[Reg. 240.14c-101]
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14 (c ) of the Securities Act of 1934
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6
(e)(2) )
[X] Definitive Information Statement
Internet Infinity, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0 - 11
1) Title of each class of securities to which transaction applies:
Common Stock, par value $0.001
2) Aggregate number of securities to which transaction applies:
(1) 10,373,196 shares of Common Stock of the Registrant.
3) Per unit price of other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
Not applicable
4) Proposed maximum aggregate value of transaction:
Not applicable
5) Total fee paid:
None
[ ] Check box if any part of fee is offset as provided by Exchange Act
Rule 0-11 (a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form of Schedule and the date of its filing.
1) Amount previously paid:
.................................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
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DEFINITIVE COPIES
INTERNET INFINITY, INC.
3303 Harbor Blvd. K-5
Costa Mesa, CA 92626
INFORMATION STATEMENT
This Information Statement is furnished to stockholders for use at the
Annual Meeting of Stockholders of the Company to be held at the Company's
principal executive offices, at 3303 Harbor Blvd. K-5, Costa Mesa, CA 92626 on
November 14, 2000, at 11:00 a.m., local time, and at any adjournments thereof
(the "Annual Meeting"). This Information Statement and the Notice of Annual
Meeting are being mailed to the Company's stockholders on or about October 8,
2000.
We Are Not Asking You for a Proxy and You Are Requested Not to Send Us a Proxy.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
The sole matter to be considered at the Annual Meeting is the election
of directors of the Company. The persons elected as directors shall serve until
the next annual meeting of the stockholders or until their successors have been
duly elected.
Only stockholders of record of Common Stock as of the close of business
on August 25, 2000 (the "Record Date") will be entitled to notice of and to vote
at the Annual Meeting. As of the close of business on the Record Date, there
were 10,373,196 shares of the Company's Common Stock outstanding and entitled to
vote. Each share of Common Stock is entitled to one vote on all matters
presented for stockholder vote.
According to the Bylaws, the holders of a majority of shares of Common
Stock issued and outstanding and entitled to vote must be present in person or
be represented by proxy to constitute a quorum and to act upon proposed
business. Failure to obtain a quorum at the Annual Meeting will necessitate an
adjournment during which time additional votes will be solicited and such a
solicitation will subject the Company to additional expense. When a quorum is
present at the Annual Meeting, the Bylaws provide that the affirmative vote or a
majority of the shares of Common Stock present in person or represented by proxy
and entitled to vote shall decide any question brought before a meeting of
stockholders, unless a different vote is required by statute, the Articles of
Incorporation or the Bylaws.
Approval of the election of directors will require the affirmative vote
of the holders of a majority of the shares of Company Common Stock represented
in person or by proxy and entitled to vote at the Annual Meeting. Abstentions
are deemed to be present and entitled to vote and, therefore, are counted for
purposes of determining the presence or absence of a quorum with respect to any
proposal presented for consideration at the Annual Meeting; consequently, an
abstention will have the effect of a vote against each proposal to which the
abstention relates.
Unlike abstentions, broker non-votes, by their terms, do not have the
authority to be voted on the proposal to which the broker non-vote relates. As a
result, broker non-votes are excluded from the calculation of the quorum
regarding the proposal to which the broker non-vote related and, therefore, will
nave no effect on the outcome of the voting on the election of directors since
such election must be approved by the affirmative vote of a majority of the
shares of Common Stock represented at the Annual Meeting and entitled to vote on
such proposals.
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ELECTION OF DIRECTORS
The following persons have been nominated by the present board of
directors to be elected as directors of the Company. Each of them is a director
of the Company at this time. Information about each of them appears below.
George P. Morris
Roger Casas
Dawn Morris
Shirlene Bradshaw
DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS
Internet Infinity's directors, officers and significant employees
occupying executive officer positions, their ages as of September 30, 2000, the
directors' terms of office and the period each director has served are set forth
in the following table:
<TABLE>
<CAPTION>
Person Positions and Officers Since Expires
------ ---------------------- ----- -------
<S> <C> <C> <C>
George Morris, 62(1) Chairman of the Board of Directors - 1996 2000
Acting President/CEO
Roger Casas, 52 Director 1998 2000
Vice President Operations
Dawn Morris, 47(1) Member of the Board of Directors 1996 2000
Vice President Internet Sales
Kathy Boag, 47 Vice President Traditional Sales 1999 2000
Shirlene Bradshaw, 62 Member of the Board of Directors 1999 2000
----------------------------
</TABLE>
(1) George Morris and Dawn Morris are husband and wife.
GEORGE MORRIS, Ph.D. Dr. Morris has been the full time Chairman of the
Board of Directors, principal shareholder, Vice President or Acting
President/Chief Executive Officer and Secretary of Internet Infinity since
Internet Infinity went public in 1996. George Morris has also been the Chairman
and Vice President of Apple Realty, Inc. doing business as Hollywood Riviera
Studios since 1974 and the Chairman of the Board of Directors of L&M Media, Inc.
since 1990. Dr. Morris is also the Founder and has been the President, Chairman
of the Board of Directors and principal of Morris Financial, Inc., a NASD member
broker-dealer firm, since its inception in 1987. He has been active in
designing, negotiation and acquiring all equipment, facilities and systems for
manufacturing, accounting and operations of Internet Infinity and its
affiliates. Morris has produced over 20 computer training programs in video and
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interactive hypertext multimedia CD-ROM versions, as well as negotiating
Internet Infinity's and its affiliate distribution and licensing agreements. Dr.
Morris earned a Bachelor of Business Administration and Masters of Business
Administration from the University of Toledo, and a Ph.D. (Doctorate) in
Marketing and Finance and Educational Psychology from the University of Texas.
Prior to founding Internet Infinity and its Affiliates, Dr. Morris had 20 years
of academic experience as a professor of Management, Marketing, Finance and Real
Estate at the University of Southern California (1969 - 1971) and the California
State University (1971 - 1999). During this period Dr. Morris served a
Department Chairman for the Management and Marketing Departments. Morris has
since retired from full time teaching at the University. Dr. Morris was the West
Coast Regional Director of the American Society for Training and Development, a
Director of the South Bay Business Roundtable and a speaker on a number of
topics relating to business, training and education. Morris has created or been
directly involved in the design, writing and development of numerous Internet
web sites for Internet Infinity, blank video, Greg Norman, Northwestern
University, etc. He most recently taught University courses about Internet
Marketing for domestic and foreign markets and Sales Force Management.
ROGER CASAS. Mr. Casas has been a Member of the Board of Directors since
1998 and the Vice President of Operations since Internet Infinity went public in
1996. Roger has managed production, personnel, helped coordinate marketing
efforts and managed packaging, printing and shipping on a daily basis. Prior to
joining Internet Infinity, Mr. Casas was a computer software marketing manager
at More Media and a Financial Consultant for Stonehill Financial in Bel Air,
California an Account Executive for Shearson Lehman Brothers in Rolling Hills,
California and Dean Witter Reynolds in Torrance, California, and the owner and
operator of the Hillside restaurant in Torrance, California. Mr. Casas earned a
Bachelor of Science in Business Administration, from Ashland University in
Ashland, Oregon, along with a Bachelor of Art in Marketing and Psychology. Mr.
Casas holds Series 22 and 7 licenses with the National Association of Securities
Dealers, Inc. and is a registered representative with Morris Financial.
KATHY BOAG. Ms. Boag has been the Sales Manager and/or Vice President of
Sales since joining Internet Infinity in 1997 where she has developed and
managed major accounts. Ms. Boag manages sales and coordinates the production of
her large orders. Prior to joining Internet Infinity, she was the President of
the International Television Association of Orange County. She has also been the
co-owner of a marketing and distribution company for Special Interest video. She
also handled the marketing, distribution and promotion for Jack LaLanne exercise
programs. Ms Boag has over 20 years experience in the electronic media industry
as a Sales Manager and Vice President for numerous companies. Her clients
include major corporations like Yamaha, Sprint and the major automobile
companies.
DAWN MORRIS. Ms. Morris has been the President, Vice President, a
principal shareholder and a Director of Internet Infinity since it went public
in 1996. She has also been the Vice President of L&M Media, Inc. since 1990, now
an affiliate of Internet Infinity. Ms. Morris has also been the Manager of
Corporate Finance/Mergers and Acquisitions and a registered representative with
Morris Financial, Inc., a NASD member broker-dealer firm, since 1994. She has
been responsible for the development of educational and computer training video
programs, some of which have been, produced in CD-ROM and other multimedia
versions. Ms. Morris has produced finance and investment, as well as commercial
and infomercial programs. Prior to joining the predecessor company in 1984, Ms.
Morris was a Senior Account Representative in the Office Products Division of
Xerox Corporation, and a Sales Manager at Joseph Magnin Stores. Ms. Morris
earned a Bachelor of Business Administration in Marketing from California State
University and studied television production and directing at UCLA and
California State University. Dawn Morris was nominated for Woman Graduate of the
Year in the California State University System.
SHIRLENE BRADSHAW. Ms. Bradshaw has been a Member of the Board of
Directors since 1999 and Internet Infinity Business Manager since 1997. She has
managed accounting including, receivable and payable processing and helped
coordinate the supplier relationship with the Apple Media Corporation supplier.
She was the Business Manager for More Media, a predecessor company of Morris &
Associates, Inc. for over six years. She had extensive experience in office
management and accounting before joining Internet Infinity.
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The Company does not have standing audit, nomination and compensation committees
of the Board of Directors.
The Board of Directors held 10 meetings during the fiscal year 2000. All board
members were present at all meetings.
LEGAL PROCEEDINGS
Neither the Company nor any of its property is the subject of any pending legal
proceedings of a material nature.
CERTAIN RELATIONSHIP AND RELATED TRANSACTIONS
Apple Media Corporation is the major supplier of products to Internet
Infinity and its subsidiaries. It provides blank video, video packaging supplies
and duplication of video and CD Media on credit terms as needed by Internet
Infinity and its subsidiaries.
Our duplication services and blank media product orders are manufactured
and fulfilled by the affiliated company, Apple Media Corporation, at a cost of
80 percent of the total invoice amount billed by us to a customer including
shipping. Apple Media Corporation is a wholly-owned subsidiary of L&M Media,
Inc., which is 98 percent owned by George and Dawn Morris, the controlling
shareholders, officers and directors of Internet Infinity. Apple Media is solely
responsible for equipment leases, raw materials and components, manufacturing,
sub-contractors, packaging and shipping labor, management and physical plant
overhead. We, through our Electronic Media Central Corporation wholly owned
subsidiary, are responsible for sales force compensation, direct sales and
accounting clerical support and executive management out of our 20 percent of
the invoice discount amount. In addition, Apple Media Corporation also provides,
at a value of $900 a month or $10,800 for the twelve-month fiscal year ended
March 31, 2000, office facilities, telephone, and utilities to our sales and
management staff. The $10,800 is an allowance included in the 80% cost of goods
paid by Electronic Media Central to Apple Media Corporation.
On December 1, 1998, Apple Media Corporation, a wholly owned subsidiary
of L&M Media, Inc., assumed all responsibility for business operations of the
former Video Magnetics, Inc. Due to a lack of working capital available to
Internet Infinity, George and Dawn Morris acquired the predecessor to AMC, known
as Video Magnetic, LLC, in order that it would continue to provide a sales
distribution opportunity for Internet Infinity. Internet Infinity had earlier
established a distribution arrangement with Video Magnetics, LLC in 1996. When
the previous owner indicated he would sell Video Magnetics and terminate the
distribution arrangement with our company, Morris bought Video Magnetics to
maintain the product source. Video Magnetics was an insolvent company at the
time of the Morris' acquisition. George and Dawn Morris finally settled the
purchase transaction for Video Magnetics through mediation and are paying the
purchase notes over the next four years. Apple Media focuses on the
manufacturing and duplication of video, CD and related products. Apple Media
Corporation, as a wholly-owned subsidiary of L&M Media, Inc. is indirectly 98
percent owned by George and Dawn Morris since George and Dawn Morris own 98
percent of L&M Media, Inc.
Internet Infinity has a non-exclusive distribution license Agreement
from L&M Media for approximately 200 special interest video programs that
automatically renews each year on August 1 until terminated by either party
without cause with thirty days written notice. Internet Infinity contacts school
distributors by telephone to offer these licensed programs. Program subjects
include "how-to" for various sports, cooking, home and auto repair, lawn and
garden, crafts, business success and computer software training.
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Our prerecorded video programs are manufactured, duplicated and shipped
by Apple Media at a cost of 20 percent of the total invoice amount billed by us
to a customer for all costs including shipping. There is a significantly lower
percentage cost of goods and higher percentage gross profit margin for the
pre-recorded programs versus blank media or duplications services. This
difference allows our Morris & Associates wholly owned subsidiary to retain the
remaining 80 percent of the sales revenue. Morris & Associates is responsible
for sales force compensation, direct sales and accounting clerical support,
executive management and product packaging out of its 80 percent. Morris &
Associates also pays a licensing royalty fee of between 10 percent to 20 percent
of the gross sales dollars to L&M Media, Inc. which owns the programs. However,
the 80 percent gross margin after cost of goods less royalties of 10 percent to
20 percent generates a net profit of 60 percent to 70 percent on sales of the
programs licensed from L&M Media.
Termination by either L&M Media or Internet Infinity would result in a
loss of revenue to Internet Infinity. However, sales for the twelve-month period
ended March 31, 2000 were $49,549 down 44.9 percent from $89,959 for the
twelve-month period ended March 31, 1999. Internet Infinity also holds exclusive
distribution licenses from L&M Media for five modules of Personal and Sales
Skill Development programs. Any royalties owed by Internet Infinity to L&M Media
from sales of the 200 special interest programs may be applied to the balance
due on the stock subscription agreements between Internet Infinity, L&M Media
and Hollywood Riviera Studios.
In early 1999 Internet Infinity acquired, from L&M Media and from
Hollywood Riviera Studio, the distribution rights to five video modules on
Personal and Sales Skill Development. Hollywood Riviera Studios is the "DBA" of
Apple Realty, Inc., which is 100 percent owned by George Morris, a controlling
shareholder and principal officer and director of Internet Infinity. We propose
to commence marketing the Personal and Sales Skill Development video modules at
the end of calendar year 2000. The five modules of the Personal and Sales Skill
Development are: The Need/benefit approach to making friends and selling more,
Identifying the problem, Developing the need, Dealing with doubts and
objections, Closing the sale.
On January 4, 1999, Apple Realty, Inc., d/b/a Hollywood Riviera Studios
subscribed to purchase 517,241 restricted shares of Internet Infinity Common
Stock at $0.29 a share, or 50 percent of the non-restricted share closing price
of $0.57 for Internet Infinity Common Stock on January 4, 1999. In addition to
its obligation to pay for the subscribed shares, Apple Realty, Inc. assigned to
Internet Infinity a three-year licensing distribution right for five training
modules on Personal and Sales Skill Development. Hollywood Riviera Studios is
revising and expanding the multimedia delivery of the programs. We estimate the
replacement cost of each module to be $150,000 or $750,000 for the set of five.
Apple Realty, Inc., DBA Hollywood Riviera Studios, is a company 100 percent
owned by George Morris.
The 50 percent value of the "free-trading" stock price assigned to the
January 4, 1999 stock subscription for licensing distribution rights for five
training modules on Personal and Sales Skill Development is deemed reasonable
considering the inability of Hollywood Riviera Studios to dispose of the
restricted stock for a long period of time. In addition, standard media industry
practice usually requires cash advance payments for the acquisition of
distribution rights of programs. Internet Infinity did pay any cash for the
rights.
Also, as part of the same transaction, Internet Infinity issued 258,621
stock options to Hollywood Riviera Studios exercisable at $0.627 a share. The
options were priced at 110 percent of the $0.57 Common Stock closing price on
January 4, 1999. The Hollywood Riviera stock options, after the two-for-one
stock split of February 25, 1999, are now for 517,241 shares at a $0.3135
exercise price.
With the pooling of earned royalties owed to L&M Media, Internet
Infinity is not required to use cash for royalty payments to L&M Media until all
the stock subscription agreements are completely paid by L&M Media and Hollywood
Riviera Studios.
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To summarize, Apple Media, d/b/a Hollywood Riviera Studios subscribed to
purchase 517,241 shares of Internet Infinity's Common Stock and obtained stock
options to purchase 517,241 shares of our Common Stock at $0.3135 a share in
exchange for:
o a subscription agreement obligation to pay $150,000 to Internet
Infinity,
o the 3-year exclusive distribution rights to five training program
modules on Personal and Sales Skill Development,
o royalties set at twenty percent of sales, the payment of which
royalties will go to the reduction of the stock subscription
obligation until the stock subscription is paid in full.
We project that sales will commence of the Personal and Sales Skill
Development modules during the third quarter of the fiscal year to commence
April 1, 2000. However, Internet Infinity cannot guarantee any sales of these
programs.
Internet Infinity takes title to the products it purchases from Apple
Media Corporation, which is 98 percent owned by George Morris, president of
Internet Infinity, just as it did under the original distributorship agreement
with independently owned Video Magnetics, LLC. Internet Infinity will take title
to products under the independent distributorship agreement with Ingram Book
Company. This distributorship model for taking title is planned for other,
future distributorship arrangements.
Under this distributorship arrangement, Internet Infinity, Inc. is
responsible for the collection of accounts receivable and must collect them or
take a bad debt loss. However, Internet Infinity carries CNA accounts receivable
loss insurance. As is standard business practice with a drop-ship arrangement,
Electronic Media Central, the 100 percent owned subsidiary of Internet Infinity,
does not carry an inventory. However, Morris & Associates does carry a small,
finished goods inventory of special interest videos from time to time and a
$39,039 packaging inventory as of March 31, 2000 to prepare orders for the 200
special interest videos. An Internet hosting service handles the server computer
equipment for the Internet. By these means the management of Internet Infinity
attempts to minimize the risk of loss from inventory and accounts receivable as
well as technology obsolescence.
The process for taking orders, shipping, billing and collection is as
follows: When Internet Infinity sells Electronic Media Central products and
services to an independent customer, we first determine the sales credit terms
that will be given to the customer based on a credit worthiness review. If the
order will be shipped on an open account basis and is over approximately $5,000,
we contact our accounts receivable insurance company, CNA, for credit insurance
approval. After credit terms and freight are determined by Internet Infinity, we
issue a purchase order to Apple Media Corporation, which is 98 percent owned by
George Morris, the president of Internet Infinity, for the products and services
ordered including shipping. Apple Media sources materials and components,
manufactures or assembles and drop ships the order to the Internet Infinity
customer. Internet Infinity invoices the customer for the products and services
delivered and credits its sales account and debits the accounts receivable
account in Internet Infinity's general ledger at the time of shipment and
invoicing. Internet Infinity is responsible for collecting the accounts
receivable from the customers. Apple Media grants a 20 percent wholesale trade
discount to Internet Infinity on the order amount and charges Internet Infinity
at the time of shipping. Internet Infinity is solely responsible for the payment
of its accounts payable to Apple Media, Inc. The CNA accounts receivable loss
insurance does not cover losses under $5,000 and the policy has a $10,000
deductible.
The major risk for Internet Infinity is the non-payment of accounts
receivable from an order. Internet Infinity remains responsible for payment of
the wholesale cost of the order to Apple Media even if a customer doesn't pay.
Internet Infinity maintains a $39,039 packaging inventory and thereby reduces
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potential losses on inventory shrinkage and obsolescence. However, the absence
of a complete Internet Infinity inventory and the control of any inventory by a
supplier to Internet Infinity has operated to reduce our control over the
shipping priority of orders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of March 31, 2000 the number of shares of
common stock of Internet Infinity beneficially owned by each officer and
director of Internet Infinity individually and as a group, and by each owner of
more than five percent of the common stock.
<TABLE>
<CAPTION>
Percent of
Number Outstanding
Name and Address of Shares Shares
---------------- --------- -----------
<S> <C> <C>
L&M Media, Inc. (1) 4,535,714 43.73
663 the Village
Redondo Beach, CA 90277
Dawn Morris 1,238,000 11.93
663 the Village
Redondo Beach, CA 90277
Apple Realty, Inc. d/b/a
Hollywood Riviera Studios (1) 1,034,482 9.97
663 the Village
Redondo Beach, CA 90277
George Morris, Chairman/CEO 938,000 9.04
663 the Village
Redondo Beach, CA 90277
Officers and Directors
over 10% as a group 7,746,196 74.67
(2 persons)(2)
--------------------
</TABLE>
(1) The shares owned of record by L&M Media, Inc. and Hollywood Riviera
Studios are under the control of George Morris.
(2) These officers and directors are George Morris and Dawn Morris, his
spouse.
Our company is under the control of George and Dawn Morris, husband and
wife, who beneficially own 74.7 percent of all outstanding stock of Internet
Infinity, Inc. The basis of their control, and the relationship of all
affiliates of Internet Infinity, are depicted in the following chart:
1. George and Dawn Morris
----------------------
a. They own 98 percent of L&M Media, Inc.
i. It owns 100 percent of Apple Media Corporation
ii. It owns 43.73 percent of Internet Infinity, Inc.
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b. They own 100 percent of Apple Realty, Inc., d/b/a Hollywood
Riviera Studios
i. It owns 9.97 percent of Internet Infinity, Inc.
c. They own 20.97 percent of Internet Infinity, Inc.
i. It owns 100 percent of Electronic Media Central Corp.
ii. It owns 100 percent of Morris & Associates, Inc.
Summary
-------
.98 x .453 = .4373
1.00 x .103 = .0997
.218 = .2097
-----
George and Dawn Morris
beneficially own .7467 of Internet Infinity, Inc.
SECTION 16(a) BENEFICIAL REPORTING COMPLIANCE
Number of late reports, number of late transactions, Failure to file Form 3 or
Form 5:
George Morris, Director & President: Form-5 filed 7/12/00 for
failure to file Form-3 for 3/28/00 100,000 share @ $0.36 stock options.
Dawn Morris, Director & Vice President: Form-5 filed 7/12/00 for
failure to file Form-3 for 3/28/00 100,000 share @ $0.36 stock options.
CHANGES IN CONTROL
There are no arrangements, which may result in a change in control of
Internet Infinity.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Executive Compensation for Fiscal Year Ended 3/31/00:
<TABLE>
<CAPTION>
Principal Fiscal Total
Name Position Year Compensation
---- --------- ------ ------------
<S> <C> <C> <C>
George Morris President/CEO 2000 31,000
1999 37,700
1998 38,400
Dawn Morris Vice President 2000 9,960
1999 1,000
1998 0
</TABLE>
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Executive Stock Option Plan:
<TABLE>
<CAPTION>
Fiscal Year Number Exercise Expiration
Granted of Shares Price Date
----------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
George Morris 2000 100,000 $0.360 9/30/04
President 1999 200,000 $0.308 1/24/04
1998 150,000 $0.125 3/29/03
Dawn Morris 2000 100,000 $0.360 9/30/04
Vice President 1999 200,000 $0.308 1/24/04
1998 150,000 $0.125 3/29/03
Kathy Boag 1999 10,000 $0.308 3/30/03
Vice President 1999 10,000 $0.308 3/31/04
1998 10,000 $0.125 9/30/01
Roger Casas 1999 10,000 $0.308 3/30/03
Vice President 1999 10,000 $0.308 3/30/04
1999 10,000 $0.308 1/24/04
1998 10,000 $0.125 9/30/01
Shirlene Bradshaw 1999 10,000 $0.308 3/30/03
Business Manager 1999 10,000 $0.308 3/30/04
1998 10,000 $0.125 9/30/01
Hollywood Riviera
Studio (1) 1999 517,242 $0.314 1/3/04
</TABLE>
(1) These options are under the control of George Morris, President
(2) 10,000 of these options expire on 3/30/03.
INDEPENDENT AUDITORS
Caldwell, Becker, Dervin, Petrick & Co. served as the Company's
independent certified public accountants for the fiscal years ending March 31,
1999 and 2000. Representatives of Caldwell, Becker, Dervin, Petrick & Co. are
not expected to be present at the Annual Meeting but will be extended the
opportunity to attend and make a statement and respond to appropriate questions
if they desire to do so.
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ANNUAL REPORT
A copy of the Company's Annual Report filed with Securities and Exchange
Commission on Form 10K-SB is enclosed, as is a copy of the President's report to
stockholders.
DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS
S.E.C. Regulation 240.14a-8 provides the requirements for stockholders
to follow if they wish to submit certain proposals for consideration at the
company's next annual meeting or a special meeting of stockholders. The deadline
for stockholders to submit Regulation 240.14a-8 stockholder proposals for
inclusion in the Company's proxy statement and form of proxy for our next annual
meeting is a "reasonable time " before we begin to print and mail our proxy
materials. The date of our next annual meeting has not been set, but it should
not be before August 30, 2001. We would deem "untimely" the submittal of a
proposal after June 15, 2001.
OTHER MATTERS
The Company's Board does not know of any other matters to be presented at the
Annual Meeting for action by stockholders.
A list of stockholders entitled to be present and vote at the Annual
Meeting will be available during the Annual Meeting for inspection by
Stockholders who are present.
By order of the Board of Directors
/s/ George Morris
----------------------------------
Secretary
September 20, 2000
Costa Mesa, California
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