TRUETRAKS INC, SB-2/A, 1998-03-09

TRUETRAKS INC
SB-2/A, 1998-03-09
RAILROADS, LINE-HAUL OPERATING

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As filed with the Securities and Exchange Commission on September 30, 1997

Registration No. 333-37035

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------------
TRUETRAKS, INC.
(Name of Small Business Issuer as specified in its charter)

Delaware 4000 41-1869713
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification
Number)

TRUETRAKS, INCORPORATED.
1408 Kit Carson Drive
Gallup, New Mexico 87301
(612) 928-0953
(Address and Telephone Number of Principal Executive Offices and Address of
Principal Place of Business or Intended Principal Place of Business.)

Michael Hall
Coordinator
3925 Excelsior Blvd. #5
St. Louis Park, MN. 55416
(612) 928-0953
(Name, Address and Telephone Number of Agent for Service)

Copies to:
R. John Bartz, Esq.
Bartz & Bartz
Southdale Office Centre
6750 France Avenue South, Suite 350
Edina, MN. 55435
(612) 920-3959 (612) 920 6494 (Fax)

Approximate Date of proposed Sale to the Public: As soon as practicable
after the effective date of the Registration Statement.

If any of the Securities being registered in this form are to be offered,
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [X]

If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering. []

If this form is a post effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. []

If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. []

CALCULATION OF REGISTRATION FEE

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<CAPTION>
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount To Offering Price Aggregate Offering Amount of
Securities To be Registered Be Registered Per Unit(1) Price (1) Registration Fee

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<S> <C> <C> <C> <C>
Common Stock
$.05 par value 200,000 $6.50 $1,300,000 $429.00
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Total $1,300,000 $429.00
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</TABLE>

(1) Estimated pursuant to Rule 457(a) under the Securities Act of 1933, as
amended, solely for purposes of computing the registration fee.

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.

<PAGE>

Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

Prospectus SUBJECT TO COMPLETION

PRELIMINARY PROSPECTUS DATED FEBRUARY 20, 1998

TRUETRAKS, INCORPORATED
1408 KIT CARSON DRIVE GALLUP, NEW MEXICO 87301 (888) 722-6900

200,000 SHARES (MAXIMUM OFFERING)
100,000 SHARES (MINIMUM OFFERING)

COMMON STOCK (PAR VALUE $.05)
$6.50 PER SHARE
-------------------------------

All of the shares of Common Stock offered hereby are being sold by
TrueTraks, Incorporated (the "Company"). Prior to this Offering there has been
no public market for the Common Stock. See "Self-Underwriting" for a discussion
of factors considered in determining the initial public offering price. All
funds received by the Company with respect to the first 100,000 shares, which
may be sold, will be deposited with FIRSTAR BANK of Minnesota N.A. Trust
Division, St. Paul, MN. as Escrow Agent, pending the effective date of the
Prospectus. There can be no assurance that the minimum number of shares will be
sold. If 100,000 shares are not sold within one hundred eighty days (180 days)
following commencement of the public offering, the Offering will automatically
terminate and all funds paid for shares will be returned to the purchasers
without deductions and without interest. See "Introductory Statement - Risk
Factors" and "Self-Underwriting". The Company believes that the net proceeds of
the Offering will not be sufficient to expand the Company and provide for the
implementation of the Company's Acquisition Strategy nor will it be sufficient
to satisfy the cash needs of the Company for the next twelve months. See Risk
Factors-"Possible Need for Additional Capital Financing".

THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK AND IMMEDIATE SUBSTANTIAL DILUTION AND SHOULD NOT BE PURCHASED BY INVESTORS
WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS"
BEGINNING ON PAGE 7 AND "DILUTION ON PAGE 13"

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

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Price to Discounts & Proceeds to
Public Commissions (1) The Company(2)
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<S> <C> <C> <C>
Per Share. . . . . . . . . . . . . . . . . . $ 6.50 $0 $ 6.50
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Total Minimum (100,000 shares) $ 650,000 $0 $ 650,000
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Total Maximum (200,000 shares) $ 1,300,000 $0 $ 1,300,000
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</TABLE>

(1) The Company will Self-Underwrite this offering: (i) This offering will be
sold by the Directors & Officers of the Company. (ii) The Officers will
place all of their 144 Stock, in its entirety, in the Escrow Account held
by the Transfer Agent for a period of one year. See "Self-Underwriting" and
"Transfer Agent."

(2) The Company has prepaid the offering expenses ($155,000) which include fees
for filing, printing, legal, accounting and other miscellaneous items.

The shares of Common Stock are offered, subject to sale, by the Company. It
is expected that certificates for such shares will be ready for delivery in
Gallup, New Mexico upon completion of the Offering.

THE DATE OF THIS PROSPECTUS IS XXXXX XX, 1998

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AVAILABLE INFORMATION

The Company is not currently subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a
result of this Offering, the Company will become subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, will file periodic reports, proxy and
information statements and other information with the Securities and Exchange
Commission (the "Commission"). The Company intends to furnish its stockholders
with annual reports containing audited financial statements and such other
periodic reports as the Company deems appropriate or as may be required by law.

The Company has filed with the Commission in Washington, D.C., a
Registration Statement on Form SB-2 under the Securities Act of 1933, as amended
(the "Act") with respect to the securities offered hereby as permitted by the
rules and regulations of the Commission. This Prospectus omits certain
information contained in the Registration Statement. For further information
with respect to the Company and the securities offered hereby, reference is
hereby made to the Registration Statement and the exhibits and schedule thereto.
Statements made in this Prospectus as to the contents of any contract or other
document are not necessarily complete, and in each such instance reference is
made to the copy of such contract or other document filed as an exhibit to such
Registration Statement, or to such other document, each such statement being
qualified in all respects by such reference. The Registration Statement and
exhibits may be inspected without charge and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street NW,
Washington, DC 20549, and at the following Regional Offices of the Commission:
Midwest Regional Office at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material also can be obtained form the Public
Reference Section of the Commission at 450 Fifth Street NW, Washington DC 20549,
at prescribed rates.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company has not filed any documents, pursuant to the Exchange Act,
which could be deemed to be incorporated by reference in the Company's
Prospectus (not including exhibits to the information that is incorporated by
reference unless the exhibits are themselves specifically incorporated by
reference).

PERTINENT INFORMATION OF THE COMPANY

Exact Corporate Name: TRUETRAKS, INCORPORATED

State and Date of Incorporation: DELAWARE MARCH 31, 1997

Street Address of Principal Office: 1408 KIT CARSON DRIVE, GALLUP, NEW MEXICO
87301

Company Telephone Number: (612) 928-0953

Fiscal year: DECEMBER 31, 1997
(month) (year)

Person(s) to Contact at Company with respect to Offering: MICHAEL HALL,
COORDINATOR

Telephone Number: (612) 928-0953

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL
OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.

2
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PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY INFORMATION IS NOT A COMPLETE PRESENTATION OF ALL
RELEVANT FACTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS. THE ENTIRE PROSPECTUS,
INCLUDING THE INFORMATION SET FORTH UNDER THE CAPTION "RISK FACTORS," SHOULD BE
READ AND CAREFULLY CONSIDERED BY PROSPECTIVE INVESTORS. ALL INFORMATION
CONCERNING THE COMPANY'S AUTHORIZED, ISSUED AND OUTSTANDING COMMON STOCK AND ITS
PREFERRED STOCK, NONE OF WHICH IS ISSUED OR OUTSTANDING, AND ALL FINANCIAL
INFORMATION IS PRESENTED ON A PER SHARE BASIS. UNLESS THE CONTEXT REQUIRES, THE
TERM "COMPANY" REFERS COLLECTIVELY TO TRUETRAKS, INC.

THE COMPANY

TrueTraks, Incorporated (the "Company"), intends on becoming a dominant
provider of rail freight transportation through the acquisition and
consolidation of existing regional, short-line and divested rail assets from
Class 1 railroads. The rail assets that become targeted by the Company, either
publicly or privately owned, could be acquired via outright purchase, stock
purchase, lease, operating lease or other combination.

The Company's fundamental acquisition philosophy with respect to regional
and/or short-line acquisitions is to identify regional and/or short-line
railroad properties within regions/areas that have an established operating
history, an established industrial and/or bulk commodity customer base that will
provide a stable initial revenue base. These railroad properties must have the
size, either individually or collectively, necessary to establish a dominant
railroad transportation presence in the region. These acquired rail assets would
become part of a comprehensive program of physical plant and equipment
improvements that the Company intends to implement.

Major rail carriers (known as "Class 1"s") may continue to downsize rail
operations, as they have in the past, and this downsizing could result in
numerous rail lines or sections of rail lines coming on the market for sale. The
current merger environment taking place among the Class 1 rail carriers could
continue thereby providing rail line acquisition opportunities as the larger
merged Class 1 systems look to maximize the profitability of their rail lines
through divestiture of certain rail lines and assets. If further mergers and
consolidation by major rail carriers continue it would make available large
portions of rail lines that could be operated profitably by a rail entity that
is more regionally focused. The divestiture of certain rail lines and assets by
Class 1's could result in a rail transportation network that would be composed
primarily of coast-to-coast rail entities and a series of smaller, regional rail
systems.

The smaller rail properties/assets, divested by the Class 1 carriers, could
be profitable if a focused marketing strategy stressing customer satisfaction
and quality service was implemented. The Company intends to establish and
develop contractual relationships with other transportation modes that could
maximize all modes of shipping. By developing cooperative relationships with
major rail entities, shippers and other transportation modes, many new sources
of revenue traffic could be developed which should lead to higher levels of
profitability for all.

The Company's intended regional rail transportation systems will: 1.)
concentrate on maximizing the current profitability of the combined individual
railroads by consolidating costs, duplicate functions, and overhead expenses,
2.) increase the percentage of revenue received through longer line-haul
opportunities, 3.) work to develop new sources of on-line traffic through
aggressive marketing efforts, and, 4.) work to develop cooperative
transportation partnerships with other rail and non-rail transportation
entities.

The Company intends to apply its acquisitions strategy to any region in the
country where the potential exists to combine several regional/short-line
railroads and/or divested Class 1 rail lines into a contiguous rail system.
Competition for the Company's services will be trucking entities, river barge
companies and other rail carriers. These entities have the ability to compete
with the Company on both price and service. The Company's primary competitor,
exclusive of other rail entities, is the trucking industry.

CURRENT STATUS

TrueTraks, Incorporated is presently a non-operating/development stage
corporation seeking to raise $1,300,000 in capital. This capital is necessary to
allow the Company to finance the administrative cost of the debt funding,
implement its acquisitions strategy and to phase into becoming a fully
operational railroad.

<PAGE>

The Company will require additional capital to fully exploit its
acquisitions and operations strategy. The Company currently has two full-time
employees. Additional management, advisory and consulting staff will be added
upon completion of this Offering. The Company currently does not own any
railroads, or have any purchase agreements or Letters of Intent outstanding to
acquire any of its targeted acquisition candidates. The Company has no contracts
with any entities to handle or manage their transportation needs.

OBJECTIVES

There are numerous objectives that may be key factors to the Company's
success within the current rail road industry. These objectives are as follows:

First, sell the maximum portion of the Offering to raise capital for the
Company. Use a portion of the proceeds from the Offering to finance the
administrative costs of the debt funding. The debt funding will allow the
Company to raise sufficient funds to acquire an initial/base property and rail
assets and to become a fully operational railroad.

Second, the acquisition of existing regional, short-line and rail lines
from Class 1 railroads in surrounding geographic territories, and combining
these properties into a contiguous regional railroad network. The Company will
detail the most appropriate acquisitions strategy tailored for each targeted
property. These acquisitions may be accomplished by outright purchase, stock
purchase, lease, operating lease or appropriate combination thereof.

Third, the Company will need to hire additional experienced management and
advisory personnel with specific experience in railroad acquisition due
diligence, railroad marketing, railroad finance and railroad law. These
individuals could aid in the preparation of the individual formal acquisition
strategies for each property sought by the Company for purchase and will aid in
the development and review of the Acquisition, Marketing and Operating Plans.
Management functions of the Company will be divided into four functional
departments, with each department being managed by an experienced professional
with appropriate railroad or business experience. These departments will be
Operations, Marketing, Administrative/Legal and Finance. The Company intends to
focus on hiring the most qualified individuals who share the Company's business
and operating philosophies, with many of the management and operating personnel
coming directly from the railroads that are acquired by the Company

Fourth, begin the process to integrate these potential acquisitions into a
contiguous rail transportation system. The Company has an opportunity to
consolidate duplicate functions, overhead expenses and to realize a greater
efficiency in the utilization of equipment and personnel resources and improve
the efficiency of operations and customer responsiveness. This integration of
potentially acquired rail properties could allow the Company to develop new
traffic sources that currently do not exist because these properties were
operating as separate entities prior to their acquisition.

Fifth, the intended domination of regional markets through aggressive
pro-active customer-focused marketing efforts, identifying, promoting and
developing economic development opportunities for each region and development of
cooperative transportation partnerships with non-rail transportation entities.
The Company wants to be recognized as an industry leader in terms of quality in
rail freight transfer. The Company intends to achieve this objective by
remaining focused and committed to our potential customers needs. The Company
intends to develop partnerships with other transportation modes that leverage
each mode's particular strengths. Higher levels of profitability may be achieved
by developing cooperative relationships with major transportation modes,
communities and shippers. The Company does not have agreements with any entities
to handle or manage their rail transportation needs.

Sixth, the Company will not expand or diversify beyond its means to remain
a profitable enterprise. This objective means that diversification and expansion
cannot occur until the Company has had profitable months and cash reserves. Even
meeting these minimum requirements, the Company intends to adopt an approach to
growth that will include a monthly assessment of progress and strategy review to
ensure that the Company is not extended beyond its means.

Seventh, the Company intends to operate within any region/area in the
country where the potential to build a dominant rail transportation network
exists.

<PAGE>

ACQUISITIONS/FUNDING

The Company presently does not own any rail assets. However, the Company
has had general discussions with various companies and individuals concerning
the status and future of their rail assets. These discussions have been of an
informational nature only, thereby allowing the Company to acquire information
for possible future action. The Company has not engaged in any direct talks with
any Company or individual to acquire rail assets. The Company has examined
various properties that may fit into the Company's acquisition strategy. This
examination has been through telephone conversations with rail line (Class 1 and
short-line) representatives concerning their Company's future plans and with
rail consultants who are familiar with current trends and properties in the rail
industry. The Company has not signed or written any Purchase Offers or Purchase
Letters of Intent to acquire any rail assets as of the date of this Prospectus.
Even though the Company does not have any written Purchase Agreements in place
as of the date of the Offering Circular, the Company believes it does have
significant relationships within the rail industry, which the directors and
executive officers have built over the years which should allow the Company to
acquire rail assets shortly after the closing of the Offering and the
acquisition of additional financing through the debt funding of Benelux
Partners, Inc. See "Management" See "Business - Financing/Funding". Upon the
closing of this Offering, the Company will use part of the proceeds from this
Offering to finance the debt funding, which should ultimately allow the company
to acquire the rail assets it will need to become a fully operational railroad
and allow the company to begin its acquisition strategy. See "Use of Proceeds"

The funds from this Offering will not be sufficient to acquire any rail
assets directly. The Company will need to secure additional debt capital in
order for any acquisitions to occur. There can be no assurance made that this
capital will be available to fund the Company's acquisitions strategy. However,
the Company has identified several potential sources of debt capital that have
expressed an interest in working with the Company. The Company has been working
with one of these sources to acquire debt capital for the acquisition that the
Company wishes to make. The Company has received a written firm funding
commitment from Benelux Partners, Inc., for additional capital (debt capital) to
fund the acquisitions planned by the Company. The firm funding commitment from
Benelux Partners, Inc. is for a maximum of up to $30M U.S. Dollars for use in
the purchase of rail assets. The Firm Funding Commitment is subject to certain
conditions being met by the initial/base property and the Company itself. The
key conditions are that the Public Offering must be completed and due diligence
must be conducted on the initial/base property the Company eventually selects.
Certain other conditions must be fulfilled before the Firm Funding Commitment
becomes effective. The Firm Funding Commitment is discussed in greater detail in
the Business Section of this Prospectus. See "Business - Financing/Funding".
There are other potential sources for additional capital that may be approached
by the Company at such time that additional acquisitions become imminent.

THE OFFERING

Securities to be Offered: . . . . . . 200,000 shares of Common Stock
(maximum)100,000 shares of Common Stock
(minimum) Par value $.05, at $6.50 per
share; These shares are being offered by
the Company on a "best efforts" basis.
See "Description of Capital Stock" and
"Self-Underwriting."

Approximate Net Proceeds - Maximum: . $1,300,000. See "Use of Proceeds."
Approximate Net Proceeds - Minimum: . $ 650,000. See "Use of Proceeds."

Use of Proceeds: . . . . . . . . . . The Company expects to use the net
proceeds of the Offering to finance the
administrative cost of the debt funding,
begin implementation of its acquisition
strategy, working capital and other
general corporate purposes. See "Use of
Proceeds."

Common Stock Outstanding After Offering
-----Maximum:..................... 1,950,000 shares.
-----Minimum:..................... 1,850,000 shares.

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Common Stock Publicly Owned After Offering
-----Maximum:..................... 200,000 shares.
-----Minimum...................... 100,000 shares.
_________________________

CERTAIN RISK FACTORS

Prospective purchasers of the Common Shares should consider carefully the
information set forth under the caption "Risk Factors" on page 7, and all other
information set forth in this Prospectus, in evaluating an investment in the
Common Shares. The Company has a limited operating history and may be construed
as a "development stage" company. For this reason investment in shares of Common
Stock offered hereby involves a high degree of risk. See "Risk Factors".

SUMMARY CONSOLIDATED FINANCIAL DATA

As of July 31, 1997 As of the Effective Date
-------------------------- ---------------------------
As Adjusted As Adjusted
Actual Maximum Minimum
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<S> <C> <C> <C>
Consolidated Balance Sheet Data
Cash and Cash Equivalents(1) $ 420 $1,275,420 $ 625,420
Total Assets 155,387 1,430,807 780,807
Total Liabilities 25,000 0 0
Stockholder's Equity(2) 130,387 1,430,807 780,807

</TABLE>

(1) THE COMPANY HAS PRE-PAID THE COSTS OF THIS OFFERING TO $155,000
(2) The Company has no redeemable convertible preferred stock.

COMPANY'S INDEBTEDNESS

The Company has no outstanding indebtedness to any officers, directors, or
commercial lending institutions, private individuals, or other affiliates. The
Company may have general obligations under normal business lease agreements.

PLAN OF DISTRIBUTION

The Company will be offering these securities under this Offering without
the use of underwriters, brokers or dealers. The Officers and Directors of the
Company will be the only persons selling the Company's securities. The Officers
and Directors will receive no commissions or remuneration for the selling of the
Company's securities. The Officers and Directors are relying on Rule 3a4-1 of
the Exchange Act as the exemption from registration as a broker-dealer.
Furthermore, no securities under this Offering are being sold on behalf of any
security account holders. There are no funds from this Offering which are to be
returned to any other stakeholders to the Company. Should the Minimum offered
securities under this Offering of $650,000 or 100,000 shares not be fully
subscribed to, it is the obligation of the Company to direct the Escrow Agent,
FIRSTAR BANK of Minnesota N.A. Trust Division, St. Paul MN, pending the
effective date of the Prospectus, to return all proceeds collected and deposited
for purchase of the securities described herein, upon the expiration of 180 days
from the effective date of this Offering. The funds deposited by the investors
with the Escrow Agent, FIRSTAR BANK of Minnesota N.A. Trust Division, St. Paul
MN, pending the effective date of the Prospectus, for the purchase of these
securities to this offering will be returned without interest.

THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. SEE " RISK FACTORS."

6
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RISK FACTORS

IN EVALUATING THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY
CONSIDER THE FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION
PRESENTED IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS FORWARD-LOOKING
STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS
MAY DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS.
POTENTIAL PURCHASERS OF THE CLASS A COMMON STOCK SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS, AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS, BEFORE DECIDING TO PURCHASE SHARES OF THE CLASS A COMMON STOCK
OFFERED HEREBY.

FLUCTUATION IN REVENUES AND EXPENSES
The companies in this industry have historically experienced fluctuations
in revenues and expenses due to unpredictable events such as one-time freight
moves, customer plant expansions and shutdowns, rail car sales, accidents and
derailments. Once the Company has acquired one or more existing railroads, the
occurrence of such events may cause further fluctuations in revenues and
expenses and negatively affect the Company's financial performance.

AVAILABILITY OF ACQUISITION OPPORTUNITIES
The Company's ability to apply its Acquisition Strategy and thus become a
fully operational railroad is dependent upon its ability to acquire existing
railroad properties. In making acquisitions the Company will compete with other
short line and regional operators, some of which are larger, more experienced
and/or have greater financial resources than the Company. There can be no
assurance that acquisition opportunities will be available to the Company in the
near future, or that the Company will be able to compete successfully for
available properties. The Company's ability to acquire existing regional and
short-line railroads and related railroad assets may also be dependent upon its
ability to obtain financing for such acquisitions. Financing may not be
available or may be available only on terms and conditions unfavorable to the
Company. In addition, the Company's future credit facilities may contain certain
limitations on the Company's ability to make acquisitions.

CUSTOMER CONCENTRATION
Upon becoming a fully operational railroad, the Company's business could be
adversely affected if any of the Company's customers suffer significant business
downturns or reduce shipments of commodities transported by the Company.
Additionally, the Company may depend on one or a small group of customers on any
given rail line. The loss of one, or any portion of these customers, could
affect the profitability of the Company.

RELIANCE ON KEY PERSONNEL
TrueTraks success to date has been largely dependent on the leadership of
Mr. Garry Oglesbee, Chairman, President and Chief Executive Officer and Mr.
Leonard Mitchell, Vice President and Chief Operating Officer. While the Company
is in the process of building a deeper, experienced management, advisory and
consulting team, the loss of Mr. Oglesbee and/or Mr. Mitchell's services could
adversely affect the Company's operations.

RELATIONSHIPS WITH CLASS 1 RAILROADS
A substantial portion of the railroad traffic in the United States is
dominated by a number of large Class 1-rail carriers that have substantial
market control and negotiating leverage. Almost all of the traffic on the
Company's potentially acquired railroads is interchanged with Class 1 carriers.
A decision by any of these Class 1 carriers to discontinue transporting certain
commodities or to use alternate modes of transportation, such as motor carriers,
could adversely affect the Company's business in the future.

Upon becoming a fully-operational railroad, the Company's ability to
provide rail service to its current and/or future customers will depend in large
part upon its ability to maintain cooperative relationships with Class 1
connecting rail carriers with respect to freight rates, car supply, reciprocal
switching, interchange, trackage rights and other matters. A deterioration in
the operations of, or service provided by connecting carriers, or in the
relationships with its connecting carriers, could adversely affect the Company's
business. The Company may not maintain an adequate supply of rail cars to meet
the transfer demands. Further, the Company may not be able to obtain additional
rail cars or replacements on favorable terms.

Portions of the Company's eventual rail system could operate under leases,
operating agreements or trackage rights agreements with Class 1 carriers.
Failure of the Company to comply with such potential leases and agreements in
all material respects could result in the loss of operating rights with respect
to such rail lines, which would adversely affect the Company's business.

7
<PAGE>

COMPETITION
Each of the Company's potentially acquired railroads intends to operate
typically as the only rail carrier directly serving its customers; however, the
Company's railroads compete directly with other modes of transportation,
including motor carriers and, to a lesser extent, ships and barges. Competition
is based primarily upon the rate charged and the transit times required, as well
as the quality and reliability of the service provided. Any improvement in the
cost or quality of these alternate modes of transportation could increase
competition from these other modes of transportation and adversely affect the
Company's business.

REGULATION
Once the Company becomes a fully operational railroad, the Company's
railroads will be subject to regulation by the Surface Transportation Board
("STB"), the Federal Railroad Administration ("FRA"), state departments of
transportation and some state and local regulatory agencies. Despite
deregulation in the recent years, federal and state regulation continues to
affect profitability and competitiveness in the railroad industry. The federal
and state regulatory processes negatively affect the Company through, among
other things, the delays and costs associated with protracted abandonment
proceedings and the legal cost associated with acquisition proceedings. Although
the recently enacted ICC Termination Act of 1995 (the "ICCTA") purports to aim
at eliminating or reducing such costs, the ICCTA has not been in effect long
enough to determine the extent to which it will be successful in this regard. In
reducing regulation, an effect of the ICCTA may be diminished regulatory
protection for small railroads, which negatively affects their competitive
position with their Class 1 connections.

ENVIRONMENTAL MATTERS
The Company's eventual railroad operations and real estate ownership will
be subject to extensive federal, state and local environmental laws and
regulations concerning, among other things, emissions to the air, discharges to
waters and the handling, storage, transportation and disposal of waste and other
materials. The railroads targeted by the Company for purchase regularly
transport hazardous materials for shippers, and also periodically use hazardous
materials in their own operations. As a result, the Company's future business
will involve the risk of substantial environmental liability as a result of
current and past operations.

LIABILITY FOR CASUALTY LOSSES

The Company will obtain new, or assume current insurance coverage for
losses arising from personal injury and for property damage in the event of
derailments or other accidents or occurrences on each of the railroads the
Company intends to acquire. The Company should be able to secure adequate
insurance coverage for the business. Under catastrophic circumstances such as
accidents involving passenger trains or spillage of hazardous materials, the
Company's liability could exceed its insurance limits. Insurance is available
from only a limited number of insurers and there can be no assurance that
insurance protection will continue to be available or, if available, will be
obtainable on terms acceptable to the Company. The occurrence of losses or other
liabilities which are not covered by insurance or which exceed the Company's
insurance limits could materially adversely affect the future financial
condition of the Company.

LABOR MATTERS
The Company could have employees who are subject to collective bargaining
agreements. Strikes and work stoppages, whether brought against the Class 1
carriers or the Company itself with which they connect, could adversely affect
the future operations of the Company's railroads. In the future the Company may
have collective bargaining agreements.

DILUTION
Purchasers of Common Stock in the Offering will experience an immediate and
substantial dilution of $6.16 per share (Minimum Offering) or $5.85 per share
(Maximum Offering) in the net tangible book value of their shares. See
"Dilution"

CONCENTRATION OF VOTING POWER

Upon completion of the Offering, the directors and executive officers of
the Company will beneficially own approximately 78% of the outstanding shares of
Common Stock (under the maxi portion of the Offering) representing approximately
78% of the voting power of the Company controlled by Garry Oglesbee, (the
Company's Chairman, President and Chief Executive Officer). As a result Mr.
Oglesbee, will have the ability to affect the vote of the Company's stockholders
on significant corporate actions requiring stockholders' approval, including
mergers, share exchanges or sale of all, or substantially all, of the Company's
assets. With such voting power, Mr. Oglesbee will have the ability to delay or
prevent a change in control of the Company.

8
<PAGE>

NO PRIOR PUBLIC MARKET FOR COMMON STOCK
Prior to this Offering there has been no public market for the Common
Stock, and there can be no assurance that an active public market for the Common
Stock will develop or be sustained after the Offering. The initial public
offering price has been determined by the Company. The trading price of the
Company's Common Stock could be subject to significant fluctuations in response
to variations in quarterly operating results, the gain and loss of significant
orders, changes in earning estimates by analysts, announcements of technological
innovations or new products by the Company or its competitors, general
conditions in the industry, and other events or factors.

The Company intends to apply for a registration/listing on the OTC Bulletin
Board, an NASD-sponsored and operated inter-dealer automated quotation system
for equity securities not included in the Nasdaq SmallCap Market or National
Market, as well as in the NQB Pink Sheets published by the National Quotations
Bureau Incorporated. The OTC Bulletin Board has only recently been introduced as
an alternative to "pink sheet" trading of over the counter securities. There can
be no assurance that the OTC Bulletin Board will be recognized by the brokerage
community as an acceptable trading medium. In the absence of such recognition,
the liquidity and stock price of the Company's securities in the secondary
market may be adversely affected. There is no guarantee that the Company will be
able to meet the requirements of the OTC Bulletin Board and become listed on the
Bulletin Board. As of this time no broker-dealer has agreed to make a market in
the Company's securities.

SHARES ELIGIBLE FOR FUTURE SALE
No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock, or the availability of shares of Common Stock for future
sales will have on the market price of the Common Stock prevailing from time to
time. Sales of substantial amounts of Common Stock, or the perception that such
sales could occur, could adversely affect prevailing market prices for the
Common Stock and limit the Company's ability to raise additional capital. Upon
completion of this Offering the Company will have 1,850,000 shares of Common
Stock (minimum) or 1,950,000 shares of Common Stock (maximum) outstanding. The
100,000 shares (minimum) or the 200,000 shares (maximum) offered hereby will be
fully tradable without restrictions. All of the remaining 1,750,000 shares of
Common Stock outstanding are deemed to be "restricted securities" as that term
is defined under Rule 144, in that such shares were issued in private
transactions not involving a public offering. The Company, its officers,
directors, and/or certain other stockholders have agreed not to sell or
otherwise dispose of any shares of Common Stock for a period of 1 year after the
date of this Prospectus subject to Rule 144 of the Securities Act ("Rule 144").
Following the Offering an aggregate of 1,750,000 shares will be subject to these
restrictions. See "Shares Eligible for Future Sale"

POSSIBLE NEED FOR ADDITIONAL CAPITAL FINANCING
The net proceeds of this Offering will not be sufficient to expand the
Company and to provide for the implementation of the Company's Acquisition
Strategy. The Company's cash needs may vary significantly from its predictions
if it is unable to generate anticipated cash flow or its growth occurs faster
than anticipated. No assurance can be given that the Company's predictions
regarding its cash needs will prove accurate, nor that the Company, if able to
secure any required additional financing when needed, or at all, or that such
financing, if obtained, will be in terms favorable or acceptable to the Company.
If the Company is unable to obtain additional financing when needed, it could be
required to curtail its planned expansion and possibly reduce the scope of its
operations. The Company's inability to obtain needed financing could have a
material adverse effect on future operating results and any future growth and
operating results will depend on management's continuing ability to implement
its Acquisitions, Marketing, and Operating strategies, as to which no assurance
can be given. See "Use of Proceeds", See "Business".

NO SPECIFIC PROPERTIES/RAIL ASSETS CHOSEN

9
<PAGE>

LIMITATIONS ON TAKEOVERS
Certain provisions of the Company's Certificate of Incorporation and
By-laws may have the effect of discouraging a third party from making an
acquisition proposal for the Company and may thereby inhibit a change in control
of the Company under circumstances that could give the stockholders the
opportunity to realize a premium over the then prevailing market prices.
Specifically, mergers and certain other corporate actions require the approval
of two-thirds of the total votes represented by all Common Stock. The board is
expressly authorized to consider a variety of factors and constituencies in
determining the Company's best interests. In addition, under certain
circumstances, Section 203 of the Delaware General Corporate Law makes it more
difficult for an "interested stockholder" (generally a 15% stockholder) to
affect certain business combinations with the corporation for a three-year
period.

NO DIVIDENDS
TrueTraks, Incorporated has never paid cash dividends on the Common Stock
and has no present intention to declare or pay a cash dividend on the Common
Stock.

NO CREDIT
The Company presently has no line of credit with any banks or leading
institutions, nor can the Company guarantee any credit will be established in
the future. Investors should be aware that lack of credit and the need for
additional capital financing could cause adverse effects to the Company.

NO OPERATING REVENUE
There have been no revenues achieved by the Company to date. There can be
no guarantee that TrueTraks Incorporated will be successfully commercialized or
that the Company will achieve any operating revenues ever.

BROAD DISCRETION IN APPLICATION OF PROCEEDS
The principal purposes of this Offering is to finance the administrative
cost of the debt funding, begin implementation of the Company's Acquisitions
Strategy and provide funds for general corporate purposes. The Company has no
current specific plans for a significant portion of the proceeds of the working
capital. As a consequence, the Company's management will have broad discretion
over the proceeds for the foreseeable future.

NON-REGISTRATION IN CERTAIN JURISDICTIONS
The Company is applying for registration of this Offering in only four
states, New Mexico, Colorado, Texas and Georgia. The Offering may not achieve
the minimum amount to be sold or the maximum amount to be sold due to this
limited registration. Registration in only four states could also affect the
tradability of the common stock. This lack of tradability may have an adverse
effect on the amount of shares sold.

NO UNDERWRITER
TrueTraks Incorporated has chosen not to employ an underwriter for this
size of an Offering. This decision by the Company to not utilize an underwriter
poses the risk of not having an Errors and Omissions insurance policy normally
carried by an underwriter. There is also the risk of the whole Offering not
being sold out due to the lack of an underwriter.

NOTE: IN ADDITION TO THE ABOVE RISKS, BUSINESSES ARE OFTEN SUBJECT TO RISKS
NOT FORESEEN OR FULLY APPRECIATED BY MANAGEMENT. IN REVIEWING THIS
DISCLOSURE DOCUMENT POTENTIAL INVESTORS SHOULD KEEP IN MIND OTHER
POSSIBLE RISKS THAT COULD BE IMPORTANT.

USE OF PROCEEDS

The net proceeds to the Company from the Offering are to be $1,300,000
under the Maximum and $650,000 under the Minimum as there are no anticipated
Underwriting fees, discounts, or commissions. It is the Company's intention to
sell this issue under its own efforts, thereby increasing the net proceeds to
the Company. The expenses of the Offering have been prepaid by the stockholders
of the Company. None of the Company's stockholders will be selling stock under
this Offering.

The following table sets forth the use of the proceeds from this Offering:

10
<PAGE>

If Minimum Sold If Maximum Sold
--------------- ----------------
Amount % Amount %
------ -- ------ --
<S> <C> <C> <C> <C>
TOTAL PROCEEDS $650,000 100% $1,300,000 100%

LESS: OFFERING EXPENSES

Commissions and Finders Fees $ 0 0% $ 0 0%
Legal & Accounting ($77,500 Prepaid)* 0% ($77,500 Prepaid)* 0%

Copying & Advertising ($77,500 Prepaid)* 0% ($77,500 Prepaid)* 0%
Other 0 0% 0 0%

NET PROCEEDS FROM OFFERING $650,000 100% $1,300,000 100%
-------- ---- ---------- ----
USE OF NET PROCEEDS
Legal Fees $ 80,000 12.3% $150,000 11.5%
Advertising 10,000 1.5% 10,000 .8%
Travel 20,000 3.1% 40,000 3.0%
Printing-Brochures 10,000 1.5% 10,000 .8%
Salaries 150,000 23.0% 150,000 11.6%
Secure Debt Funding 250,000 38.6% 572,000 44.0%
Working Capital 130,000 20.0% 368,000 28.3%
-------- ------ ---------- ----
TOTAL USE OF NET PROCEEDS 650,000 100.0% 1,300,000 100.0%
-------- ------ ---------- ------
-------- ------ ---------- ------

</TABLE>

* THE EXPENSE OF THIS OFFERING, $155,000, HAS BEEN PREPAID BY THE
COMPANY. NO PROCEEDS FROM THIS OFFERING WILL BE USED TO PAY FOR ANY
EXPENSES OF THIS OFFERING.

The Company intends to use the net proceeds from this Offering to finance
the administrative costs of the debt funding, which is needed to purchase the
initial/base property, begin implementation of its acquisitions strategy and
working capital purposes. The acquisitions strategy stage will require the
Company to hire or retain the services of individuals with specific railroad
experience in the areas of acquisitions, due diligence, operations, marketing,
finance, and law. The Company will attempt to secure the services of these
types of individuals as soon as possible upon completion of the Offering. The
Company intends to become a fully operational railroad through the acquisition
of an initial/base property, which could be an existing regional, short-line
railroad and/or divested Class 1 rail line. The Company feels it can become a
fully operational railroad within 18 months after it acquires the initial
acquisition/base property. Beyond the Company's Acquisitions Strategy, the
Company intends to grow through the acquisition of existing regional, short-line
railroads, and/or divested Class 1 rail lines. These acquisitions may be by
asset purchase, stock purchase, lease, operating lease or any combination
thereof. The Company may manage rail assets for a non-affiliated third party,
for a fee or other type of compensation. As of the date of this Prospectus, no
acquisition is probable.

The proceeds that will be used for legal representation in the acquisition
of rail assets will be in the amount of $150,000 under the Maximum and $80,000
under the Minimum. Advertising by the Company, to promote the Company and its
services, will be $10,000 under the Maximum and $10,000 under the Minimum.
Travel by the Company's executives to appraise and negotiate with the various
rail property owners is $40,000 under the Maximum and $20,000 under the Minimum.
Printing costs for the Company's collateral material under the Maximum is
$10,000 and $10,000 under the Minimum. The executives will receive salaries
(collectively) from the Offering in the amount of $150,000 under the Maximum and
$150,000 under the Minimum.

The Company plans on using funds from working capital to secure leases for
office space, office equipment, computers, automobiles and possibly other
equipment which may be needed in the everyday course of business. These
equipment leases will be secured using part of the proceeds from the $368,000
under the Maximum and $130,000 under the Minimum These leases may be secured
through a commercial building leasing service or a realtor for the office space.
The Company may use various business retailers or distributors for the office
equipment and computers and through local automobile dealers for the auto
leases, depending on the best price at the time of leasing. Additional items
that may be needed will be leased from local or international companies
depending on the best price at the time of leasing.

11
<PAGE>

Working capital will be used to run the day to day operations of the
Company and would result in $368,000 under the Maximum and $130,000 under the
Minimum. A portion of the working capital may be used to assist in the securing
of the debt funding.

The Company plans to secure the debt funding by using funds from the
$572,000 under the Maximum, or $250,000 under the Minimum. The debt funding
should allow the Company to acquire its initial/base property. This Offerings
main purpose is to finance the debt funding the Company will need to acquire its
initial/base property. See "Business".

The Company will need additional funding to complete the initial/base
property acquisition and any additional properties the Company plans to acquire.
There can be no assurance made that this capital will be available to fund the
Company's initial acquisition or any further acquisitions planned in the
Company's Acquisitions Strategy. However, the Company has met with and received
a written commitment from a funding source in Fort Lauderdale, Florida for the
additional capital required to purchase the Company's initial acquisition. The
Company will need funding of up to $30M U. S. Dollars to complete the purchase
of the Company's initial/base acquisition. The Company feels, based on the
experience of the Officers and Directors, that it will require up to $30M to
purchase an initial/base property, purchase equipment and allow the Company to
have sufficient cash on hand to sustain the business until it is generating a
self-sustaining cash flow itself. See "Business - Financing/Funding. The funding
source in Fort Lauderdale, Florida, (the firm of Benelux Partners, Inc.) has
expressed an interest in funding other acquisitions that the Company intends to
pursue. Other funding sources for additional capital will be approached by the
Company at such time that additional acquisitions become imminent or probable.
See "Business"

The proceeds of this Offering after deducting cash used in the Company's
operations will not be adequate to fund all of the Company's plans. If adequate
funds are not made available, the Company may be required to delay, scale back
or eliminate parts of its development plan or obtain funds through arrangements
with collaborative partners or others that may require the Company to alter its
plans on ownership and/or control. If the Company was not able to secure the
additional debt financing, the Company presumably would not be able to secure
the initial/base property, begin implementation of its acquisition strategy and
never become a fully operational railroad. If this situation occurred the
Company would have to find another method of acquiring railroad assets, if
possible, and another method to generate revenue for the Company, if possible.
If these options were not feasible or even if they were feasible, the Company
may never come to fruition and/or become a profitable entity. These types of
situations could force the Company into financial distress or worse.

The net proceeds from the Offering will not be sufficient to fund the
development of the Company's Acquisitions Strategy for the next 12 months.
Additional funding will be required for the continuing development of the
Acquisition Strategy. The intended acquisition of the Company's initial/base
property should enable the Company to become a fully operational railroad. The
Company will require additional capital to acquire additional rail assets that
will be targeted, at some point in time, for purchase by the Company. While no
assurance can be given, the Company believes that it will be able to secure the
additional capital required to successfully implement its Acquisitions Strategy.
The Company believes it will be able to secure the additional capital to advance
its acquisition strategy because of the conversations between the Company,
Benelux Partners, Inc. and other potential lending sources. Proceeds not
immediately required for the purposes described above will be invested primarily
in United States Government securities or qualified money market funds. The
Company will need material amounts of funds from other sources to be used in
conjunction with the proceeds of this Offering.

The Company will have access to the Minimum (escrowed) portion of the funds
raised in this Offering, once the Minimum sale of shares has been reached, even
if the Company has not obtained the debt financing as of that date. It is highly
unlikely that the debt funding will be in place until after the Offering is
closed, either the minimum or the maximum portion. The Company will need the
funds from this Offering to pay for the administrative costs of the debt funding
that will allow the Company to acquire its initial/base property.

The foregoing represents the Company's best estimate of the net proceeds of
the Offering based on current planning and business conditions. The exact
allocation of the proceeds for the purposes set forth above and timing of the
expenditures may vary significantly depending upon numerous factors, the time
and cost involved in obtaining any regulatory approvals, the status of competing
entities, the establishment of sales and marketing capabilities and the
establishment of collaborative relationships with other parties, if necessary.

12
<PAGE>

DILUTION

MAXIMUM OFFERING
The net tangible book value of the Common Stock after a successful Maximum
Offering would be $0.65. Net tangible book value per share of Common Stock
represents the total tangible assets (total assets minus intangible assets)
reduced by total liabilities, divided by the number of outstanding shares of
Common Stock. After giving effect of this Offering by the Company of 200,000
shares offered hereby assuming an offering price of $6.50 per share, the pro
forma net tangible book value of the Common Stock, after deduction of selling
and offering expenses, would have been approximately $1,275,420 or approximately
$.65 per share. Thus purchasers of the shares offered hereby would have suffered
immediate dilution of $5.85 per share.

<TABLE>

<S> <C> <C>
Initial public offering price per share. . . $6.50
Net tangible book value per share at
July 31, 1997. . . . . . . . . . . . . . $0.00
Increase per share to attributable to
new investor . . . . . . . . . . . . . . $0.65
-----
Pro forma net tangible book value per
share after the offering . . . . . . . . . $0.65
-----
Dilution per share to new investors. . . . . $5.85
-----
-----
</TABLE>

MINIMUM OFFERING
The net tangible book value of the Common Stock after a successful Minimum
Offering would be $0.34. Net tangible book value per share of Common Stock
represents the total tangible assets (total assets minus intangible assets)
reduced by total liabilities, divided by the number of outstanding shares of
Common Stock. After giving effect of this Offering by the Company of 100,000
shares offered hereby assuming an offering price of $6.50 per share, the pro
forma net tangible book value of the Common Stock, after deduction of selling
and offering expenses, would have been approximately $625,420 or approximately
$0.34 per share. Thus purchasers of the shares offered hereby would have
suffered immediate dilution of $6.16 per share.

<TABLE>
<S> <C> <C>
Initial public offering price per share . . $6.50
Net tangible book value per share at
July 31, 1997 . . . . . . . . . . . . . $0.00
Increase per share to attributable to
new investor . . . . . . . . . . . . . $0.34
Pro forma net tangible book value after
this offering . . . . . . . . . . . . . . $0.34
-----
Dilution per share to new investors . . . . $6.16
-----
-----

</TABLE>

The following tables sets forth the number of shares of Common Stock
purchased from the Company, the total consideration paid and the average price
per share paid by existing shareholders and to be paid (at the initial public
offering price of $6.50 per share by purchasers of shares offered by the Company
hereby.)

MINIMUM OFFERING

Shares Purchased Total Consideration
---------------- ----------------------
Ave. Price
Amount Percent Amount Percent Per Share
--------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Existing Shareholders 1,750,000 94.6% $ 157,500 19.5% $ 0.09
New Investors 100,000 5.4% $ 650,000 80.5% $ 6.50

Total 1,850,000 100% $ 807,500 100%

</TABLE>

MAXIMUM OFFERING

Shares Purchased Total Consideration
---------------- ----------------------
Ave. Price
Amount Percent Amount Percent Per Share
--------- --------- --------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Existing Shareholders 1,750,000 89.7% $ 157,500 10.8% $ 0.09
New Investors 200,000 10.3% $ 1,300,000 89.2% $ 6.50

Total 1,950,000 100% $ 1,457,500 100%

</TABLE>

13
<PAGE>

DIVIDEND POLICY

The Company intends to retain all future earnings for use in the
development of its business and does not anticipate paying any cash dividends in
the foreseeable future. The payment of all dividends will be at the discretion
of the Company's board of directors and will depend upon, among other things,
future earnings, operations, capital requirements, the general financial
condition of the Company and general business conditions.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of July
31, 1997 and as adjusted to give effect to, among other things, the Offering (at
an assumed initial public offering price of $6.50 per share):

As of:
July 31, 1997 Minimum Maximum
------------- --------- ----------
<S> <C> <C> <C>
Long-term debt. . . . . . . . . . . $ 0 $ 0 $ 0
Short-term debt . . . . . . . . . . 0 0 0
Total debt . . . . . . . . . . 0 0 0
Stockholder's Equity:
Common Stock, $.05 par value,
2,000,000 shares authorized,
1,750,000 shares issued and
outstanding actual, as
adjusted (1) 1,850,000 shares
issued and outstanding
(minimum) 1,950,000 shares
issued and outstanding
(maximum) . . . . . . . . . . . 87,500 92,500 97,500
Additional paid-in capital . . 70,000 715,000 1,360,000
Deficit accumulated during
development stage . . . . . (27,113) (27,113) (27,113)
Total Stockholder's Equity. $130,387 $780,387 $1,430,387
-------- -------- -----------

Total Capitalization. . . . $130,387 $780,387 $1,430,387
-------- -------- -----------
-------- -------- -----------

</TABLE>

(1) At July 31, 1997, the Company had 1,750,000 common shares outstanding on a
fully diluted basis consisting of: (i) 1,750,000 shares issued and
outstanding; (ii) as adjusted common shares outstanding includes the sale
of 100, 000 shares for the Minimum Offering and the sale of 200,000 shares
for the Maximum Offering.

PLAN OF OPERATION

The Company was organized on March 31, 1997 and is in the development
stage. Since inception the Company has been engaged principally in
organizational activities, including developing a business plan, identifying and
having general discussions with regional and short-line railroad acquisition
candidates and potentially-divested Class 1 rail lines. The Company has also
been negotiating with lending sources to acquire additional capital for the
acquisition (s) that the Company wishes to secure. The Company has also been
identifying qualified management, consulting, and advisory personnel necessary
for the successful implementation of the Company's Acquisitions, Marketing and
Operating Strategies and working to establish the business opportunities within
the niche in which to focus the Company's efforts

The Company has generated no revenues as to date and does not expect to
generate meaningful revenues in the near future until such time, if ever, it has
acquired its "initial/base property" and is a fully functioning railroad. The
Company feels it can become a fully operational railroad within 18 months, after
it acquires the initial/base property. The Company has incurred a loss since its
inception, resulting in an accumulated deficit at July 31, 1997 of $42,580. The
Company anticipates that it will continue to incur losses for the foreseeable
future until such time, if ever, the Company is able to generate sufficient
revenues to finance its operations.

The Company's objective is to become a dominant provider of rail freight
transportation through the acquisition and consolidation of existing regional,
short-line and divested rail assets from Class 1 railroads. The rail

14
<PAGE>

assets that become targeted by the Company, either publicly or privately owned,
may be acquired via outright purchase, stock purchase, lease, operating lease or
other combination.

Following the completion of this Offering, the Company will move forward
with its Acquisition, Marketing and Operating Strategies. The Company intends to
acquire an initial/base property that would allow the Company to eventually
become a fully operational railroad. The Company would then attempt to acquire,
via asset purchase, stock purchase, lease, operating contract or appropriate
combination thereof, additional rail properties within the surrounding areas.
The Company then intends to acquire as many additional properties within the
region (surrounding areas) that it could. It would then attempt to combine the
acquired properties into a contiguous rail transportation system. The Company
would then apply its Marketing and Operating Strategies to the operation of the
rail system, contiguous or otherwise. The Company intends to begin a complete
and comprehensive rail line rehabilitation program, commensurate and appropriate
with existing traffic levels to increase reliability and enhance safety
conditions. The Company intends to simultaneously reduce operating expenses to a
level where maximum expense efficiencies are reached without compromising safety
or customer service. The Company will attempt to generate sufficient levels of
revenue and profitability to allow the Company to continue to explore new
business and railroad acquisitions opportunities that are consistent with its
Marketing and Operating Strategies.

The funds received from this Offering will not be sufficient to satisfy the
cash needs of the Company for the next twelve months. The Company will need
additional funding after the Offering closes to acquire the initial/base
property, which is discussed throughout this Prospectus. The Company intends to
use the net proceeds from this Offering to finance the administrative costs of
the debt funding that the Company will need to acquire its initial/base property
and to begin implementation of its acquisitions strategy that should eventually
allow the Company to become a fully-operational railroad and for working capital
purposes.

Over the next twelve months the Company intends to add employees on an
as-needed basis. In addition to the initial management team, the Company, upon
completion of this Offering, intends to secure the services of individuals with
specific expertise in the railroad acquisitions due diligence process, railroad
operations, transportation marketing, logistics and railroad law. These
individuals' prior involvement/employment in the rail industry may bring to the
Company, important contacts and relationships within the Class 1 and
regional/short-line railroad communities. These individuals will work during the
Company's ongoing Acquisitions Strategy to focus the process of identifying
acquisition opportunities, perform the due diligence analysis needed to
determine acquisition price and operating strategy, and to conduct marketing
studies and shipper interviews to identify what additional opportunities for
revenue growth are available.

It is the Company's intent to acquire an existing regional or short-line
railroad and utilize the property as its initial/base property. Thus, the
initial management, operating, marketing, and the administrative work force will
already be in place. As additional railroads or rail lines are acquired, the
organizational structure will evolve, by absorbing, where practical, operating
employees of each acquired railroad.

BUSINESS

INDUSTRY SUMMARY
Since 1980 the railroad industry in the United states has undergone
significant changes due to the passage of the Staggers Rail Act of 1980 (the
"Staggers Rail Act") The 1980 Staggers Rail Act fundamentally changed Federal
regulatory policy by emphasizing the promotion of "revenue adequacy" (the
opportunity to earn revenues sufficient to cover cost and to attract capital)
for the railroads and allowing competition to determine, to a greater extent,
rail prices and route service options. Since 1980, Class 1 railroads in the U.S
and Canada have taken steps to improve profitability and increase their market
share. The Class 1 railroads have focused their capital resources on their core
system, which is the long haul sector. Certain Class 1 railroads have sold
branch lines/short-lines to smaller operators, who have lower overheads and are
willing to commit the resources necessary to service the shippers/customers on
the branch lines. The divestment of the branch lines/short lines allows Class 1
carriers to minimize capital expenditures, improve efficiency while avoiding
traffic losses and the long drawn out legal processes involved with abandonment.

Out of this environment was created a host of smaller regional and
short-line railroads that could afford to operate profitably where the larger
carriers could not, due to their much lower overhead and operating cost
structures. While able to operate on a profitable basis, many of these
newly-created regional and short-line railroads

15
<PAGE>

simply did not have the excess capital or access to capital required to expand
and improve their physical plant and equipment resources. As a result, many of
these new regional and short-line railroads took on a "custodial" transportation
role; providing continued service for selected shippers that remained on-line,
but limited, by lack of capital or management resources as to their ability to
upgrade their physical plant or transportation services in order to compete for
new traffic sources.

A new wave of merger activity appears to be taking place within the
railroad industry. In 1995, the Burlington Northern and Santa Fe railroads
merged. In 1996, the Union Pacific and Southern Pacific railroads merged and in
1997 the Norfolk Southern and CSX railroads have agreed to buy and divide the
Conrail railroad system. In 1998 the Canadian National and the Illinois Central
are contemplating a merger. These completed and proposed mergers could result,
as they have in the past, in a new wave of rail line divestitures by these new,
larger entities, as they focus their resources on their most profitable core
routes.

As the remaining Class 1 railroads look to rationalize non-priority
portions of their rail systems, they will be looking to divest those rail line
assets to other railroad operators. These railroad operators will be required
to have the capital and management resources to continue to operate these rail
lines efficiently, maintain the physical plant, and be willing to work
cooperatively with the Class 1 railroads to create a structured and seamless
interchange of traffic to and from these divested rail lines.

CURRENT CORPORATE STATUS

PRESENT STATUS
The Company is currently a non-operating/development stage company. The
activities of the executives to-date have been: 1.) identifying regional,
short-line railroad acquisition candidates and potentially-divested Class 1 rail
lines; 2.) identifying and negotiating with lending sources to acquire
additional capital for possible acquisitions that the Company wishes to secure;
3.) identifying qualified management, consulting, and advisory personnel
necessary for the successful implementation of the Company's Acquisitions,
Marketing and Operating Strategies; and 4.) working to establishing the business
opportunities within the niche in which to focus the Company's efforts.

The Company intends to begin a complete and comprehensive rail line
rehabilitation program, commensurate and appropriate with existing traffic
levels to increase reliability and enhance safety conditions. The Company
intends to simultaneously reduce operating expenses to a level where maximum
expense efficiencies are reached without compromising safety or customer
service. The Company goal would be to generate sufficient levels of revenue and
profitability to allow the Company to continue to explore new business and
railroad acquisitions opportunities that are consistent with its Marketing and
Operating Strategies.

CURRENT MANAGEMENT TEAM
GARRY G. OGLESBEE
Mr. Garry G. Oglesbee is the Founder, Chief Executive Officer and a
Director of the Company. Please see "Management" for a complete resume of Mr.
Oglesbee, located on page 22.

LEONARD R. MITCHELL
Mr. Leonard R. Mitchell is the Vice-President and a Director of the
Company. Please see "Management" for a complete resume of Mr. Mitchell, located
on page 22.

ADDITIONAL MANAGEMENT
In addition to the initial management team, the Company acquisitions
strategy stage will require the Company to hire or retain the services of
individuals with specific railroad experience in the areas of: acquisitions, due
diligence, operations, marketing, finance, and law. The Company will attempt to
secure the services of these types of

16
<PAGE>

individuals as soon as possible upon completion of the Offering. These
individuals, prior involvement/employment in the rail industry may bring to the
Company important contacts and relationships within the Class 1 and
regional/short-line railroad communities. These individuals will work during the
Company's ongoing Acquisitions Strategy to focus the process of identifying
acquisition opportunities, perform the due diligence analysis needed to
determine acquisition price and operating strategy, and to conduct marketing
studies and shipper interviews to identify what additional opportunities for
revenue growth are available.

After successful implementation of the Acquisitions Strategy, the Company
anticipates it will continue to employ a staff of full-time and contract
personnel whose function is to evaluate additional acquisitions opportunities
and revise the base Company structure to allow for effective expansion.
Employees will be added on an as-needed basis as the business dictates.

LICENSE AND REGULATORY CONSIDERATIONS
TrueTraks, Incorporated will be subject to regulations by the Surface
Transportation Board (STB), the Federal Railway Administration (FRA), State
Departments of Transportation, and various state and local regulatory agencies
once it becomes an operating railroad company. The STB is the successor to
certain regulatory functions previously administered by the Interstate Commerce
Commission (ICC). Established in 1995 by Congressional Act, the STB has
jurisdiction over service levels and compensation of rail carrier for rail car
use by other railroads, authorizing extension or rail line abandonment,
acquisition of rail lines, and consolidation, merger or acquisition of control
of rail carriers. The STB may also review rail carrier pricing only in the event
of a complaint concerning transportation rates where there is an absence of
competition.

The FRA has jurisdiction over safety and railroad equipment standards and
also assists in the coordination of projects for railroad route simplification.
The FRA regulates nearly all aspects of railroad operations. These regulations
can be found in the Federal Code of Regulations Title 49. These regulations
include, but are not limited to, safety rules, locomotives, car and track
inspection, hours of service, engineer certification, drug and alcohol testing
for covered employees, accident reporting (injuries and derailment), record
keeping and track maintenance.

The Department of Transportation also regulates the Company's trucks and
drivers for proper licensing of individuals who are engaged in track and
equipment maintenance.

If the Company did not comply with all the regulations of appropriate
regulatory agencies the Company may be forced to cease operations temporarily or
permanently. The Company could also be fined or face other disciplinary actions
brought by regulatory bodies. The governing regulatory bodies may also pass
additional regulations that may make it difficult or impossible for the Company
to continue operations. Any of the above mentioned actions, or other possible
actions brought against the Company by the regulatory authorities, may be
detrimental to the Company.

STRATEGY

GENERAL
TrueTraks, Incorporated intends on becoming a fully functioning rail
transportation company and a major provider of rail freight transportation in
the regions of the country where it eventually will serve. It intends to
accomplish this goal through the acquisition and consolidation of existing
regional, short-line or divested Class 1 rail lines in the regions of the
country the Company intends to serve.

The acquisition and consolidation of existing regional and short-line
railroads could provide opportunities to generate new levels of revenue,
profitability and more efficient customer service through the elimination of
duplicate costs and functions. It may also provide the opportunity to generate
more efficient single-line rail transportation service for a greater number of
customers and the opportunity to gain a longer line-haul and a greater share of
the transportation revenue for goods moving through the region on the Company's
combined rail system. The acquisition and consolidation of existing regional and
short-line railroads may also provide the opportunity to attract new customers
through the efficiencies gained by establishing a single, contiguous regional
rail transportation system.

The Company's strategy is to acquire existing regional, short-line
railroads and rail lines divested by Class 1 railroads in geographic regions of
the country and combine them into a contiguous railroad system within that
region. The Company's fundamental acquisition strategy is to identify properties
that have large industrial

17
<PAGE>

customers that can provide the Company with a stable revenue base and the
potential to generate revenues and additional customers upon the implementation
of a focused market plan. In new areas that the Company plans to enter, the
Company intends to select rail properties that have adequate size to establish a
presence in the area, provide a basis of growth for the area and have the
availability to attract qualified management. In areas the Company already would
have a presence, the Company intends to select properties that it believes the
implementation of a revised operating plan is likely to generate a significant
operating efficiency, which ultimately should lead to increased revenues. The
properties that would be selected in the areas that the Company already has a
presence in, also must have large industrial customers that have the potential
to generate revenues. The goal of these "regionally-specific" railroad entities
would be to provide consistent, quality rail transportation services and to work
aggressively within the region to identify, develop and promote industrial and
economic development opportunities that utilize rail transportation as a primary
transportation source.

The Company intends to engage itself cooperatively with connecting Class 1
railroads to maximize the benefits to them by providing a rail "feeder" system
and the Company intends to further work cooperatively with non-railroad
transportation entities to develop strategic transportation partnerships.

ACQUISITION SOURCES
Over the last 15 years, a large number of regional and short-line railroads
were created as larger rail entities (often-times Class 1 railroads) divested
portions of their rail infra-structure that they deemed as marginal, too
expensive to maintain or superfluous due to a merger with another railroad. Many
of these regional and short-line railroads were created by operating entities
whose primary desire was to maintain rail service for a selected number of
customers on-line. In many cases, the customers themselves created a shipper's
consortium to purchase and operate the divested rail lines to ensure continued
rail service.

The number of regional and short-line railroads continues to grow, and is
expected to grow at an accelerated pace if the current wave of merger activity
continues between the Class 1 rail carriers. This continued merger activity
creates the opportunity for additional divestiture candidates by the Class 1
railroads. It is within this current and growing number of existing regional,
short-line and eventually divested Class 1 rail lines, that the Company will
apply its Acquisitions Strategy.

The Company has identified numerous rail properties in various geographic
regions that could fit into the Company's acquisition strategy and allow the
Company to acquire and combine some of these selected rail properties into a
larger contiguous regional rail system. In the various areas of the country
which the Company desires to employ its Acquisitions Strategy, the Company has
spent time conducting trips, meeting local, state and government officials, and
holding meetings with shippers and economic development groups to share its
proposal to create a regional rail transportation system. The information gained
by the Company during these meetings has provided a broad base of information
which has been, and will be, used in the development of acquisitions proposals
once the Offering is completed and will eventually be incorporated in the
Marketing and Operating Plans.

The continued merger activity among the remaining Class 1 railroads could
eventually cause these larger railroads to shift their operating focus away from
serving the local and regional markets that they once served prior to their
merging. The Company would generate revenue by positioning itself as the
dominant rail carrier within a geographic region and expanding the rail service
to those once-served by a Class 1 railroad, or by assuming service on rail lines
once owned by a Class 1 railroad. The Company should be able to compete for the
acquisition of divested sections of Class 1 rail lines after it has established
itself as a dependable and experienced railroad operating company. The
acquisition and operation of existing regional and short-line railroad
properties may provide the Company the necessary credibility to compete for
acquisition of divested Class 1 rail lines when they become available.

Some of the railroads, which the Company could acquire after the completion
of the offering, are owned by entities that do not have the financial resources
and/or the incentive to dramatically improve the rail infrastructure. Rail line
maintenance and rehabilitation are required to maintain reliable and safe
service, and to expand potential service options. The Company will take a
long-term view on the rehabilitation of the railroads that it may purchase. The
business value of a combined system such as the Company envisions could provide
both the financial resources and the business incentive to bring rail line
infrastructure improvements within a five-to-seven year time frame.

The Company sees opportunity throughout the entire United States to
implement its Acquisitions Strategy. Various regions of the country which
appear, based upon the availability of connectable regional and short-line
railroad properties and potential Class 1 rail line divestitures, would be: 1.)
the near-West region, encompassing

18
<PAGE>

such states as Kansas, Colorado, New Mexico, and Utah; 2.) Northeast,
encompassing such states as New York, New Jersey, and the New England area; 3.)
the Southeast, encompassing such states as The Carolinas, Tennessee, and
Kentucky; and 4.) Midwest, encompassing such states as The Dakotas, Minnesota,
Iowa, Indiana, and Ohio While these are general regions which the Company has
identified as having the greatest near-term opportunities to implement the
Company's Acquisitions Strategy, it will not rule out other geographic locales,
provided they fit within the niche that the Company has defined.

ACQUISITION COMPETITION
There are currently a number of publicly and privately held companies that
are involved in the ownership and operation of regional and short-line railroads
in numerous geographic locations. The primary competitors for the Company's
goals and objectives are: Genesee and Wyoming Corporation, RailTex Industries,
OmniTRAX, RailAmerica, and Pioneer Railcorp and possibly others. These companies
own and operate several hundred to several thousand miles of rail lines
throughout the United States, and have the advantages of an established track
record, established relationships with Class 1 railroads and established lines
of credit and financing facilities.

Not all of the primary competitors seem to have a corporate strategy
similar to that of the Company. RailTex, Pioneer Railcorp, OmniTRAX, and
RailAmerica tend to focus their acquisitions on smaller short-line and switching
railroads with under $10 million in revenues. These competitors tend to grow
their business by diversification of geographic location as opposed to maximum
expansion within a defined geographic location.

The prime competitor whose historical corporate acquisitions and operations
strategy most closely mirrors that of the Company is Genesee and Wyoming
Corporation. With the supply of available regional and short-line railroads and
the potential for additional rail line divestiture by the Class 1 railroads,
there could be an ample availability of acquisition candidates for the Company,
which could mitigate any direct competitive effects.

Typically the Company would bid against other short line and regional
operators for available properties. Based upon economic and strategic
considerations, the seller would determine the structure/price of each
transaction. In addition to the financial terms of the transaction, sellers may
consider more subjective criteria such as a prospective purchaser's operating
experience or management's experience in the railroad industry.

The Company intends to compete with the trucking industry by hauling large
volumes of commodities at a lower cost per ton/mile and provide on time service
to meet the customers needs. These factors coupled with a lower cost and greater
fuel efficiency should allow the Company to compete with the trucking industry.
The Association of American Railroads has computed fuel efficiencies and found
locomotives are three (3) times as fuel efficient as trucks and can haul greater
loads longer distances, which should produce considerable fuel savings for the
Company.

The Company intends to compete within the rail industry by charging a lower
price per ton/mile. The Company intends to operate with a reduced crew, which
would consist of an engineer and conductor. The Company intends to have lower
horsepower locomotives and less costly locomotives, which should allow the
Company to have a very competitive rate structure.

ACQUISITION COSTS/CONSIDERATIONS
Purchase prices for railroads and divested Class 1 rail lines are arrived
at through negotiations based upon several industry norms. The various methods
center around three basic industry guidelines: 1.) Multiple-to-Revenue generated
on-line, 2.) $1.00 lease per year plus a percentage of business interchange
charges should rail traffic be diverted to a different railroad, 3.) Net
Liquidation Value of the Base, which is the scrap value of the track structure
and underlying land values. Historically, acquisitions of divested Class 1 track
and outright acquisition of an existing regional or short-line railroad have
been based on a multiple of gross revenues. Recent transaction costs have ranged
from between 1.5 times to 2.5 times gross revenues. These figures will often
include equipment, but everything is negotiable. The multiple to revenues paid
can be adjusted up or down by several factors, including: track condition,
maintenance requirements, diversity and stability of customer base, seasonality
of the business, connecting rail carriers, assumption of certain liabilities and
expected financial returns.

The Company, in evaluating acquisition opportunities, would consider, among
other things, the size of the rail operations, customer and commodity
diversification, connecting carriers, revenue stability, track and maintenance
requirements, opportunities for expansion and financial returns. The Company
would also consider

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<PAGE>

acquisition opportunities that would have the potential to enable the rail line
to provide better or more cost effective service to major shippers or to
increase or diversify the overall customer make-up of the railroad.

The Company's strategy will be to acquire railroads by asset purchase,
stock purchase, leasing, operating rights or any appropriate combination
thereof, using the lowest multiple to gross revenues possible, yet insuring that
all underlying real estate and underground and air rights are included in any
purchase. The advisory and consulting staff hired during the Acquisitions Stage
should help to insure the maximum level of success in this area.

The decision to abandon, sell, or otherwise cease operational interest in
certain track by Class 1 railroad management can arise for numerous reasons. One
major factor in that decision is based upon how much and what type of traffic is
carried on the property. If the traffic on the railroad or rail line segment is
primarily concentrated in the hands of a single customer, the price paid must
reflect the potential risk of the loss of the key customer. If the Class 1 rail
line acquisition includes equipment (locomotives and rail cars), the sales price
will be adjusted to reflect those equipment assets.

The definitions of available rail lines divested by Class 1 railroads can
be described by the three terms utilized industry-wide: The first term is
"scrap". If the property under consideration for divestiture carries less than
20 rail cars per mile per year, the owning railroad will consider this property
to be scrap unless it provides other strategic benefits to maintaining
ownership. The second term is "sell as marginal". If a rail line carries less
than 30 rail cars per mile per year, the railroad will consider the sale of this
property due to its marginal profitability, unless it provides some other
strategic benefit to the Class 1. The operational costs on Class 1 railroads and
many large regional railroad operating companies make continued operations of
these low-traffic properties not viable from an economic standpoint. The third
term is "keep as profitable". If the rail line carries more than 30 cars per
mile per year, the Class 1 will typically consider retaining this property
unless there is some strategic or resource allocation benefit that can be
derived from its sale or lease.

As additional railroads and divested Class 1 rail lines are added to the
initial/base acquisition, line haul distances for traffic will be expanded,
thereby improving revenues-per-ton-mile. Equipment utilization will be improved
by operating locomotives greater distances and by expanding the number of
originating customers that can utilize Company-owned or-leased freight car
equipment. As additional properties are added, overhead costs should be reduced
by the consolidation of administrative, accounting, maintenance, marketing and
other management functions.

SUMMARY
An opportunity may currently exist to acquire independently owned regional
and short-line railroads in various geographic regions and combine them into a
single contiguous regional rail transportation system. Furthermore, the
railroad industry could experience further merger and consolidation activity
among the Class 1 railroads. In time, this could make available for purchase or
lease portions of former Class 1 track that can be operated profitably by an
entity whose focus is more regional in nature and has a lower overhead expense
than a Class 1 railroad.

This acquisition and merger trend could eventually result in a national
rail system composed of a few coast-to-coast railroads, and smaller, regionally
specific "feeder" rail systems. While this system exists partially today in the
current railroad environment, this trend could accelerate in the comings years,
and will require a greater level of cooperation and coordination between all
rail transportation service providers to deliver a seamless level of service to
the customer.

The Company intends to operate in any region of the country where the
potential exists to acquire several existing regional, short-line and divested
Class 1 rail lines, and combine these acquisitions into a larger contiguous
regional rail transportation system. While the Company has had general
discussions with various regional and short-line acquisition candidates, no
formal purchase agreements or Letters of Intent for the purchase of rail assets
have been executed to-date.

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<PAGE>

FINANCING/FUNDING

The Company will need additional funding after the offering closes to
acquire the initial/base property, which is discussed throughout this
Prospectus. The debt funding will be for an amount of up to $30M U.S. Dollars.
The Company feels, based on the experience of the Officers and Directors, that
it will require $30M to purchase an initial/base property, purchase equipment
and allow the Company to have sufficient cash on hand to sustain the business
until it is generating a self-sustaining cash flow itself. The Company intends
to use the proceeds of this Offering, either the $650K minimum or the $1.3M
maximum, to finance the administrative costs of the debt funding, begin
implementation of the Company's acquisition strategy and for working capital
purposes.

The Company has met with and received a written commitment from a funding
source in Fort Lauderdale, Florida for the additional capital required to
purchase the Company's initial/base property. There will be certain
administrative fees, legal, accounting, travel, consulting, etc. that will be
incurred by the Company in the process of acquiring the debt funding to secure
the base property. These expenses will be paid out of the use of proceeds.

The Firm Funding Commitment is based upon certain conditions being met.
First, The Company must substantiate there is adequate collateral available to
meet the lenders requirements. Second, the Company must substantiate that the
property has a sufficient cash flow, or will have, in a time frame sufficient to
handle the debt load of the loan and other everyday monetary obligations. Third,
the Company must complete the SB-2 filing with the Securities Exchange
Commission and at least close the minimum portion of the Offering. Fourth, the
Company must pay any necessary fees that pertain to the debt funding. Fifth, the
property must pass the due diligence investigation of the lender. Sixth, there
may be certain other conditions that arise during the funding process that the
Company will have to fulfill to complete the financing.

Once the Company has acquired its initial/base property it will proceed
with the process of attempting to acquire additional rail properties. The
funding source in Fort Lauderdale, Florida, (the firm of Benelux Partners, Inc.)
has also expressed an interest in funding other acquisitions that the Company
intends to pursue. Other funding sources for additional capital will be
approached by the Company at such time that additional acquisitions becomes
imminent. The Company's executive officers and directors have many years'
experience in the rail industry and have acquired numerous contacts throughout
the rail industry. The contacts and the experience of the officers and directors
in the rail industry may help the Company stay informed of rail assets that are
on the market or will be coming on the market.

Debt financing for rail assets may be the most viable method for the
Company to use in acquiring rail assets. The most viable form of debt financing
could be a type of convertible debt. This convertible debt would allow the debt
holders the option to convert their interest payments, principal payments or a
combination of these two into an equity position in lieu of receiving cash. This
debt structure could help the Company if a cash flow shortage occurred, at some
point in time. There is no guarantee that this is the debt structure the Company
and Benelux Partners Inc. will agree on to be used as the debt vehicle.

There can be no assurances made that additional capital will be available
to fund the Company's initial/base acquisition or any further acquisitions
planned by the Company. Such funding, if available, may be on terms unfavorable
to the Company, have restrictions on future acquisition and/or restrictions on
future uses of capital or other restrictions that may be unfavorable for the
Company.

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<PAGE>

MARKETING

It is the Company's intent to acquire an existing regional or short-line
railroad and utilize the property as it's initial/base property. Thus, the
initial management, operating, marketing, and the administrative work force will
already be in place. As additional railroads or rail lines are acquired, the
organizational structure will evolve, by absorbing, where practical, operating
employees of each acquired railroad.

The Company's intended marketing plan is designed to work synergistically
with the operational plan. The Company's operational plan has various objectives
which are, maximizing the profitability of the current revenue base of each
railroad acquired, increasing the revenue traffic on each acquired railroad,
creating operational and customer service efficiencies. These objectives also
include developing traffic and revenue synergies through the combined contiguous
regional rail transportation entity and generating incremental revenue growth by
attracting smaller customers and providing ancillary services that generate
non-freight revenues.

TARGET MARKETING
Upon becoming a fully operational railroad operating company, the Company
intends to implement an aggressive marketing campaign in the regional markets
that it intends to serve. The Company intends to utilize a well-trained,
knowledgeable and pro-active marketing team experienced in understanding and
explaining the benefits of rail transportation services to potential customers.
The Company also intends to develop creative and/or expanded transportation
solutions for the current customer base. The Company intends to direct its
marketing efforts towards manufacturers, inter-modal trucking companies,
agricultural firms, commodity producing industries, municipalities, and
industrial/economic development authorities whose transportation needs are not
being fully met, or whose businesses could expand or diversify through the
application of greater transportation efficiencies.

The Company intends on being pro-active in working with our customers to
provide new or additional transportation services. Personal involvement by the
Company's operational, marketing and customer service professionals will
emphasize the value that the Company places on the customers' business. The
Company anticipates personal relationships with customers can be established
that will strengthen the Company's opportunity to foster long-term customer
loyalty.

Upon becoming a fully-operational railroad, the Company intends to develop
additional transportation and logistics strategies that should improve the
customers' ability to move their products to their customers and to customize
existing services to meet specialized customer demands. This strategy should
complement our customer service philosophy and foster customer loyalty. This
strategy should also allow the Company to capture and retain a greater portion
of the customers' transportation needs.

Upon becoming a fully-operational railroad, the Company may seek alliances
with other railroads for the purpose of conducting mutually beneficial business.
These alliances could be beneficial to the expected growth in revenue traffic
that could be carried by the Company's future railroads. These alliances could
result in additional profit for the Company. The Company intends to work
cooperatively with other transportation modes to develop partnerships designed
to leverage each other's inherent strengths. By developing these relationships
with Class 1 carriers, other regional and short-line railroads and other
non-rail transportation entities, new sources of revenue traffic and higher
levels of profitability could eventually be realized.

OPERATIONS

REVENUE
The railroad industry is an interconnected network of track. As a result,
rail cars that originate on one railroad will often travel over the track of
another or several railroads. In these cases, the railroad that has the foreign
rail cars traveling on their property are charged a daily rate (known as "Car
Hire") by the owner of the rail car. This daily rate is incumbent upon the rail
car owner to track and collect. The coordination of the interchange of rail cars
is done through the Association of American Railroads (AAR) by means of
electronic data interchange. Once the Company acquires its first railroad, it
will earn car hire income on equipment that it owns or leases that travels over
other railroads. The Company will also earn revenue for the repair of
foreign-owned freight car equipment that requires repair while traveling on the
Company's rail system. Billing for this service is through AAR-established rates
and is remunerative.

<PAGE>

Although some traffic may both originate and terminate on Company-owned
rail lines, most traffic will be received or forwarded via interchange with
other railroads. For customer convenience, only one rate is quoted on traffic
moving over multiple railroads and only one railroad is responsible for the
billing and collection of revenues. The revenue collected must be divided
between all railroads participating in the traffic move, with that division
being accomplished by one of the following methods: Revenue may be collected by
negotiation between railroads; an established division of revenue agreement; a
dictated allowance from a Class 1 railroad to a short-line railroad; an
established switching allowance in major terminal areas; or a set
fee-for-haulage agreement.

INSURANCE
The Company intends to carry or obtain insurance coverage for losses
arising from personal damages in the event of derailments or other accidents or
occurrences. The Company may also carry excess liability insurance policies that
would provide supplemental coverage for losses in excess of the primary policy
limits. The Company's liability policy would also cover certain aspects of
hazardous commodities and personal injury issues. The Company also plans to
carry all-risk property damage insurance coverage. The Company plans to carry
sufficient insurance coverage to handle most situations; however; in the event
of a catastrophic situation, the Company may not have sufficient insurance
coverage to adequately cover the liability. If this type of situation occurred
the Company could be adversely effected.

CONTRACTS
Once a railroad acquisition has taken place, the Company will assume
certain contractual conditions. Historically, when an acquisition takes place,
all marketing contracts with shippers remain in effect, trackage rights remain
in effect and all leases on property or adjacent property are assigned to the
new owner. Should a shipper have certain negotiated pricing with a
current-servicing Class 1 railroad, those arrangements remain in effect.

ENVIRONMENTAL
The Company's intended operation will be subject to various federal, state
and local laws and regulations relating to the protection of the environment
which have and will become increasingly stringent. These environmental laws and
regulations, which are implemented principally by the Environmental Protection
Agency (EPA) and equivocal state agencies, govern the management of hazardous
wastes, the discharge of pollutants in the air and into surface and underground
waters and the disposal and manufacture of certain substances. Any expense
incurred in maintaining compliance with current environmental laws and
regulations should not have a material effect on the Company's earnings or
expenditures. However, there can be no assurance that the current regulatory
environment will not change, or unforeseen environmental incidents will not
occur, or that past non-compliance with environmental laws and regulations will
not be discovered on Company property or acts committed by the Company were in
non-compliance by the Company. The Company may be acquiring property that may
have environmental considerations and potential remediations. Prior due
diligence should reveal this aspect, and the eventual purchase price will be
adjusted to reflect the potential expenses for the remediation of any
environmental issues.

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The Company's Officers and Directors have more than 140 years of Experience
in the Rail Industry. During the railroad careers of Messrs. Eidson, Mitchell,
Wiles, Chappue and Oglesbee they have built many relationships. These
relationships range from highly placed officers in Class 1 and short line rail
lines to administrative and line managers and other middle level managers in the
rail industry. These relationships also include governmental agencies, shippers,
political officials, railroad consultants and human resource consultants. There
are many other relationships that are too numerous to disclose. These
relationships may provide a wide range of necessary and future contacts to help
the Company achieve its desired results.

Information regarding the Company's Directors and Executive Officers as of
the date of this Prospectus, is as follows:

<PAGE>

Name Age Position
---- ---- ---------
<S> <C> <C>
Garry G. Oglesbee . . . . . 56 Chairman, President, Chief
Executive Officer, Director
Leonard R. Mitchell . . . . 53 Vice-President, Chief
Operating Officer, Director

</TABLE>

GARRY G. OGLESBEE
Mr. Oglesbee was named Chief Executive Officer of the Company effective
March 31, 1997. Mr. Oglesbee is a 1973 graduate of LaSalle University, Chicago,
Illinois, where he received his degree in Business Management. Prior to
attending LaSalle University, Mr. Oglesbee attended Barstow Community College,
Barstow, California, where he studied Civil Engineering and Mathematics. Mr.
Oglesbee also is a Certified Locomotive Electrician, he completed his
apprenticeship in 1964 with the Atchison and Topeka, Santa Fe Railway Apprentice
School where he attained a 4.0 GPA and finished in the top 10% of his class.

Prior to accepting this position, Mr. Oglesbee was an independent
consultant in his own firm, Rail Transportation Consulting Inc., providing
executive level focused services to the rail transportation industry. The
focused services Mr. Oglesbee offered his clients included planning new rail
services, operational improvements, Federal Railroad Administration Regulations,
facilities planning and development, computer systems requirements, locomotive
engineering training, and scheduling.

Prior to operating Rail Transportation Consulting Inc., Mr. Oglesbee spent
over 30 years with the Atchison and Topeka, Santa Fe Railway. Mr. Oglesbee
spent 22 years in positions of responsibilities and management. Mr. Oglesbee is
a federally licensed locomotive engineer and designated supervisor of locomotive
engineers (DSLE). He left Santa Fe in 1994 as the Manager of Train Operations,
Trainmaster of five subdivisions Gallup East, Gallup West, Lee Ranch, Defiance,
and Coranoda and Springerville. His responsibilities also included management of
all Yard and Local Train Operations in Gallup that encompassed the supervision
of over 600 personnel.

Mr. Oglesbee's other achievements are the establishment and conduction of
the locomotive maintenance training program including solid state and transistor
theory. He was responsible for the development and implementation of the "split
yard" concept which allows for storage and operations to coexist thereby
reducing switching time and increasing revenue which realized a 46% ROI in 3
years. Mr. Oglesbee was also responsible for the design and implementation of
track switching layouts to serve the paper mill industry providing for efficient
loading, unloading, and turnaround that realized $5 million in annual revenues.
He designed and implemented train schedules and crew training to move 11 million
tons of coal annually from 2 mines to 5 power plants representing 35% of Santa
Fe's coal business with a 96% on-time delivery and zero injuries in 3 years of
operation. He was responsible for the re-design of the operations plan for
service to industrial customers thereby increasing on-time service to 89% and
crew reduction costs by 22%. Additionally, Mr. Oglesbee implemented the Federal
Engineer licensing certification program and personally certified 35 Engineers
in less than 12 months

LEONARD R. MITCHELL
Mr. Mitchell was named Vice-President and Chief Operating Officer for the
Company effective August 1, 1997.

Mr. Mitchell is a 1972 graduate of Eastern New Mexico University of
Portales, New Mexico where he received his Bachelor of Science degree. Mr.
Mitchell also is a graduate of the Westinghouse Air Brake School, the Santa Fe
Locomotive Engineer Training School and the Nashville Diesel Mechanics School.

Mr. Mitchell has over 34 years experience in the Railroad Industry. Mr.
Mitchell starting with the Santa Fe Railroad as a Locomotive Fireman in 1963 and
progressed through the positions of Locomotive Engineer, Operating Assistant and
Safety Supervisor. As Safety and Transportation Supervisor for the Santa Fe
Railroad from 1974 to 1976 Mr. Mitchell was responsible for safety and training
programs for various railroad divisions. He was responsible for maintaining and
developing budgets, interpreting and dealing with F.R.A. regulations and dealing
and directing large staff organizations.

In 1977 Mr. Mitchell became an Assistant Trainmaster and in 1976 became a
relief Assistant Superintendent. In 1981 Mr. Mitchell became a Rules Examiner
and in 1987 became a Manager of Rules for the Santa Fe Railroad. In 1991 Mr.
Mitchell became the designated supervisor of Locomotive Engineers and in 1993

<PAGE>

became the Assistant Superintendent of Operations for the Santa Fe Railroad. Mr.
Mitchell at the present time is still employed by the Omnitrax railroad as
Superintendent of Operations.

LILLY BETER
Lilly Beter is president of Lilly Beter Capital Group, Ltd. with offices in
Washington, DC, Minneapolis and Century City, Los Angeles. The firm was founded
over thirty years ago when she had been associated with her late husband, Dr.
Peter David Beter in his law firm until his death in 1987. During that time, Dr.
Beter had been General Counsel for the Export-Import Bank of Washington,
co-founded a mining exploration company (SODESMIR) in Zaire and represented
financial interests internationally. Ms. Beter provided government
representation to their clients.

She has lived abroad extensively and has a global perspective representing
companies in the Pacific Rim countries, South America, Europe and the Caribbean.
Ms. Beter is on the Board of Directors of various national and international
companies and a member of the American League of Lobbyists and the American
Arbitration Association.

MICHAEL CHAPPUE
Mr. Chappue was named Director effective March 31, 1997. Mr. Chappue
attended the University of Pittsburgh for Mechanical and Electrical Engineering.
He served in the Army from 1967 to 1969, from which he was honorably discharged.

Mr. Chappue served his apprenticeship as locomotive electrical apprentice
for the Missouri Pacific Railroad from 1964 till 1967. Mr. Chappue was employed
by Southern Pacific Railroad as a Locomotive Electrician from 1969 till 1971.
Pima Mining Company also employed him as lead electrician from 1969 till 1971.
In 1971, Utah International employed him as Lead Electrician and Supervisor
until 1972. In 1972, he was the Electrical Superintendent for the Peabody Coal
Company until 1974. From 1974 till 1975 he was the Electrical Superintendent for
the Arch Mineral Corporation. From 1975 till 1976 he was the Electrical
Superintendent for the Wierton Ice and Coal Company.

Mr. Chappue, from 1976 till 1978 was the Electrical Superintendent for the
Peabody Coal Company in Black Mesa, Arizona. From 1978 till 1989, he was the
Electrical Superintendent for Chevron Minerals Corporation. In 1989, Mr. Chappue
was Vice-President of Industrial Power and Equipment Company. This company was a
service organization for field and shop electrical service and engineering,
railroad and mining servicing. From 1992 till 1996 he was Superintendent of the
motive power division, as a Contractor and Supervisor, for Arizona and
California Railroad. In 1996, Mr. Chappue formed and became the President of
Motive Power LTD., a company that specializes in locomotive electrical repairs
and modifications.

LONNIE EIDSON,
Mr. Eidson was named Director effective March 31, 1997. Mr. Eidson served
four years in the United States Marine Corp, He was honorably discharged in
March of 1949. In 1950 he was employed by the Santa Fe Railroad at Belen, New
Mexico.

Mr. Eidson started as switchman, then a Yardmaster. In 1962 he was promoted
to the position of General Yardmaster, which is responsible for all operations
of a railroad terminal. From 1964 till 1965, he held the position of Acting
Trainmaster at different locations on the division.

In 1966 he was promoted to Trainmaster and worked out of Clovis, New Mexico
and San Bernardino, California. He was also an Assistant Superintendent in
Carlsbad, New Mexico. In 1967 he received a certificate from the University of
Southern California, Institute of Business Economics, for achievements in
business economics. In 1972 he was appointed Division Superintendent of the Los
Angeles Terminal Division. After six years at this position he was transferred
to the Albuquerque Division Headquarters at Winslow, Arizona. In 1988 he was
transferred to Amarillo Texas as Division Superintendent of the plains division.
On August of 1989 Mr. Eidson retired from Santa Fe Railroad where he has worked
for over 39 years.

WILLIAM T. MUTH
Mr. Muth was named director and secretary effective March 31, 1997. Mr.
Muth has spent his business career engaged in growth and entrepreneurial
companies that have been on the leading edge of business and industry trends.
Mr. Muth completed a five-year professional baseball career with the Montreal
Expos and the New

25
<PAGE>

York Mets baseball organizations. Mr. Muth worked for three years in the
planning and analysis group of Connecticut General Insurance Company in
Davenport Iowa where he accomplished President's Club qualifications all three
years.

Mr. Muth entered the communications industry with ROLM Corporation in 1983
in large systems marketing. During his nine-year career with the ROLM product
line he was honored as Sales Person of the year twice, managed two vertical
markets in higher education and health care, and was a product manager and part
of the 9005 Product Announcement team in 1990. Mr. Muth left his position at
ROLM to start EBS, a physician computing company in Chicago in 1992, and grew
the business rapidly supporting over 200 doctors within two years. Upon
successful sale of EBS in 1994, Mr. Muth began financial consulting with
start-up and expanding entrepreneurial firms.

Among his other qualifications, he has executive negotiation and consulting
experience, strong analytical, financial and marketing skills, Mergers and
Acquisitions experience, business development and competitive industry analysis
skills. Mr. Muth has also been trained as an ISO 9000 lead auditor. Mr. Muth
attended Elmhurst College in Elmhurst IL. and Northwestern University in
Evanston IL. from 1989 to 1992, where he studied Marketing, Finance and
Economics.

JACK L. WILES
Mr. Wiles was named a director effective July 1, 1997. Mr. Wiles is a 1963
graduate of Texas Tech University, Lubbock, Texas where he received a Bachelor
of Science degree in Biology and Physical Sciences. He also received a degree in
International Business and Economics from the University of Southern California
in 1980.

Mr. Wiles was in the United States Air Force from 1963 till 1969. He
graduated pilot training in 1964 and when he was honorable discharged in 1969 he
held the rank of captain.

From 1969 till 1973 he was Assembly Supervisor for Texas Instruments. He
was responsible for the assembly of certain weaponry ordered by the U.S.
Government.

From 1973 till 1978 Mr. Wiles was a locomotive engineer. From 1979 till
1988 he held the position of Road Foreman of Engines. This position included the
training and evaluating of locomotive engineers.

From 1988 till 1996 he held the position of Assistant Superintendent
Operating. In this position Mr. Wiles managed 2 to 4 sub-divisions, with an
operating budget from $40 to $85 million dollars. He administered discipline
programs, set operating priorities and was responsible for personnel
development. Some of his accomplishments in this position are as follows.
Designed switching operations and track layout for two paper and OSB mills. He
was selected to teach a four-month course at the locomotive training facility
located in Topeka, Kansas in 1995. He also designed an efficiency test form for
use in field-testing and it is in use today.

Since 1997 he has pursued contract work within the Short Line rail
industry. He is a manager with demonstrated ability to administer all facets of
the rail industry. He has experience in operations on both division and
sub-division levels.

KEY MAN INSURANCE
The Company plans to obtain "key man" insurance policies on its officers at
the completion of this Offering. The loss or incapacity of any of the Company's
management to perform their functions at the present time or in the foreseeable
future before a qualified replacement is found could have a material adverse
effect on the Company's operation. The Company, at the present time, does not
have key man life insurance policies in place on the officers of the Company.

BOARD OF DIRECTORS COMPOSITION
The Company's By-laws authorize the Board to designate the number of
directors. The Company currently has seven directors. All directors hold office
until the next annual meeting of the stockholders or until their successors have
been elected and qualified. Officers serve at the discretion of the Board of
Directors. Each of the Company's officers and directors, other than non-employee
directors, devotes substantially full time to the affairs of the Company. The
Company's non-employee directors, when elected or appointed, will devote such
time to the affairs of the Company as is necessary to discharge their duties.
There are no family relationships between any of the director's executive
officers or key employees of the Company.

26
<PAGE>

BOARD OF DIRECTORS COMMITTEES
The Company's Board of Directors plans in the near future to establish a
Compensation Committee and an Audit Committee. The Compensation Committee would
establish salaries, incentives and other forms of compensation for directors,
executive officers and key employees of the company, and administer various
other incentive compensation plans than may be instituted in the future. The
Audit Committee would oversee the work performed by the Company's independent
auditors and review the Company's internal audit controls.

DIRECTOR COMPENSATION
The Company does not currently pay any cash director's fees, but it will
pay the expenses of its directors in attending board meetings. The non-employee
directors of the Company may, in the future, be entitled to cash compensation or
compensation through stock options or warrants. The Employee Directors will not
be entitled to cash Director's fees but will have their expenses paid, if
required, to attend board meetings.

LIMITATIONS ON DIRECTORS' AND OFFICERS' LIABILITY
The Company's Certificate of Incorporation provides that directors of the
Company shall not be personally liable to the Company or its stockholders for
monetary damages for breach of fiduciary duty as a director except for liability
(i) for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General Corporation Law,
or (iv) for any transaction from which the director derived an improper personal
benefit. The effect of these provisions will be to eliminate the rights of the
Company and its stockholders (through stockholders' derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of
fiduciary duty as a director (including breaches resulting from grossly
negligent behavior), except in the situations described above. These provisions
will not limit the liability of directors under federal securities laws.

The Company's Certificate of Incorporation provides that the Company shall
indemnify its directors, officers, employees and agents to the fullest extent
permitted by law. The Company believes that such indemnification covers gross
negligence on the part of the indemnified parties. The Company's Certificate of
Incorporation also permits it to secure insurance on behalf of any director,
officer, employee or agent against any expense, liability or loss arising out of
his or her actions in such capacity.

The Company intends to obtain directors' and officers' liability
insurance ("D&O Insurance") after the effective date of this Offering, and
expects to continue to carry D&O Insurance following this Offering. In addition,
the Company has entered into an indemnification agreement with each of its
directors and officers under which the Company has indemnified each of them
against expenses and losses incurred for claims brought against them by reason
of being a director or officer of the Company.

The Company through the limitation of liability, indemnification provisions
in its Certificate of Incorporation, D&O Insurance and the indemnification
agreements will enhance the Company's ability to continue to attract and
retain qualified individuals to serve as directors and officers. There is no
pending litigation or proceeding involving a director, officer or employee of
the Company to which the indemnification provisions would apply.

LEGAL PROCEEDINGS
TrueTraks, Incorporated is not a party to any legal proceedings.

EXECUTIVE COMPENSATION

The following table reflects all forms of compensation for services to the
Company. No executive officer, director or significant employee will receive
compensation that will exceed $150,000 per annum for the first fiscal year the
Company is in operation. There has been no remuneration for services to the
officers of the Company prior to the completion of this Offering. The Company
has accrued wages for the executive officers of the Company commencing on March
31, 1997.

27
<PAGE>

Long-Term Compensation
----------------------
Annual Compensation Awards Payouts
-------------------- ------- -------

Other Securities All
Annual Restricted Underlying LTIP Other
Salary Bonus Compensation Stock Options/ Payouts Compensation
Year ($)(3) ($)(1)(3) ($)(2)(3) Awards ($) SARs (#) ($) ($)(2)(3)
---- ------- --------- ------------- ----------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Garry G. Oglesbee 1997 $75,000 * * - - - *
Chief Executive Officer 1998 $75,000 * * - - - *
President

Leonard R. Mitchell 1997 $75,000 * * - - - *
Chief Operating Officer 1998 $75,000 * * - - - *
Vice-President

</TABLE>

(1) Each officer of the Company is eligible to receive annual bonus awards
totaling not more than 2% of gross sales on any given month, based on the
achievement of performance established by the Board of Directors.
(2) Will consist of premiums paid by the Company on life and health insurance
polices.
(3) No officer, director or employee will receive compensation in excess of
$150,00 for the first fiscal year of operations.
* The value of this compensation can not be determined at this time. No bonus
projections have been figured or insurance policy premiums or other types
of compensation have been calculated at this time.

MANAGEMENT BONUS PLAN
The Company has established a Management Bonus Plan pursuant to which key
management personnel of the Company are eligible to receive cash bonuses based
upon achievement of specified targets and goals for the Company and for the
particular employees. Each officer of the Company is eligible to receive annual
bonus awards totaling not more than 2% of gross sales on any given month, based
on the achievement of performance criteria established by a bonus review
committee consisting of members of the Board of Directors of the Company.

DIRECTOR COMPENSATION
The Company does not currently pay any cash director's fees, but it will
pay the expenses of its directors in attending board meetings. The non-employee
directors of the Company may, in the future, be entitled to cash compensation or
compensation through stock options or warrants. The employee directors will not
be entitled to cash director's fees but will have their expenses paid, if
required, to attend board meetings.

EMPLOYMENT AGREEMENTS
The Company presently has five-year employment agreements with Messrs.
Oglesbee and Mitchell. Each employment agreement has a five-year term. Pursuant
to the agreements, each officer receives a specified annual salary which may, at
the discretion of the Board, be increased in light of performance, inflation or
other factors. Each officer may also be entitled to receive an annual bonus
based on the Company's performance, awarded at the discretion of the Board based
upon the attainment of mutually agreed upon performance goals. Performance goals
of the Company for purposes of calculating bonus payments are not specified in
the employment agreements but rather are determined on a yearly basis by mutual
agreement between the Board and the officers. Additionally, pursuant to such
employment agreements, Messrs. Oglesbee and Mitchell have entered into
Confidentiality, Non-Compete and Proprietary Rights Agreements.

STOCK OPTION PLAN
The Company currently has no stock option plans in force for officers,
directors and/or employees of the Company. Any such plan must be adopted by the
Board of Directors and approved by the shareholders. The Board of Directors
Compensation Committee would administer these types of plans. The Company, at
some time in the future, may institute a stock option plan or a variant of a
stock option plan for the officers, directors and/or employees of the Company.

OTHER COMPENSATION
The Company has tentative plans to offer to the officers, directors and/or
employees of the Company, in the future, health insurance, life insurance and
possibly other forms of compensation. There have been no decisions or plans
made on implementation of these other methods of compensation for officers,
directors and/or employees.

<PAGE>

PRINCIPAL SHAREHOLDERS

The following table sets forth as of July 31, 1997 and as adjusted to
reflect the sale of shares of the Company's Common Stock in this offering,
certain information with respect to beneficial ownership of the Common Stock by
(i) each person or entity known by the Company to own beneficially more than 5%
of the Common Stock, (ii) each director of the Company, (iii) each executive
officer of the Company named in the summary compensation table, and (iv) all
directors and officers as a group. Except if indicated in footnotes to this
table, each of the persons named in the table have sole voting and investment
power with respect to all shares of Common Stock shown as beneficially owned by
them.

SHARES BENEFICIALLY SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED BEFORE OWNED AFTER OWNED AFTER
THE OFFERING THE OFFERING THE OFFERING
----------------------- ------------------------ -----------------------
MINIMUM MAXIMUM
-------- --------
NUMBER PERCENT(4) NUMBER PERCENT(4) NUMBER PERCENT(4)
-------- ----------- ---------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS
AND/OR BENEFICIAL OWNERS

Garry G. Oglesbee(1)(2)(3) 1,750,000 100% 682,000 36.9% 682,000 34.9%

Leonard R. Mitchell(1)(2)(3)(5) 0% 50,000 2.7% 50,000 2.6%
0

Lilly Beter(2)(3)(5) 0% 600,000 32.5% 600,000 30.7%
0

Motive Power Ltd.(5)(6) 0% 50,000 2.7% 50,000 2.6%
0

Lonnie Eidson(2)(3)(5) 0% 84,000 4.5% 84,000 4.3%
0

Karl Benz(5) 0% 100,000 5.4% 100,000 5.1%
0

Dr. George Gavrell(5) 0% 100,000 5.4% 100,000 5.1%
0

Nelda Oglesbee(5) 0% 34,000 1.8% 34,000 1.8%
0

William T. Muth(2)(3) 0 0% 0 0% 0 0%

Jack Wiles(2)(3)(5) 0 0% 50,000 2.7% 50,000 2.6%

Michael T. Chappue(2)(3) 0 0% 0 0% 0 0%

All directors and officers as a
group (7 persons) 1,750,000 100% 1,466,000 79.2% 1,466,000 75.2%

</TABLE>

DETAIL OF OWNERSHIP OF TRUETRAKS INCORPORATED HELD BY
MOTIVE POWER LTD. COMMON STOCK

Michael T. Chappue (6) 0 0% 50,000 2.7% 50,000 2.6%
49545 Hopi Drive
Parker, Arizona 85344

</TABLE>

29
<PAGE>

(1) The address of the executive officers are as follows:
Garry G. Oglesbee Leonard Mitchell
1408 Kit Carson Drive 1509 Sundance
Gallup, NM 87301 Wichita, KS 67230

(2) A Director of the Company.

(3) The addresses of the Directors are as follows:
Garry G. Oglesbee Leonard Mitchell Lilly Beter
1408 Kit Carson Drive 1509 Sundance 3925 Excelsior Blvd. #5
Gallup, NM 87305 Wichita, KS 67230 St. Louis Park, MN. 55416

William T. Muth Lonnie Eidson Michael Chappue
4N 608 High Meadow Road 4570 Valancius Way 49545 Hopi Dr.
St. Charles, IL 60174 Lake Montezuma, AZ 86342 Parker, AZ 85344

Jack Wiles
12940 Basswood Lane
Beaumont, TX 77713

(4) Percentage calculation is based upon 1,750,000 shares outstanding (actual)
as of July 31, 1997. The minimum percentage calculation is based upon
1,850,000 shares outstanding after the Offering and the maximum percentage
calculation is based upon 1,950,000 shares outstanding after the Offering.
There are no options, warrants or rights to purchase securities
outstanding.

(5) Will receive shares from Mr. Oglesbee open completion of this offering.
These shares are to be considered partial compensation for the funds loaned
to Mr. Oglesbee by the Officers, Directors and/or future shareholders. See
"Shares Beneficially Owned After the Offering".

(6) Michael T Chappue owns 100% of the stock of Motive Power Ltd.

</TABLE>

Certain Officers, Directors and future shareholders will be receiving
shares of Common Stock from Garry G. Oglesbee. These Officers, Directors and
future shareholders are receiving their equity ownership in the Company, shares
of Common Stock, for loaning Mr. Oglesbee money to capitalize the Company and
for performing certain services/tasks that Mr. Oglesbee needed performed. See
"Shares Beneficially Owned After the Offering - Minimum" located in the table
preceding this paragraph. Mr. Oglesbee will repay the Officers, Directors and
future shareholders the funds that were loaned to him in full. Mr. Oglesbee
received loans from the following Officers, Directors and/or future Shareholders
in the following amounts; Lilly Beter $30,000, Leonard Mitchell $15,000, Lonnie
Eidson $5,000, Karl Benz $30,000, Motive Power Ltd. $15,000, Dr. George Gavrell
$30,000. Nelda Oglesbee and Jack Wiles performed pre-formation services for the
Company. Mr. Oglesbee invested $30,000 of his own funds prior to receiving loans
from other Officers, Directors and future shareholders that he used to
capitalize the Company. See "Shares Beneficially Owned After the Offering -
Minimum" located in the table preceding this paragraph The distribution of the
shares of Common Stock to certain Officers, Directors and future shareholders is
to be considered part of the repayment plan for the funds borrowed by Mr.
Oglesbee. The shares of Common Stock that Mr. Oglesbee is distributing to
certain Officers, Directors and future shareholders is to be considered 144
stock. This 144 stock that the certain Officers, Directors and future
shareholders will receive will be subject to a lock-up agreement and will be
held by the transfer agent for a period of one year from the date of
distribution.

SUMMARY OF CERTAIN TRANSACTIONS

OFFICER OR TRANSACTION VALUE AMOUNTS TO
DIRECTOR RECEIVED BE
(IN STOCK) RECEIVED
(IN CASH)
<S> <C> <C> <C>
Garry G. Garry G. Oglesbee contributed cash in 1,750,000 None
Oglesbee the amount of $157,500 for
organizational expenses and to
capitalize the Company.

</TABLE>

<PAGE>

The Company has no plans to enter into any transactions with or make any
advances to or from officers, directors or stockholders of the Company. In the
future, the Company will not engage in any transactions with its officers,
directors or five percent shareholders or their affiliates unless the
transaction is approved by a majority of the disinterested directors of the
Company after full disclosure and will be on terms no less favorable to the
Company than would be available from an affiliated third party.

DESCRIPTION OF CAPITAL STOCK

GENERAL
The Company's Certificate of Incorporation provides that the authorized
capital stock of the Company consists of 2,000,000 shares of Common Stock, par
value $0.05 per share. Upon consummation of the Offering, 1,850,000 shares of
Common Stock will be issued and outstanding under the Minimum, and 1,950,000
shares of Common Stock will be issued and outstanding under the Maximum. The
Company's Certificate of Incorporation does not authorize any shares of
Preferred Stock.

The following summary description of the securities of the Company is
qualified in its entirety by reference to the Articles of Incorporation
("Articles") of the Company, a copy of which is filed as an exhibit to the
Registration Statement of which this Offering Circular is a part. The By-laws
have been adopted by the stockholders and the Board of Directors of the Company.

COMMON STOCK
The issued and outstanding shares of Common stock are, and the shares
offered hereby when issued in accordance with the terms of this Offering will be
validly issued, fully paid and non-assessable. Holders of Common Stock are
entitled to one vote for each share held of record on all matters submitted to a
vote of the shareholders. The holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available for that purpose. In the event
of a liquidation, dissolution or winding up of the Company, the holders of
Common Stock are entitled to share ratably in all assets remaining after payment
of liabilities then outstanding. Holders of Common Stock have no preemptive
rights, conversion rights, subscription rights or cumulative voting rights to
any securities. There are no redemption or sinking fund provisions applicable to
the Common Stock.

PREFERRED STOCK
The Board has the authority to authorize and issue shares of Preferred
Stock in one or more series and to fix the designations, relative powers,
preferences, rights, qualifications, limitations and restrictions of all shares
of each such series, including without limitation dividend rates, conversion
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences, and the number of shares constituting each series, without any
further vote or action by the stockholders. Shares of Preferred Stock that are
so designed may have rights which are superior to those of Common Stock. The
issuance of Preferred Stock could decrease the amount of earnings and assets
available, or adversely affect the rights and powers, including voting rights,
of the holders of Common Stock. The issuance of Preferred Stock also could have
the effect of delaying, deferring or preventing a change in control of the
Company without further action by the stockholders, may discourage bids for the
Common Stock at a premium over the market price of the Common. At present the
Company has no plans to authorize or issue any Preferred Stock.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW CERTIFICATE OF INCORPORATION AND BYLAWS
The Certificate of Incorporation provides that, effective upon the closing
of this offering, all stockholder actions must be effected at a duly called
meeting and not by a consent in writing. The Bylaws provide that the Company's
stockholders may call a special meeting of stockholders only upon a request of
stockholders owning at least 50% of the Company's capital stock. These
provisions of the Certificate of Incorporation and Bylaws could discourage
potential acquisition proposals and could delay or prevent a change in control
of the Company. These provisions are intended to enhance the likelihood of
continuity and stability in the composition of the Board of Directors and in the
policies formulated by the Board of Directors and to discourage certain types of
transactions that may involve an actual or threatened change of control of the
Company. These provisions are designed to reduce the vulnerability of the
Company to an unsolicited acquisition proposal. The provisions also are intended
to discourage certain tactics that may be used in proxy. However, such
provisions could have the effect of

<PAGE>

discouraging others from making tender offers for the Company's shares and, as a
consequence, they also may inhibit fluctuations in the market price of the
Company's shares that could result from actual or rumored takeover attempts.
Such provisions also may have the effect of preventing changes in the management
of the Company.

DELAWARE TAKEOVER STATUTE
The Company is subject to Section 203 of the Delaware General Corporation
Law ("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (i) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
(ii) upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (iii) on or subsequent
to such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66% of the outstanding voting stock
that is not owned by the interested stockholder.

Section 203 defines business combination to include: (i) any merger or
consolidation involving the corporation and the interested stockholder; (ii) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation involving the interested stockholder; (iii) subject to certain
exceptions, any transaction that results in the issuance or transfer by the
corporation of any stock of the corporation to the interested stockholder, (iv)
any transaction involving the corporation that has the effect of increasing the
proportionate share of the stock of any class or series of the corporation
beneficially owned by the interested stockholder, or (v) the receipt by the
interested stockholder of the benefit of any loans, advances, guarantees,
pledges or other financial benefits provided by or through the corporation. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this Offering, the Company will have 1,850,000 shares
of Common Stock outstanding (minimum) and 1,950,000 shares of Common Stock
outstanding (maximum). Of these shares, the 100,000 shares (minimum) or the
200,000 shares (maximum) sold in this Offering will be freely tradable without
restriction or further registration under the Securities Act, except that any
shares purchased by "affiliates" of the Company, as that term is defined under
the Securities Act ("Affiliates"), may generally only be sold in compliance with
the limitations of Rule 144 described below.

SALES OF RESTRICTED SHARES
The remaining 1,750,000 shares of Common Stock are deemed "Restricted
Shares" under Rule 144. The number of shares of Common Stock available for sale
in the public market is limited by restrictions under the Securities Act. On the
date of this Offering Circular, no shares other than the 100,000 shares
(minimum) or the 200,000 shares (maximum) offered hereby will be eligible for
sale.

In general, under Rule 144 of the Securities Act as currently in effect,
beginning 90 days after this Offering, a person (or persons whose shares are
aggregated) who has beneficially owned "restricted" shares for at least one
year, including a person who may be deemed an Affiliate of the Company, is
entitled to sell within any three-month period a number of shares of Common
Stock that does not exceed the greater of 1% of the then-outstanding shares of
Common Stock of the Company and the average weekly trading volume of the Common
Stock during the four calendar weeks preceding such sale. Sales under Rule 144
of the Securities Act are subject to certain restrictions relating to manner of
sale, notice and the availability of current public information about the
Company. A person who is not an Affiliate of the Company at any time during the
ninety days preceding a sale, and who has beneficially owned shares for at least
two years, would be entitled to sell such shares immediately following this
Offering without regard to the volume limitations, manner of sale provisions or
notice or other requirements of Rule 144 of the Securities Act. However, the
transfer agent may require an opinion of counsel that a

<PAGE>

proposed sale of shares comes within the terms of Rule 144 of the Securities Act
prior to effecting a transfer of such shares.

Prior to this Offering, there has been no public market for the Common
Stock of the Company and no predictions can be made of the effect, if any, that
the sale or availability for sale of shares of additional Common Stock will have
on the market price of the Common Stock. Nevertheless, sales of substantial
amounts of such shares in the public market, or the perception that such sales
could occur, could adversely affect the market price of the Common Stock and
could impair the Company's future ability to raise capital through an offering
of its equity securities.

SELF-UNDERWRITING

This Offering will be Self-Underwritten to save the commission expenses
incurred by using an independent underwriter.

The sales of this Offering will be through this Prospectus only. This
Prospectus is the only official document of this Offering. No officer or
director will receive compensation or commission from the sales of this
Offering. The Officers and Directors are indemnified through the Company's
Certificate of Incorporation. See "Management, Limitations on Director's and
Officer's Liability". This Offering will only be sold by the following officers
of the Company:

<TABLE>
<S> <C>
Garry G. Oglesbee Leonard Mitchell
P.O. Box 5065 15029 Sundance
Gallup, New Mexico 87305 Wichita, Kansas 67230

</TABLE>

Prior to the Offering made hereby, there has been no public market for the
Common Stock. Accordingly, the initial public offering price has been
arbitrarily determined by the Company. Among the factors considered were the
Company's results of operations, current financial conditions, estimates of the
business potential and prospects of the Company, the market for the Company's
products, the experience of the Company's management, the economics of the
industry in general, the general condition of the equities market, market
conditions for new offerings of securities and the prices of similar securities
of comparable companies and other relevant factors. There can be no assurance
that any active trading market will develop for the Common Stock or as to the
price at which the Common Stock may trade in the public market from time to time
subsequent to the Offering made hereby.

ESCROW ACCOUNT

The Board has made the decision that FIRSTAR BANK of Minnesota N.A. Trust
Division, St. Paul MN, will be used for the impound of funds generated by this
Offering, pending the effective date of the Prospectus. They will hold in escrow
all proceeds from this Offering until the Minimum $650,000 (the sales of 100,000
shares) has been obtained. At that time, under the pending agreement, FIRSTAR
BANK of Minnesota N.A. Trust Division, St. Paul MN., will release the funds to
the general fund account of TrueTraks, Incorporated, although the Company will
continue to sell the offering to reach the Maximum $1,300,000 (the sale of
200,000 shares) from the date of effectiveness to 180 days. These funds once
released will then be used as described in the Use of Proceeds. See "Use of
Proceeds".

<PAGE>

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Bartz & Bartz, 6750 France Avenue South, Suite 350,
Edina, Minnesota 55435 Certain legal matters in connection with the Offering
will be passed upon for the Company by Bartz & Bartz, 6750 France Avenue South,
Suite 350, Edina, Minnesota 55435.

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is Commercial
Transaction Center Ltd., 3925 Excelsior Boulevard, Suite 5, St. Louis Park
Minnesota 55416.

EXPERTS

The balance sheet as of July 31, 1997 and the related statements of Income
(Loss) and Retained Earnings (Deficit), stockholders' equity and cash flows
included in this Prospectus and the related financial statements included
elsewhere in the registration statement of which this Prospectus is a part, have
been included herein in reliance on the reports of Curtis Forse, an independent
Certified Public Accountant, 5304 - 367 Court, North Branch, Minnesota 55056,
given upon the authority of Curtis Forse as an expert in auditing and
accounting.

<PAGE>

TRUETRAKS INCORPORATED
INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . F-2
Balance Sheet at July 31, 1997 (audited) . . . . . . . . . . . . . . . . . F-3
Statement of Income (Loss) and Retained Earnings (Deficit)
for the Four Months Ended July 31, 1997 (audited). . . . . . . . . . . . F-4
Statement of Changes in Stockholders' Equity for the
Four Months Ended July 31, 1997 (audited). . . . . . . . . . . . . . . . F-5
Statement of Cash Flows for the Four Months Ended
July 31, 1997 (audited). . . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . F-7

F-1
<PAGE>

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders
TrueTraks, Incorporated
Gallup, NM. 87301

I have audited the accompanying balance sheet of TrueTraks, Incorporated as
of July 31, 1997, and the related statements of Income (Loss) and Retained
Earnings (Deficit), stockholders' equity and cash flows for the four months
ended July 31, 1997. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on this
financial statement based on my audit.

I have 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 presents fairly,
in all material respects, the financial position of TrueTraks, Incorporated as
of July 31, 1997, and the results of its operations and its cash flows for the
four months ended July 31, 1997 in conformity with generally accepted accounting
principles.

- ---------------------------
Curtis Forse CPA
North Branch, MN.55056
September 29, 1997
Revised February 20, 1998

F-2
<PAGE>

TRUETRAKS, INCORPORATED
BALANCE SHEET
July 31, 1997

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Current Assets:
Cash in Bank $ 420
---------
Intangible Assets
Deferred Offering Costs 154,500
Organizational Costs 500
Less: Accumulated Amortization (33)
---------
Total Intangible Assets 154,967
---------

TOTAL ASSETS $ 155,387
---------
---------

LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities
Accrued Salaries $ 25,000
---------

TOTAL LIABILITIES 25,000
---------

STOCKHOLDERS' EQUITY

Common Stock, $.05 par value 2,000,000 Shares $ 87,500
authorized, 1,750,000 shares
issued and outstanding

Additional Paid in Capital 70,000

Retained Earnings (Deficit) (27,113)
---------

Total Stockholders' Equity 130,387
---------

Total Liabilities and Stockholders' Equity $ 155,387
---------
---------
</TABLE>

F-3
<PAGE>

TRUETRAKS, INCORPORATED
STATEMENT OF INCOME (LOSS) AND RETAINED EARNINGS (DEFICIT)
For the Four Months Ended July 31, 1997

<TABLE>
<CAPTION>
OPERATING EXPENSES

<S> <C>
Amortization $ 33
Bank Charges 63
Dues & Subscriptions 55
Meetings 234
Professional Fees 448
Travel 177
Office Supplies 270
Telephone 833
Accrued Wages 25,000

Net Income (Loss) (27,113)

Retained Earnings, Beginning 0
----------

Retained Earnings (Deficit), Ending ($ 27,113)
----------
----------

Weighted average common and
common equivalent shares outstanding 1,750,000

Income (Loss) per share $ (.02)
----------

TOTAL NET INCOME (LOSS) PER SHARE $ (.02)
----------
----------

</TABLE>

F-4
<PAGE>

TRUETRAKS, INCORPORATED
CHANGES IN STOCKHOLDERS' EQUITY
For the Four Months Ended July 31, 1997

Common Stock Additional Total
--------------------------- Paid-in Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Balance as of January 1, 1997 0 $ 0 $ 0 $ 0 $ 0

Common Stock issued at 1,750,000 $ 87,500 $ 70,000
$.09 per share

Net Loss (27,113)
------------ ------------ ------------ ------------ ------------

Balance as of July 31, 1997 1,750,000 $ 87,500 $ 70,000 ($ 27,113) $ 130,387
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------

</TABLE>

F-5
<PAGE>

TRUETRAKS, INCORPORATED
STATEMENT OF CASH FLOWS
For the Four Months Ended July 31, 1997

<TABLE>
<S> <C>
Cash Flows From Operating Activities:
Net Income (Loss) $(27,113)
Adjustments to reconcile Net Income (Loss)
to net cash provided from operating activities:
Depreciation & Amortization 33
Increase in Accrued Salaries 25,000
--------

Net Cash Flows (used) by Operating Activities: (2,080)
--------

Cash Flows From Investing Activities:
Purchase of Assets (155,000)
--------

Net Cash Flows (used) by Investing Activities: (155,000)
--------

Cash Flows From Financing Activities:
Proceeds From Issuance of Stock 157,500
--------

Net Cash Flows Provided by Financing Activities: 157,500
--------

Net Increase in cash 420
Cash - Beginning of Period 0
--------
Cash - End of Period $ 420
--------
--------

</TABLE>

<PAGE>

TRUETRAKS, INCORPORATED
NOTES TO THE FINANCIAL STATEMENT
JULY 31, 1997

NATURE OF BUSINESS

The Company intends to build regionally-specific rail entities via purchase,
lease, or combination purchase-leasing of existing rail operations and/or rail
lines deemed expendable by larger (typically "Class 1") rail entities.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The summary of certain significant accounting policies of TrueTraks Incorporated
is presented to assist in understanding the Company's financial statements. The
financial statements and notes are representations of the Company's management
which is responsible for their integrity and objectivity. These accounting
policies conform to generally accepted accounting principles and have been
consistently applied in the preparation of the financial statements.

USE OF ESTIMATES

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

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Costs of maintenance, repairs and
minor renewals are expensed as incurred. Major improvements and repairs are
capitalized. The cost and accumulated depreciation of assets sold or otherwise
disposed of are removed from accounts and any loss or gain is recognized.

INTANGIBLE ASSETS

Intangible assets are stated at cost. Intangible assets consist of
organizational costs. The costs of the intangible assets will be amortized
straight line over 5 years.

HISTORY

TrueTraks, Incorporated was incorporated under the laws of Delaware on March 31,
1997. TrueTraks, Inc. is recognized as a development stage company for financial
reporting purposes as required by FAS #7. The Company's year end is December 31.

DEPRECIATION & AMORTIZATION

Property, plant and equipment are recorded at cost. Depreciation is computed
using the MACRS method over the estimated useful lives of the assets, which is
five years.

COMPANY EMPLOYMENT AGREEMENTS

The Company has five year employment agreements with each of its 2 officers. As
of the date of the financials the two officers have received no compensation.
The CEO of the Company, Garry G. Oglesbee,

F-7
<PAGE>

will receive a salary of 75,000 per annum, Leonard R. Mitchell, Vice-President,
will receive a salary of $75,000 per annum. These funds will be paid in U.S.
Dollars.

CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations of
credit risks consist principally of temporary cash investments. The Company
maintains its cash balances in one financial institution located in Gallup, NM.
The balances are insured by the Federal Deposit Insurance Corporation up to
$100,000. As of July 31, 1997 the Company has no credit risk.

DEFERRED OFFERING COSTS

As of July 31, 1997 the Company has incurred deferred offering costs of
$154,500, relating to expenses incurred in connection with the proposed
Offering. Upon consummation of the proposed Offering, the deferred offering
costs will be charged to Equity. Should the proposed Offering prove to be
unsuccessful, the deferred offering costs will be charged to operations, along
with additional expenses to be incurred.

F-8

<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

No person has been authorized to give any information or to make any
representations in connection with this offering other than those contained in
this Prospectus, and if given or made, such other information or representations
must not be relied upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any sales made hereunder shall, under any
circumstances, create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to its date. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy such securities in any circumstances in which such offer of solicitation is
unlawful.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Pertinent Information. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Dividend Policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Plan of Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Principal Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . 31
Shares Eligible for Future Sale. . . . . . . . . . . . . . . . . . . . . . . 32
Self-Underwriting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Escrow Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Transfer Agent and Registrar . . . . . . . . . . . . . . . . . . . . . . . . 34
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Index to Financial Statements. . . . . . . . . . . . . . . . . . . . . . . .F-1
</TABLE>

100,000 SHARES (MINIMUM)
200,000 SHARES (MAXIMUM)

TRUETRAKS, INCORPORATED

COMMON STOCK

----------

PROSPECTUS

----------

Xxxxxxxx xx, 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 102(b) of the Delaware General Corporation Law ("Delaware Law")
permits a provision in the certificate of incorporation of each corporation
organized thereunder eliminating or limiting, with certain exceptions, the
personal liability of a director to the corporation or its stockholders for
monetary damages for certain breaches of fiduciary duty as a director. The
Certificate of Incorporation of the Registrant eliminates the personal liability
of directors to the fullest extent permitted by Delaware Law.

Section 145 of Delaware Law ("Section 145"), in summary, empowers a
Delaware corporation, within certain limitations, to indemnify its officers,
directors, employees and agents against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by them in connection with any nonderivative suit or proceeding, if they acted
in good faith and in a manner they reasonably believe to be in or not opposed to
the best interest of the corporation, and, with respect to a criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.

With respect to derivative actions, Section 145 permits a corporation to
indemnify its officers, directors, employees and agents against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense of settlement of such action or suit, provided such person meets the
standard of conduct described in the preceding paragraph, except that no
indemnification is permitted in respect of any claim where such person has been
found liable to the corporation, unless the Court of Chancery or the court in
which such action or suit was brought approves such indemnification and
determines that such person is fairly and reasonably entitled to be indemnified.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 ( the "Securities Act") may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been informed that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is therefore, unenforceable.

The Company's Bylaws provide that the Company shall indemnify officers and
directors, and to the extent authorized by the Board of Directors, employees and
agents of the Company, to the fullest extent permitted by and in the manner
permissible under the laws of the State of Delaware. The Bylaws also permit the
Board of Directors to authorize the Company to purchase and maintain insurance
against any liability asserted against any director, officer, employee or agent
of the Company arising out of his capacity as such.

The Company intends to enter into and execute indemnity agreements with
present and future directors for indemnification to the fullest extent permitted
by law.

ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the costs and expenses in connection with
the sale of the Common Stock. All amounts are estimated. All such fees have been
prepaid by the Company.

<TABLE>

<S> <C>
SEC Filing Fee $ 429
Blue Sky Expenses 6,000
Accounting Fees and Expenses 25,000
Legal Fees and Expenses 40,000
</TABLE>

II-1

<PAGE>

<TABLE>

<S> <C>
Legal Writing (outsourced) 19,000
Postage 5,000
Printing Fees 19,571
Escrow Agent Fees 5,000
Transfer Agent Fees 5,000
Due Diligence Fees 20,000
Miscellaneous Fees 10,000

TOTAL $155,000
</TABLE>

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

Since its inception on March 31, 1997, the Registrant has issued securities
without registration under the Securities Act of 1933, as amended (the
"Securities Act"), in the following transactions:

On March 31, 1997, TrueTraks Inc. (the Registrant) issued an aggregate of
1,750,000 shares of Common Stock to its founder. The total consideration for the
1,750,000 shares of Common Stock by the founder was $157,500 U.S. Dollars.

The sales and issuance of the securities described above were deemed to be
exempt from registration under the Securities Act in reliance upon section 4(2)
thereof as transactions not involving a public offering and/or pursuant to
regulations promulgated under the Securities Act.

ITEM 27. EXHIBITS

Exhibit
Number Description of Document
- -------- -----------------------
<S> <C>
1.1 Underwriting Agreement, Company Underwritten Offering

3.1 Articles of Incorporation

3.2 By-Laws

4.1 TrueTraks, Inc., Instrument defining the rights of the security holders

4.2 TrueTraks, Inc., Instrument defining the rights of the security holder, Karl Benz

4.3 TrueTraks, Inc., Instrument defining the rights of the security holder, Jack Wiles

4.4 Sample of Stock Certificate

5.1 Opinion of Counsel regarding legality

5.2 Opinion of Counsel regarding legality, February 20, 1998

6.1 Opinion Statement of Accountant

6.2 Opinion Statement of Accountant, February 20, 1998

7.1 Subscription Agreement

8.1 Employment Agreement with the Registrant and Garry Oglesbee
</TABLE>

II-2

<PAGE>

<TABLE>

<S> <C>
8.2 Employment Agreement with the Registrant and Leonard Mitchell, Jr.

9.1 Proprietary Information Agreement with Registrant and Garry Oglesbee

9.2 Proprietary Information Agreement with Registrant and Leonard Mitchell, Jr.

10.1 Escrow Agreement, (To be filed by Amendment)

10.2 TrueTraks, Inc., Documents deposited in Escrow to Commercial Transaction Center

11.1 Consent of Independent Accountant

12.1 Directors Letters of consent

12.2 Directors Letters of consent, February 20, 1998

13.1 Officers selling Company Securities

14.1 Consent to process, (Form U-2)

14.2 Corporate Resolution, (Form U-2a)

23.1 Consent of Independent Accountant, September 29, 1997

23.2 Consent of Independent Accountant, February 20, 1998

24.0 Funding Commitment/TrueTraks, Inc.

25.0 Schedule 13 D, Motive Power

27.0 Financial Data Schedule
</TABLE>

ITEM 28. UNDERTAKINGS

The undersigned Registrant hereby undertakes to:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:

(i) Include any prospectus required by section 10(a)(3) of the
Act,

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in
the information set forth in the Registration Statement, and

(iii) Include any additional or changed material information on the
plan of distribution;

(2) For determining liability under the Act, treat such post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide offering.

II-3

<PAGE>

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to directors, officers and controlling
persons of the small business issuer pursuant to the forgoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable.

In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submitted to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

II-4

<PAGE>

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in Minneapolis,
Minnesota, on February 20, 1998.

TRUETRAKS, INCORPORATED

By: /s/ Garry G. Oglesbee
--------------------------------
Garry G. Oglesbee, President

In accordance with the requirements of the Securities Act of 1933, this
Registration Statement on Form SB-2 was signed by the following persons in the
capacities and on the dates stated.

Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Garry G. Oglesbee Chief Executive Officer, February 20, 1998
- ----------------------------------- President, Chairman of the Board

/s/ Lilly Beter Vice Chairperson, Director February 20, 1998
- -----------------------------------

/s/ Leonard Mitchell, Jr. Chief Operating Officer, February 20, 1998
- ----------------------------------- Vice President, Director,
Chief Financial Officer (Acting)

/s/ William Muth Secretary, Director February 20, 1998
- -----------------------------------

/s/ Lonnie Eidson Director February 20, 1998
- -----------------------------------

/s/ Michael Chappue Director February 20, 1998
- -----------------------------------

/s/ Jack Wiles Director February 20, 1998
- -----------------------------------

</TABLE>

II-5

<PAGE>

EXHIBIT INDEX

Exhibit
Number Description of Document
- ------ -----------------------

1.1 Underwriting Agreement, Company Underwritten Offering, Incorporated
By Reference

3.1 Articles of Incorporation, Incorporated By Reference

3.2 By-Laws, Incorporated By Reference

4.1 TrueTraks, Inc., Instrument defining the rights of the security
holders, Incorporated By Reference

4.2 TrueTraks, Inc., Instrument defining the rights of the security
holder, Karl Benz, Incorporated By Reference

4.3 TrueTraks, Inc., Instrument defining the rights of the security
holder, Jack Wiles, Incorporated By Reference

4.4 Sample of Stock Certificate, Incorporated By Reference

5.1 Opinion of Counsel regarding Legality, Incorporated By Reference

5.2 Opinion of Counsel regarding Legality, February 20, 1998

6.1 Opinion Statement of Accountant, Incorporated By Reference

6.2 Opinion Statement of Accountant, February 20, 1998

7.1 Subscription Agreement, Incorporated By Reference

8.1 Employment Agreement with the Registrant and Garry Oglesbee,
Incorporated By Reference

8.2 Employment Agreement with the Registrant and Leonard Mitchell, Jr.,
Incorporated By Reference

9.1 Proprietary Information Agreement with Registrant and Garry Oglesbee,
Incorporated By Reference

9.2 Proprietary Information Agreement with Registrant and Leonard
Mitchell, Jr., Incorporated By Reference

10.1 Escrow Agreement, (To be filed by Amendment), Incorporated By
Reference

10.2 TrueTraks, Inc., Documents deposited in Escrow to Commercial
Transaction Center, Incorporated By Reference

11.1 Consent of Independent Accountant, Incorporated By Reference

12.1 Directors Letters of consent, Incorporated By Reference

12.2 Directors Letters of consent, February 20, 1998

13.1 Officers selling Company Securities, Incorporated By Reference

14.1 Consent to process, ( Form U-2), Incorporated By Reference

14.2 Corporate Resolution, ( Form U-2a), Incorporated By Reference

23.1 Consent of Independent Accountant, September 29, 1997

23.2 Consent of Independent Accountant, February 20, 1998

24.0 Funding Commitment/TrueTraks, Inc.

25.0 Schedule 13D, Motive Power

27.0 Financial Data Schedule

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EXHIBIT 5.2

LAW OFFICES
BARTZ & BARTZ
A PROFESSIONAL ASSOCIATION

SOUTHDALE OFFICE CENTRE
6750 FRANCE AVENUE SOUTH, SUITE 350
MARY A. BARTZ EDINA, MINNESOTA 55435
R. JOHN BARTZ TELEPHONE (612) 920-3959 TELECOPIER (612) 920-6494

Securities Commissioner February 20, 1998
Securities and Exchange Commission
450 5th Street NW
Washington, DC. 20549

Dear Commissioner,

We have acted as counsel to TrueTraks, Incorporated, a Delaware
corporation, in connection with the preparation of a Regulation SB Offering
Statement (the "Offering Statement" on Form SB-2, to be filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933. The Offering Statement relates to the sale of 200,000 shares of Common
Stock, with par value of $.05 ( the "Common Stock") as more particularly
described in the Offering Statement.

In connection therewith, we have examined (i) the Articles of Incorporation
and the By-Laws of TrueTraks, Incorporated; (ii) records of the corporate
proceedings of TrueTraks, Incorporated with respect to the issuance of shares of
Common Stock by TrueTraks, Incorporated; (iii) the Offering Statement; and (iv)
and such other documents as we have deemed necessary for the expression of the
opinions contained herein.

In making the foregoing examinations, we have assumed the genuineness of
all signatures and the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photo-static copies. As to questions of fact material to
this opinion, where such facts have not been independently established by us,
and as to the content and form of Articles of Incorporation, By-Laws, minutes
and resolutions and other documents or writings, we have relied to the extent we
deemed reasonably appropriate, upon representations of corporate officers or
certificates of governmental officials. We express no opinion as to compliance
with applicable state anti-fraud statutes, rules or regulations concerning the
issuance of securities.

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Opinion of Consul
September 29,1997
Page 2 of 2

Based upon and subject to the foregoing and having due regard for such
legal considerations that we deem relevant, we are of the opinion (i) that the
Common Stock has been duly authorized for issuance and (ii) that upon payment
for, and issuance of, the Common Stock in accordance with the terms of the
Offering Statement, the Common stock will be validly issued and will be fully
paid and non-assessable.

We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Offering Statement.

Sincerely,

BARTZ & BARTZ, P.A.

/s/ R. John Bartz
Attorney at Law

RJB/cn

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EXHIBIT 6.2

INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders
TrueTraks, Incorporated
Gallup, NM. 87301

I have audited the accompanying balance sheet of TrueTraks, Incorporated as
of July 31, 1997, and the related statements of income (Loss) and Retained
Earnings (Deficit), stockholders' equity and cash flows for the four months
ended July 31, 1997. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on this
financial statement based on my audit.

I have 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 principals 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 statement referred to above presents fairly, in
all material respects, the financial position of TrueTraks, Incorporated as of
July 31, 1997, and the results of its operations and its cash flows for the four
months ending July 31, 1997 in conformity with generally accepted accounting
principles.

/s/ Curtis Forse
- --------------------------------
Curtis Forse CPA
North Branch, MN. 55056
September 29, 1997
Revised February 20, 1998

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EXHIBIT 12.2