ZEDIK ENTERPRISES INC, 10KSB, 2000-03-30

ZEDIK ENTERPRISES INC
10KSB, 2000-03-30
BLANK CHECKS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-KSB

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

(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 [Fee Required]

For the fiscal year ended December 31, 1999 or

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]

For the transition period from _______________ to ________________

Commission File No. 0-25801

ZEDIK ENTERPRISES, INC.
--------------------------------------------
(Name of Small Business Issuer in its Charter)

Colorado 84-1504371
-------- ----------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)

26 West Dry Creek Circle, Suite 600
Littleton, Colorado 80120
---------------------------------------------------------
(Address of principal executive offices including Zip Code)

Issuer's telephone number: (303) 794-9450

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

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

No Par Value Common Stock
-------------------------
(Title of Class)

<PAGE>

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

As of February 29, 2000, 976,200 shares of the Registrant's no par value
Common Stock were outstanding. As of February 29, 2000, there was no market
value of the Registrant's no par value Common Stock, since such stock was not
trading on any exchange.

Check if there is no disclosure contained herein of delinquent filers in
response to Item 405 of Regulation S-B, and will not be contained, to the best
of the Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ X ]

The Registrant's revenues for its most recent fiscal year were negligible.

The following documents are incorporated by reference into Part III, Items
9 through 12 hereof: None.

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS
- -------------------------------

The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed throughout the Report and
will be further discussed from time to time in the Company's periodic reports
filed with the Commission. The forward-looking statements included in the Report
speak only as of the date hereof.

Introduction

Business Development.

Zedik Enterprises, Inc. (the "Company") was organized under the laws of the
State of Colorado, on February 23, 1996, to make a distribution of the shares of
Common Stock to friends and business associates of the Company's officers and
directors who are accredited investors. The purpose of the distribution was to
allow the Company to become widely-held, thereby allowing it the opportunity to
merge in the future with a privately-held company seeking a larger stockholder
base. As a result of the foregoing distribution, the Company currently has 235
shareholders.

The Company is seeking business opportunities through a merger with, or
acquisition of, one or more private companies. The Company has had no material
operations in the past three years.

The Company believes that there is a demand by non-public corporations for
shell corporations that have a public distribution of securities, such as the
Company. The Company believes that demand for shell corporations has increased
dramatically since the Securities and Exchange Commission (the "Commission")
imposed additional requirements upon "blank check" companies pursuant to Reg.
419 of the Securities Act of 1933, as amended (the "Act"). According to the
Commission, Rule 419 was designed to strengthen regulation of securities
offerings by blank check companies, which Congress has found to have been a
common vehicle for fraud and manipulation in the penny stock market. See
Securities Act Releases No. 6891 (April 17, 1991), 48 SEC Docket 1131 and No.
6932 (April 13, 1992) 51 Docket 0382, SEC Docket 0382. The foregoing regulation
has substantially decreased the number of "blank check" offerings filed with the
Commission, and as a result has stimulated an increased demand for shell
corporations. While the Company has made the foregoing assumption, there is no
assurance that the same is accurate or correct and, accordingly, no assurance
that the Company will merge with or acquire an existing private entity.

General

The Company proposes to seek, investigate and, if warranted, acquire an
interest in one or more business opportunity ventures. As of the date hereof,
the Company has no business opportunities or ventures under contemplation for
acquisition or merger but proposes to investigate potential opportunities with
investors or entrepreneurs with a concept which has not yet been placed in
operation, or with firms which are developing companies. The Company may seek
out established businesses which may be experiencing financial or operation
difficulties and are in need of the limited additional capital the Company could
provide. The Company anticipates that it will seek to merge with or acquire an
existing business. After the merger or acquisition has taken place, the

<PAGE>

surviving entity will be the Company, however, management from the acquired
entity will in all likelihood operate the Company. There is a remote possibility
that the Company may seek to acquire and operate an ongoing business, in which
case the existing management might be retained. Due to the absence of capital
available for investment by the Company, the types of business seeking to be
acquired by the Company will invariably be smaller and higher risk types of
businesses. In all likelihood, a business opportunity will involve the
acquisition of or merger with a corporation which does not need additional cash
but which desires to establish a public trading market for its Common Stock.
Accordingly, the Company's ability to acquire any business of substance will be
extremely limited.

The Company does not propose to restrict its search for investment
opportunities to any particular industry or geographical location and may,
therefore, engage in essentially any business, anywhere, to the extent of its
limited resources.

It is anticipated that business opportunities will be available to the
Company and sought by the Company from various sources throughout the United
States, including its officers and directors, professional advisors such as
attorneys and accountants, securities broker/dealers, venture capitalists,
members of the financial community, other businesses and others who may present
solicited and unsolicited proposals. Management believes that business
opportunities and ventures will become available to it due to a number factors,
including, among others: (a) management's willingness to enter into unproven,
speculative ventures; (b) management's contacts and acquaintances; and (c) the
Company's flexibility with respect to the manner in which it may structure
potential financing, mergers and/or acquisitions. However, there is no assurance
that the Company will be able to structure, finance, merge with and/or acquire
any business opportunity or venture.

Operation of the Company

The Company intends to search throughout the United States for a
merger/acquisition candidate, however, because of its lack of capital, the
Company believes that the merger/acquisition candidate will be conducting
business within a limited geographical area. The Company intends to maintain its
corporate headquarters and principal place of business at 26 West Dry Creek
Circle, Suite 600, Littleton, Colorado 80120. All corporate records will be
maintained at said office, and it is anticipated that all shareholders' meetings
will take place in Colorado. In the event that a merger or acquisition of the
Company takes place, no assurance can be given that the corporate records or
headquarters will continue to be maintained at Littleton, Colorado, or that
shareholders' meetings will be held in Colorado.

The Company's executive officers will seek acquisition/merger candidates
and/or orally contact individuals or broker/dealers and advise them of the
availability of the Company as an acquisition candidate. The Company's executive
officers will review material furnished to them by the proposed
merger/acquisition candidates and decide if a merger/acquisition is in the best
interests of the Company and its shareholders.

The Company may employ outside consultants until a merger/acquisition
candidate has been targeted by the Company, however, management believes that it
is impossible to consider the criteria that will be used to hire such
consultants. While the Company may hire independent consultants, it has not
considered any criteria regarding their experience, the services to be provided,
or the term of service. The Company has not had any discussions with any
consultants and there are no agreements or understandings with any consultants.
Other than as disclosed herein, there are no other plans for accomplishing the
business purpose of the Company.

<PAGE>

Selection of Opportunities

The analysis of new business opportunities will be undertaken by or under
the supervision of the Company's executive officers.Inasmuch as the Company will
have no funds available to it in its search for business opportunities and
ventures, the Company will not be able to expend significant funds on a complete
and exhaustive investigation of such business or opportunity. The Company will
however, investigate, to the extent believed reasonable by its management, such
potential business opportunities or ventures.

As part of the Company's investigation, representatives of the Company will
meet personally with management and key personnel of the firm sponsoring the
business opportunity, may visit and inspect plants and facilities, obtain
independent analysis or verification of certain information provided, check
references of management and key personnel, and conduct other reasonable
measures, to the extent of the Company's limited financial resources and
management and technical expertise.

Prior to making a decision to recommend to shareholders participation in a
business opportunity or venture, the Company will generally request that it be
provided with written materials regarding the business opportunity containing
such items as a description of products, services and company history;
management resumes; financial information; available projections with related
assumptions upon which they are based; evidence of existing patents, trademarks
or service marks or rights thereto; current and proposed forms of compensation
to management; a description of transactions between the prospective entity and
its affiliates during relevant periods; a description of current and required
facilities; an analysis of risks and competitive conditions; and other
information deemed relevant.

It is anticipated that the investigation of specific business opportunities
and the negotiation, drafting and execution of relevant agreements, disclosure
documents and other instruments will require substantial management time and
attention and costs for accountants, attorneys and others. The Company's
executive officers anticipate funding the Company's operations, including
providing funds necessary to search for acquisition candidates, until an
acquisition candidate is found, without regard to the amount involved.
Accordingly, no alternative cash resources have been explored.

The Company will have unrestricted flexibility in seeking, analyzing and
participating in business opportunities. In its efforts, the Company will
consider the following kinds of factors:

(i) Potential for growth, indicated by new technology, anticipated market
expansion or new products;

(ii) Competitive position as compared to other firms engaged in similar
activities;

(iii) Strength of management;

(iv) Capital requirements and anticipated availability of required funds
from future operations, through the sale of additional securities,
through joint ventures or similar arrangements or from other sources;
and

(v) Other relevant factors.

<PAGE>

Potentially available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. Potential investors must recognize that due to
the Company's limited capital available for investigation and management's
limited experience in business analysis, the Company may not discover or
adequately evaluate adverse facts about the opportunity to be acquired.

The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more. The
Company does not plan to raise any capital at the present time, by private
placements, public offerings, pursuant to Regulation S promulgated under the
Act, or by any means whatsoever. Further, there are no plans, proposals,
arrangements or understandings with respect to the sale or issuance of
additional securities prior to the location of an acquisition or merger
candidate.

Form of Acquisition

The manner in which the Company participates in an opportunity will depend
upon the nature of the opportunity, the respective needs and desires of the
Company and the promoters of the opportunity, and the relative negotiating
strength of the Company and such promoters. The exact form or structure of the
Company's participation in a business opportunity or venture will be dependent
upon the needs of the of the particular situation. The Company's participation
may be structured as an asset purchase agreement, a lease, a license, a joint
venture, a partnership, a merger, or acquisition of securities.

As set forth above, the Company may acquire its participation in a business
opportunity through the issuance of Common Stock or other securities in the
Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under
Section 368(a)(1) of the Internal Revenue Code of 1954, as amended, may depend
upon the issuance to the shareholders of the acquired company of at least eighty
percent (80%) of the Common Stock of the combined entities immediately following
the reorganization. If a transaction were structured to take advantage of these
provisions rather than other "tax free" provisions provided under the Internal
Revenue Code, all prior shareholders may, in such circumstances, retain twenty
percent (20%) or less of the total issued and outstanding Common Stock. If such
a transaction were available to the Company, it will be necessary to obtain
shareholder approval to effectuate a reverse stock split or to authorize
additional shares of Common Stock prior to completing such acquisition. This
could result in substantial additional dilution to the equity of those who were
shareholders of the Company prior to such reorganization. Further, extreme
caution should be exercised by any investor relying upon any tax benefits in
light of the proposed new tax laws. It is possible that no tax benefits will
exist at all. Prospective investors should consult their own legal, financial
and other business advisors.

The present management and the shareholders of the Company will in all
likelihood not have control of a majority of the voting shares of the Company
following a reorganization transaction. In fact, it is most probable that the
shareholders of the acquired entity will gain control of the Company. The terms
of sale of the shares presently held by management of the Company may not be
afforded to other shareholders of the Company. As part of any transaction, the
Company's then directors may resign and new directors may be appointed without
any vote by shareholders.

The Company may not borrow funds and use funds to make payments to Company
promoters, management or their affiliates or associates.

<PAGE>

The Company has an unwritten policy that it will not acquire or merge with
a business or company in which the Company's management or their affiliates or
associates directly or indirectly have an ownership interest. Management is not
aware of any circumstances under which the foregoing policy will be changed and
management, through their own initiative, will not change said policy.

Pursuant to regulations promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), the Company will be required to obtain
and file with the Commission audited financial statements of the acquisition
candidate not later than 60 days from the date the Form 8-K is due at the
Commission disclosing the acquisition/merger.

Rights of Dissenting Shareholders

Under the Colorado Business Corporation Act, a business combination
typically requires the approval of a majority of all the votes entitled to be
cast on the business combination of both participating companies. Shareholders
who vote against any business combination in certain instances may be entitled
to dissent and to obtain payment for their shares pursuant to Article 113 of the
Colorado Business Corporation Act. The requirement of approval of the Company's
shareholders in any business combination is limited to those transactions
identified as a merger or a consolidation. A business combination identified as
a share exchange under which the Company would be the survivor does not require
the approval of the Company's shareholders, nor does it entitle shareholders to
dissent and obtain payment for their shares. Accordingly, unless the acquisition
is a statutory merger, requiring shareholder approval, the Company will not
provide shareholders with a disclosure document containing audited or unaudited
financial statements, prior to such acquisition.

Prior to any business combination for which shareholder approval is
required, the Company intends to provide its shareholders complete disclosure
documentation concerning the business opportunity or target company and its
business. Such disclosure will in all likelihood be in the form of a proxy
statement which will be distributed to shareholders at least 20 days prior to
any shareholder's meeting.

None of the Company's officers, directors, promoters, their affiliates or
associates have had any preliminary contact or discussions with and there are no
present plans, proposals, arrangements or understandings with any
representatives of the owners of any business or company regarding the
possibility of an acquisition or merger transaction at the present time.

Not an "Investment Adviser"

The Company is not an "investment adviser" under the Federal Investment
Advisers Act of 1940, which classification would involve a number of negative
considerations. Accordingly, the Company will not furnish or distribute advice,
counsel, publications, writings, analysis or reports to anyone relating to the

<PAGE>

purchase or sale of any securities within the language, meaning and intent of
Section 2(a)(11) of the Investment Advisers Act of 1940, 15 U.S.C. 80b2(a)(11).

Not an "Investment Company"

The Company may become involved in a business opportunity through
purchasing or exchanging the securities of such business. The Company does not
intend however, to engage primarily in such activities and is not registered as
an "investment company" under the Federal Investment Company Act of 1940. The
Company believes such registration is not required.

The Company must conduct its activities so as to avoid becoming
inadvertently classified as a transient "investment company" under the Federal
Investment Company Act of 1940, which classification would affect the Company
adversely in a number of respects. Section 3(a) of the Investment Company Act
provides the definition of an "investment company" which excludes an entity
which does not engage primarily in the business of investing, reinvesting or
trading in securities, or which does not engage in the business of investing,
owning, holding or trading "investment securities" (defined as "all securities
other than United States government securities or securities of majority-owned
subsidiaries") the value of which exceeds forty percent (40%) of the value of
its total assets (excluding government securities, cash or cash items). The
Company intends to implement its business plan in a manner which will result in
the availability of this exemption from the definition of "investment company."
The Company proposes to engage solely in seeking an interest in one or more
business opportunities or ventures.

Effective January 14, 1981, the Commission adopted Rule 3a-2 which deems
that an issuer is not engaged in the business of investing, reinvesting, owning,
holding or trading in securities for purposes of Section 3(a)(1), cited above,
if, during a period of time not exceeding one year, the issuer has a bona fide
intent to be engaged primarily, or as soon as reasonably possible (in any event
by the termination of a one year period of time), in a business other than that
of investing, reinvesting, owning, holding or trading in securities and such
intent is evidenced by the Company's business activities and appropriate
resolution of the Company's Board of Directors duly adopted and duly recorded in
the minute book of the Company. The Rule 3a-2 "safe harbor" may not be relied on
more than one single time.

The Company's Office

The Company's office is located at 26 West Dry Creek Circle, Suite 600,
Littleton, Colorado 80120, and the telephone number is (303) 794-9450. The
Company's office is located in the office of Ernest Mathis, Jr., the Company's
President and a Director of the Company. The Company's office will remain at Mr.
Mathis' office until an acquisition has been concluded. There are no written
documents memorializing the foregoing. The Company is not responsible for
reimbursement for out-of-pocket office expenses, such as telephone, postage or
supplies.

There are no agreements or understandings with respect to the office
facility subsequent to the completion of an acquisition. Upon a merger or
acquisition, the Company intends to relocate its office to that of the
acquisition candidate.

<PAGE>

Competition

The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established
venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's lack of financial resources and limited management
availability, the Company will continue to be at a significant competitive
disadvantage compared to its competitors. The Company will also be competing
with a large number of small, widely-held companies located throughout the
United States, as well as other publicly-held companies.

Employees

The Company has no salaried employees and none of its officers, directors
or principal stockholders will receive any compensation for any assistance they
may provide the Company. Management of the Company expects to use consultants,
attorneys and accountants as necessary, and does not anticipate a need to engage
any full-time employees so long as it is seeking and evaluating business
opportunities. The need for employees and their availability will be addressed
in connection with the decision whether or not to acquire or participate in a
specific business opportunity.

Reports to Security Holders

The Company is subject to reporting obligations under the Exchange Act.
These obligations include an annual report under cover of Form 10-KSB, with
audited financial statements, unaudited quarterly reports and the requisite
proxy statements with regard to annual shareholder meetings. The public may read
and copy any materials the Company files with the Commission at the Commission's
Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. The
public may obtain information of the operation of the Public Reference Room by
calling the Commission at 1-800-SEC-0030. The Commission maintains an Internet
site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding issuers that file electronically with
the Commission.

ITEM 2. DESCRIPTION OF PROPERTY
- -------------------------------

The Company is provided rent free office space by an officer and director
of the Company at 26 West Dry Creek Circle, Suite 600, Littleton, Colorado
80120. The Company is not responsible for reimbursement for out-of-pocket office
expenses, such as telephone, postage or supplies.

ITEM 3. LEGAL PROCEEDINGS
- -------------------------

The Company is not a party to any litigation and, to its knowledge, no
action, suit or proceedings have been threatened against the Company.

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

Not applicable.

<PAGE>

PART II

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

No market exists for the Company's securities and there is no assurance
that a regular trading market will develop, or if developed, that it will be
sustained. A shareholder in all likelihood, therefore, will be unable to resell
the securities referred to herein should he or she desire to do so. Furthermore,
it is unlikely that a lending institution will accept the Company's securities
as pledged collateral for loans unless a regular trading market develops.

There are no plans, proposals, arrangements or understandings with any
person with regard to the development of a trading market in any of the
Company's securities.

As of February 28, 1999, the Company has 235 holders of record of its
Common Stock.

Dividend Policy

The Company has not paid any dividends since it is inception and does not
anticipate paying any dividends on its Common Stock in the foreseeable future.

Blue Sky Considerations

The laws of some states prohibit the resale of securities issued by "blank
check" or "shell" corporations. The Company may be considered a "blank check" or
"shell" corporation for the purpose of state securities laws. Accordingly, it is
possible that current shareholders may be unable to resell their securities in
other states. The Company is unaware which particular states prohibit such
resales, other than Idaho and Indiana.

The Commission has suggested that the Company take steps to prohibit
further transfer of the securities distributed to current shareholders, unless
the Company is assured that the further transfer would not violate the
securities laws of the fifty states. The Company believes that the Commission
has no authority to cause the Company to place restrictions on the securities it
previously distributed and which it currently does not own. Such action by the
Company would legally be construed as a unilateral modification of a fully
executed contract and would be considered as a breach thereof. Further, the
Company believes that such action by the Commission would be a usurpation of the
authority granted it by Congress.

Further, because each state has a series of exempt securities transaction
predicated upon the particular facts of each transaction, it is impossible to
determine if a contemplated transaction by an existing shareholder would
possibly violate the securities laws of any particular state.

In the event a current shareholder or broker/dealer resells its securities
in a state where such resale is prohibited, the Company believes that the seller
thereof may be liable criminally or civilly under that particular state's laws.
The Company believes that it will not be liable for such improper secondary
sales.

Existing shareholders should exercise caution in the resale of their shares
of common stock in light of the foregoing.

II-1

<PAGE>

SEC Rule 15g

The Company's shares are covered by Section 15g of the Securities Act of
1933, as amended that imposes additional sales practice requirements on
broker/dealers who sell such securities to persons other than established
customers and accredited investors (generally institutions with assets in excess
of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouses). For
transactions covered by the Rule, the broker/dealer must make a special
suitability determination for the purchase and have received the purchaser's
written agreement to the transaction prior to the sale. Consequently, the Rule
may affect the ability of broker/dealers to sell the Company's securities and
also may affect the ability of purchasers in this offering to sell their shares
in the secondary market.

Section 15g also imposes additional sales practice requirements on
broker/dealers who sell penny securities. These rules require a one page summary
of certain essential items. The items include the risk of investing in penny
stocks in both public offerings and secondary marketing; terms important to an
understanding of the function of the penny stock market, such as "bid" and
"offer" quotes, a dealers "spread" and broker/dealer compensation; the
broker/dealers duties to its customers, including the disclosures required by
any other penny stock disclosure rules; the customers rights and remedies in
causes of fraud in penny stock transactions; and, the NASD's toll free telephone
number and the central number of the North American Administrators Association,
for information on the disciplinary history of broker/dealers and their
associated persons.

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

The Company seeks merger candidates with on-going operations. As of
December 31, 1999, the Company had not identified any such candidates.

Results of Operations

Year Ended December 31, 1999 vs. Year Ended December 31, 1998.

No operating revenues were generated during the years ended December 31,
1999 and 1998. Operating expenses increased by $15,413 to $15,460 for the year
ended December 31, 1999 compared to $47 for the year ended December 31, 1998.
The increase in operating expenses resulted from professional fees incurred in
connection with filing Form 10-SB and other periodic reports. The Company's net
loss increased to $16,455 for the year ended December 31, 1999 compared to $47
for the year ended December 31, 1998.

Liquidity and Capital Resources

During 1999, stockholders loaned $14,700 to the Company. The loans bear
interest at 12% and are payable upon demand. The Company had a working capital
deficiency of $16,421 at December 31, 1999.

The Company does not have sufficient funds to continue its operating
activities. Future operating activities are expected to be funded by loans from
major stockholders.

ITEM 7. FINANCIAL STATEMENTS
- ----------------------------

II-2

<PAGE>

ZEDIK ENTERPRISES, INC.

INDEX TO FINANCIAL STATEMENTS

Financial Statements Page
- -------------------- ----
Independent Auditors' Report F-2

Independent Auditor's Report F-3

Balance Sheet as of December 31, 1999 F-4

Statements of Operations for the years ended
December 31, 1999 and 1998 and for the period
from February 23, 1996 (date of inception)
to December 31, 1999 F-5

Statements of Changes in Stockholders' Equity (Deficit) for
the years ended December 31, 1999, 1998, 1997 and 1996 F-6

Statements of Cash Flows for the years ended
December 31, 1999 and 1998 and for the period
from February 23, 1996 (date of inception)
to December 31, 1999 F-7

Notes to Financial Statements F-8

F-1

<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
Zedik Enterprises, Inc.

We have audited the accompanying balance sheet of Zedik Enterprises, Inc. ( a
development stage Company) as of December 31, 1999, and the related statements
of operations, changes in stockholders' equity (deficit) and cash flows for the
year then ended and for the period from February 23, 1996 (date of inception) to
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Zedik Enterprises, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
year then ended and for the period from February 23, 1996 (date of inception) to
December 31, 1999 in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company incurred a net loss of $16,455 during the year ended December 31,
1999, and, as of that date had a working capital deficiency of $16,421 and
stockholders' deficit of $16,421. As discussed in Note 1 to the financial
statements, the Company's operating losses and working capital deficiency raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also discussed in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

Angell & Deering
Certified Public Accountants

Denver, Colorado
February 22, 2000

F-2

<PAGE>

INDEPENDENT AUDITOR'S REPORT
----------------------------

Stockholders
Zedik Enterprises, Inc.
(A Development Stage Enterprise)
Englewood, Colorado

I have audited the accompanying statements of operations, changes in
stockholders' equity, and cash flows for Zedik Enterprises, Inc. (A Development
Stage Enterprise) for the year ended December 31, 1998. 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 provides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all
material respects, the results of operations and cash flows of Zedik
Enterprises, Inc. for the year ended December 31, 1998, in conformity with
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The continuation of the Company's business is
dependent upon its ability to maintain adequate financing arrangements and
ultimately, upon future profitable operations. These matters raise substantial
doubt about its ability to continue as a going concern. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

LARRY LEGEL

Certified Public Accountant

February 11, 1999

F-3

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
BALANCE SHEET
DECEMBER 31, 1999

ASSETS
------

Current Assets:
Cash and cash equivalents $ 1,774
--------

Total Assets $ 1,774
========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------

Current Liabilities:
Accounts payable - trade $ 2,500
Notes payable - stockholders 14,700
Accrued interest - stockholders 995
--------

Total Current Liabilities 18,195
--------

Stockholders' Equity (Deficit):
Preferred stock: no par value, 10,000,000 shares
authorized, none issued or outstanding --
Common stock: no par value, 25,000,000 shares
authorized, 976,200 shares issued and outstanding 2,602
Deficit accumulated during the development stage (19,023)
--------

Total Stockholders' Equity (Deficit) (16,421)
--------

Total Liabilities and Stockholders' Equity (Deficit) $ 1,774
========

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

F-4

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND
FOR THE PERIOD FROM FEBRUARY 23, 1996 (DATE OF INCEPTION)
TO DECEMBER 31, 1999

Year Ended
December 31, Inception To
----------------- December 31,
1999 1998 1999
---- ---- ----

Revenue $ -- $ -- $ --

Operating expenses 15,460 47 18,028
--------- --------- ---------

Loss From Operations (15,460) (47) (18,028)

Other Income (Expense):
Interest expense - stockholders (995) -- (995)
--------- --------- ---------

Net Income (Loss) $ (16,455) $ (47) $ (19,023)
========= ========= =========

Net Income (Loss) Per Share of
Common Stock:

Basic $ (.02) $ -- $ (.02)
========= ========= =========

Diluted $ (.02) $ -- $ (.02)
========= ========= =========

Weighted Average Number of
Common Shares Outstanding:

Basic 976,200 976,200 973,257

Diluted 976,200 976,200 973,257

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

F-5

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Common Stock
------------ Accumulated
Shares Amount Deficit
------ ------ -------

Balance at February 23, 1996 (inception) -- $ -- $ --

Shares of common stock issued in February
1996 for cash at $.002 per share 895,000 1,790 --

Shares of common stock issued in
April 1996 Private Placement
distribution for no cash, valued
at $.01 per share 81,200 812 --

Net loss for the period -- -- (2,475)
-------- -------- --------

Balance at December 31, 1996 976,200 2,602 (2,475)

Net loss for the year -- -- (46)
-------- -------- --------

Balance at December 31, 1997 976,200 2,602 (2,521)

Net loss for the year -- -- (47)
-------- -------- --------

Balance at December 31, 1998 976,200 2,602 (2,568)

Net loss for the year -- -- (16,455)
-------- -------- --------

Balance at December 31, 1999 976,200 $ 2,602 $(19,023)
======== ======== ========

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

F-6

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998 AND
FOR THE PERIOD FROM FEBRUARY 23, 1996 (DATE OF INCEPTION)
TO DECEMBER 31, 1999

Year Ended
December 31, Inception To
---------------- December 31,
1999 1998 1999
---- ---- ----
Cash Flows From Operating Activities:
Net income (loss) $(16,455) $ (47) $(19,023)
Adjustments to reconcile net
income (loss) to net cash (used)
by operating activities:
Issuance of common stock in Private
Placement distribution -- -- 812
Changes in assets and liabilities:
Accounts payable 2,500 -- 2,500
Accrued interest 995 -- 995
-------- -------- --------

Net Cash (Used) By Operating
Activities (12,960) (47) (14,716)
-------- -------- --------

Cash Flows From Financing Activities:
Proceeds from stockholder loans 14,700 -- 14,700
Issuance of common stock -- -- 1,790
-------- -------- --------

Net Cash Provided By Financing
Activities 14,700 -- 16,490
-------- -------- --------

Net Increase (Decrease) in Cash
and Cash Equivalents 1,740 (47) 1,774

Cash and Cash Equivalents at
Beginning of Period 34 81 --
-------- -------- --------

Cash and Cash Equivalents at
End of Period $ 1,774 $ 34 $ 1,774
======== ======== ========

Supplemental Disclosure of Cash
Flow Information:
Cash paid during the period for:
Interest $ -- $ -- $ --
Income taxes -- -- --

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

F-7

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies
------------------------------------------
Description of Business
-----------------------
Zedik Enterprises, Inc. (the "Company") was organized on February 23,
1996 as a Colorado corporation. The Company is in the development
stage as is more fully defined in Statement of Financial Accounting
Standards ("SFAS") No. 7, "Accounting and Reporting by Development
Stage Enterprises". The Company intends to evaluate, structure and
complete a merger with, or acquisition of, prospects consisting of
private companies, partnerships or sole proprietorships. The Company
may seek to acquire a controlling interest in such entities in
contemplation of later completing an acquisition.

Basis of Presentation
---------------------
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the
amount and classification of liabilities that might be necessary
should the Company be unable to continue as a going concern. The
Company's continuation as a going concern is dependent upon its
ability to generate sufficient cash flow to meet its obligations on a
timely basis and to obtain additional financing as may be required.

The Company's continued existence is dependent upon its ability to
secure loans from its principal stockholders. Future operating
expenses will be funded by these loans. The Company's ability to
continue to meet its obligations is dependent upon obtaining the above
loans.

Cash and Cash Equivalents
-------------------------
For purposes of the statements of cash flows, the Company considers
all highly liquid investments with a maturity of three months or less
at the date of purchase to be cash equivalents.

Income Taxes
------------
Deferred income taxes are provided for temporary differences between
the financial reporting and tax basis of assets and liabilities using
enacted tax laws and rates for the years when the differences are
expected to reverse.

Net Income (Loss) Per Share of Common Stock
-------------------------------------------
As of December 31, 1997, the Company adopted SFAS No. 128, "Earnings
Per Share", which specifies the method of computation, presentation
and disclosure for earnings per share. SFAS No. 128 requires the
presentation of two earnings per share amounts, basic and diluted.

Basic earnings per share is calculated using the average number of
common shares outstanding. Diluted earnings per share is computed on
the basis of the average number of common shares outstanding plus the
dilutive effect of outstanding stock options using the "treasury
stock" method.

Estimates
---------
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the reported

F-8

<PAGE>

ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (Continued)
-----------------------------------------------------
Estimates (Continued)
--------------------
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amount of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

2. Notes Payable - Stockholders
----------------------------
12% unsecured demand notes payable to Stockholders. $14,700
=======

3. Preferred Stock
---------------
The authorized preferred stock of the Company consists of 10,000,000
shares, no par value. The preferred stock may be issued in series from
time to time with such designation, rights, preferences and
limitations as the Board of Directors of the Company may determine by
resolution. The rights, preferences and limitations of separate series
of preferred stock may differ with respect to such matters as may be
determined by the Board of Directors, including without limitation,
the rate of dividends, method and nature of payment of dividends,
terms of redemption, amounts payable on liquidation, sinking fund
provisions (if any), conversion rights (if any), and voting rights.
Unless the nature of a particular transaction and applicable statutes
require approval, the Board of Directors has the authority to issue
these shares without shareholder approval.

4. Income Taxes
------------
The components of the provision for income taxes are as follows:

Year Ended Inception To
December 31, December
---------------- --------
1999 1998 1999
---- ---- ----
Current:
Federal $-- $-- $--
State -- -- --
--- --- ---

Total -- -- --
--- --- ---

Deferred:
Federal -- -- --
State -- -- --
--- --- ---

Total -- -- --
--- --- ---

Total Provision For Income Taxe $-- $-- $--
=== === ===

The provision (benefit) for income taxes reconciles to the amount
computed by applying the federal statutory rate to income before the
provision (benefit) for income taxes as follows:

F-9

<PAGE>
ZEDIK ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

4. Income Taxes (Continued)
-----------------------
<TABLE>
<CAPTION>
Year Ended
December 31, Inception To
----------------- December
1999 1998 1999
---- ---- ----

<S> <C> <C> <C>
Federal statutory rate (34)% (34)% (34)%
State income taxes, net of federal
benefits (3) (3) (3)
Valuation allowance 37 37 37
--- --- ---

Total --% --% --%
=== === ===

The following is a reconciliation of the provision for income taxes to
income before provision for income taxes computed at the federal
statutory rate of 34%.
Year Ended
December 31, Inception To
----------------- December
1999 1998 1999
---- ---- ----

Income taxes at the federal statutory rate $(5,995) $ (16) $(6,468)
Federal surtax exemption 3,126 9 3,614
State income taxes, net of federal benefits (664) (2) (768)
Valuation allowance 3,533 9 3,622
------- ----- -------

Total $ -- $ -- $ --
======= ===== =======
</TABLE>

Significant components of deferred income taxes as of December 31,
1999 are as follows:

Net operating loss carry forward $ 3,622
-------

Total deferred tax asset 3,622

Less valuation allowance (3,622)
-------

Net Deferred Tax Asset $ --
=======

The Company has assessed its past earnings history and trends and
expiration dates of carryforwards and has determined that it is more
likely than not that no deferred tax assets will be realized. A
valuation allowance of $3,622 as of December 31, 1999 is maintained on
deferred tax assets which the Company has not determined to be more
likely than not realizable at this time. The net change in the
valuation allowance for deferred tax assets was an increase of $3,133
for the year ended December 31, 1999. The Company will continue to
review this valuation on an annual basis and make adjustments as
appropriate.

As of December 31, 1999 the Company had net operating loss
carryforwards of approximately $19,000. The net operating losses can
be carried forward twenty years to offset future taxable income. The
net operating loss carryforwards expire in the years 2011 through
2019.

F-10

<PAGE>

ZEDIK ENTERPRISES INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS

5. Related Party Transactions
--------------------------
Notes payable - stockholders (Note 2).

6. Fair Value of Financial Instruments
-----------------------------------
Disclosures about Fair Value of Financial Instruments for the
Company's financial instruments are presented in the table below.
These calculations are subjective in nature and involve uncertainties
and significant matters of judgment and do not include income tax
considerations. Therefore, the results cannot be determined with
precision and cannot be substantiated by comparison to independent
market values and may not be realized in actual sale or settlement of
the instruments. There may be inherent weaknesses in any calculation
technique, and changes in the underlying assumptions used could
significantly affect the results. The following table presents a
summary of the Company's financial instruments as of December 31,
1999:
1999
-------------------------
Carrying Estimated
Amount Fair Value
------ ----------
Financial Assets:
Cash and cash equivalents $ 1,774 $ 1,774

Financial Liabilities:
Notes payable 14,700 14,700

The carrying amounts for cash and cash equivalents, accounts payable
and accrued expenses approximate fair value because of the short
maturities of these instruments. The fair value of the notes payable
approximates fair value because of the market rate of interest on the
notes.

F-11

<PAGE>

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

(a) The independent certified public accounting firm for the Company, Larry
Legel, has been dismissed due to the Company's desire to engage a local
certified public accounting firm for ease of administration. Accordingly, the
dismissal was necessary in order for the Company to retain Angell & Deering,
Denver, Colorado as the Company's independent certified public accountants. The
dismissal was effective January 24, 2000.

(b) (i) Larry Legel was dismissed solely because of the Company's desire to
have a local independent certified public accounting firm.

(ii) The reports on the financial statements of the Company by Larry
Legel over the past two years contain no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles except for a qualaification based upon the Company's
business being dependent upon its ability to maintain adequate financing
arrangements and ultimately, upon future profitable operations which have raised
substantial doubt about its ability to continue as a going concern.

(iii) The decision to change accountants was approved by the Board of
Directors of the Company.

(iv) During the Company's two most recent fiscal years and any
subsequent interim period preceding the dismissal of Larry Legel there were no
disagreements with Larry Legel on any matter of accounting principles or
practices, financial statements, disclosure or auditing scope or procedure.

(v) No reportable events referred to in Item 304(a)(v) of regulation
S-K occurred during the two years prior to the dismissal of Larry Legel.

(2) Angell & Deering has been engaged effective January 24, 2000.
The Company did not, during the two most recent fiscal years or any subsequent
interim period prior to engaging Angell & Deering, consult with Angell & Deering
on any matter.

(3) The Company has provided Larry Legel with a copy of the
foregoing disclosures and Larry Legel has furnished the Company with a letter
addressed to the Commission stating that it agrees with the foregoing statements
made by the Company.

II-3

<PAGE>

PART III

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

The name, age and position held in the Company by its executive officers
and directors are as follows:

Officer/Director
Name Age Position Since
---- --- -------- -----

Earnest Mathis, Jr. 40 President and 1996
Director

Gary J. McAdam 48 Secretary/Treasurer 1996
and Director

Gary A. Agron 55 Director 1996

Directors serve in such capacity until the next annual meeting of the
Company's shareholders and until their successors have been elected and
qualified. The Company's officers serve at the discretion of the Company's Board
of Directors, until their death, or until they resign or have been removed from
office.

There are no agreements or understandings for any director or officer to
resign at the request of another person and none of the directors or officers is
acting on behalf of or will act at the direction of any other person. No other
person's activities are material to the operation of the Company.

Earnest Mathis, Jr. - President and Director.

From September 1988 to December 1999, Mr. Mathis was President and director
of Express Capital Concepts, Inc., a blank check company. Express Capital is a
Delaware corporation formed in May 1988. In 1988 Express completed a public
offering after its S-18 registration statement was cleared by the SEC. Mr.
Mathis purchased stock in Express at the time of formation and still owns the
shares. In June 1997 Express entered into a binding letter of intent with
privately held GreyStone Technology, Inc. ("GreyStone"). In December 1999,
Express completed a business combination with GreyStone, an operating company
engaged in the design, manufacture and marketing of its proprietary software. On
December 22, 1999, Express held a special shareholder's meeting where the
shareholders approved the name change to GreyStone Digital Technology, Inc.
("GreyStone Digital"). In connection with the business combination, Mr. Mathis
resigned as an officer and director of the corporation. GreyStone Digital's
shares trade on the bulletin board under the symbol "GSTN."

From April 1994 to February 1997 Mr. Mathis was President and a director of
Galt Financial Corporation, a Colorado corporation formed in June 1987. Prior to
Mr. Mathis being involved with Galt, the Company had completed a public offering
through a S-18 registration statement. In April 1994, Mr. Mathis restructured
Galt and purchased stock from the corporation. In February 1997, Galt completed
a business combination with Capital Growth Holdings Corporation, a development
stage financial services company and Galt changed its name to Microcap
Financial. Mr. Mathis resigned as an officer and director of Galt upon the
completion of the business combination. No other relationships existed with Galt

<PAGE>

after the completion of the business combination. In 1999, the company changed
its name to Globalnet Financial. Com, Inc. and its securities are traded on the
Bulletin Board under the symbol "GLBND".

From May 1994 to September 1996, Mr. Mathis was President and a director of
Dynasty Capital Corporation, a Florida corporation formed in October 1986. Prior
to Mr. Mathis' involvement, in June 1987, Dynasty completed a public offering of
its securities. In May 1994, Mr. Mathis purchased stock from the corporation. In
September 1996, Dynasty completed a business combination with Visitor Services,
Inc., an operating company engaged in travel services. Dynasty changed its name
following the combination to Visitor Services International Corp., and trades on
the Bulletin Board under the symbol "TSIG". Mr. Mathis resigned as an officer
and director upon completion of the combination. No other relationships existed
with the Dynasty after completion of the business combination. Mr. Mathis has
not received any compensation from Dynasty.

From July 1989 to December 1995 Mr. Mathis was President and a director of
Jefferson Capital Corporation a Nevada corporation formed in July 1989.
Jefferson completed a distribution of its stock to public shareholders through
an S-18 registration statement in January 1990. Mr. Mathis purchased stock in
Jefferson in July 1989. In December 1995 Jefferson completed a business
combination with privately held Spirit Gaming Corporation, a development stage
company engaged in the development of Indian casinos and Jefferson changed its
name to Spirit. Spirit trades on the Bulletin Board under the symbol "SPGG". Mr.
Mathis resigned as an officer and director of the corporation upon completion of
the business combination. No other relationships existed with Jefferson after
the completion of the business combination. Mr. Mathis has not received any
compensation from Spirit.

From April 1996 to April 1999, Mr. Mathis was President and a director of
Cancun Acquisitions, Inc., a Colorado corporation formed in April 1989. In March
1996 the principal stockholders of Cancun agreed to sell majority interests to
Earnest Mathis, Gary McAdam, and a third party. Messrs. Mathis and McAdam became
the officers and directors of the Company. In April 1999 Cancun completed a
business combination with privately held Metalico, Inc., an operating company
engaged in fabricating, smelting and refining of lead and non-ferrous scrap
metal recycling. Cancun changed its name to Metalico, Inc. Mr. Mathis resigned
as an officer and director of Cancun upon completion of the business
combination. No other relationships existed with Metalico after the completion
of the business combination. As of August 1999, no market existed for Metalico's
securities. Mr. Mathis has not received any compensation from Metalico. From
February 1996 to February 1998, Mr. Mathis was President and a director of Hai
Enterprises, Inc., a Colorado corporation formed in February 1996. In February
1998 Hai Enterprises, Inc. completed a business combination with Wrapsters, Inc.
Upon completion of the transaction Hai changed its name to Wrapsters, Inc.
Wrapsters is a development stage company engaged in the development of fast food
sandwich shops whose securities trade on the Bulletin Board under the symbol
"WRAP". In January 2000 Wrapsters changed its name to Uptown Restaurant Group,
Inc. and changed its symbol to "UTRG." Mr. Mathis resigned as an officer and
director of the corporation upon the completion of the business combination. No
other relationships existed with Hai after the completion of the business
combination. Mr. Mathis has not received any compensation from Wrapsters.

From February 1996 to September 1998 Mr. Mathis was President and a
director of Gimmel Enterprises, Inc., a Colorado corporation formed in February
1996. In September 1998 Gimmel completed a business combination with Win
Systems, Inc., an operating company engaged in post secondary education. After
the combination took place, Gimmel changed its name to Whitney Information
Network, Inc. The company's securities trade on the Bulletin Board under the
symbol "RUSS". Mr. Mathis resigned as an officer and a director of Gimmel upon
the completion of the business combination. No other relationships existed with

III-2

<PAGE>

Gimmel after the completion of the business combination. Mr. Mathis has not
received any compensation from Whitney. From February 1996 to March 1999, Mr.
Mathis was President and a director of Zion Enterprises, Inc., a Colorado
corporation formed in February 1996. In March 1999, Zion Enterprises completed a
business combination with Genysis Information Systems, Inc., an operating
company engaged in the development of enterprise software. After the combination
took place, Zion changed its name to Genysis Information Systems, Inc. Mr.
Mathis resigned as an officer and a director of Zion upon the completion of the
business combination. No other relationships existed with Zion after the
completion of the business combination. No market exists for the company's
securities as of August 1999. Mr. Mathis has not received any compensation from
Genysis.

From February of 1996 to present. Mr. Mathis has been President and a
director of Vov, Tesh and Zedik. In July 1999 Mr. Mathis became President of
Chay Enterprises Inc. All of these companies are inactive Colorado Corporations.
From November 1996 to the present, Mr. Mathis has been President and a director
of Mauna Kea Enterprises, Inc., Kahului Enterprises, Inc., Haleakala
Enterprises, Inc., Kihei Enterprises, Inc., Kauai Enterprises, Inc. All are
inactive Colorado corporations. From February 1997 to May 1997, Mr. Mathis was
President and a director of Hana Acquisitions, Inc., a Colorado corporation
formed in May 1991. In May 1997 a principal stockholder of Hana sold control of
Hana to a third party and Mr. Mathis resigned at that time. Mr Mathis received
cash compensation in the amount of $60,000 for his assistance in the sale.

Gary J. McAdam - Secretary/Treasurer and a Director

From February 1996 until November 1996, Mr. McAdam was an officer and a
director of Hai Enterprises Inc., a Colorado corporation, formed in February
1996. Mr. McAdam purchased a principal shareholder position at the time of its
formation and was a promoter of Hai. In November 1996, he resigned as an officer
and director. Mr. McAdam has had no other relationship with Hai nor has he
received any compensation from Hai. At the time of his resignation, Hai was an
inactive company. From February 1996 until November 1996, Mr. McAdam was an
officer and a director of Gimmel Enterprises, Inc., a Colorado corporation,
formed in February 1996. Mr. McAdam purchased a principal shareholder position
at the time of its formation and was a promoter of Gimmel. In November 1996, he
resigned as an officer and director. Mr. McAdam has had no other relationship
with Gimmel nor has he received any compensation from Gimmel. At the time of his
resignation, Gimmel was an inactive company.

From February 1996 until March 1999, Mr. McAdam was an officer and a
director of Zion Enterprises Inc., a Colorado corporation, formed in February
1996. Mr. McAdam purchased a principal shareholder position at the time of its
formation and was a promoter of Zion. Mr. McAdam resigned his positions upon the
completion of a business combination with privately held Genysis Information
Systems, Inc., an operating company engaged in the development of enterprise
software. Mr. McAdam has had no other relationship with the Zion nor has he
received any compensation from Zion. No public market has existed or currently
exists for Zion's securities.

From April 1996 until April 1999, Mr. McAdam was an officer and a director
of Cancun Acquisitions, Inc., a Colorado corporation, formed in April 1989. Mr.
McAdam purchased a principal shareholder position of Cancun in 1996. Mr. McAdam
resigned his positions upon the completion of a business combination with
privately held Metallico, Inc., an operating company engaged in fabricating,
smelting and refining of lead and non-ferrous scrap metal recycling. Mr. McAdam
has had no other relationship with Cancun nor has he received any compensation
from Cancun. No public market has existed or current exists for Cancun's
securities.

III-3

<PAGE>

From May 1994 until September 1996, Mr. McAdam served as an officer and
director of Dynasty Capital Corporation, a Florida corporation, formed in
October 1986. Mr. McAdam purchased a principal shareholder position in 1994.
Dynasty completed an offering of its securities in 1987. Mr. McAdam resigned as
an officer and director upon completion of Dynasty's business combination with
Visitor Services, Inc. an operating company engaged in travel services. Dynasty
changed its name following the combination to Visitor Services International
Corp. and trades on the bulletin Board under the symbol TSIG. Mr. McAdam has had
no other relationship with Dynasty nor has he received any compensation from
Dynasty. In December 1996, Mr. McAdam became an officer and director in Florida
Venture Fund, Inc., a Florida corporation, formed in December 1988. Mr. McAdam
resigned his positions in February 1999. Mr. McAdam has had no other
relationship with Florida Venture Fund nor has he received any compensation from
Florida Venture Fund. At the time of his resignation, Florida Venture Fund had
not completed a business combination.

From April 1994 until February 1997, Mr. McAdam was a director of Galt
Financial Corporation, a Colorado corporation, formed in June 1987. Mr. McAdam
purchased a principal shareholder position in 1994. Galt completed a public
offering through an S-18 registration statement in 1988. In February 1997, Galt
completed a business combination with Capital Growth Holdings Corporation, a
development stage financial services company and changed its name to Capital
Growth Holdings, Ltd. The Company then changed its name to Microcap Financial
and more recently changed its name to Globalnet Financial.Com, Inc. Its
securities are traded on the Bulletin Board under the symbol "GLBN". Mr. McAdam
resigned as an officer and director of Galt upon the completion of the business
combination. Mr. McAdam has had no other relationship with Galt nor has he
received any compensation from Galt.

From May 1997 through June 1997, Mr. McAdam was an officer and director of
Hana Acquisitions, Inc., a Colorado Corporation, formed in May 1991. Mr. McAdam
purchased a principal shareholder position in 1997. In June 1997, Mr. McAdam
resigned his positions at the time of a business combination with Liberty Mint,
Inc., an operating company engaged in custom minting of coins, sculptures,
jewelry and other collectibles. The stock of the company trades on the bulletin
board under the symbol "LIBYD". Mr. McAdam resigned as an officer and director
of Hana upon the completion of the business combination. Mr. McAdam has had no
other relationship with Hana. Summer Breeze, LLC, an entity which Mr. McAdam
controls received 1,700,000 warrants to purchase 1,700,000 shares in connection
with the business combination.

Since December 1996, Mr. McAdam has been an officer and director of Zycom,
Inc., a Colorado corporation, formed in May 1983. Mr. McAdam purchased a
principal shareholder position in 1996. Zycom trades on the Bulletin Board with
a symbol of "ZYCN". Mr. McAdam has had no other relationship with the Company
and has received no compensation from Zycom. Zycom remains inactive at this
time.

From February 1996 until July 1999, Mr. McAdam was an officer and a
director of Hesh Enterprises Inc., a Colorado corporation, formed in February
1996. Mr. McAdam purchased a principal shareholder position at the time of its
formation and was a promoter of Hesh. He resigned his positions in July 1999.
Mr. McAdam has had no other relationship with Hesh, nor has he received
compensation from Hesh. Hesh remained inactive through the time of his
resignation.

From November 1996 to the present, Mr. McAdam has been and remains an
officer and director of Mauna Lani Enterprises, Inc., Molokai Enterprises, Inc.,
Molokini Enterprises, Inc., Oahu Enterprises, Inc. and Waikiki Enterprises,
Inc., all Colorado corporations formed in November 1996. Mr. McAdam purchased a
principal shareholder position at the time of their formation and was a promoter
of each of these companies.

III-4

<PAGE>

Mr. McAdam has had no other relationship with the companies nor has he received
any compensation from the companies. These companies remain inactive to date.

From February 1996 until February 1998, Mr. McAdam was an officer and
director of Bes Enterprises Inc. and Dalid Enterprises, Inc., both Colorado
corporations formed in February 1996. Mr. McAdam purchased a principal
shareholder position at the time of their formation and was a promoter of these
companies. Mr. McAdam resigned those positions in February 1998. In July 1999,
Mr. McAdam became and remains an officer and director of the Companies. Mr.
McAdam has had no other relationship with the companies nor has he received any
compensation from the companies. These companies remain inactive to date.

From February 1996 until July 1999, Mr. McAdam was an officer and director
of Chay Enterprises Inc., and Tesh Enterprises, Inc. Colorado corporations
formed in February 1996. Mr. McAdam purchased a principal shareholder position
at the time of their formation and was a promoter of these companies. Mr. McAdam
resigned those positions in July 1999. Mr. McAdam has had no other relationship
with the two companies nor has he received any compensation from them. The
companies remained inactive through the time of his resignation.

From February 1996 until present, Mr. McAdam has been an officer and
director of Vov Enterprises Inc. and Zedik Enterprises, Inc., both Colorado
corporations formed in February 1996. Mr. McAdam purchased a principal
shareholder position at the time of their formation and was a promoter of these
companies. Mr.McAdam has had no other relationship with the two companies nor
has he received any compensation from the companies. These companies remain
inactive to date.

Gary A. Agron - Director

Gary A. Agron earned his Bachelor of Arts degree from the University of
Colorado in 1966 and his Juris Doctorate degree from the university of Colorado
School of Law in 1969. Since 1969, he has been engaged in the private practice
of law in Denver, Colorado, and since 1974, has specialized exclusively in
securities law. Mr. Agron currently is a director of Xedar Corporation, a
publicly-held high technology research and development firm, Meadow Valley
Corporation, a publicly-held heavy construction contractor, U. S. Pawn Inc., a
publicly-held pawn shop company and Vov Enterprises, Inc., a publicly-held
company that is seeking business opportunities through mergers with, or
acquisitions of private companies. Mr. Agron devotes such time as is necessary
to Company affairs.

There are no family relationship between any director or executive office
and any other director or executive officer.

There are no agreements or understandings for any officer or director to
resign at the request of another person and that none of the officers or
directors are acting on behalf of or will act at the direction of any other
person. The officers and directors may resign, however, at the time of the
acquisition or merger at the request of the management of the acquisition
candidate.

The activities of each Officer and Director will be material to the
operation of the Company. No other person's activities will be material to the
operation of the Company. There are no promoters of the Company, other than its
Officers and Directors.

III-5

<PAGE>

ITEM 10. EXECUTIVE COMPENSATION
- -------------------------------

None of the Company's executive officers or directors received compensation
in excess of $100,000 for the years ended December 31, 1999 or 1998 and none
currently receive any compensation. The Company does not anticipate entering
into employment agreements with any of its officers or directors in the near
future. Directors do not receive compensation for their services as directors
and are not reimbursed for expenses incurred in attending board meetings.

Other than consulting fees and finder's fees which may be paid to
unaffiliated third parties, no other individuals will receive any salaries or
fees from the Company. The Company's officers and directors will not receive
finder's fees, consulting fees or salaries. Officers, directors and/or principal
shareholders may receive cash or stock from the sale of their shares of the
Company's stock to the Company's merger/acquisition candidate or principals of
the merger/acquisition candidate.

Option Grants in Last Year and Stock Option Grant

The following table provides information on option grants during the
year ended December 31, 1999, to the named executive officers:

Individual Grants

% of Total Options
Granted to
Options Employees
Name Granted in Year Exercise Price Expiration Date
---- ------- ------- -------------- ---------------

Earnest Mathis, Jr. -0- 0% ---- ----

Gary J. McAdam -0- 0% ---- ----

Gary A. Agron -0- 0% ---- ----

Aggregate Option Exercise of Last Fiscal year and Fiscal Year-End Option Values

There were no executive officers' unexercised options at December 31, 1999.
No shares of Common Stock were acquired upon exercise of options during the
fiscal year ended December 31, 1999.

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

The following table sets forth the Common Stock ownership, as of the date
of this Report, of (i) each person known by the Company to be the beneficial
owner of 5% or more of the Company's Common Stock, (ii) each director
individually, and (iii) all directors and officers of the Company. Each person
has sole voting and investment power with respect to the shares of Common Stock
shown, and all ownership is of record and beneficial.

III-6

<PAGE>

Amount of Percent of
Name Ownership Class
- --------------- ---------- ----------
Earnest Mathis, Jr. [1] 298,334 30.56%
26 West Dry Creek Circle, Suite 600
Littleton, CO 80120

Gary J. McAdam [2] 298,333 30.56%
6041 South Syracuse Way, Suite 307
Englewood, CO 80111

Gary A. Agron 298,333 30.56%
5445 DTC Parkway, Suite 520
Englewood, CO 80111

All officers and
directors as a
group (3 persons)[1][2] 895,000 91.68%

[1] Represents 298,334 shares held in the name of Mathis Family Partners, Ltd.,
a Colorado limited partnership of which Mr. Mathis is the general partner.

[2] Represents 298,333 shares held in the name of GM/CM Family Partners, Ltd.,
a Colorado limited partnership of which Mr. McAdam is the general partner.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------------------------------------------------------

Management of the Company believes that the transactions described below
were no less fair than the terms of transactions which the Company might
otherwise have entered into with third party nonaffiliated entities. All related
party transactions must be approved by a majority of the disinterested members
of the Company's Board of Directors.

The Company was incorporated on February 23, 1996. In February 1996, the
Company issued a total of 895,000 shares of Common Stock to the Company's
Officer, Directors, and one director's wife.

Other than the Company's officers and directors, there are no promoters as
that term is defined in Rule 405 of Regulation C. The Company's officers and
directors are deemed founders of the Company. The 895,000 shares of common stock
issued to the Company's officers and directors were issued for cash in the
amount of $1,790.00. A portion of the foregoing shares are held in the name of
nominees on behalf of the said officers and directors. See "Item 11. Security
Ownership of Certain Beneficial Owners and Management."

III-7

<PAGE>

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

a. Exhibits:

Exhibit No. Title
----------- -----

2.01 Articles of Incorporation of the Registrant [1]

2.02 Bylaws of the Registrant [1]

[1] Filed with the Company's Form 10-SB.

16.01 Letter regarding change in certified public accountant

b. Reports on Form 8-K

No reports on Form 8-K were filed during the last quarter of the
period covered by this Report.

III-8

<PAGE>

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has duly caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized, in Littleton, Colorado, on March 15, 2000.

ZEDIK ENTERPRISES, INC.

By /s/ Earnest Mathis, Jr.
------------------------------------
Earnest Mathis, Jr., President

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed below by the following persons on the dates
indicated.

Signature Title Date
--------- ----- ----

/s/ Earnest Mathis, Jr. President and Director March 20, 2000
- ---------------------------
Earnest Mathis, Jr.

/s/ Gary J. McAdam Secretary/Treasurer (Chief March 20, 2000
- --------------------------- Financial Officer) and
Gary J. McAdam Director

/s/ Gary A. Agron Director March 20, 2000
- ---------------------------
Gary A. Agron

III-9

Exhibit 16.01

LARRY LEGEL, CPA

Practice Concentrating in
Taxation and Securities
5100 N. Federal Highway, Suite 409
Ft. Lauderdale, FL 33308

(954) 493-8900 Office
(954) 493-8300 Fax
e-mail: [email protected]

March 28, 2000

Securities & Exchange Commission
450 Fifth Street N.W.
Washington, DC 20549

re: Zedik Enterprises, Inc.

Securities and Exchange Commission:

In accordance with Item 304 of Regulation S-B. Zedik enterprises, Inc. a
corporation incorporated within the State of Colorado, has made and has approved
by the Board of Directors of The Company the following statements that I agree
with:

A. The independent certified public accounting firm for the Company,
Larry Legel, has been dismissed due to the Company's desire to engage a local
certified public accounting firm for ease of administration. Accordingly, the
dismissal was necessary in order for the Company to retain Angell & Deering,
Denver, Colorado as the Company's independent certified public accountants. The
dismissal was effective January 24, 2000.

B. (i) Larry Legel was dismissed solely because of the Company's
desire to have a local independent certified public accounting firm.

(ii) The reports on the financial statements of the Company by
Larry Legel over the past two years contain no adverse opinion or disclaimer of
opinion and were not qualified or modified as to uncertainty, audit scope or
accounting principles except for a qualification based upon the Company's
business being dependent upon its ability to maintain adequate financing
arrangements and ultimately, upon future profitable operations which have raised
substantial doubt about its ability to continue as a going concern.

(iii) The decision to change accountants was approved by the Board
of Directors of the Company.

<PAGE>

(v) No reportable events referred into Item 304(a)(v) of Regulation
S-K occurred during the two years prior to the dismissal of Larry Legel.

Sunshine,

/s/ Larry Legel, CPA
- ---------------------
Larry Legel, CPA

<ARTICLE> 5

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