreement with Intra
Films to acquired the "producer" rights to the film "Not Of This World" for a
period of 21 years. Under the agreement, the Company obtained the exclusive
copyright and all other rights to exploit this film, including all theatrical,
non-theatrical, television, home video, music publishing, print and internet
rights.

On October 26, 1999 a press release appeared which discussed a
"multi-million media agreement between the Company and Triangle Multi-Media
Limited. On September 15, 1999 a article appeared in the Daily Variety and a
press release appeared on September 14, 1999 both of which stated that the

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Company acquired "Pink Motel" and that the Company intends to "go public on Wall
Street, has already applied for listing and has appointed Erik Jensen as vice
president of international." The Company did not control the release of the
October 26, 1999 press release, the September 15, 1999 article or the September
14, 1999 press release. The Company has not entered into a multi-million media
agreement with Triangle Multi-Media Limited, has not acquired the rights to
"Pink Motel," has not already applied for listing and has not appointed Erik
Jensen as a vice president.

(4) Competitive Business Conditions

The Company faces well-established and well-funded competition. Motion
pictures are produced and marketed by major film studios as well as a large
number of smaller independent production companies. The Company will compete
with these smaller independent production companies in the production and
marketing of feature films. Many of the Company's competitors are well
established organizations with extensive knowledge of the industry, marketing
staffs and organizations, and financial resources greatly in excess of those
available to the Company.

Many of the Company's current and potential competitors have longer
operating histories, larger customer bases, greater brand recognition and
significantly greater financial, marketing and other resources than the Company.
Increased competition may result in reduced operating margins, loss of market
share and a diminished brand franchise. There can be no assurance that the
Company will be able to compete successfully against current and future
competitors. New technologies and the expansion of existing technologies may
increase the competitive pressures of the Company in this area of its
operations.

(5) Dependence on Major Customers

As indicated throughout this Item 1, the Company is a reorganizational
stage and is in the process of developing its new entertainment products and
services. At this point in time, the Company has no major customers. Of course,
the Company intends to develop a broad base of customers so its success is not
dependent upon a few sources of revenue.

(6) Intellectual Property

The Company will regard its trade secrets and similar intellectual
property as valuable to its business, and will rely on trademark and copyright
law, trade secret protection and confidentiality and/or license agreements with
its employees, partners and others to protect its proprietary rights. There can
be no assurance that the steps taken by the Company will be adequate to prevent
misappropriation or infringement of its intellectual property. The Company
expects that it may license in the future, certain of its proprietary rights,
such as trademarks or copyrighted material, to third parties. While the Company
attempts to ensure that the quality of its brand is maintained by such
licensees, there can be no assurance that such licensees will not take actions
that might materially adversely affect the value of the Company's proprietary
rights or reputation, which could have a material adverse effect on the Company.
As of the time of the filing of this Form 10-KSB, the Company has no
intellectual property rights.

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<PAGE>
(7) Governmental Approval, Regulation and Environmental Compliance

At this point in time, there is no need for governmental approval of
the Company's intended principal products or services. However, recent high
profile events have focused attention on the content of products and services
offered by the entertainment industry. Specifically, some governmental review of
a link, if any, between the violent content of some movies and crimes committed
by members of the society viewing those movies has emerged. While the Company
believes that it is unlikely that such scrutiny will result in governmental
restrictions placed on the content of products in the entertainment industry,
including those the Company intends to produce, such governmental restrictions
have rarely been given such consideration and it is possible that restrictions
on entertainment content could be imposed. At the time of the filing of this
Form 10-KSB, however, it is unclear what form any such restrictions would take
or how they would be enforced. Nonetheless, the Company is mindful of the fact
that such matters are being reviewed on a national level.

The Company anticipates that it will have no material costs associated
with compliance with either federal, state or local environmental law.

(8) Research and Development

The Company intends to establish a small Research and Development team,
composed of both core and rotating engineering and marketing personnel, who will
develop and adopt new products, services, equipment, software and tools. The
Company believes that the results of this work will allow the Company to enhance
its services as well as its ability to provide those services effectively.
During the last two years, EnterTech has not incurred costs in connection with
research and development.

(9) Employees and Facilities

As of June 15, 2000, EnterTech had seven (7) full-time and three (3)
part-time employees. The Company also employs independent contractors and other
temporary employees. Such individuals perform basic business office clerical
work such as answering the phones, producing correspondence and filing. The
Company's consulting agreement with Peter Marai calls for Mr. Marai to oversee
the growth of the Company's film distribution activities. Other members of
management, specifically Mark Tolner and John Daly, devote a substantial amount
of their time on the Company's business. They do so, however, on a non-exclusive
basis. The Company estimated that Mr. Tolner devotes approximately 80% of his
time to the Company's business and that Mr. Daly devotes approximately 70% of
his time. Other employees devote all their time to the Company's business. The
Company's day-today operations consist of seeking out and developing feature
film projects from their inception through to a finished product and thence to
theatrical, television and/or video distribution.

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None of the Company's employees is represented by a labor union, and
the Company considers its employee relations to be good. The Company expects the
number of employees to grow significantly over the next twelve months.
Competition for qualified personnel in certain areas of the Company's industry
is intense, particularly among software development and other technical staff.
The Company believes that its future success will depend in part on its
continued ability to attract, hire and retain qualified personnel.

While the Company maintains a business office in Reno, Nevada the
Company's executive offices are located in, and substantially all of its
operating activities are conducted from office space located in Los Angeles,
California. The Company does not own any real estate.

Prior to filing its Form 10-SB with Securities and Exchange Commission
on June 11, 1999, the Company had not been required to deliver annual reports.
To the extent that the Company is required to deliver annual reports to security
holders through its status as a reporting company, the Company shall deliver
annual reports. Also, to the extent the Company is required to deliver annual
reports by the rules or regulations of any exchange upon which the Company's
shares are traded, the Company shall deliver annual reports. If the Company is
not required to deliver annual reports, the Company will not go the expense of
producing and delivering such reports. If the Company is required to deliver
annual reports, they will contain audited financial statements as required.

Prior to filing its Form 10-SB, the Company had not filed reports with
the Securities and Exchange Commission. Now that the Company has become a
reporting company, it is required to file Forms 10K-SB, 10Q-SB, 8-K along with
appropriate proxy materials as the same become due. If the Company issues
additional shares, the Company may file additional registration statements for
those shares.

The public may read and copy any materials the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by call the Commission
at 1-800-SEC-0330. The Commission maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. The Internet address of
the Commission's site is (http://www.sec.gov).

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR
PLAN OF OPERATION
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Plan of Operation

During the next twelve-month period, the Company intends to develop its
operations from capital contributions made by management and existing
shareholders. For example, the Company has obtained substantial funding from
Whyteburg Limited, one of the Company's shareholders. Through the end of March
2000, such funding from Whyteburg totaled $659,776. A loan agreement dated April
30, 1999 governs the terms of the loan of funds from Whyteburg. However, all
amounts received from Whyteburg through the end of 1999, funds totaling
$195,396, have been capitalized and are not carried on the Company's books as
loans. Whyteburg has consented to and confirmed to the Company's auditors this
treatment of such funds. At this point in time the success of the Company's
future operation is entirely dependent on management and shareholder funding of
operations. Management believes that it can provide sufficient funding for the
Company's operations for the next 12 months. Also management will attempt to
finance the production of its films through "off balance sheet" financing.
Generally speaking, "off balance sheet financing" refers to the use of funds
from venture partners or from subsidies from third parties. By using such
financing, the Company does not intend to use its own funds for the production
of the films it produces. It will use established methods of film financing to
avoid as far as is possible any financial risk or burden to its shareholders in
relation to such costs. For example, it is common practice in the film industry
to bring in joint venture partners who provide the necessary production funds in
return for a profit participation in the film. Additionally, the Company intends
to make use of any appropriate tax subsidies and grants that are available for
film making in various parts of the world. If such funding is insufficient to
operate the Company, management will look to outside sources of funding such
offerings of debt and equity securities. If management is unable to raise funds
from sources outside of management, it is unlikely that the Company will be able
to fund its plans to produce and market films and the Company's business plan
will fail. The Company has no liquidation plans if appropriate funding is not
received. The Company has not produced any films to date and its only basis for
indicating that a any profit may be realized from its endeavors is the past
experience of management, specifically John Daly, in the film industry.

Management anticipates that the Company will require funds to operate
as planned as follows: approximately $850,000 for acquiring feature films, on
productions and co-productions of feature films and music production and
licensing, $175,000 on technology development and infrastructure including
creating a web site for the Company, $100,000 on sales and marketing, $100,000
for general and administration and $125,000 for working capital and other
general corporate purposes. Additional funds will be needed for broader sales
and marketing efforts required in connection with the Company's plan.

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The Company intends to employ approximately 12 people in the next six
months, of which 5 will be directly related to film and soundtrack production, 3
to film distribution, 1 will be directly related to the design and development
of the Company's web site, 1 will be directly related to technology support and
development and 2 will be directly related to general and administrative.

During the period ending December 31, 1999 management identified a
number of feature films that it wishes the Company to produce and distribute and
it began seeking the necessary off balance sheet funding for them. Production
began on one such film entitled "Level 9" and principal photography was
completed in December of 1999. The company expects to complete the film by
August 31, 2000.

The Company is also seeking to acquire rights to distribute films made
by third parties and in particular is looking to acquire rights to groups of
films or "Libraries" of films. As of December 31,1999 the Company has acquired
such rights in respect to 3 full length feature films and it expects to
theatrically release these in the USA in the year 2000.

Management have been seeking to raise the profile of the Company in the
marketplace in which it operates and have made a number of staff appointments
which it has announced in the trade press. These appointments have been in the
area of film sales, acquisitions and distribution and have helped the Company to
be able to actively pursue its objectives.

Management have also been investigating the possibility of close
relationships with companies engaged in complementary activities which would
enable the Company to better exploit the revenue earning potential of its
products. In particular the Company has been carefully exploring the merits of
becoming the visual entertainment content provider to Talk Visual Corporation, a
provider of Video Telephone services.

The Company has been developing in house its own Internet Web Site
which can be found at http://www.entertechmedia.com and also a site to promote
Level 9 which can be found at http://www.level9themovie.com. In order to develop
its Internet presence management intends to develop relationships for the
Company with existing Internet sites.

If the Company's business plans fail, the Company may or may not be
operated as a "shell" corporation.

From time to time the Company may evaluate potential acquisitions
involving complementary businesses, content, products or technologies. The
Company has no present agreements or understanding with respect to any such
acquisition.

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ITEM 3. DESCRIPTION OF PROPERTY
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While the Company maintains a business office in Reno, Nevada the
Company's executive offices are located in, and substantially all of its
operating activities are conducted from office space located in Los Angeles,
California. The Company subleases office space from Karzan Communications, Inc.,
in an office building located at 4929 Wilshire Boulevard, Suite 830, Los
Angeles, California. The Company pays Karzan approximately $7,000 per month in
rent. In addition, Nevada Agency and Trust Company, the Company's resident agent
and transfer agent, maintains an office in Reno, Nevada and provides its
corporate clients, including the Company, with office space as necessary. The
Company also has use of a condominium in London, England as a branch office. To
date, the Company has not taken advantage of the use of that facility. The
Company has not entered into any written lease agreement regarding its offices
in Reno or London and no business activities have been conducted in the London
office to date. The Company believes that additional space will be required as
its business expands and believes that it will be able to obtain suitable space
as needed. The Company does not own any real estate, nor is the Company engaged
in the business of investing in real estate or real estate mortgages.

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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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(a) 5% Shareholders:

The following information sets forth certain information as of December
31, 1999 about each person who is known to the Company to be the beneficial
owner of more than five percent (5%) of the Company's Common Stock:

(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- ----- -------------------- -----

Common John Daly 4,000,000 27.2%
1255 Norman Place, Brentwood
Los Angeles, CA 90049

Common Whyteburg Limited 3,500,000 31.7%
P.O. Box 3463 Road Town
Tortola BVI

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(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- ----- -------------------- -----
Common Mark Tolner 1,500,000 13.6%
4929 Wilshire Blvd., #830
Los Angeles, CA 90010

Common Cullen Trading LTD 1,000,000 9.1%
c/o Kerman & Co. Wentworth
House S St. James Square
London, England SW1 Y4JU

(b) Security Ownership of Management:

(2)
(1) Name and Address (3) (4)
Title of Beneficial Amount and Nature of Percent of
of Class Owner Beneficial Ownership Class
-------- ----- -------------------- -----

Common John Daly 4,000,000 36.3%
1255 Norman Place, Brentwood
Los Angeles, CA 90049

Common Mark Tolner 1,500,000 13.6%
4929 Wilshire Blvd., #830
Los Angeles, CA 90010

Common Alexander H. Walker, Jr. 528,181 1 4.8%
1700 Coronet Drive
Reno, Nevada 89509

All Directors and 6,028,181 54.7%
Officers as a Group
--------------------------------------------

(1) Of this amount 106,750 shares are owned by a Nevada corporation
named Hidden Splendor Resources, Inc., of which Mr. Walker is an officer and
director and 21,431 shares are owned by a Nevada corporation named Nevada Agency
& Trust Company, of which Mr. Walker also is an officer and director. With his
wife, Mr. Walker owns a controlling interest in both Nevada Agency and Trust and
Hidden Splendor. The remaining 400,000 shares are owned by Mr. Walker in his own
name.

There is no arrangement which may result in a change in control.

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ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
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(a) Directors and Executive Officers

As of June 9, 2000, the directors and executive officers of the
Company, their ages, positions in the Company, the dates of their initial
election or appointment as director or executive officer, and the expiration of
the terms as directors are as follows:
<TABLE>
<CAPTION>

Period Served As
Name Age Position Director
---- --- -------- --------
<S> <C> <C> <C>
John Daly 63 Chairman of the October 1999 to present
Board and a Director

Mark Tolner 44 President, March 1999 to present
Treasurer and
Director

Alexander H. Walker, Jr. 74 Secretary and March 1999 to present
Director
</TABLE>

*The Company's directors are elected at the annual meeting of stockholders and
hold office until their successors are elected and qualified. The Company's
officers are appointed annually by the Board of Directors and serve at the
pleasure of the Board.

(b) Business Experience:

John Daly, age 63, is Chairman of the Board and a Director of the
Company. He has dedicated his life to the entertainment industry. With a
partner, Mr. Daly formed Hemdale which has packaged, financed and produced
motion pictures. Through Hemdale, Mr. Daly has been involved in the production
of many motion pictures including the Oscar- winning Best Pictures, "Platoon"
and "Last Emperor", the award winning "Hoosiers" and "At Close Range". Other
films in which he and Hemdale participated include "The Terminator", the Cannes
award winner "Images," "The Triple Echo", "The Falcon and the Snowman" and
"Hidden Agenda".

Mark Tolner, age 44, is the President, Treasurer and a Director of the
Company. Mr. Tolner's background is in international business, financial and
investment management, areas in which he generally has worked during the last
eight years. In this regard, Mr. Tolner has been involved with the
conceptualizing, negotiating, funding and managing the joint venture vehicle
used in the expansion of the a chain of specialist sandwich retailers in London,
England. He has negotiated the acquisition from a Danish Venture Capital company

-13-

<PAGE>
of a controlling interest in an company with joint ventures in television data
broadcasting with CNN and Reuters. He also has worked on a debt restructuring
for the Brazilian State owned shipping line Lloyd Brasiliero cn.

Alexander H. Walker, Jr., age 74, is the Secretary and a Director of
the Company. He received his B.A. from Waynesburg College in 1950 and his J.D.
from the University of Pittsburgh School of Law in 1952. Since 1956, Mr. Walker
has been a practicing attorney, with his practice including trial and
transactional work, with an emphasis on corporate securities matters. From 1955
to 1956, he served as the Attorney in Charge of the Salt Lake City, Utah Branch
of the United States Securities and Exchange Commission, first serving as the
Attorney Advisor for the Division of Corporate Finance in Washington, D.C. from
1954 to 1955. From 1956 through the present, Mr. Walker has maintained a private
practice. He maintains licenses in both Utah and Pennsylvania. Mr. Walker also
in an owner of Nevada Agency and Trust Company, the Company's transfer agent,
and Hidden Splendor Resources, Inc., a Company shareholder. Hidden Splendor owns
mining properties in Utah, Colorado and Nevada. Mr. Walker devotes part of his
time to businesses of Nevada Agency and Trust Company and Hidden Splendor
Resources, Inc. Prior the election of Mr. Tolner as President of the Company,
Mr. Walker served as the Company's President. He served as the Company's
President from 1996 until 1998.

Mr. Walker also is a director of Talk Visual Corp. whose shares are
traded under the symbol TVCP on the OTC Bulletin Board market. Talk Visual Corp.
is the video-telephone communication business. He also is an officer and
director of Harvard Scientific Corp. whose shares are traded under the symbol
"VGEN" on the Over-the-Counter Bulletin Board market. Harvard is developing
medical treatments for human sexual dysfunction. He also is a director of
FilmWorld, Inc. whose shares have no quoted value. FilmWorld is in the same
general business as the Company. Mr. Tolner and Mr. Daly also are directors of
FilmWorld.

(d) Employees:

The officers and directors who are identified above are the current
significant employees of the Company. Mr. Tolner spends a majority of his time
on the business operations of the Company, but performs services for the Company
on a non-exclusive basis. Mr. Walker spends whatever time is required on the
Company's business, also on a non-exclusive basis. Neither Mr. Tolner nor Mr.
Walker have any experience in film production. The Company will rely on Mr.
Daly's experience in the film industry in connection with its operations. Mr.
Daly spends whatever time is required of him on the Company's business, but does
so on a non-exclusive basis.

(e) Family Relationships:

There are no family relationships between the directors, executive
officers or any other person who may be selected as a director or executive
officer of the Company.

-14-

<PAGE>
(f) Involvement in Certain Legal Proceedings:

None of the officers, directors, promoters or control persons of the
Company have been involved in the past five (5) years in any of the following:

(1) Any bankruptcy petition filed by or against any business of
which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior
to that time;

(2) Any conviction in a criminal proceedings or being subject to a
pending criminal proceeding (excluding traffic violations and
other minor offenses);

(3) Being subject to any order, judgment or decree, not
subsequently reversed, suspended or vacated, or any Court of
competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in
any type of business, securities or banking activities; or

(4) Being found by a court of competent jurisdiction (in a civil
action), the Commission or the Commodity Futures Trading
Commission to have violated a federal or state securities laws
or commodities law, and the judgment has not been reversed,
suspended, or vacated.

--------------------------------------------------------------------------------
ITEM 6. EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------

The Company has not compensated its management in the last three years.
However, the following table sets forth information about compensation paid or
accrued during the years ended December 31, 1999, 1998 and 1997 to the Company's
officers and directors. None of the Company's Executive Officers earned more
than $100,000 during the years ended December 31, 1999, 1998 and 1997.

-15-

<PAGE>

Summary Compensation Table
Long Term Compensation
Annual Compensation Awards Payouts
--------------------- ------------ ---------
(e) (g)
Other (f) Securities (i)
(a) Annual Restricted Under- (h) Other
Name and (c) (d) Compen- Stock Lying LTIP Compen-
Principal (b) Salary Bonus sation Awards Options/ Payouts sation
Position Year $ ($) ($) ($) SARs(#) ($) ($)
-------- ------ ------ ----- ------ ----- -------- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John Daly
Chairman and 1999 $ None $ None $ None $ None None None None
Director 1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
Mark Tolner
President, 1999 $ None $ None $ None $ None None None None
Treasurer and 1998 $ None $ None $ None $ None None None None
Director 1997 $ None $ None $ None $ None None None None
Alexander H. Walker, Jr
Secretary and 1999 $ None $ None $ None $ None None None None
Director 1998 $ None $ None $ None $ None None None None
1997 $ None $ None $ None $ None None None None
</TABLE>

--------------------------------------------------------------------------------
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
--------------------------------------------------------------------------------

During the past two (2) years, the Company has not entered into a
transaction with a value in excess of $60,000 with a director, officer or
beneficial owner of 5% or more of the Company's common stock, except as
disclosed in the following paragraphs. The Company has no policy as such of
entering into transactions with affiliates.

From time to time, the Company uses office space at the offices of
Nevada Agency and Trust Company, the Company's transfer agent. Alexander H.
Walker, Jr., an officer and director of the Company, is an owner of Nevada
Agency and Trust Company. Though the Company uses Nevada Agency and Trust's
services, amounts paid by the Company do not total more than $60,000 per year.

Also, John Daly, Mark Tolner and Alexander H. Walker, Jr. can be deemed
as promoters of the Company. They have received compensation from the Company as
disclosed below.

-16-

<PAGE>

During April of 1999, management entered into an Exchange Agreement
with a Nevada corporation named EnterTech Limited. Under the terms of that
Exchange Agreement, the Company was obligated to issue a minimum of 11,500,000
shares and a maximum of 15,000,000 shares of it common stock in exchange for all
the issued and outstanding shares of EnterTech Limited. At the time of the
Exchange Agreement, EnterTech Limited had 10,000,000 shares of common stock
issued and outstanding. EnterTech Limited also was in the process of offering a
minimum of 1,500,000 shares and a maximum of 5,000,000 shares of its common
stock pursuant to a private placement memorandum. Because the Company was
obligated to issue a minimum of 11,500,000 pursuant to the Exchange Agreement,
it issued 11,500,000 shares of its common stock to an exchange agent who was
charged under the terms of the Exchange Agreement with assuring that the
appropriate number of the Company's shares are issued to the shareholders of
EnterTech Limited once EnterTech Limited's private placement was complete.
10,000,000 of these initial 11,500,000 shares were issued for the 10,000,000
shares of EnterTech Limited issued and outstanding apart from the private
placement offering, and the remain 1,500,000 shares were issued for the exchange
of the minimum number of shares EnterTech Limited was offering pursuant to its
private placement memorandum. Because no consideration was paid for these
1,500,000 shares, their issuance and return are not reflected on the Company's
financial statements, though the issuance and return of these shares do appear
on the Company's stock transfer records. Mr. Tolner, the Company's President
signed the exchange agreement on behalf of both the Company and EnterTech
Limited. The private placement was terminated following the filing of the
Company's Form 10-SB. The 1,500,000 shares issued in connection with the
EnterTech Limited private placement will be returned to the Company. The
10,000,000 shares issued pursuant to the Exchange Agreement were issued as
follows:

John Daly 4,000,000
Mark Tolner 1,500,000
Whyteburg Limited 3,500,000
Cullen Trading Limited 1,000,000

The principals of Whyteburg Limited are Christopher Langenauer and
Margrith Burer. The principals of Cullen Trading are Jason Tabone and Stephen
Hirst.

On or about April 30, 1999, the Company entered into an agreement with
Whyteburg Limited under the terms of which Whyteburg agreed to loan the Company
funds as needed from time to time. The principal of funds forwarded by Whyteburg
carries interest at the rate of 1% per annum. The Company can repay the loaned
amounts, or any part thereof, at any time. English law governs the terms of the
loan agreement. To date, Whyteburg has provided the Company with $195,396 under
the terms of this agreement. However, all amounts received from Whyteburg
through the end of 1999 have been capitalized and are not carried on the
Company's books as loans. Whyteburg has consented to this treatment of such
funds.

EnterTech Limited owns 100% of the issued and outstanding shares of two
subsidiaries, EnterTech Picture Corporation and EnterTech Releasing Corporation,
also Nevada corporations.

-17-

<PAGE>

On or about May 21, 1999, the Company issued 400,000 shares to
Alexander H. Walker, Jr., an officer and director, in exchange for legal and
business services to the Company. The shares issued to Mr. Walker were issued in
reliance on the exemption from registration contained in Section 4(2) of the
Securities Act of 1933, as amended, and the certificate representing such shares
bears a restrictive legend reflecting the limitations on future transfer of
those shares.

On July 31, 1998, prior to the six for one reserve split of the
Company's shares, the Company issued a total or 700,000 to the following
individuals in consideration of the payment of the Company's debt of
approximately $1,333 to Nevada Agency and Trust Company, the Company's transfer
agent and resident agent:

Amanda Cardinalli 96,000 pre-split shares
Alexander H. Walker III 96,000 pre-split shares
Timotha Kent 96,000 pre-split shares
Hidden Splendor Resources 288,000 pre-split shares
Nevada Agency and Trust Company 124,000 pre-split shares

This stock was issued in accordance with the exemption from registration
contained in Section 4(2) of the Securities Act of 1933, as amended. The amount
of debt extinguished was less than $60,000.

Also, the Company intends to enter into 2-year employment agreements
individuals the Company deems vital the Company's operations. These individuals
are Mark Tolner, an officer and director and John Daly. Pursuant to these
employment agreements, Mark Tolner will be compensated for his services at the
rate of $120,000 per year, and John Daly will be compensated for his services at
the rate of $120,000. The Company's board of directors may increase the base
salary of these individuals, as it deems appropriate.

The employment agreements will provide that if Messrs. Tolner and Daly
are terminated by the Company without just cause (as defined in the employment
agreements), each will be entitled to the lesser of (i) his base salary for one
year from the termination plus the value of any benefits, or(ii) the aggregate
amount of his base salary plus the value of any benefits during the balance of
the agreements.

The employment agreements also will provide that Messrs. Tolner and
Daly will not, during the term of the Agreements or thereafter, disclose any
confidential information of the Company without prior approval of the Company.
The agreements also will provide that Messrs. Tolner and Daly will not, during
the term of the Agreements and for a period of one year thereafter, participate
in any business that competes with the Company or solicit any of the Company's
employees or customers or otherwise interfere with the relations of the Company.
State and or federal courts may or may not enforce such restrictions. Currently,
no such agreement have been signed.

-18-

<PAGE>
--------------------------------------------------------------------------------
ITEM 8. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
--------------------------------------------------------------------------------
The Company is registering all of its issued and outstanding shares of
its capital stock with a par value of One Mill ($0.001) per share. On June 15,
2000, there were 11,030,000 shares of stock issued and outstanding.

Capital Stock

Each of the holders of record of stock is entitled to one (1) vote per
share thereof at all shareholder meetings for all purposes, including the
election of the Company's directors and all other matters submitted to such
holders for a vote of stockholders; to share ratably in all dividends, when, as,
and if declared by the Company's Board of Directors from funds legally available
therefor; and to share ratably in all assets available for distribution to
holders of record of capital stock upon liquidation or dissolution after the
payment of all debts and other liabilities. Shares of common stock are not
redeemable and the holders have no conversion rights, pre-emptive or other
rights to subscribe to or purchase additional shares in the event of a
subsequent offering. The common stock does not carry cumulative voting rights.
All issued and outstanding shares of common stock are fully-paid and
non-assessable.

There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available therefor.
The Company has not paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earnings, if any, to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial condition at the time.

The Company may, if approved at the general meeting of shareholders,
resolve to authorize the Board of Directors to declare and pay dividends to the
Company's shareholders in the form of bonus shares. The shareholders would
receive bonus shares in lieu of cash dividends, if any, declared and paid by the
Company.

"Anti-Takeover" Provisions. Although the Board of Directors is not
presently aware of any takeover attempts, the Company's Certificate of
Incorporation and By-laws contain certain provisions which may be deemed to be
"anti-takeover" in nature in that such provisions may deter, discourage, or make
more difficult the assumption of control of the Company by another corporation
or person through a tender offer, merger, proxy contest or similar transaction
or series of transactions. These provisions were adopted unanimously by the
Board of Directors and approved by the stockholders of the Company.

-19-

<PAGE>

Authorized but Unissued Shares. The Company has authorized 100,000,000
shares of common stock, par value $0.001 per share. These shares were authorized
for the purpose of providing the Board of Directors of the Company with as much
flexibility as possible to issue additional shares for proper corporate purposes
including equity financing, acquisitions, mergers, stock dividends, stock
splits, stock options and other purposes. The Company has no agreements,
commitments or plans at this time for the sale or use of its shares of common
stock except as described herein. Through September 30, 1999, the Company had
issued 11,150,000 shares of stock.

No Cumulative Voting. The Company's Certificate of Incorporation and
Bylaws do not contain any provisions for cumulative voting. Cumulative voting
entitles stockholders to as many votes as equal the number of shares owned by
such holder multiplied by the number of directors to be elected. A stockholder
may cast all these votes for one candidate or distribute them among any two or
more candidates. Thus, cumulative voting for the election of directors allows a
stockholder or group of stockholders who hold less than fifty percent (50%) of
the outstanding shares voting to elect one or more members of a Board of
Directors. Without cumulative voting for the election of directors, the vote of
holders of a plurality of the shares voting is required to elect any member of a
Board of Directors and would be sufficient to elect all the members of the Board
of Directors being elected.

General Effect of Anti-Takeover Provisions. The overall effect of these
provisions may be to deter a future tender offer or other takeover attempt that
some stockholders might view to be in their best interest as the offer might
include a premium over the market price of the Company's capital stock at that
time. In addition, these provisions may have the effect of assisting the
Company's current management in retaining its position and place it in a better
position to resist changes which some stockholders may want to make if
dissatisfied with the conduct of the Company's business.

Voting Rights Except as set forth below, every holder of shares present
in person or by proxy or by representative, attorney or proxy appointed under
the Company's By-laws at a meeting of shareholders has one vote on a vote taken
by a show of hands, and on a poll every holder of shares who is present in
person or by proxy or representative has one vote for every fully paid share
held by him, registered in each shareholder's name on the Company's stockholder
list. Unless a poll is demanded, every question submitted to a meeting of
holders of shares shall be decided by a show of hands of the shareholders
present and entitled to vote. In the case of an equality of votes, in either a
poll or a show of hands, the chairman shall have a second or casting vote.
Notwithstanding the above, restrictions are imposed on voting rights in the
following circumstances: (a) if two or more persons are registered as the holder
of the share, the only one of the holders entitled to vote is the senior who
tenders a vote, seniority being determined by the order of names in the
company's list of stockholders; (b) if the terms upon which the shares was
issued restrict the voting rights attaching to that share, the holder is
entitled to vote only in accordance with the terms upon which that share was
issued (neither any shares currently outstanding nor the common shares have
restricted voting rights).

-20-

<PAGE>

Article II Section 5 of the Company's By-laws allows that the holders
of a majority of the issued and outstanding shares of the common stock of the
Company entitled to vote thereat, present in person or represented by proxy,
shall constitute a quorum for the transaction of business at all meetings of the
stockholders. All resolutions (e.g. resolutions for the election of directors,
the approval of increase in authorized capital, approval of financial
statements, amending the Articles of Incorporation and By-laws; authorizing
liquidation or a going private transaction) require the affirmative vote of the
holders of a majority of the issued and outstanding shares of the common stock
of the Company entitled to vote.

Not less than ten days' notice of any general shareholders meeting,
specifying the place, day and hour of the meeting, specifying the general nature
of the business, shall be given to the shareholders.

Article III Section 4 of the Company's By-laws allows that any director
or the entire Board of Directors may be removed, at any time, with or without
cause, by the holders of a majority of the shares then entitled to vote with or
without a stockholders meeting.

Certain Voting Requirements. The affirmative vote of the holders of a
majority of the shares present at a shareholders meeting and entitled to vote
generally constitutes shareholder approval or authorization of matters for which
such approval or authorization is required. A sale or transfer of substantially
all of the Company's assets, liquidation, merger, consolidation, reorganization
or similar extraordinary corporate action generally requires the affirmative
vote of a majority of the shares outstanding and entitled to vote thereon.

Restricted Shares. Restricted shares may not be sold unless they are
registered or are sold pursuant to an applicable exemption from registration,
including pursuant to Rule 144.

Reports to Shareholders. The Company intends to furnish its
shareholders with annual reports containing financial statements for each fiscal
year containing unaudited summary financial information and such other periodic
reports as it may deem appropriate or as required by law.

Preferred Stock. The Articles of Incorporation provide that the Board
of Directors shall adopt resolutions as to the preferences granted to preferred
stockholders. No such action has been taken to date by the Board.

-21-

<PAGE>

PART II
--------------------------------------------------------------------------------
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT'S COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS
--------------------------------------------------------------------------------

Market Information:

The Company's common stock currently is not traded on any exchange.
Management anticipates that once the Company has cleared all comments the
Securities and Exchange Commission's staff has on the Company's Form10-SB
registration statement, and the amendments to that registration statement, that
the Company will ask a market maker member of the NASD to apply for quotation
privileges for the Company's shares on the OTC Bulletin Board system. It is the
Company's understanding that all such comments must be cleared and that the
Company must be current on its filings with the Commission prior to applying for
an OTCBB trading symbol. To date, the Company has not entered into any
negotiations or arrangements to make a market for its common stock.

There has been no market for the Company's stock in the last two years.
Accordingly, the Company has no range of high and low bid prices for the
Company's common stock to report.

Holders:

There were approximately 101 holders of record of the Company's common
stock as of June 15, 2000. Of the 11,030,000 shares issued and outstanding,
10,530,000 shares are restricted. Of that amount 10,400,000 shares have been
held for more than one (1) year and would be available for sale under Rule 144.

Dividends:

The Company has never paid cash dividends on its stock and does not
intend to do so in the foreseeable future. The Company currently intends to
retain its earnings for the operation and expansion of its business. The
Company's continued need to retain earnings for operations and expansion are
likely to limit the Company's ability to pay dividends in the future.

Options and Warrants.

There are no outstanding options or warrants to purchase additional
stock.

-22-

<PAGE>

"Penny Stock"

The Company's common stock is a "penny stock" as defined by the rules
and regulations promulgated by the Securities and Exchange Commission. Pursuant
to Section 3(a)(51)(A) of the Exchange Act of 1934, as amended, any equity
security is considered to be a "penny stock" unless that security is:

- Registered and traded on a national securities exchange
meeting specified SEC criteria;

- authorized for quotation on NASDAQ;

- issued by a registered investment company;

- excluded, on the basis of price of the issuer's net tangible
assets, from the definition of the term by SEC rule; or

- exempted from the definition by the SEC.

Currently, the Company's common stock does not fall within any of these
non-penny stock categories.

The Commission's rules and regulations imposed disclosure, reporting
and other requirements on brokers-dealers in penny stock transactions. In
summary, these requirements are as follows:

Brokers and dealers, prior to effecting any penny stock transactions, must
provide customers with a document that discloses the risks of investing in the
penny stock market. Section 15(g)(2) requires such risk disclosure documents to:

- contain a description of the nature and level of risk involved
in the penny stock market;

- fully describe the duties of the broker-dealer to the
customer, and the rights and remedies available;

- explain the nature of "bid" and "ask" prices in the penny
stock market;

- supply a toll-free telephone number to provide information on
disciplinary histories;

- describe all significant terms used in the risk disclosure
document.

Also, prior to the transaction the broker-dealer must obtain from the
customer a manually signed and dated written acknowledgment of receipt of the
disclosure document. The broker-dealers required to preserve a copy of the
acknowledgment as part of its records.

-23-

<PAGE>

Brokers and dealers must disclose the bid and ask prices for penny
stocks, the number of shares to which the prices apply, and the amount and
description of any compensation received by the broker or dealer. Also, brokers
and dealers are to provide each customer whose account contains penny stocks
with a monthly statement indicating the market value of those stocks.

--------------------------------------------------------------------------------
ITEM 2. LEGAL PROCEEDINGS
--------------------------------------------------------------------------------

The Company is not party to, and none of the Company's property is
subject to, any pending or threatened legal, governmental, administrative or
judicial proceedings. The Company was involved in the legal proceedings
described below, both of which have been resolved. Both actions involved the
same circumstances and both actions were resolved by way of settlement between
the parties. The parties agreed to dismiss with prejudice the action pending in
the United States with each party bearing its own costs and attorneys fees. The
action in England was struck out, again with each party bearing its own costs
and fees.

1. Interlink Communications Group, Inc. v. Unisat, Inc., Sam Lupton,
Richard Elliot- Square and Does 1 through 50. On or about April 1,
1999, the Company filed a complaint in the District Court, Washoe
County, State of Nevada naming itself as the plaintiff and Unisat,
Inc., Sam Lupton and Richard Elliot-Square as defendants. The
allegations in the complaint involve an agreement the Company had with
an entity named Telforce Communications, Ltd. and an individual named
Christopher James Clark to acquire all of the issued and outstanding
shares of Telforce. The Company alleges that the individual defendants,
one of whom was a director of the Company at the time of the Company's
agreement with Telforce, caused Telforce to breach its agreement with
the Company and enter into a different agreement with Unisat for the
acquisition of Telforce. The Company alleges that defendants
intentionally interfered with the Company's contractual rights, breach
their fiduciary duties to the Company, engaged in unfair business
practices, and were unjustly enriched by their actions, among other
things. The complaint in that action does contain a specific dollar
amount for monetary damages. The Company seeks an accounting of
defendants' profits in the Unisat agreement for the acquisition of
Telforce and seeks damages against the defendants. No counterclaim has
been filed.

2. Interlink Communications Group, Inc. v. Christopher James Clark. On or
about April 22, 1999, the Company commenced an action in the High Court
of Justice, Queen's Bench Division, in Great Britain naming itself as
plaintiff and Christopher James Clark as the defendant. In that action,
the Company alleges that Clark breached his agreement to sell the
Company all of the issued and outstanding shares of Telforce
Communications, Ltd., a Nevada corporation. The Company seeks an order
of specific performance requiring Clark to honor his agreement to sell
or, in the alternative, an award of damages against Clark for his
failure to honor his agreement. This action has been dismissed without
prejudice.

-24-

<PAGE>

--------------------------------------------------------------------------------
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
--------------------------------------------------------------------------------

There have been no disagreements with the Company's independent
accountants over any item involving the Company's financial statements. The
Company's independent accountant is W. Dale McGhie, Town & Country Plaza, 1539
Vasser Street, Reno, Nevada 89502.

--------------------------------------------------------------------------------
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
--------------------------------------------------------------------------------

Such debt was less than $60,000 and was incurred as the result of the
accumulation of transfer fees and resident agent and transfer agent fees. This
stock was issued in accordance with the exemption from registration contained in
Section 4(2) of the Securities Act of 1933, as amended. All persons who received
such stock were sophisticated investors and were able to acquire any information
about the Company they so desired.

-25-

<PAGE>

In April of 1999, the Company authorized the issuance of 11,500,000 to
John Daly as the Exchange Agent for the shareholders of EnterTech Limited in
connection with the Exchanges Agreement between EnterTech Media Group, Inc. and
EnterTech Limited. Under the terms of that Exchange Agreement, the Company was
obligated to issue a minimum of 11,500,000 shares and a maximum of 15,000,000
shares of it common stock in exchange for all the issued and outstanding shares
of EnterTech Limited. At the time of the Exchange Agreement, EnterTech Limited
had 10,000,000 shares of common stock issued and outstanding. EnterTech Limited
also was in the process of offering a minimum of 1,500,000 shares and a maximum
of 5,000,000 shares of its common stock pursuant to a private placement
memorandum. Because the Company was obligated to issue a minimum of 11,500,000
pursuant to the Exchange Agreement, it issued 11,500,000 shares of its common
stock to John Daly, the exchange agent who was charged under the terms of the
Exchange Agreement with assuring that the appropriate number of the Company's
shares were issued to the shareholders of EnterTech Limited once EnterTech
Limited's private placement was complete. 10,000,000 of these initial 11,500,000
shares were issued for the 10,000,000 shares of EnterTech Limited issued and
outstanding apart from the private placement offering, and the remain 1,500,000
shares were issued for the exchange of the minimum number of shares EnterTech
Limited was offering pursuant to tits private placement memorandum. The
10,000,000 shares of EnterTech Limited for which 10,000,000 of the initial
issuance of 11,500,000 shares of EnterTech Media Group, Inc. was made are owned
as follows:

John Daly 4,000,000
Mark Tolner 1,500,000
Whyteburg Limited 3,500,000
Cullen Trading Limited 1,000,000

The private placement subsequently was terminated. The 1,500,000 shares issued
in connection with the EnterTech Limited private placement have been returned to
the Company.

On or about October 22, 1999, the Company issued 20,000 shares of its
capital stock to Morgounova Corp. in exchange for translation services rendered
to the Company. Such services were valued at $2,000 and shares were issued at
the rate of $0.10 per share. Such shares were issued pursuant to the exemption
from registration under Section 4(2) of the Securities Act of 1933, as amended.

On or about October 29, 1999, the Company issued 5,000 shares of its
capital stock to Mark Polan in exchange for business referral services. Such
services were valued at $500 and shares were issued at the rate of $0.10 per
share. Such shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.

On or about October 29, 1999, the Company issued 5,000 shares of its
capital stock to Jay Polan in exchange for business referral services. Such
services were valued at $500 and shares were issued at the rate of $0.10 per
share. Such shares were issued pursuant to the exemption from registration under
Section 4(2) of the Securities Act of 1933, as amended.

-26-

<PAGE>

On or about December 9, 1999, the Company issued 100,000 shares of its
capital stock to John Smallcombe in exchange for future services to be rendered
to the Company in connection with its production efforts. Such services were
valued at $10,000 and shares were issued at the rate of $0.10 per share. Such
shares were issued pursuant to the exemption from registration under Section
4(2) of the Securities Act of 1933, as amended.

--------------------------------------------------------------------------------
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
--------------------------------------------------------------------------------

Section 78.751 of the Nevada General Corporation Law allows the Company
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, except an action by or
in the right of the corporation, by reason of the fact that such person is or
was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses including attorneys fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with the action, suit or proceeding if such person acted in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendre or its equivalent, does not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best interest
of the corporation, and that, with respect to any criminal action or proceeding,
such person had reasonable cause to believe that his conduct was unlawful.

Section 78.751 of the Nevada General Corporation Law also allows the
Company to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in the corporation's favor by
reason of the fact that such person is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses including amount paid
in settlement and attorneys fees actually and reasonable incurred by such person
in connection with the defense or settlement of the action or suit if such
person acted in good faith and in a manner which such person reasonably believed
to be in or not opposed to the best interests of the corporation.
Indemnification may not be made for any claim, issue or matter as to which such
a person has been adjudged by a court of competent jurisdiction determining,
after exhaustion of all appeals therefrom, to be liable to the corporation or
for amount paid in settlement to the corporation, unless and only to the extent
that the court in which the action or suit was brought or other court of
competent jurisdiction determines upon application that in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court deems proper.

-27-

<PAGE>

Section 78.751 of the Nevada General Corporation Law also provides that
to the extent that a director, officer, employee or agent of the corporation has
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraphs above, or in defense of any claim, issue or
matter therein, the corporation shall indemnify him against expenses, including
attorneys fees, actually and reasonably incurred by such person in connection
with the defense.

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

PART F/S
--------------------------------------------------------------------------------
Financial Statements
--------------------------------------------------------------------------------

-28-

<PAGE>

ENTERTECH MEDIA GROUP, INC
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)

FINANCIAL STATEMENTS

APRIL 30, 1999, DECEMBER 31, 1998 AND 1997

<PAGE>

DALE McGHIE Town & Country Plaza
CERTIFIED PUBLIC ACCOUNTANT 1539 Vassar St. Reno, Nevada 89502
Tel: 775-332-7744
Fax: 775-332-7747

To the Board of Directors
EnterTech Media Group, Inc., and Subsidiaries,
(Formerly Armas International Corporation, Inc.)
Reno, Nevada

ACCOUNTANT'S AUDIT REPORT

I have audited the accompanying balance sheets of EnterTech Media Group, Inc.,
and Subsidiaries - A Development Stage Enterprise - (formerly Armas Intl. Mfg.
Co., Inc.) as of December 31, 1999, 1998 and 1997, and the related statements of
operations, changes in stockholders' equity and cash flows for the years then
ended, and from inception of the development stage to December 31, 1999. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.

I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above, present fairly in all
material respects the financial position of EnterTech Media Group, Inc., and
Subsidiaries - A Development Stage Enterprise - (formerly Armas Intl. Mfg. Co.,
Inc.), as of December 31, 1999, 1998 and 1997, and the results of their
operations, changes in stockholders' equity and their cash flows for the years
then ended and from inception of the development stage to December 31, 1999, in
conformity with generally accepted accounting principals.

The accompanying financial statements have been presented assuming that the
Company will continue as a going concern. As discussed in Notes 1 and 4 to the
financial statements, the Company became active and its ability to continue as a
going concern is dependent on attaining future profitable operations. The
financial statements do not include and adjustments that might result from the
outcome of this uncertainty.

By:/s/ Dale McGhie
------------------
Dale McGhie
Certified Public Accountant

Reno, Nevada
April 13, 2000

<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
BALANCE SHEETS

December 31, 1999, 1998 and 1997

ASSETS

1999 1998 1997
-------- ------- --------
CURRENT ASSETS

Cash $ 12,946 $ -- $ --
Other Receivables 33,347
Travel Advances 1,722 -- --
-------- ------- --------

Total Current As 48,015 -- --
-------- ------- --------
EQUIPMENT

Equipment 17,190 -- --
Vehicles 57,000 -- --
-------- ------- --------

74,190 -- --
Less accumulated depreciati 7,419e 1 -- --
-------- ------- --------

66,771 -- --
-------- ------- --------
OTHER ASSETS

Advances on Film Rights 117,797 -- --
Work in Process - Films 37,573 -- --
Investments - Securities 440 -- --
-------- ------- --------

155,810 -- --
-------- ------- --------

Total Assets $270,596 $ -- $ --
======== ======= ========
F-2

<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
BALANCE SHEETS
December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts Payable $ 7,053 $ -- $ --
--------- --------- ---------

OTHER LIABILITIES
Deferred Income 100,000 -- --
--------- --------- ---------
STOCKHOLDERS' EQUITY- Note 1
Common Stock ($0.001 par
value) 100,000,000 Shares Authorized;
11,030,000 Issued and Outstanding on
Decemberl 31, 1999, 500,000 on
December 31, 1998,
and 383,333 on December 31, 1997 11,030 500 383
Additional Paid in Capital, 537,723 56,891 55,758
Retained Earnings (deficit) Accumulated
Before the Development Stage (57,391) (57,391) (56,141)
Deficit Accumulated During the
Development Stage (327,819) -- --
--------- --------- ---------
Total Stockholder's Equity 163,543 -- --
--------- --------- ---------
Total Liabilities and
Stockholder's Equity $ 270,596 $ -- $ --
========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements

F-2A
<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDING DECEMBER 31, 1999,1998 AND 1997
<TABLE>
<CAPTION>

Inception of
Development
Stage
1999 1998 1997 Cumulative
--------- --------- --------- ----------

<S> <C> <C> <C> <C>
REVENUE $ -- $ -- $ --
--------- --------- --------- ----------

EXPENSE

Outside Services & Wages 155,832 -- -- 155,832
Promotional Costs 24,918 -- -- 24,918
Legal & Accounting 8,433 1,250 -- 8,433
Occupancy Costs 28,256 -- -- 28,256
Communicationn Costs 15,218 -- -- 15,218
Office Expense 31,919 -- -- 31,919
Travel & Entertainment 49,410 -- -- 49,410
Depreciation & amortization 13,833 -- -- 13,833
--------- --------- --------- ----------

Total Expense 327,819 1,250 -- 327,819
--------- --------- --------- ----------

Net Income (Loss) $(327,819) $ (1,250) $ -- $ (327,819)
========= ========= ========= ==========

Net Income (Loss) Per Share (Note 1) $ (0.049) $ (0.003) $ N/A
========= ========= =========
</TABLE>

The accompany notes are an integral part of these financial statements

F-3

<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE YEARS ENDING DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>

Retained Deficit Accum.
Common Additional Earnings During the
Stock paid in Capitol (Deficit) Developmt. Stg.
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Balance, January 1, 1995,
2,063,749 Shares $ 10,319 $ 45,822 $ (56,141) $ --
Retroactive restatement of par value
in common stock (8,255) 8,255 -- --
Retroactive restatement of 6 for 1
reverse stock split (1,720) 1,720 -- --
--------- --------- --------- ---------
Restated Balance, January 1, 1995,
343,958 shares 344 55,797 (56,141) --
Issue of 39,375 shares of common
stock for services on May 22, 1995
recorded at no value 39 (39) -- --
--------- --------- --------- ---------

Balance, December 31, 1995, 383,333 shares 383 55,758 (56,141) --

Net income for the year ending
December 31, 1996 and 1997 -- -- -- --

Issue of 116,667 shares of common
stock for services on July 31, 1998 117 1,133 -- --
Net income for the year ending
December 31, 1998 -- -- (1,250) --
--------- --------- --------- ---------

Balance December 31, 1998,
500,000 Shares 500 56,891 (57,391) --

Issue of 400,000 shares of common
stock for services on April 21, 1999,
recorded at invoice amount 400 600 -- --
Sale of 10,000,000 shares of common stock
for cash on April 22, 1999 (Note 2),
11,500,000 shares 10,000 271,966 -- --
Issue of 130,000 shares of common
for services valued at $13,000
October and December 1999 130 12,870 -- --
Capital contributed from Shareholder -- 195,396 -- --
Net (loss) for the year
ending December 31, 1999 -- -- -- (327,819)
--------- --------- --------- ---------

Balacne December 31, 1999
11,030,000 shares $ 11,030 $ 537,723 $ (57,391) $(327,819)
========= ========= ========= =========
</TABLE>

The accompanying notes are an integral part of these financial statements

F-4
<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDING DECEMBER 31, 1999, 1998 AND 1997
<TABLE>
<CAPTION>

Deficit
From
Inception of
Development
1999 1998 1997 Stage
--------- --------- --- ---------
<S> <C> <C> <C> <C>
Cash Flows Operating Activities

Net (Loss) $(327,819) $ (1,250) $-- $(327,819)
Adjustments to Reconcile Net Income to
Net Cash provided by operation activities
Depreciation and Amortization 13,833 -- -- 13,833
Stock issued for Services 14,000 1,250 -- 14,000
Changes in Operating Assets and
liabilities:
Advances and Receivables (35,069) -- -- (35,069)
Organizational Costs (6,414) -- -- (6,414)
Increase in Other Assets (155,370) -- -- (155,370)
Increase in Accounts Payable 7,053 -- -- 7,053
--------- --------- --- ---------

Net Cash used by Operating Activities (489,786) -- -- (489,786)
--------- --------- --- ---------

Cash Flows Investing Activities

Purchase of Equipment and Vehicle (74,190) -- -- (74,190)
Purchase of Securities (440) -- -- (440)
--------- --------- --- ---------

Net Cash used by Investing Activities (74,630) -- -- (74,630)
--------- --------- --- ---------

Cash Flows Financing Activities

Proceeds from Issuance of
Debt 100,000 -- -- 100,000
Common Stock 477,362 -- -- 490,232
--------- --------- --- ---------

Net Cash provided by Financing Activities 577,362 -- -- 590,232
--------- --------- --- ---------

Net Increase (Decrease) in Cash 12,946 -- -- 25,816

Cash at Beginning of Period -- -- -- --
--------- --------- --- ---------

Cash at End of Period $ 12,946 $ -- $-- $ 25,816
========= ========= === =========
</TABLE>

The accompanying notes are an integral part of these financial statements

F-5

<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997

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

NATURE OF BUSINESS AND ORGANIZATION:

EnterTech Media Group, Inc., and Subsidiaries (formerly Armas Intl. Mfg. Co.,
Inc., dba Inter-Link Communications Group, Inc.), hereafter referred to as the
Company, is a Nevada Corporation and a Development Stage Enterprise as defined
by FASB's Statements of Financial Accounting Standards ("SFAS") 7. Since the
beginning of 1999, the Company devoted all of its efforts to establishing a new
business. Planned principal operations to produce and distribute films has
commenced, production rights have been secured and services contracted out.

The Company was incorporated November 17, 1986, under the name Stones Stores,
Inc. The Company changed its name in 1987 to Stone International, Inc., and
again in 1990 to Armas Intl. Mfg. Co., Inc. The Company became inactive in 1989
and remained inactive until 1999. On April 22, 1999, the Company charged it's
name to EnterTech Media Group, Inc., and authorized capital stock of 100,000,000
shares with a par value of $.001 per share (following a 6 to 1 reverse split in
October 1998). These financial statements reflect the changes made in the
Company's name and the par value of common stocks retroactively. See also Note
2.

Prior to 1995, all books and records were destroyed. Federal income tax returns
have been prepared for the years ending December 31, 1998 and 1997 based on
these financial statements.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

PRINCIPLES OF CONSOLIDATION:

The accompanying consolidated financial statements include the accounts of
Entertech Media Group, Inc., and its wholly-owned subsidiary, EnterTech Limited
(along with EnterTech Limited's subsidiaries, EnterTech Picture Corporation and
EnterTech Releasing Corporation). See also notes 2 and 3. All significant
intercompany balances and transactions have been eliminated.

USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect certain reported accounts and disclosures. Accordingly, actual results
could differ from these estimates.

REVENUE RECOGNITION:

revenues on motion pictures are recognized on show dates under both percentage
of receipts and flat fee arrangements. Nonrefundable guarantees are deferred and
recognized as revenue as show dates occur. Outright dales of motion jpictures
are recoqnized as revenue as of date of sale.

PRODUCTION COSTS:

Production costs of motion pictures are capitalized as inventory and amortized
using the individual-film-forecast method.

PROPERTY AND EQUIPMENT:

Property and Equipment are recorded at cost and depreciated over their useful
lives using the straight line method.

EARNINGS PER SHARE:

The earnings per share calculation is based on the weighted average number of
shares outstanding during the period: 6,670,000 shares in 1999; 431,944 shares
in 1998; and 383,333 shares in 1997.

F-6
<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997

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

INVENTORIES:

Inventories are stated at the lower of cost or market. Film costs are segregated
between current and non-current assets. Unamortized cost of films released,
completed films not released and television films in production under contract
of sale are current assets. All other capitalized film costs are classified as
non-current assets.

ORGANIZATIONAL COSTS:

The Company has adopted Statement of Position ("SOP") 98-5 "Reporting on the
costs of start-up activities" issued in April 1998 by the Accounting Standards
Executive Committee of the American institute of Certified Public Accountants.
Pursuant to SOP 98-5, organizational costs are expensed as incurred instead of
being capitalized and amortized.

DIVIDEND POLICY:

The company has not paid dividends and any dividends that may be paid in the
future will depend upon the financial requirements of the Company and other
relevant factors.

INCOME TAXES:

The Company adopted Financial Accounting Statement No. 109,"Accounting for
Income Taxes," which requires recognition of deferred tax liabilities and assets
for the expected future tax consequences of events that have been i9ncluded in
the financial statements or tax returns. The Company made the required
calculation based upon the difference between financial statements and tax bases
of assets and liabilities using tax rates in effect for the year in which the
differences were expected to reverse.

CASH EUIVALENTS:

The Company records as cash equivalents all highly liquid short-term investments
with original maturates of three months or less.

NOTE 2 - OPERATING LOSS CARRYFORWARD:

A deficit of $57,391 reflected on the financial statements from prior losses
will not be available as a net operating loss carry forward because of change in
ownership and business purpose. The current period loss of $11,951 will be
available to offset future taxable income for 15 years.

NOTE 3 - BUSINESS ACQUISITIONS

On April 22, 1999, the Company acquired EnterTech Limited, a Nevada corporation,
in a business combination accounted for as a combination of entities under
common control. EnterTech Limited had previously been known as EnterTech Media
Group, but exchanged names with the Company in conjunction with the business
combination. EnterTech Limited, which plans to engage in film production and
distribution, became a wholly-owned subsidiary of the Company through the
exchange of 10,000,000 shares of the Company's common stock for all of the
outstanding stock of EnterTech Limited. The acquisition has been accounted for
as a combination of entities under common control which is similar to a pooling
of interests. Accordingly, the accompanying financial statements are restated
for all periods presented to give effect to the combination. Assets and
liabilities are reflected at their original cost bases using the pooling of
interests method.

F-7
<PAGE>

ENTERTECH MEDIA GROUP, INC.
AND SUBSIDIARIES
A DEVELOPMENT STAGE ENTERPRISE
(FORMERLY ARMAS INTL. MFG. CO., INC.)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999, 1998 AND 1997

NOTE 4 - PRIVATE PLACEMENT

On March 31, 1999, EnterTech Limited (then known as EnterTech Media Group as
discussed in Note 2) offered a minimum of 1,500,000 shares and a maximum of
5,000,000 chares of its common stock in units of 25,000 at a price of $1.00 per
share pursuant to a Private Placement Memorandum. Subsequently, this private
placement was cancelled.

NOTE 5 - DEPOSIT ON FILM PRODUCTION:

The Company has accepted a deposit of $100,000 that is to be used for production
costs of a film. The deposit is to be repaid from the final budget and no later
than the first day of principal photography.

NOTE 6 - UNCERTAINTY REGARDING GOING CONCERN:

The Company's financial statements have been prepared assuming that the Company
will continue as a going concern. The Company's ability to continue as a going
concern is dependent on attaining future profitable operations. If operations do
not become profitable, then substantial doubt exists about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustment that might result from the outcome of this uncertainty.

F-8

<PAGE>

PART III

--------------------------------------------------------------------------------
ITEM 1. Index to Exhibits
--------------------------------------------------------------------------------

The exhibits filed with the Company's Form 10-SB dated June 11, 1999
are incorporated herein by this reference. The following exhibits also are filed
with this Amended Form 10-SB:

Assigned
Number Description
------ -----------
(2)

Plan of acquisition, reorganization, arrangement, liquid, or
succession: Exchange Agreement by and Between EnterTech Media Group,
Inc. and EnterTech Limited. Previously included with the Company's
Form 10-SB filed on June 11, 1999.

(3)(i) Articles of Incorporation dated November 17, 1986; Amendment to
Articles of Incorporation dated May 1, 1987; Amendment to Articles
of Incorporation dated May 10, 1990; Amendment to Articles of
Incorporation dated October 23, 1998; ; and Amendment to Articles of
Incorporation dated June 1, 1999. Previously included with the
Company's Form 10-SB filed on June 11, 1999.

(3)(ii) By-laws of the Company: Previously included with the Company's Form
10-SB filed on June 11, 1999.

(4) Instruments defining the rights of holders including indentures:
None

(9) Voting Trust Agreement: None

(10) Material Contracts: The Exchange Agreement by and Between EnterTech
Media Group, Inc. and EnterTech Limited listed above is incorporated
herein by this reference. Consulting Agreement dated March 1, 1999.
Previously included with the Company's Form 10-SB filed on June 11,
1999.

April 30, 1999 Agreement with Whyteburg Limited.

May 25, 1999 Agreement with Le Studio Canal Plus.

October 26, 1999 Agreement with Intra Films.

-29-

<PAGE>

November 17, 1999 Joint Venture Agreement with the Polan Group.

(11) Statement regarding computation of per share earnings: Computations
can be determined from the financial statements.

(16) Letter on change in certifying accountant: None

(21) Subsidiaries of the registrant: Previously included with the
Company's Form 10-SB filed on June 11, 1999.

(24) Power of Attorney: None

(27) Financial Data Schedule: Included

(99) Additional Exhibits: Form Stock Certificate.

--------------------------------------------------------------------------------
SIGNATURES
--------------------------------------------------------------------------------

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

Dated: June 15, 2000.

ENTERTECH MEDIA GROUP, INC.

By:/s/ Mark R. Tolner
---------------------
Mark R. Tolner
President

-30-