CARD SMART CORP
10SB12G/A, 2000-10-23
BUSINESS SERVICES, NEC
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                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                         AMENDMENT NO. 2 TO FORM 10-SB


                 GENERAL FORM FOR REGISTRATION OF SECURITIES OF
                  SMALL BUSINESS ISSUERS Under Section 12(b) or
                   (g) of the Securities Exchange Act of 1934


                                Card-Smart Corp.
                 (Name of Small Business Issuer in its charter)

             Nevada                                     52-2043569
   -----------------------------            ------------------------------------
  (State or other jurisdiction of           (I.R.S. Employer Identification No.)
   incorporation or organization)

     38820 N. 25TH Avenue, Phoenix, AZ                    85086
   --------------------------------------              ----------
  (Address of principal executive offices)             (zip code)


                 1-602-617-4456 (Phone) 1-480-905-8078 (FAX)
                 -------------------------------------------
                         Issuer's Telephone Number

Securities to be registered under section 12(b) of the Act:

     Title of Each Class                Name on each exchange on which
     to be registered                   each class is to be registered

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

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


Securities to be registered under section 12(g)of the Act:

Common Stock, $.001 par value per share, 25,000,000 shares authorized,
9,360,000 issued and outstanding as of June 30, 2000.
---------                              -------------
Copies of Communications sent to:

                       Georgios Polyhronopoulos, President
                                Card-Smart Corp.
                               38820 N 25th Avenue
                                Phoenix AZ 85027
                    Tel: (602) 617-4456 - Fax: (480) 905-8078


                                      1

FORWARD LOOKING STATEMENTS

CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS

Card-Smart Corp, a developmental stage company ("Card-Smart Corp)," or the
"Company" or the "Registrant") cautions readers that certain important factors
may affect the Company's actual results and could cause such results to
differ materially from any forward-looking  statements that may be deemed to
have been made in this Document or that are otherwise made by or on behalf of
the Company.  For this purpose, any statements contained in the  Document
that are not statements of historical fact may be deemed to be forward-looking
statements.  This Registration contains statements that constitute "forward-
looking statements."  These forward-looking statements can be identified by the
use of predictive, future-tense or forward-looking terminology, such as
"believes," "anticipates," "expects," "estimates," "plans," "may," "will," or
similar terms.  These statements appear in a number of places in this
Registration and include statements regarding the intent, belief or current
expectations of the Company, its directors or its officers with respect to,
among other things:  (i) trends affecting the Company's financial condition
or results of operations for its limited history;  (ii) the Company's business
and growth strategies;  (iii) the Internet and Internet commerce;  and, (iv)
the Company's financing plans.  Investors are cautioned that any such forward-
looking statements are not guarantees of future performance and involve
significant risks and uncertainties, and that actual results may differ
materially from those projected in the forward-looking statements as a result
of various factors.  Factors that could  adversely affect actual results and
performance include, among others, the Company's limited operating history,
    dependence on continued growth in the use of the Internet, the Company's
inexperience with the Internet,     potential fluctuations in quarterly
operating results and expenses, security risks of transmitting information over
the Internet, government regulation, technological change and competition.

The accompanying information contained in this Registration,  including, without
limitation,  the  information  set  forth  under  the  heading  "Risk  Factors,"
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations" and "Business"  identifies  important  additional factors that could
materially adversely affect actual results and performance. All of these factors
should be carefully  considered and evaluated.  All  forward-looking  statements
attributable  to the Company are  expressly  qualified in their  entirety by the
foregoing cautionary  statement.  Any forward- looking statements in this report
should be evaluated in light of these  important  risk  factors.  The Company is
also  subject to other risks  detailed  herein or set forth from time to time in
the Company's filings with the Securities and Exchange Commission.


                                      2

INFORMATION REQUIRED IN REGISTRATION STATEMENT

Part I   ....................................................... 4
Item 1.  Description of Business................................ 4
Item 2.  Management's Discussion and Analysis or Plan of
         Operation............................................. 22
Item 3.  Description of Property............................... 23
Item 4.  Security Ownership of Management and Others
         and Certain  Security Holders......................... 23
Item 5.  Directors, Executives, Officers and Significant
         Employees............................................. 25
Item 6.  Remuneration of Directors and Executive
         Officers.............................................. 30
Item 7.  Certain Relationships and Related Transactions........ 30

Part II  ...................................................... 31
Item 1.  Market Price of and Dividends of the Registrant's
         Common Equity and Other Stockholder Matters........... 31
Item 2.  Legal Proceedings..................................... 32
Item 3.  Recent Sales of Unregistered Securities............... 32
Item 4.  Description of Securities............................. 34
Item 5.  Indemnification of Directors and Officers............. 35

Part F/S ...................................................... 36
Item 1.  Financial Statements.................................. 36
Item 2.  Changes in and Disagreements With Accountants on
         Accounting and Financial Disclosure................... 36

Part III ...................................................... 37
Item 1.  Exhibit Index......................................... 37
Item 2.  Description of Exhibits............................... 37

The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and the Financial Statements
and Notes related thereto appearing elsewhere in this Registration.  Except
where the context otherwise requires, all references in this Registration to
(a) the "Registrant" or the "Company" or Card Smart" refer to Card-Smart  Corp,
a Nevada corporation, (b) the "Web" refer to the World Wide Web and the "site"
refers to the Company's Web site.


                                     3

                                  Part I

Item 1.  Description of Business

A.   Business  Development, Organization and Acquisition  Activities Card-Smart
Corp, is a developmental stage Company, who plans to market its products
through the Internet, hereinafter referred to as "Card-Smart Corp" or the
"Company" or the "Registrant", was organized by the filing of Articles of
Incorporation with the Secretary of State of the State of Nevada on May 01,
1998.  The Company is a development stage company with a principal business
objective to sell and market Smart Cards to hotels, resorts, cruise lines and
casinos.  The Company plans to support these services through its future WEB
site     (www.card-smart.net)    .  The Company plans to be a provider of
consumer credit tracking and loyalty programs for specialized market niches
in the world resort and cruise markets through the use of Smart Cards.  The
original Articles of the Company authorized the issuance of twenty-five
million (25,000,000) common shares.  There are twenty-five million (25,000,000)
shares of Common Stock at par value of $0.001 per share and no Preferred stock.
The Registrant was incorporated on May 01, 1998, in the state of Nevada under
the name Card-Smart Corp In connection with its formation, a total of two
million (2,000,000) shares of its common stock were purchased by the three
founders of the Company, on May 10, 1998 for services.  Between July 10 and
July 20, 1998, the Company sold one million (1,000,000) shares of its common
stock in connection with a public offering at a price of $0.025 per share.  On
or about July 20, 1998, the Company completed a public offering of shares of
common stock of the Company  pursuant to Regulation "D," Rule 504 of the
Securities Act of 1933, as amended, whereby it sold one million shares of the
Common Stock of the Company for twenty-five thousand ($25,000) dollars to
approximately twenty-five (25) unaffiliated shareholders of record.  The
Company filed an original Form D with the Securities and Exchange Commission
on or about July 20, 1998.  On January  11,2000 the company completed a
subsequent Public Offering that was offered without registration under the
Securities Act of 1933, as amended (The "Act"), in reliance  upon the
exemption from registration afforded by sections 4(2) and 3 (b) of the
Securities Act and Regulation "D" promulgated  thereunder.  The Company
sold to one (1) additional unaffiliated shareholder, one hundred twenty
thousand (120,000) shares of common stock at a price of $.20 per share for a
total amount raised of twenty four thousand ($24,000) dollars.  On May 25,
2000, the Company approved a forward stock split on the basis of 3 for 1, thus
increasing the common stock from 3,120,000 shares to 9,360,000 shares of its
$0.001 par value common voting stock issued and outstanding which are held by
approximately thirty (30) shareholders, including the three founding
shareholders, of record. The Company is a newly formed development stage
company, which plans to market Loyalty Programs to hotels, resorts, cruise
lines and casinos using Smart Cards (plastic cards with embedded
microprocessors) and support these services through its future Web site.


                                  4

B.   Business of Issuer

1)   Principal Products, Services and Principal Markets.

The Company is developmental stage company, which plans to market Smart Cards to
hotels,  resorts, cruise lines and casinos using Smart Cards (plastic cards with
embedded microprocessors) and support these services through its future Web
site,    www.card-smart.net    .  Management of company believes that they can
deliver a more cost-effective  turn-key program with the ability to share
consumer  information and profiles between clients and build a comprehensive
database for resale.  The Company hopes to provide  solutions  for the growing
demand in  application  of computers  in the  wallet  or  what  have  been
termed  Smart  Cards,  and  the implementation of loyalty programs based on the
technology (See "Business of the Company").

The Company plans to provide  consumer  credit  tracking and loyalty programs
for  specialized  market  niches  focused  toward the resort and cruise markets
through the use of Smart Cards.  The  Card-Smart  Cards are designed to
eliminate growing  transaction charges by creating an internal credit system for
each client while adding photo  identification  for security  verification.  The
Company plans to contract with Gemplus a major worldwide  provider of Smart Card
solutions,  for use of their technology platform.  At this time, no contract has
been made  between the Company and  Gemplus.  Gemplus has  developed a flexible,
configurable  technology  engine  which  offers  merchants  a method  to  retain
customers as compared to traditional  stand alone paper card  alternatives.  Any
potential  revenue which the Company might  generate would be derived from sales
by the Company to hotels,  casinos,  cruise lines and resorts,  which  generally
achieve full occupancy levels and consistent sold out turnover.

Management  believes  that placing this  technology  into foreign  resorts would
enhance the Company's revenues as wholesaler volume discounts for hardware would
then be made available to these customers from the Company. The Company hopes to
also achieve revenues from maintenance contracts and supply of new cards.

Management believes their product has value for the following reasons:

1)   Client  resorts would be able to bypass  numerous  credit card  transaction
     fees by  providing  Global  SmartCards  with an  adjustable  credit  value.
     Card-Smart Card holder would pay for the credit value once at the beginning
     of their vacation using Visa,  MasterCard,  Traveler's  Cheques,  etc. This
     would mean one transaction fee to the client. Thereafter, there would be no
     transaction  fees  involved in using the  Card-Smart  Cards.  If the credit
     limit runs out,  the  Card-Smart  Card holders can add more credit to their
     card via regular payment methods.

2)   Card-Smart  plans to have the digitized  photograph of the Card-Smart  Card
     holder placed in a database  accessible  to resort  cashiers to verify that
     the  particular  person is a Card-Smart  Card holder.  The credit total and
     transaction  history would be tracked through this database.  Additionally,
     the Global Card would have the Card-Smart Card holder's  picture printed on
     the card itself.

3)   Loyalty programs with reward points could be built into the card program as
     an added value and  customization  for the client resort. At the end of the
     vacation  period,  any remaining credit would be refunded to the Card-Smart
     Card holder.


                                        5


(a)  Limited Operating History

The  Company  was first  incorporated  in the  State of Nevada on May 01,  1998.
Accordingly,  the  Company  has  a  limited  operating  history  upon  which  an
evaluation of the Company,  its current business and its prospects can be based,
each of which must be  considered  in light of the risks,  expenses and problems
frequently encountered by all companies in the early stages of development,  and
particularly  by such companies  entering new and rapidly  developing and mature
markets.  The  Company's  prospects  must be  considered  in light of the risks,
uncertainties,  expenses and difficulties frequently encountered by companies in
their early stages of development,  particularly  companies who face competition
from  other more  established  companies  in this  market.  Such risks  include,
without limitation,  the lack of broad acceptance of the company's products, the
company's inability to build a customer base, inability for the Company to fully
develop and utilize  its  Internet  Web site,  the  inability  of the Company to
generate  significant  revenues  from  customers,  the  company's  inability  to
anticipate  and adapt to a  developing  market,  the  failure  of the  company's
network  infrastructure   (including  its  server,  hardware  and  software)  to
efficiently  handle its Internet traffic,  changes in laws that adversely affect
the  company's  business,  the ability of the Company to manage its  operations,
including the amount and timing of capital expenditures and other costs relating
to the expansion of the company's  operations,  the introduction and development
of different or more extensive communities by direct and indirect competitors of
the Company,  including  those with greater  financial,  technical and marketing
resources,  the  inability  of the Company to maintain  and  increase  levels of
traffic on its Web site,  the  inability  of the Company to attract,  retain and
motivate qualified personnel and general economic conditions.

(b)  Anticipated Losses for the Foreseeable Future

The Company has not achieved  profitability to date, and the Company anticipates
that it will continue to incur net losses for the foreseeable future. The extent
of these losses will depend,  in part,  on the amount of growth in the Company's
revenues from sales of its products. As of June  30,  2000,  the  Company had an
                                           ---------------
accumulated deficit of Fifty Thousand Eight Hundred Thirty-eight  dollars.   The
                       -----------------------------------------
Company expects that its operating expenses will increase  significantly  during
the next several  years,  especially  in the areas of sales and  marketing,  and
brand promotion.  Thus, the Company will need to generate  increased revenues to
achieve  profitability.  To the extent that increases in its operating  expenses
precede or are not subsequently followed by commensurate  increases in revenues,
or that the Company is unable to adjust  operating  expense levels  accordingly,
the Company's  business,  results of operations and financial condition would be
materially and adversely  affected.  There can be no assurances that the Company
can achieve or sustain profitability or that the Company's operating losses will
not increase in the future.

(c)  Dependence on Continued Growth and Viability of Smart Cards

The Company's  future success is  substantially  dependent  upon  acceptance and
usage of Smart Cards.  To generate  product  sales,  the Company must identify a
customer base that has a need for their  products.  There are no assurances that
this can take  place.  Management must take the initiative to market these cards
                       ---------------------------------------------------------
to  their  targeted customer base, the  Internet  may  prove  not to be a viable
---------------------------------
commercial marketplace  for  their  products.  Additionally,  due to the ability
of their customers to easily

                                        6

compare  prices of similar  products or services on competing  Web sites,  gross
margins for e-Commerce  transactions may narrow in the future and,  accordingly,
the Company's revenues from utilizing its Web site may be materially  negatively
impacted.

Additionally,   to  the  extent  that  the  Internet   continues  to  experience
significant  growth in the number of users and the level of use, there can be no
assurance that its technical  infrastructure will continue to be able to support
the  demands  placed  upon  it.  The  necessary  technical   infrastructure  for
significant  increases with the Internet,  such as a reliable network  backbone,
may  not  be  timely  and  adequately   developed.   In  addition,   performance
improvements,  such as  high-speed  modems,  may not be  introduced  in a timely
fashion.  Furthermore,  security  and  authentication  concerns  with respect to
transmission  over the  Internet  of  confidential  information,  such as credit
information, may remain. Issues like these could lead to resistance against the
acceptance of the  Internet as a viable  commercial  marketplace.  Also,  the
Internet could lose its viability due to delays in the  development or adoption
of new standards and protocols required to handle increased levels of activity,
or due to increased governmental regulation.  Changes in or insufficient
availability of telecommunications services  could result in slower response
times and adversely affect usage of the Internet.  Demand and market acceptance
for recently introduced services and products over the Internet are subject to a
high level of uncertainty, and this exist few proven services and products.

The Internet may not be commercially viable in the long term for a number of
reasons, including potentially  inadequate development of the necessary network
infrastructure or delayed development of enabling technologies, performance
improvements and security measures. To the extent that the Internet continues to
experience significant growth in the number of users, their frequency of use or
their band width requirement, this can be no assurance that the infrastructure
for the Internet and other online services will be able to support the demands
placed upon them.  In addition, the Internet or other online services could lose
their viability due to delays in the development or adoption of new standards
and protocols required to handle increased levels of Internet or other online
service activity, or due to increased  governmental regulation.  Changes in or
insufficient availability of telecommunications services to support the Internet
or other online services also could result in slower response times and
adversely affect usage of the Internet and other online services generally and
Global SmartCards, Inc, in particular.  If use of the Internet and other online
services does not continue to grow or grows more slowly than expected, if the
infrastructure for the Internet and other online  services does not effectively
support growth that may occur, or if the Internet and other online services do
not become a viable commercial marketplace, the Company's business, results of
operations and financial condition would be adversely affected.

(d)  Risk Supply Failures

The Company plans to use the Gemplus  (Gem Club Micro  platform) to operate and
market its loyalty programs.  Gem Club Micro is a microprocessor card with
advanced loyalty function that has been developed for loyalty card applications.
Gem Club Micro cards can be used in other type of application, including coupon
programs, store-valued cards, private electronic purses, metering (e.g.,
measuring


                                        7

consumption of gas or electricity), customer identification.  Up to thirty (30)
counters can be created in a Gem Club Micro cards. The Company plans to purchase
and  market these  microprocessor cards.  The Company is dependent upon the
manufacturer of these cards.  If the manufacturer experiences problems in
producing these cards, this would hamper sales results for the Company.  If the
manufacturer supplies microprocessor cards which malfunction, this could hurt
the image of the Company  and future  business.  The  Company does not have any
exclusive contract with any manufacturer to produce these microprocessors cards.
                                         ----------
Therefore, if supplies  become limited there are no assurances that the Company
will have product to market and sell.

(e)  Risk of System Failures

The Company's ability to facilitate trade successfully and provide high quality
customer service via the Internet, depends on the efficient and  uninterrupted
operation of its computer and communications through its  designated  Internet
Service Provider (ISP). These systems and operations are vulnerable to damage or
interruption  from earthquakes, floods, fires, power loss, telecommunication
failures, break-ins, sabotage, intentional acts of vandalism and similar events.
The Company does not have fully redundant systems, a formal disaster recovery
plan or  alternative  providers of hosting  services and does not carry business
interruption  insurance to compensate it for losses that may occur.  Despite any
precautions taken by, and planned to be taken by the Company,  the occurrence of
a natural disaster or other unanticipated  problems with its ISP could result in
interruptions in the services provided by the Company.

In addition, the failure by the ISP to provide the data communications capacity
required by the Company, as a result of human error, natural disasters other
operational disruption, could result in interruptions in the Company's service.
Any damage to or failure of the systems of the Company could result  in
reductions in, or terminations of, the Global SmartCards service, which could
have a material adverse effect on the Company's business,  results of operations
and financial condition.  In the case of frequent or persistent system failures,
the Company's  reputation and name brand could be materially adversely affected.
Although the Company has implemented certain network security measures, the
Company and its IPS are also vulnerable to computer viruses, physical or
electronic break-ins and similar disruptions, which could lead to interruptions,
delays, loss of data or the inability to complete customer auctions.  In
addition, although the Company works to prevent unauthorized access to Company
data, it is impossible to eliminate this risk completely.  The occurrence of any
and all of these events could have a material adverse effect on the Company's
business, results of operations and financial condition.


                                        8

(f)  Competition

     The Company  expects to  experience  heavy  competition  in  marketing  its
services.  The Company will experience  competition  from  Corporations  who are
developing  their own  marketing  departments  using similar off the shelf Smart
Card   technologies.   Management   believes   that  they  can  deliver  a  more
cost-effective  turn-key program with the ability to share consumer  information
and  profiles  between  clients and build a  comprehensive  database for resale.
However, there are no assurances that they will be successful in this endeavor.

Smart card  manufacturers  are now marketing to secondary  adopters who requires
Smart  Cards  shift  from  being  the  new  technological  wonder  to  providing
legitimate  solutions  for the  businesses.  The Smart Card  industry has yet to
prove  fully the  technology's  case as a  legitimate  business  tool.  Although
manufacturers  are still exploring other  applications such as loyalty programs,
internet  commerce  and network  security,  the market has stalled as far as the
end-user is concerned  with warning  signs that the next few years will be lean,
and may include the failure of the  immediate  materialization  of  stored-value
card  installations  by bank card  associations  such as Visa and member  banks,
delays in project roll-out, and extreme pricing competition.

The Company will utilize the services of its management team to market these
--------------------------------------------------------------------------------
smart cards to resorts, casinos, cruise lines and chain stores.  Once these new
--------------------------------------------------------------------------------
customers are found, the Company plans to offer these customers the ability to
--------------------------------------------------------------------------------
obtain their individual resource information through a company website.
--------------------------------------------------------------------------------
The market for  providing  Smart Card  services  over the Internet is relatively
new,  rapidly  evolving  and  intensely  competitive,  and the  Company  expects
competition to intensify further in the future. Barriers to entry are relatively
low, and current and new  competitors  can launch new sites at a relatively  low
cost using commercially-  available software.  The Company potentially  competes
with a number of other companies marketing similar health care products over the
Internet.  Competitive  pressures  created by any of the Company's  competitors,
could have a  material  adverse  effect on the  Company's  business,  results of
operations  and  financial  condition.  The Company  believes that the principal
competitive factors in its market are volume and selection of goods,  population
of buyers and sellers,  community  cohesion and interaction,  customer  service,
reliability  of  delivery  and  payment by users,  brand  recognition,  WEB site
convenience  and  accessibility,  price,  quality  of search  tools  and  system
reliability.  Some of the Company's potential  competitors have longer operating
histories,  larger customer bases,  greater brand  recognition and significantly
greater financial, marketing, technical and other resources than the Company. In
addition,  other online trading services may be acquired by, receive investments
from or enter into other commercial relationships with larger,  well-established
and  well-financed  companies as use of the  Internet and other online  services
increases.

Therefore,  certain of the Company's  competitors with other revenue sources may
be able to devote  greater  resources to marketing  and  promotional  campaigns,
adopt more aggressive  pricing policies and devote  substantially more resources
to Web site and  systems  development  than the  Company  or may try to  attract
traffic by  offering  services  for free.  Increased  competition  may result in
reduced  operating  margins,  loss of market share and  diminished  value in the
Company's  brands.  There can be no  assurance  that the Company will be able to
compete  successfully  against  current and future  competitors.  Further,  as a
strategic response to changes in the competitive  environment,  the Company may,
from time to time,  make  certain  pricing,  service or  marketing  decisions or
acquisitions that could have a material adverse effect on its business,  results
of operations and financial  condition.  New  technologies  and the expansion of
existing  technologies may increase the competitive  pressures on the Company by
enabling the Company's competitors to offer a lower-cost service.

Certain Web-based applications that direct Internet traffic to certain Web sites
may channel users to trading  services  that compete with the Company.  Although
the Company  plans to  establish  arrangements  with online  services and search
engine  companies,  this can be no  assurance  that these  arrangements  will be
renewed  on  commercially  reasonable  terms or that they will  otherwise  bring
traffic to the  Company's website.  In addition,  companies  that control
access to transactions through network access or Web browsers could promote the
Company's competitors or charge the Company substantial fees for inclusion.  Any
and all of these events could have a material  adverse  effect on the  Company's
business, results of operations and financial condition.


                                        9


(g)  Potential Fluctuations in Operating Results; Quarterly Fluctuations

The Company's  operating results may fluctuate  significantly in the future as a
result of a variety of factors, many of which are outside the Company's control.
See  "-Limited  Operating  History."  As a strategic  response to changes in the
competitive environment,  the Company may from time to time make certain pricing
or marketing decisions with their Smart Card business that could have a material
short-term or long-term  adverse  effect on the Company's  business,  results of
operations and financial  condition.  In particular,  in order to accelerate the
promotion and marketing of the Company's future website,  the Company intends to
          -------------------------------------
market it Web site through the major search engines.  The Company  believes that
it may  experience  seasonality  in its  business,  with use of the Internet and
its general business being somewhat lower during the summer vacation and year-
end holiday periods.  Advertising impressions (and  therefore revenues)  may  be
expected to decline accordingly in those periods. Additionally,  seasonality may
affect  significantly  any potential  advertising  revenues during the first and
third calendar  quarters,  as advertisers  historically  spend less during these
periods.  There can be no assurance  that such patterns will not have a material
adverse  effect on the Company's  business,  results of operations and financial
condition.  In addition to selling its brands,  it is the Company's  strategy to
generate  additional  revenues  through e- Commerce  arrangements  including for
other  companies  to  advertise  on the  Company's  Web  site.  There  can be no
assurance  that the Company will receive any  material  amount of revenue  under
these agreements in the future. The foregoing factors,  in some future quarters,
may lead the Company's operating results to fall below the expectations.

(h)  Risk Of Capacity Constraints And Systems Failures

A key element of the  Company's  strategy is to support its Smart Card  services
through its Web site. The Company's  ability to attract customers and to achieve
market acceptance of its products depends  significantly upon the performance of
the Company and its network infrastructure  (including its server,  hardware and
software).  The Company plans to enter into a web site  agreement  with Smackdab
Corporation.  Under this agreement,  Smackdab will market the Company's web site
with the major search engines (e.g., Yahoo, Lycos,  Infoseek,  etc.) in order to
increase  traffic to the  Company's  Web Site.  Any system  failure  that causes
interruption  or slower  response  time of the  Company's  products and services
could  result in less  traffic to the  Company's  Web site and, if  sustained or
repeated, could reduce the attractiveness of the Company's products. An increase
in the  volume of user  traffic  could  strain  the  capacity  of the  Company's
technical  infrastructure,  which could lead to slower  response  time or system
failures,  and  could  adversely  affect  operating  results.  There  can  be no
assurance that the Company and its technical infrastructure will be able to grow
accordingly,  and the Company  faces risks related to its ability to scale up to
its expected customer levels while maintaining superior performance. Any failure
of the  Company's  server and  networking  systems  to handle  current or higher
volumes  of  traffic  would  have a  material  adverse  effect on the  Company's
business,  results of operations  and financial  condition.  The Company is also
dependent upon third parties to provide product support. In the past, users have
occasionally  experienced  difficulties with Internet and online services due to
system failures,  including  failures  unrelated to the Company's  systems.  Any
disruption in


                                       10

Internet access  provided by third parties could have a material  adverse effect
on the  Company's  business,  results of  operations  and  financial  condition.
Furthermore, the Company is dependent on hardware suppliers for prompt delivery,
installation and service of equipment used to deliver the Company's products and
services.  The  Company's  operations  are dependent in part upon its ability to
protect its operating  systems  against damage from human error,  fire,  floods,
power loss,  telecommunications  failures,  break-ins  and similar  events.  The
Company does not presently have redundant,  multiple-site  capacity in the event
of any such  occurrence.  The Company's  servers are also vulnerable to computer
viruses,  break-ins and similar disruptions from unauthorized tampering with the
Company's  computer systems.  The occurrence of any of these events could result
in the interruption, which could have a material adverse effect on the Company's
business,  results of  operations  and  financial  condition.  In addition,  the
Company's reputation could be materially and adversely affected.

(i)  Risks Associated With New Services, Features and Functions

There  can be no  assurance  that  the  Company  would  be  able to  expand  its
operations in a  cost-effective  or timely manner or that any such efforts would
maintain or increase  overall  market  acceptance.  Furthermore,  any Smart Card
business  launched by the Company  that is not  favorably  received by customers
could damage the Company's  reputation and diminish the value of its brand name.
Expansion  of the  Company's  operations  in  this  manner  would  also  require
significant  additional  expenses  and  development,  operations,  training  the
Company's management,  financial and operational  resources.  The lack of market
acceptance of the Company's products would result in the Company's  inability to
generate  satisfactory  revenues  and its  inability to offset their costs could
have a material adverse effect on the Company's business,  results of operations
and financial condition.

(j)  Online Commerce Security Risks

A  significant   barrier  to  online  Global   SmartCard   service  support  and
communications  is the secure  transmission  of  confidential  information  over
public networks. Card-Smart Corp plans to support its services via its Web site.
The Company will rely on encryption and authentication  technology licensed from
third  parties to provide the security and  authentication  technology to effect
secure transmission of confidential information, including confidential customer
information.  There can be no assurance that advances in computer  capabilities,
new  discoveries in the field of  cryptography,  or other events or developments
will not result in a compromise or breach of the technology  used by the Company
to protect customer transaction data from one its competitors.

If any such compromise of the Company's  security were to occur, it could have a
material  adverse  effect on the Company's  reputation  and,  Therefore,  on its
business,  results of operations and financial condition.  Furthermore,  a party
who is able to circumvent the Company's  security measures could  misappropriate
proprietary information or cause interruptions in the Company's operations.  The
Company may be required to expend  significant  capital and other  resources  to
protect against such security  breaches or to alleviate  problems caused by such
breaches.  Concerns over the security of transactions  conducted on the Internet
and other  online  services and the privacy of users may also inhibit the growth
of the Internet and other online services generally,  and the Web in particular,
especially as a means of conducting commercial transactions.  To the extent that
activities of the


                                       11


Company involve with the storage and  transmission  of proprietary  information,
security  breaches could damage the Company's  reputation and expose the Company
to a risk  of  loss  or  litigation  and  possible  liability.  There  can be no
assurance that the Company's security measures will prevent security breaches or
that failure to prevent such security  breaches will not have a material adverse
effect on the Company's business, results of operations and financial condition.

(k)  Risks Associated with Acquisitions

If  appropriate  opportunities  present  themselves,  the Company  would acquire
businesses,  technologies,  services or product(s) that the Company believes are
strategic.


The company does not have significant cash or other material assets, nor does it
--------------------------------------------------------------------------------
have an established source of revenues sufficient to cover its operating costs
--------------------------------------------------------------------------------
and to allow it to continue as a going concern.  The auditors of the Company
--------------------------------------------------------------------------------
have issued a going concern opinion in Financial Footnote 3 of the Notes to
--------------------------------------------------------------------------------
Financial Statements, which states in pertinent part the following, "Company
--------------------------------------------------------------------------------
has no current source of revenue.  Without realization of additional capital,
--------------------------------------------------------------------------------
it would be unlikely for the Company to continue as a going concern.  It is
--------------------------------------------------------------------------------
management's plan to seek additional capital through a merger with an existing
--------------------------------------------------------------------------------
operating company."  (See also Financial Footnote 3, "Going Concern" and
--------------------------------------------------------------------------------
Footnote 6 "Officer Advances.") Management may also consider raising additional
--------------------------------------------------------------------------------
capital via a private placement offering pursuant to Regulation "D" Rule 505 or
--------------------------------------------------------------------------------
506, if need to acquire businesses, technologies, services or product(s) that
--------------------------------------------------------------------------------
the Company believes are strategic.
-----------------------------------

The Company  currently has no  understandings,  commitments  or agreements  with
respect to any other material  acquisition and no other material  acquisition is
currently being pursued. There can be no assurance that the Company will be able
to  identify,  negotiate  or finance  future  acquisitions  successfully,  or to
integrate  such  acquisitions   with  its  current  business.   The  process  of
integrating an acquired  business,  technology,  service or product(s)  into the
Company may result in unforeseen operating difficulties and expenditures and may
absorb  significant  management  attention that would otherwise be available for
ongoing  development  of  the  Company's  business.  Moreover,  there  can be no
assurance that the  anticipated  benefits of any  acquisition  will be realized.
Future  acquisitions  could result in potentially  dilutive  issuances of equity
securities,  the incurrence of debt, contingent  liabilities and/or amortization
expenses related to goodwill and other intangible assets, which could materially
adversely  affect the Company's  business,  results of operations  and financial
condition. Any future acquisitions of other businesses,  technologies,  services
or  product(s)  might  require the Company to obtain  additional  equity or debt
financing, which might not be available on terms favorable to the Company, or at
all, and such financing, if available, might be dilutive.

(l)  Risks Associated With International Operations

A  component  of the  Company's  strategy  is to offer  its  products  online to
international  customers.  Expansion into the international markets will require
management  attention  and  resources.  The Company has  limited  experience  in
localizing its service,  and the Company  believes that many of its  competitors
are also undertaking  expansion into foreign markets.  There can be no assurance
that the Company will be successful in expanding into international  markets. In
addition to the uncertainty regarding the Company's ability to generate revenues
from foreign operations and expand its international  presence, this are certain
risks inherent in doing business on an  international  basis,  including,  among
others, regulatory requirements, legal uncertainty regarding liability, tariffs,
and  other  trade  barriers,  difficulties  in  staffing  and  managing  foreign
operations,  longer payment cycles, different accounting practices,  problems in
collecting accounts receivable,  political  instability,  seasonal reductions in
business activity and potentially  adverse tax consequences,  any of which could
adversely affect the success of the Company's international operations.


                                       12

To  the  extent  the  Company  expands  its  international  operations  and  has
additional  portions  of  its  international  revenues  denominated  in  foreign
currencies,  the Company  could become  subject to increased  risks  relating to
foreign currency exchange rate fluctuations.  There can be no assurance that one
or more of the factors  discussed above will not have a material  adverse effect
on the Company's  future  international  operations  and,  consequently,  on the
Company's business, results of operations and financial condition.

2)   Distribution Methods of the Products and Services

The  Company  will  be  significantly  dependent  on  a  number  of  third-party
relationships to supply product(s), to ship product(s),  and increase traffic to
future website. Additionally, with regards to the Company's Internet Web site is
---------------
generally dependent on other Web site operators that provide links to Card-Smart
Corporation's future website.  The Company does not have any agreements with any
----------------------------
Web site operators that provide links to its Web site at this time,  and, if the
Company can establish such links the other Web site operators may terminate such
links at any time without notice to the Company.  There can be no assurance that
third  parties will regard their  relationship  with the Company as important to
their own respective  businesses and operations.  There can be no assurance that
the Company will ever develop a relationships with third parties that supply the
Company with links to their future Web site. In particular, the elimination of a
                            ------
pre-installed bookmark on a Web browser directs traffic to the Company's Web
site could  significantly  reduce traffic on the Company's Web site, which would
have a material adverse effect on the Company's business,  results of operations
and financial condition. Additionally, at this time, the Company has not entered
into any agreements with any suppliers to ship and provide products.

3)   Status of Any Announced New Product or Service

The Company does not have any announced new product or service.  The Company is
in the process of developing a customer base for its Loyalty Programs,
--------------------------------
utilizing the SmartCard.  The Company, however, has yet to announce  any new
products and has not announced any other recent additions or services.  The
Company has yet to obtain any customers for its products.                    ---
---------------------------------------------------------

4)   Industry Background

There was initial  interest in Smart Cards by early adopters ten (10) years ago,
when these  cards  were  first  introduced.  The Smart  Card  industry  has been
developing new and improved technologies.  Due to the maturity of this industry,
business for Smart Cards has been slowing down.  According to research conducted
by Frost & Sullivan,  Worldwide  Smart Card  Application  Markets and  Worldwide
Smart Card IC Markets,  the Smart Cards market has hit a "market  canyon" in its
transition  from  embryonic to the  developmental  stage.  Building an in- house
database of project,  Frost & Sullivan  calculated the Smart Card market to have
issued 912  million  cards in 1998.  Analyst  Alyxia T. Do, for Frost & Sullivan
stated,  "The Smart Card  industry is now ending its dynamic  growth  phase that
resulted from installation by early adopters of the technology."

The support of Smart Cards services through the company's Web site is a somewhat
new and evolving concept,  it is difficult to predict with any assurance whether
the Web will prove to be a viable  commercial  marketplace in the long term. The
Web has  experienced,  and is expected to  continue to  experience,  significant
growth in the numbers of users and amount of traffic. To the extent that the Web
continues  to  experience  increased  numbers  of  users,  frequency  of  use or
increased bandwidth requirements of users, this can be no assurance that the Web
infrastructure  will continue to be able to support the demands  placed on it by
this continued growth or that the performance or reliability of the Web will not
be adversely affected.


                                       13


Furthermore,  the Web has experienced a variety of outages and other delays as a
result of damage to portions of its infrastructure,  and could face such outages
and delays in the future.  These  outages and delays could  adversely affect the
level of Web usage and also the level of traffic for Global SmartCards,  Inc. In
addition,  the Web could lose its viability due to delays in the  development or
adoption of new development or adoption of new standards and protocols to handle
increased levels of activity or due to increased governmental regulation.

The Internet allows marketers to collect meaningful demographic  information and
feedback from  consumers,  and to rapidly respond to this  information  with new
messages.  This offers a significant  new opportunity for businesses to increase
the effectiveness of their direct marketing  campaigns.  In traditional media, a
significant  portion of all  advertising  budgets are spent on direct  marketing
because of its  effectiveness.  However,  the  effectiveness of direct marketing
campaigns  is  dependent  upon the quality of consumer  data used to develop and
place complementary  products,  services or facilities are developed and the Web
becomes a viable  commercial  marketplace in the long term, the Company might be
required to incur  substantial  expenditures  in order to adapt its  products to
changing Web  technologies,  which could have a material  adverse  effect on the
Company's business, results of operations and financial condition.


                                       14

(a)  E-Commerce and Direct Marketing.

The Internet has become a significant  marketplace  for buying and selling goods
and services.  Industry estimates that the amount of goods or services purchased
in online consumer  transactions  will grow from  approximately  $2.6 billion in
1997 to approximately $37.5 billion in 2002. Improvements in security, interface
design and transaction-  processing technologies have facilitated an increase in
online consumer transactions. Early adopters of such improvements include online
merchants  offering broad product catalogs (such as books,  music CDs and toys),
those seeking distribution efficiencies (such as PCs, flowers and groceries) and
those  offering   products  and  services  with  negotiable   pricing  (such  as
automobiles and mortgages).  The Company believes that online companies  provide
businesses an opportunity to link Internet  customers with like  interests.  The
Internet allows marketers to collect  meaningful  demographic  information.  The
Company's  business  strategy  relies on  providing  support  for the  Company's
services via the Company's Web site. Any  significant  deterioration  in general
economic  conditions  that adversely  affected these companies could also have a
material  adverse  effect on the Company's  business,  results of operations and
financial condition.

5)   Raw Materials and Suppliers

The Company is a not a manufacturer and is dependent in purchasing plastic cards
with embedded microprocessors from other suppliers.  Therefore, the Company does
not use any raw materials.

6)   Customers

The Company believes that  establishing  and maintaining  brand identity through
Loyalty  Programs to Hotels,  Resorts,  Cruise  Line,  and Casinos is a critical
aspect  of its  efforts  to  attract  new  customers  In  order to  attract  new
customers,  the  Company  intends  to  make a  commitment  to the  creation  and
maintenance of brand loyalty among these groups. The Company plans to accomplish
this,  although not  exclusively,  through  marketing its programs directly to
                                             -----------------------------------
these customers and further advertising its Web site through the various  search
---------------------------
engines,  marketing  its site to  businesses/customers  through e-mail, online
media, and other marketing and promotional efforts.

There can be no assurance that brand  promotion  activities will yield increased
revenues or that any such  revenues  would offset the  expenses  incurred by the
Company in building its brands.  Further, there can be no assurance that any new
users attracted to Global SmartCards will conduct business with the Company on a
regular basis.  If the Company fails to promote and maintain its brand or incurs
substantial  expenses in an attempt to promote and  maintain its brand or if the
Company's  existing  or  future  strategic  relationships  fail to  promote  the
Company's brand or increase brand awareness, the Company's business,  results of
operations and financial condition would be materially adversely affected.


                                       15

7)   Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements,
     or Labor Contracts

The  Company  regards   substantial   elements  of  its  future  and  underlying
infrastructure  and  technology as  proprietary  and attempts to protect them by
relying  on  trademark,  service  mark,  copyright  and  trade  secret  laws and
restrictions on disclosure and transferring title and other methods. The Company
plans to enter into confidentiality agreements with its future employees, future
suppliers and future  consultants and in connection with its license  agreements
with third parties and generally seeks to control access to and  distribution of
its technology,  documentation and other proprietary information.  Despite these
precautions,  it may be possible for a third party to copy or  otherwise  obtain
and  use the  Company's  proprietary  information  without  authorization  or to
develop  similar  technology  independently.  Legal  standards  relating  to the
validity,  enforceability and scope of protection of certain  proprietary rights
in  Internet-related  businesses  are  uncertain  and  still  evolving,  and  no
assurance  can be  given  as to the  future  viability  or  value  of any of the
Company's  proprietary rights. There can be no assurance that the steps taken by
the Company will prevent  misappropriation  or  infringement  of its proprietary
information,  which  could  have a  material  adverse  effect  on the  Company's
business,  results of operations  and  financial  condition.  Litigation  may be
necessary in the future to enforce the Company's  intellectual  property rights,
to protect the Company's trade secrets or to determine the validity and scope of
the proprietary  rights of others.  Such litigation  might result in substantial
costs and diversion of resources and management  attention.  Furthermore,  there
can be no assurance  that the Company's  business  activities  will not infringe
upon the  proprietary  rights of others,  or that other  parties will not assert
infringement  claims against the Company,  including  claims that by directly or
indirectly  providing  hyperlink  text  links  to Web  sites  operated  by third
parties.  Moreover,  from time to time,  the Company may be subject to claims of
alleged  infringement  by the  Company or service  marks and other  intellectual
property  rights of third  parties.  Such claims and any  resultant  litigation,
should it occur, might subject the Company to significant liability for damages,
might result in  invalidation of the Company's  proprietary  rights and, even if
not  meritorious,  could result in substantial  costs and diversion of resources
and  management  attention  and  could  have a  material  adverse  effect on the
Company's business, results of operations and financial condition.

8)   Regulation

The law  relating to the  liability of companies  promoting  their  products and
services online is currently unsettled. It is possible that claims could be made
against online e-Commerce companies under both United States and foreign law for
defamation,  libel,  invasion of privacy,  negligence,  copyright  or  trademark
infringement, or other theories based on the nature and content of the materials
disseminated  through their Web site. Several private lawsuits seeking to impose
such liability upon other online companies are currently pending.


                                       16

9)   Effect of Existing or Probable Government Regulations

Government legislation has been proposed that imposes liability for or prohibits
the transmission over the Internet of certain types of information.

The  imposition  upon the  Company  and  other  online  providers  of  potential
liability for  information  carried on or  disseminated  through their  services
could  require the Company to implement  measures to reduce its exposure to such
liability,  which may require the Company to expend substantial resources and/or
to discontinue certain service offerings.  In addition,  the increased attention
focused upon  liability  issues as a result of these  lawsuits  and  legislative
proposals could impact the growth of Internet use.

The Company does not believe that such regulations,  which were adopted prior to
the advent of the Internet,  govern the operations of the Company's business nor
have any claims been filed by any state  implying that the Company is subject to
such legislation. There can be no assurance, however, that State government will
not attempt to impose these  regulations  upon the Company in the future or that
such  imposition  will not  have a  material  adverse  effect  on the  Company's
business,  results of operations  and financial  condition.  Several States have
also proposed legislation that would limit the uses of personal user information
gathered online or require online services to establish  privacy  policies.  The
Federal Trade  Commission has also recently settled a proceeding with one online
service  regarding the manner in which  personal  information  is collected from
users and provided to third parties.  Changes to existing laws or the passage of
new legislation,  could create  uncertainty in the marketplace that could reduce
demand for the services of the Company or increase the cost of doing business as
a result of litigation  costs or increased  service  delivery costs, or could in
some other  manner have a material  adverse  effect on the  Company's  business,
results  of  operations  and  financial  condition.  In  addition,  because  the
Company's  services are  accessible  worldwide,  and the Company may  facilitate
sales of goods  to users  worldwide,  other  jurisdictions  may  claim  that the
Company is  required  to  qualify  to do  business  as  foreign  corporation  in
particular state or foreign country. Due to the increasing popularity and use of
the Internet and other online services, it is possible that a number of laws and
regulations may be adopted with respect to the Internet or other online services
covering issues such as user privacy,  freedom of expression,  pricing,  content
and  quality of  products  and  services,  taxation,  advertising,  intellectual
property   rights  and   information   security.   Although   sections   of  the
Communications  Decency  Act of 1996  (the  "CDA")  that,  among  other  things,
proposed to impose criminal penalties on anyone distributing "indecent" material
to  minors  over the  Internet,  were  held to be  unconstitutional  by the U.S.
Supreme Court,  there can be no assurance that similar laws will not be proposed
and adopted.  Certain  members of Congress  have  recently  discussed  proposing
legislation that would regulate the distribution of "indecent" material over the
Internet in a manner that they believe would withstand challenge on constitution
law.


                                       17

Any new  legislation  or regulation,  or the  application of laws or regulations
from jurisdictions  whose laws do not currently apply to the Company's business,
for  third-party  activities and  jurisdiction.  The adoption of new laws or the
application of existing laws may decrease the growth in the use of the Internet,
which could in turn decrease the demand for the Company's services, increase the
Company's cost of doing business or otherwise have a material  adverse effect on
the Company's  business,  results of operations  and  financial  condition.  The
Company does not believe that such regulations,  which were adopted prior to the
advent of the Internet, govern the operations of the Company's business nor have
any claims been filed by any state  implying that the Company is subject to such
legislation.  There can be no assurance, however, that State government will not
attempt to impose these  regulations upon the Company in the future or that such
imposition  will not have a material  adverse effect on the Company's  business,
results of operations and financial condition.

10)  Research and Development Activities

The  Company, among  other things,  plans to enhance its brands, implement and
execute its business and  marketing  strategy successfully,   continue   to
develop and   upgrade its technology and information-processing  systems,  meet
the needs of a changing  market,  provide superior  customer  service,  respond
to competitive  developments  and attract, integrate, develop  and market its
Web site, retain and  motivate  qualified  personnel  provided the company can
generate sales and profit.

The Company also needs to develop and identify  SmartCard  products that achieve
market  acceptance  by its  end-users.  There can be no  assurance  that  Global
SmartCards  will achieve  market  acceptance.  Accordingly,  no assurance can be
given  that the  Company's  business  model  will be  successful  or that it can
sustain  revenue growth or be profitable.  The market for SmartCards has matured
and is finite.  As is typical of any rapidly evolving market,  demand and market
acceptance  for  products are subject to a high level of  uncertainty  and risk.
Moreover,  because this market is rapidly  evolving,  it is difficult to predict
its future growth rate, if any, and its ultimate size.

If the market fails to develop,  develops  more slowly than  expected or becomes
saturated  with  competitors,  or if the  Company's  products  do not achieve or
sustain market acceptance,  the Company's business,  results of operation may be
materially and adversely affected.

There can be no assurances the Company will be successful in  accomplishing  all
of these things,  and the failure to do so could have a material  adverse effect
on the company's business, results of operations and financial condition.

11)  Impact of Environmental Laws

The Company is not aware of any federal, state or local environmental laws which
would effect is operations.


                                       18

12)  Employees

The Company currently has three (3) employees:  one President, and one Secretary
and one Chief Financial Officer,  all of which are Directors of the Company. The
Company has no intention at this time to add full employees.

     (i)  The  Company's   performance   is   substantially   dependent  on  the
          performance   of   its   corporate   President   and   CEO,   Georgios
          Polyhronopoulos.  In particular,  the Company's success depends on his
          ability to define and develop markets and business for the Company.

     (ii) The  Company  does not carry key person life  insurance  on any of its
          personnel.  The loss of the services of any of its executive  officers
          or other key  employees  could have a material  adverse  effect on the
          business,  results  of  operations  and  financial  condition  of  the
          Company.  The Company's  future success also depends on its ability to
          retain  and  attract   highly   qualified   technical  and  managerial
          personnel.

     (iii)There can be no assurance  that the Company will be able to retain its
          key  managerial  and  technical  personnel  or that it will be able to
          attract  and  retain   additional   highly  qualified   technical  and
          managerial  personnel  in the  future.  The  inability  to attract and
          retain the technical and managerial personnel necessary to support the
          growth of the Company's business,  due to, among other things, a large
          increase  in the  wages  demanded  by  such  personnel,  could  have a
          material  adverse  effect  upon the  Company's  business,  results  of
          operations and financial condition.

13)  Year 2000 Implications

The Company plans to market and sell Smart Cards which are plastic cards with an
embedded  microprocessor.  The Company has not completed any tests or assessment
of internal and external  (third-party)  IT systems and non-IT systems.  At this
point, the Company is not currently aware of any Year 2000 problems  relating to
its Smart  Cards or the use of its Smart  Cards  with other  computer  equipment
operated by third  parties  that would have a material  effect on the  Company's
business,  results of operations  or financial  condition,  without  taking into
account the Company's efforts to avoid such problems. Based on its assessment to
date, the Company does not anticipate that costs associated with remediating the
Company's non-compliant IT systems or non-IT systems will be material,  although
there can be no assurance to such effect.

                                       19


Such a failure could prevent the Company from  operating its business,  and have
an adverse  affect on the  company's  business.  The Company  believes  that the
primary business risks, in the event of such failure,  would include, but not be
limited to, lost of  potential  revenues,  increased  operating  costs,  loss of
customers,  or other business  interruptions  of a material  nature,  as well as
claims of mismanagement,  misrepresentation, or breach of contract, any of which
could have a  material  adverse  effect on the  Company's  business,  results of
operations and financial condition.

14)  The Industry & Potential Effect on the Company's Plan of Operations

The  rapid  adoption  of  the  Internet  as  a  means  to  gather   information,
communicate,  interact and be entertained,  combined with the vast proliferation
of Web sites(estimated  worldwide domains 15,719,462),  has made the Internet an
important  new mass  medium.  Industry  estimates  that the  number of Web users
exceeded  68 million  in 1997,  and will grow to over 319  million by 2002.  The
market  for  Internet   products  and   services  is   characterized   by  rapid
technological  developments,  evolving industry  standards and customer demands,
and  frequent  new  product   introductions  and   enhancements.   These  market
characteristics  are  exacerbated  by the emerging  nature of the market and the
fact that many  companies  are expected to introduce  new Internet  products and
services in the near future. The Company's future success will depend in part on
its ability to continually improve the performance,  features and reliability of
its  product(s)  to both evolving  demands of the  marketplace  and  competitive
product and service  offerings;  and, there can be no assurance that the Company
will be successful in doing so.  Accordingly,  the Company's future success will
depend on its  ability to adapt to rapidly  changing  technologies,  to adapt to
evolving industry standards and to continually improve the performance, features
and  reliability of its service in response to  competitive  service and product
offerings and evolving demands of the marketplace. The failure of the Company to
adapt to such  changes  would have a material  adverse  effect on the  Company's
business,  results of  operations  and  financial  condition.  In addition,  the
widespread   adoption  of  the  Internet,   networking   or   telecommunications
technologies   or  other   technological   changes  could  require   substantial
expenditures  by the Company to modify or adapt its services or  infrastructure,
which could have a material adverse effect on the Company's business, results of
operations and financial condition.


                                       20

15)  Present Licensing Status

None-Not Applicable.

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

All  statements,   trend  analysis  and  other  information  contained  in  this
Registration  relative  to  markets  for the  Company's  products  and trends in
revenues,  gross  margin  and  anticipated  expense  levels,  as well  as  other
statements   including   words  such  as  "believe,"   "anticipate,"   "expect,"
"estimate,"  "plan"  and  "intend"  and other  similar  expressions,  constitute
forward-looking  statements.  Those forward-  looking  statements are subject to
business and economic risks,  and the Company's actual results of operations may
differ from those  contained in the  forward-looking  statements.  The following
discussion of the  financial  condition and results of operations of the Company
should  also be read in  conjunction  with the  Financial  Statements  and Notes
related thereto included elsewhere in this Registration.


                                       21

                                     Item 2

Item 2. Management's Discussion and Analysis or Plan of Operation

A.   Management's Plan of Operation

1) In its initial  operating  period ended June 30, 2000,  the Company incurred
                                            ------------
a net loss of $50,838 from development stage operations. It has yet to receive
               -------
any revenues from operations.

An original  stock  offering  was made in reliance  upon an  exemption  from the
registration  provisions of Section 5 of the Securities Act of 1993, as amended,
pursuant  to  Regulation  D,  Rule  504,  of the  Act.  a total  of two  million
(2,000,000)  shares of its common stock were  purchased by the three founders of
the Company,  on May 15, 1998 for cash.  Between July 10 and July 15, 1998,  the
Company sold One Million  (1,000,000)  shares of its common stock in  connection
with a public  offering  at a price of $0.025  per  share.  On or about July 15,
1998, the Company  completed a public  offering of shares of common stock of the
Company  pursuant to Regulation  "D," Rule 504 of the Securities Act of 1933, as
amended,  whereby it sold one million  (1,000,000) shares of the Common Stock of
the  Company  for  twenty-five   thousand  ($25,000)  dollars  to  approximately
twenty-five  (25)  unaffiliated  shareholders  of record.  The Company  filed an
original Form D with the Securities and Exchange Commission on or about July 20,
1998.  On January 11, 2000, the company  completed a subsequent  Public Offering
that was offered  without  registration  under the  Securities  Act of 1933,  as
amended (The "Act"), in reliance upon the exemption from  registration  afforded
by sections 4(2) and 3 (b) of the Securities Act and Regulation "D"  promulgated
thereunder.  The Company sold to one  (1)  additional  shareholder,  one hundred
twenty  thousand  (120,000)  shares of common stock at a price of $.20 per share
for a total amount raised of twenty four thousand ($24,000) dollars.  On May 25,
2000, the Company approved a forward stock split on the basis of 3 for 1, thus
increasing the common stock from 3,120,000 shares to 9,360,000 shares of its
$0.001 par value common voting stock issued and outstanding  which are held by
approximately thirty (30) shareholders, including the three founding
shareholders, of record.

Management  fully  anticipates  that  the  proceeds  from the sale of all of the
Common  Shares  sold in the  offering  delineated  above will be  sufficient  to
provide the  Company's  capital  needs for the next twelve (12)  months.  If the
Company  cannot  generate  sufficient  revenues  or  raise  money in the next 12
months,  it is most  likely the  company  will not be able to stay in  business.
Card-Smart  Corp  is  a  developmental  stage  company.  The  Company  does  not
anticipate any revenues until it can identify and sell customers its products.

The Company currently anticipates that it has enough available funds to meet its
anticipated  needs  for  working  capital,  capital  expenditures  and  business
expansion  for the next twelve (12)  months.  The Company  expects  that it will
continue to experience  negative  operating cash flow for the foreseeable future
as a result of  significant  spending on  advertising  and  infrastructure.  The
Company does not have  significant  cash or other material  assets,  nor does it
have an established  source of revenues  sufficient to cover its operating costs
and to allow it to continue as a going concern.  It is,  however,  the intent of
the Company to seek to raise additional capital via a private placement offering
pursuant  to  Regulation  "D" Rule 505 or 506 or a  private  placement  once the
Company is trading on OTC-BB.  If the Company needs to raise additional funds in
order to fund expansion,  develop new or enhanced services or products,  respond
to  competitive  pressures  or acquire  complementary  products,  businesses  or
technologies,  any  additional  funds  raised  through the issuance of equity or
convertible debt securities, the percentage ownership of the stockholders of the
Company will be reduced,  stockholders  may experience  additional  dilution and
such  securities may have rights,  preferences or privileges  senior to those of
the Company's  Common Stock. The Company does not currently have any contractual
restrictions  on its ability to incur debt and,  accordingly,  the Company could
incur  significant  amounts of indebtedness to finance its operations.  Any such
indebtedness   could  contain  covenants  which  would  restrict  the  Company's
operations.  There  can  be no  assurance  that  additional  financing  will  be
available on terms  favorable to the Company,  or at all. If adequate  funds are
not available or are not available on acceptable  terms,  the Company may not be
able  to  continue  in  business,  or to a  lessor  extent  not be  able to take
advantage of acquisition opportunities,  develop or enhance services or products
or respond to competitive pressures.  The Company does not have significant cash
or other material  assets,  nor does it have an  established  source of revenues
sufficient to cover its  operating  costs and to allow it to continue as a going
concern. The Company does not have any preliminary  agreements or understandings
between the Company and its  stockholders/officers and directors with respect to
loans or financing to operate the Company.


                                       22

2)   No engineering,  management or similar report has been prepared or provided
for external use by the Company in connection  with the offer of its  securities
to the public.

3)   Management  believes  that the  Company's  future  growth and success  will
depend on its ability to find customers for its Smart Card  products,  and their
ability to develop a Web site to support their services.  The Company expects to
continually  evaluate  its  potential  products  to  determine  what  additional
products or enhancements are required by the  marketplace.  The Company does not
plan to develop products internally,  but find suppliers who would be willing to
sell, market or license their products through the Company.  This can help avoid
the time and expense involved in developing actual products.

The  Company has yet to incur any  research  and  development  costs May 01 1998
through March 20, 2000. The only research and  development  the Company plans to
incur in  finding  suitable  products  which  offer the  Company  potential  for
revenues and profits.

4)   The  Company  currently  does not  expect  to  purchase  or sell any of its
equipment,  since it owns no equipment. Any computer equipment to be utilized is
equipment owed by the Officers of the Company.

B.   Segment Data

As of June 30,  2000,  no sales  revenue  has  been  generated  by the  Company.
Accordingly,  no table  showing  percentage  breakdown  of revenue  by  business
segment or product line is included.


Item 3. Description of Property

A.   Description of Property

The address of the principal office is: 38820 N. 25th Avenue, Phoenix, AZ 85027.
One of the Officers of the Company is providing office space and computer use at
no cost to the Company.  Management believes that this is currently suitable for
the Company's needs for the next twelve (12) months.

Item 4.  Security Ownership of Management and Certain Security Holders

A.   Security Ownership of Management and Certain Beneficial Owners

The following table sets forth  information as of the date of this  Registration
Statement  certain  information with respect to the beneficial  ownership of the
Common Stock of the Company  concerning  stock  ownership by (i) each  director,
(ii) each executive officer,  (iii) the directors and officers of the Company as
a group, (iv) and each person known by the Company to own beneficially more than
five (5%) of the Common Stock. Unless otherwise indicated,  the owners have sole
voting and investment power with respect to their respective shares.


                                       23
<TABLE>
<CAPTION>

Title   Name & Address                      Amount of       Percent
of      of Beneficial                       shares          of
Class   Owner of Shares (1)       Position  held by Owner   Class
------  ---------------           --------  -------------   ------
<S>                               <C>        <C>             <C>
Common  Georgios Polyhronopoulos  Chairman/  1,500,000       48.00%
                                  CEO
Common  Larry Richardson          Secretary    250,000        8.00%
                                  Director

Common  Stephen J. Antol          Treasurer    250,000        8.00%

All Executive Officers and Directors as a
Group (3 persons), purchased shares         2,000,000        64.00%

</TABLE>

These 2,000,000 shares were purchased at par value ($0.001) by these
three individuals on May 15, 1998 for a total of two thousand
($2,000) dollars cash.


(1)  c/o Card-Smart Corp 38820 N. 25th Avenue, Phoenix, AZ 85086

B.   Persons Sharing Ownership of Control of Shares

No person other than Georgios Polyhronopoulos,  President/CEO owns or shares the
power to vote ten percent (10%) or more of the Company's securities.

C.   Non-voting Securities and Principal Holders Thereof

The Company has not issued any non-voting securities.

D.   Options, Warrants and Rights

This are no options, warrants or rights to purchase securities of the Company.

E.   Parents of Issuer

Under the definition of parent,  as including any person or business  entity who
controls  substantially  all (more than 80%) of the issuers of common stock, the
Company has no parents.

F.   Other

Not applicable


                                       24

Item 5. Directors,  Executives,  Officers and  Significant  Employees The names,
ages and  positions of the Company's  directors  and  executive  officers are as
follows:

<TABLE>
<CAPTION>

Name                         Age              Position
--------                    ------           ----------
<S>                          <C>             <C>
Georgios Polyhronopoulos     42              President, CEO, &
                                             Director

Larry L. Richardson          54              Secretary, Director &
                                             Chief Technology
                                             Officer

Stephen J. Antol             57              Chief Financial
                                             Officer & Director
</TABLE>

B.  Work Experience

Georgios Polyhronopous (George Poulos),  President and CEO of Global SmartCards,
Inc., organized and formed the company.

George  Poulos,  President and CEO of the Company,  since  inception.  He has 10
years experience in corporate  development,  and has managed multiple  projects.
Mr. Poulos has been directly involved in taking several companies  "Public" from
seed  funding to IPO.  He has worked as an  Investment  Banker and  Broker.  Mr.
Poulos closely follows Technological  Developments and Trends, as they relate to
both the Telecommunications  Industry and the Internet and World Wide Web. He is
a  Professional  Member  of the  National  Association  of  Certified  Valuation
Analysts.

1998-present,  Director  Enterprise  Solutions,  Telemax  Communications,  he is
responsible  for  developing  a Corporate  Finance  team to seek out and attract
funding sources during Telemax's various stages of development.  His position at
Telemax  requires him to interface with licensees,  negotiate  lease  management
arrangements,  and deal with the  providers of  enterprise  solutions,  such as:
educational institutions;  public utilities; community, city, state, and federal
offices; media relations and medical facilities.

1997-present,  Co-founder/Corporate  Secretary,  Infobuild Networks, he provided
investors to "seed" the Company, he structured and prepared the Offering for the
Company.  He initially  negotiated  the licensing of certain  technologies,  and
eventually  the  acquisition  of said  technologies.  He recruited  the Board of
Directors,  and the Chief Technology Officer. And was responsible for developing
the World Wide Web presence for the Company at www.infobuild.com.

1989-1996,  Managing  Director,  Capcom  Equities Inc., he was  responsible  for
facilitating  mergers and or  acquisitions  for  private and public  development
stage and  Micro-cap  companies  provided  strategic  financing  advice  and the
development of public market  strategies.  Mr. Poulos performed many of the same
functions as his position as an Investment Banker.


                                       25


1989-1996, Broker/Investment Banker, Osler Inc., Mr. Poulos spent seven years in
the Securities Industry in Vancouver,  Canada,  initially as a retail broker; he
progressed to assistant of the lead analyst,  and eventually  became part of the
Investment Banking team focusing on emerging  technologies.  His duties included
full  due-diligence  review of the Companies and their industries,  and complete
evaluation and comparison of the business case.

Larry L. Richardson,  Corporate Secretary, Chief Technology Officer and Director
for Card-Smart Corp

March, 1999 to Present, Larry L. Richardson has been the Chief Operating Officer
and Chief Technology Officer for Telemax Communications. He has over 30 years of
engineering, operations, and telecommunications operations management experience
and expertise.  He currently provides the technical direction of the company and
oversees the company's RF engineers and business development activities.

September  1998  -  February  1999,  RF  Engineering   and  Enterprise   Network
Consultant,  Mr.  Richardson  served as a captive  consultant  under contract to
Telecellular,  Inc., a startup Enhanced Specialized Mobile Radio (ESMR) company,
with radio frequency license construction  contracts in Puerto Rico. As such, he
provided the business,  financial and technical recommendations to the company's
board of directors.  His tasks included the  identification  of funding sources,
development of the business plan, identification of teledensity,  defense of the
pro forma,  and preparation of the network launch plan to rapidly realize return
on investment.

February  1997-August 1998,  Project  Development/International  Project Leader,
Black & Veatch,  Kansas City,  MO.  Black & Veatch is an  engineer-  constructor
company specializing in power plants and telecommunications  infrastructure.  As
an executive level engineer and International  Project Leader Mr. Richardson was
responsible  for wireless and wireline  telecommunications  business and project
development  for  Latin  America,  as  well as  oversight  of the  company's  RF
engineering.  He interfaced with equipment  manufacturers  and carriers in Latin
America (Ericsson,  Motorola,  NexTel,  Qualcomm,  NEC, Nortel, Lucent, Alcatel,
McCaw) to address the technical issues of their projects;  prepared proposals in
Spanish and Brazilian  Portuguese;  identified the human and materiel  resources
required to perform the work;  and  orchestrated  the initial  launch of project
implementation.  During the  proposal  preparation  phase,  Mr.  Richardson  was
responsible for designing the initial promotional illustrations,  addressing the
immediate and strategic  commercial  issues  regarding  contracting,  liability,
currency,  and other associated  commercial risks, as well as the implementation
scheduling.

February  1995-February  1997,  Team  Leader,  Telecommunications  and  Security
Engineering  Team, Holmes & Narver  Architects and Engineers,  Albuquerque,  NM.
Holmes & Narver is an  architectural-engineering  firm,  which covers the entire
gamut  of  A/E  work,  and  has  operations  worldwide.  As a team  leader,  Mr.
Richardson  managed,  mentored and developed a team of engineers and specialists
who engineered LAN, MAN, WAN and security  systems.  In the capacity as a senior
engineer,  he engineered a TDMA cellular telephone network for Puerto Rico using
a combination of MicroPath and AutoCad software tools as a proof-of-capabilities
to GTE;  performed the  conceptual  design of a WAN  manipulating  multiple data
bases within Oracle for a client in Mexico,  and performed the conceptual design
of SDH rings, optical fiber backbone,  ATM switches,  satellite  teleports,  and
technical  control  facilities  for a client in the  Republic of Panama.  As the
company's Program Manager for Latin America,  Mr. Richardson  performed business
development for work in that geographical  area,  composed  proposals in Spanish
and  Brazilian  Portuguese,  and served as the corporate  representative  to the
Panamerican Federation of Consulting Engineers.


                                       26

December 1990-February 1995, Systems Engineer and Supervisor  Telecommunications
Engineering  Team  Science  Applications  International  Corp.:  Communications.
Science  Applications   International   Corporation  (SAIC)  is  an  Information
Technology and  Telecommunications  integration  company.  This assignment was a
continuation  of the previous  assignment  under Martin  Marietta.  SAIC won the
re-compete  contract  during  contract  renewal  negotiations.  As SAIC's senior
engineer  and engineer  manager on the U.S.  Department  of Energy,  Albuquerque
Operations  Office contract,  Mr.  Richardson  performed Value Added Engineering
(VAE)  of  fixed  and   mobile   radio   networks,   microwave   and   satellite
communications, video communications,  outside plant cable, emergency operations
centers and technical  control  functions for the  department,  Sandia  National
Laboratories, Los Alamos National Laboratory, and its nationwide contractors. RF
engineering  was  performed by both  traditional  mathematics  and physics,  and
MicroPath.  The associated civil works were designed using AutoCad.  He prepared
technical  analyses,   reports,  executive  summaries,  and  briefings  for  the
department's  executives.   Subsequent  to  the  design  and  engineering,   Mr.
Richardson   performed  the  project  management  and  construction   management
functions for the  implementation  and initial  operations of the projects using
MSProject,  Excel, and Word. He also served as the technical  representative  to
the DOE's nuclear Accident  Response Group and Nuclear Emergency Search Team for
designing specialized telecommunications capabilities to support the recovery of
damaged  nuclear  weapons,  cleanup of  radioactive  materials,  and response to
nuclear  terrorism.  As a manager,  he mentored  technical  personnel  under his
supervision,  developed them professionally, and provided the organizational and
financial input to the federal government's budget and long range plans.

Mr.  Richardson  was  nominated by the U.S.  Department of Energy to receive the
University  of  Florida's   "Henry  J.  Phister"   award  for  his   outstanding
contribution to the field of  telecommunications  in the federal  government for
the period 1985-1995.

November  1985-December  1990,  Principal  Engineer and Manager  Engineering and
Design, Martin Marietta Information Systems. As an senior engineering contractor
to the U.S. Department of Energy's Albuquerque Operations Office, Mr. Richardson
performed  Value Added  Engineering  (VAE) of fixed and mobile  radio  networks,
microwave  and satellite  communications,  video  communications,  outside plant
cable,  emergency  operations  centers and technical  control  functions for the
department,  Sandia National Laboratories,  Los Alamos National Laboratory,  and
its  nationwide  contractors.   RF  engineering  was  performed  by  traditional
mathematics and physics.  The associated  civil works were designed using manual
drafting.  He prepared technical analyses,  reports,  executive  summaries,  and
briefings  for  the  department's  executives.  Subsequent  to  the  design  and
engineering,  Mr. Richardson  performed the project  management and construction
management  functions  for the  implementation  and  initial  operations  of the
projects  using Lotus 1-2-3,  and Word Perfect.  He also served as the technical
representative  to  the  DOE's  nuclear  Accident  Response  Group  and  Nuclear
Emergency Search Team for designing specialized telecommunications  capabilities
to support  the  recovery of damaged  nuclear  weapons,  cleanup of  radioactive
materials,  and  response  to  nuclear  terrorism.  As a  manager,  he  mentored
technical personnel under his supervision,  developed them  professionally,  and
provided the  organizational  and  financial  input to the federal  government's
budget and long range  plans.  Mr.  Richardson  was  awarded  Martin  Marietta's
highest award for Technical Excellence.


                                       27

October 1983-November 1985,  Telecommunications  Specialist,  U.S. Department of
Energy, As a federal  government  telecommunications  engineering  manager,  Mr.
Richardson managed the RF, telephony,  National Security Emergency Preparedness,
nuclear weapons Accident  Response Group, and  Radiological  Assistance  Program
communications  programs.  His duties included all of the technical and business
aspects of the programs including:  financial planning,  long range planning, as
well as preparation of scope and SOWs for bid to contractors.  He also served as
the Communications  Officer to the nuclear Accident Response Group (ARG) and the
ARG program manager to the Nuclear Emergency Search Team.

April  1983-October 1983,  Electromagnetic  Pulse (EMP) Engineer III, EG&G WASC,
Inc.,  Mr.  Richardson  designed EMP tests to  instrument  Department of Defense
aircraft,  vehicles and operations  vans to determine the damages caused by High
Altitude   Electromagetic   Pulse  (HEMP).  Using  Maxwell  pulsers,  EMP  waves
simulating  nuclear blasts were imposed on test objects,  the effects  recorded,
and the  remedial  actions  recommended.  During  his  employment  at EG&G,  Mr.
Richardson  designed a nuclear  attack-  survivable,  RF-based,  broadband  data
network  for  Western  Europe.   The  network   employed  every  form  of  radio
communications  and tied  into  the  NATO  countries'  terrestrial  fiber  optic
backbone  networks.  The network  was termed the  European  Distribution  System
Logistics Command, Control, Communications and Information (EDS LogC3I) network.
The design was submitted for bid to the U.S. Air Force Logistics Command.

October  1982-April  1983,  Telecommunications  Specialist,  Special  Operations
Consultant  and  Department of the Army,  Mr.  Richardson  developed  conceptual
RF-based  telecommunications  systems for use by U.S. Special  Operations Forces
elements (Army Special Forces,  Navy SEALS, Air Force Special  Operations Wings)
for clandestine warfare and counter- terrorism operations.

June 1962-September 1982, United States Army, Mr. Richardson is retired from the
U.S. Army.

Education:  MA Degree,  1986, Webster University,  Computer Resources Management
(IT Systems  Analysis  and Design);  BS Degree,  1981,  University  of New York,
Liberal  Studies  (ADP  and  Communications  Engineering);  1984-  1994,  George
Washington  University,   Continuing   Engineering  Education.   Certifications:
Engineer  Class  I,  National   Association  of  Radio  and   Telecommunications
Engineers, Certification No. E1-03422, with master endorsements in RF and Non-RF
technologies. Hekimian Laboratories REACT Technical Control Facilities, 1993

Professional  Affiliations,  Institute of Electrical and Electronics  Engineers,
Decade  Member,  Member  Number:  08563231  National  Association  of Radio  and
Telecommunications Engineers, Member.


Stephen J. Antol, Chief Financial Officer, and Director of Card-Smart Corp.

Stephen  James  Antol,  has over  twenty-six  years  experience  in the field of
Corporate Finance and  Administration,  and over four and half years' experience
with two major CPA firms in Phoenix, Arizona. His work background includes areas
of cash auditing, control and flow, budget administration, credit and collection
policies and procedures,  management  information  systems,  inventory  control,
audits  by  outside   agencies  and  CPA's.   Mr  Antol  has  also  managed  the
administration  of  profit  sharing  programs,   benefits  packages,   corporate
insurance programs, human resources and corporate restructuring.


                                       28

1993- Present,  he has been self-employed  working as a financial  consultant to
small business.  This includes  providing  outside chief  financial  officer and
controller  services to small  businesses  requiring  technical  expertise  on a
limited  or  recurring  basis.  These  include:  corporate  financial,  tax  and
administrative  functions.  As an independent consultant he provides services to
private and public corporations,  partnerships and proprietorships. In September
1997,   he  accepted  the  Chief   Financial   Officer   position  with  Telemax
Communications and handles all financial functions for the Company.

1990-1992,  Chief Financial Officer and Corporate  Controller,  for Lou Regester
Furniture Co., Inc., a  multiple-location  retailer,  Mr. Antol  responsible for
entire  accounting  function,  including  LIFO  inventory,  budgets,  cash  flow
projections,  financial statements, information systems and corporate income tax
return  preparation.  He  directed  administrative  functions  in areas of human
resources,  payroll, group and liability insurance.  Mr. Antol also was the with
outside CPAs and the Company's Bank. He directed installation and implementation
of new computer LAN system with related  software for  furniture  retailers.  In
conjuction with the new system Mr. Antol Designed and implemented new accounting
procedures,   internal  controls  and  paperwork  flow.  Mr  Antol  oversaw  the
reconstruction of lost accounting information and developed plan for catch-up of
monthly accounting due to an old computer hardware failure.

1987-1989,  Director of Finance,  F.S.  Inc.,  d.b.a.  Audio Express and Country
House Furniture, a four state  multiple-location  retailer and manufacturer.  He
administered all financial functions,  including  statements,  inventory,  store
budgets,  cash flow projections,  payroll and taxes. Mr. Antol established store
audit checklist. Designed and implemented accounting system and controls for new
manufacturing  affiliate.  Mr Antol also  developed new  incentive  compensation
program for sales personnel at the retail store locations.

1975- 1987,  Corporate  Treasurer,  Giant  Industries,  Inc,a large  independent
refiner, distributor and retailer of petroleum products. Mr. Antol headed entire
accounting  function as controller,  including  financial  statements,  payroll,
human  resources,  taxes,  budgets,  cash flow  projections,  audits by  outside
agencies  and CPA's,  and  corporate  income tax return  preparation.  Mr. Antol
implemented  new management  information  system for  monitoring  profit centers
profitability and cost control he accelerated  monthly closings and Improved the
credibility of financial  information.  Mr. Antol was responsible for conversion
from  manual  to  a  computerized   accounting   system  in  1976-1977  and  the
developement of all related paperwork and internal controls.  Mr. Antol promoted
to Corporate  Treasurer in late 1977.  Developed treasury  function,  including:
cash  flow  analysis,   investments,   compliance  to  regulatory  requirements,
corporate  tax return  preparation,  issuance  and receipt of letters of credit,
corporate  insurance  coverage,  credit and collection  procedures,  and oversaw
audits by outside agencies. He maintained involvement with banking relations and
outside  regulatory  agencies,  including the  Department of Energy  referencing
petroleum  price  controls  and related  reporting  requirements.  Mr Antol also
administered the Company's profit-sharing plan.

1973- 1975,  Director of Finance,  Freight Sales,  Ltd., a five state  multiple-
location retailer. Mr Antol directed the financial and administrative  functions
of this $8 million dollar  limited  partnership.  He developed and  administered
accounting  system and related  internal  controls,  inventory and store audits,
operating budgets,  administrative policies and procedures,  and prepared income
tax return filings.

1971- 1973, Audit  Supervisor,  Laventhol,  Kreckstein & Horwath,  CPA's, he was
responsible for conducting and managing audits of partnerships and corporations.
He administered  budgets,  staffing  requirements and on-job training,  Prepared
related client income tax returns and maintained client relations.

1968-1971,  Audit Senior,  Touche Ross & Company,  CPA's, he conducted audits of
clients  in  various  industries,  which  included:   electronic  manufacturing,
distributors,  construction, title company, service and real estate. He prepared
related income tax returns, reviewed and evaluated internal controls, accounting
systems, SEC and shareholder reports.

Education:  Michigan State University,  East Lansing, Michigan, Bachelor of Arts
Degree in  Accounting-1968;  Certified  Public  Accountant  (CPA),  Arizona 1970
(1970-1986), currently non-registered).


                                       29

Item 6.  Remuneration of Directors and Executive Officers

(1)  Compensation of Executive Officers

Only the President and CEO of Company has been  compensated  for the period from
February  16,  1999 to July  31,  1999  for  services  provided  as an  Officer.
Compensation  is for this Officer is $12,000 per year,  paid on a monthly basis.
"See Employment Agreements, Exhibits 10(a)."

(2)  Compensation of Directors

This were no  arrangements  pursuant  to which any  director  of the Company was
compensated  for  the  period from May 1, 1998 to June  30, 2000 for any service
                                   -----------    --------------
provided as a director. In addition, no such  arrangement  is  contemplated  for
the   foreseeable  future  as  the  Company's  only  directors  are its  current
executive officers. "See Employment Agreements,  Exhibits 10(a)." The By-laws of
the Company state:  "Section 6.1. Compensation - The directors may be paid their
expenses of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation  therefor.  Members
of  special  or  standing  committees  may be  allowed  like  reimbursement  and
compensation for attending committee meetings."

Item 7. Interest of Management and Others in Certain Transactions

None-Not applicable.


                                       30

                              Part II

Item 1. Market price of and  Dividends  on the  Registrant's  Common  Equity and
        Other Stockholder matters

A.   Market Information

The  common  stock of the  Company  is  currently  not  traded on the NASDAQ OTC
Bulletin Board or any other formal or national securities  exchange.  This is no
trading  market for the  Company's  Common Stock at present and this has been no
trading  market  to  date.  At this  time,  management  has not  undertaken  any
discussions,  preliminary  or  otherwise,  with  any  prospective  market  maker
concerning the  participation  of such market maker in the  aftermarket  for the
Company's  securities,  but the Company may  initiate  such  discussions  in the
future following receipt of an effective date for this Registration Statement.

(i)  There is currently no Common Stock which is subject to outstanding  options
     or warrants to purchase,  or  securities  convertible  into,  the Company's
     common stock.

(ii) There is currently no common stock of the Company which could be sold under
     Rule 144 under the Securities Act of 1933 as amended or that the registrant
     has agreed to register for sale by security holders.

(iii)There is  currently  no common  equity  that is being or is  proposed to be
     publicly  offered by the  registrant,  the  offering  of which could have a
     material effect on the market price of the issuer's common equity.

B.   Holders

As of June 30, 2000,  the Company has approximately  thrity (30) stockholders of
      -------------
record.  Penny Stock  Regulation  Broker-dealer  practices  in  connection  with
transactions  in "Penny  Stocks"  are  regulated  by certain  penny  stock rules
adopted by the Securities and Exchange  Commission.  Penny stocks  generally are
equity  securities  with a price  of less  than  $5.00  (other  than  securities
registered  on certain  national  securities  exchanges  or quoted on the NASDAQ
system).  The penny stock rules require a broker-dealer,  prior to a transaction
in a penny stock not otherwise  exempt from the rules, to deliver a standardized
risk disclosure  document that provides  information  about penny stocks and the
risk associated with the penny stock market. The broker-dealer must also provide
the customer  with  current bid and offer  quotations  for the penny stock,  the
compensation of the broker- dealer and its salesperson in the  transaction,  and
monthly account  statements showing the market value of each penny stock held in
the customer's  account.  In addition,  the penny stock rules generally  require
that prior to a  transaction  in a penny stock,  the broker-  dealer must make a
written  determination  that the penny  stock is a suitable  investment  for the
purchaser  and receive the  purchaser's  written  agreement to the  transaction.
These  disclosure  requirements  may have the  effect of  reducing  the level of
trading activity in the secondary market for a stock that becomes subject to the
penny stock rules.  When the Registration  Statement  becomes  effective and the
Company's  securities  become  registered,  the stock will likely have a trading
price of less than  $5.00  per  share  and will not be traded on any  exchanges.
Therefore,  the Company's stock will become subject to the penny stock rules and
investors  may find it more  difficult  to sell their  securities,  should  they
desire to do so.

C.   Dividend Policy

The  Company  has not  paid any  dividends  to date.  In  addition,  it does not
anticipate paying dividends in the immediate  foreseeable  future.  The Board of
Directors of the Company  will review its  dividend  policy from time to time to
determine the  desirability  and  feasibility of paying  dividends  after giving
consideration  to  the  Company's   earnings,   financial   condition,   capital
requirements and such other factors as the Board may deem relevant.


                                       31

D.   Reports to Shareholders

The Company intends to furnish its shareholders  with annual reports  containing
audited financial  statements and such other periodic reports as the Company may
determine to be appropriate or as may be required by law. Upon the effectiveness
of this  Registration  Statement,  the  Company  will be required to comply with
periodic  reporting,  proxy  solicitation and certain other  requirements by the
Securities Exchange Act of 1934.

E.   Transfer Agent and Registrar

The  Transfer  Agent for the  shares of common  voting  stock of the  Company is
Holladay Stock  Transfer,  2939 North 67th Place,  Scottsdale,  Arizona,  Phone:
480-481-3940.

Item 2. Legal Proceedings

The Company is not currently  involved in any legal proceedings nor does it have
knowledge of any threatened litigation.

Item 3. Recent sale of Unregistered Securities

A total of two million  (2,000,000) shares of its common stock were purchased by
the three founders of the Company, on May 15, 1998 for cash. Between July 10 and
July 15,  1998,  the Company sold One Million  (1,000,000)  shares of its common
stock in connection with a public offering at a price of $0.025 per share. On or
about July 15, 1998, the Company completed a public offering of shares of common
stock of the Company  pursuant to Regulation "D," Rule 504 of the Securities Act
of 1933,  as  amended,  whereby it sold one  million  (1,000,000)  shares of the
Common  Stock of the  Company  for  twenty-five  thousand  ($25,000)  dollars to
approximately  twenty-five (25) unaffiliated shareholders of record. The Company
filed an original Form D with the Securities and Exchange Commission on or about
February  25,  1999.  On January 11,  2000,  the company  completed a subsequent
Public Offering that was offered without  registration  under the Securities Act
of  1933,  as  amended  (The  "Act"),   in  reliance  upon  the  exemption  from
registration  afforded  by  sections  4(2) and 3 (b) of the  Securities  Act and
Regulation "D"  promulgated  thereunder.  The Company sold to one(1)  additional
unaffiliated  shareholders,  one hundred twenty (120,000) shares of common stock
at a price of $.20 per share for a total amount  raised of twenty four  thousand
($24,000)  dollars.  As of  June 30,  2000,  the Company  has three  million one
                            --------------
hundred twenty shares  (3,120,000)  shares of its $0.001 par value common voting
stock  issued  and  outstanding  which  are held by  approximately  thirty  (30)
shareholders, including the three founding shareholders, of record.


                                       32

The Company Shareholder List, as of June 30, 2000 is the following
                                    -------------
This lists reflects the 3 for 1 stock split which took place on
---------------------------------------------------------------
May 25, 2000.
------------

<TABLE>
<CAPTION>

    Shareholder                    Number of Shares
    --------------------           ----------------
<S> <C>                                 <C>
1.  Thomas A. Todd Sr.                  112,500
2.  Lorrie L. Todd                      127,500
3.  Thomas A Todd Jr                    120,000
4.  Kristine D. Todd                    120,000
5.  Fran Muro                           120,000
6.  Joanne L. Richardson                120,000
7.  J.R. Steward                        120,000
8.  Robert D. Morgan                    120,000
9.  Mardelle Steward                    120,000
10. Carole Williams                     120,000
11. William C. Todd                     120,000
12. Robert Sletner                      120,000
13. Joanne Sletner                      120,000
14. Lucille Sletner                     120,000
15. Terrance Moore                      120,000
16. David Williams                      120,000
17. Norma Moore                         120,000
18. Enrique C. Parecki                  120,000
19. Darius Williams                     120,000
20. Kenneth Atkinson                    120,000
21. Doug Walkup                         120,000
22. Michael Fiscus                      120,000
23. Mary Jane Fiscus                    120,000
24. Jason Moran                         120,000
25. Adam W. Steward                     120,000

Restricted Common Stock:
-----------------------
Founders Shares, purchased May 15, 1998:

26. Georgios Polyhronopoulos         4,500,000
27. Stephen J. Antol                   750,000
28. Larry Richardson                   750,000

Private Placement Stock sold on or before January 11, 2000:

29. Xen Stephanopoulos                 360,000

</TABLE>

                                    33

Item 4.  Description of Securities

A.   Common Stock

(1)  Description of Rights and Liabilities of Common Stockholders

     i.   Dividend  Rights - The holders of  outstanding  shares of common stock
          are  entitled to receive  dividends  out of assets  legally  available
          Therefore  at such times and in such amounts as the board of directors
          of the Company may from time to time determine.

     ii.  Voting Rights - Each holder of the Company's common stock are entitled
          to one vote for each share held of record on all matters  submitted to
          the vote of  stockholders,  including the election of  directors.  All
          voting is noncumulative,  which means that the holder of fifty percent
          (50%) of the shares voting for the election of the directors can elect
          all the  directors.  The  board of  directors  may  issue  shares  for
          consideration  of  previously  authorized  but  unissued  common stock
          without future stockholder action.

     iii. Liquidation Rights - Upon liquidation, the holders of the common stock
          are  entitled  to receive  pro rata all of the  assets of the  Company
          available for distribution to such holders.

     iv.  Preemptive  Rights - Holders  of  common  stock  are not  entitled  to
          preemptive rights.

     v.   Conversion Rights - No shares of common stock are currently subject to
          outstanding options, warrants, or other convertible securities.

     vi.  Redemption  rights - no  redemption  rights exist for shares of common
          stock.

     vii. Sinking Fund Provisions - No sinking fund provisions exist.

     viii.Further  Liability  For Calls - No shares of common  stock are subject
          to Further  call or  assessment  by the  issuer.  The  Company has not
          issued stock options as of the date of this Registration Statement.

(2)  Potential Liabilities of Common Stockholders to State and Local Authorities

No material potential  liabilities are anticipated to be imposed on stockholders
under state statues. Certain Nevada regulations,  however, require regulation of
beneficial  owners of more than 5% of the voting  securities.  Stockholders that
fall into this  category,  Therefore,  may be subject to fines in  circumstances
where non-compliance with these regulations are established.

B.   Debt Securities

The Company is not registering any debt securities, nor are any outstanding.

C.   Other Securities To Be Registered

The Company is not registering any security other than its common stock.


                                       34

Item 5. Indemnification of Directors and Officers

THE  ARTICLES  OF   INCORPORATION   AND  BY-LAWS  OF  THE  COMPANY  PROVIDE  FOR
INDEMNIFICATION  OF  EMPLOYEES  AND  OFFICERS  IN  CERTAIN  CASES.   INSOFAR  AS
INDEMNIFICATION  FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933 MAY BE
PERMITTED TO DIRECTORS,  OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO
THE FOREGOING  PROVISIONS,  THE COMPANY HAS BEEN INFORMED THAT IN THE OPINION OF
THE SECURTIES AND EXCHANGE  COMMISSION  SUCH  INDEMNIFICATION  IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.

Article 10 of the Articles of Incorporation  states:  "No Director or Officer of
this Corporation  shall be personally liable to the Corporation or to any of its
stockholders  for damages for breach of fiduciary  duty as a director or officer
involving  any act or  commission  of any such  director  or  officer  provided,
however, that the foregoing provision shall not eliminate or limit the liability
of a  director  or  officer  for acts of  omissions  which  involve  intentional
misconduct,  fraud or a knowing violation of law, or the payment of dividends in
violation  of  Section  78.300 of the  Nevada  Revised  Statutes.  Any repeal or
modification of this Article by the Stockholders  shall be prospective only, and
shall not  adversely  affect  any  limitation  on the  personal  liability  of a
director  or  officer of the  Corporation  for acts or  omissions  prior to such
repeal or modification."

Article 11 of the Company's  By-laws state: " Every person who was or is a party
or is  threatened  to be made a party to or is involved  in any action,  suit or
proceeding, whether civil, criminal,  administrative or investigative, by reason
of the fact that he or a person of whom he is the legal representative is or was
a director or officer of the  corporation or is or was serving at the request of
the  corporation  or for  its  benefit  as a  director  or  officer  of  another
corporation, or as its representative in a partnership,  joint venture, trust or
other  enterprise,  shall be indemnified and held harmless to the fullest extent
legally  permissible  under the General  Corporation  Law of the State of Nevada
from time to time against all expenses,  liability and loss  (including  moneys'
fees, judgments,  fines and amounts paid or to be paid in settlement) reasonably
incurred or suffered by him in  connection  therewith.  The expenses of officers
and  directors  incurred  in  defending  a civil  or  criminal  action,  suit or
proceeding  must be paid by the  corporation as they are incurred and in advance
of the final  disposition of the action,  suit or proceeding  upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if it
is  ultimately  determined by a court of competent  jurisdiction  that he is not
entitled to be indemnified  by the  corporation.  Such right of  indemnification
shall be a contract  right which may be  enforced in any manner  desired by such
person. Such right of indemnification  shall not be exclusive of any other right
which such directors,  officers or representatives may have or hereafter acquire
and, without  limiting the generality of such statement,  they shall be entitled
to their respective rights of indemnification under any bylaw,  agreement,  vote
of  stockholders,  provision of law or otherwise,  as well as their rights under
this Article.

The Board of  Directors  may cause the  corporation  to  purchase  and  maintain
insurance  on behalf of any person  who is or was a  director  or officer of the
corporation,  or is or was  serving  at the  request  of  the  corporation  as a
director  or officer  of  another  corporation,  or as its  representative  in a
partnership,  joint  venture,  trust or other  enterprise  against any liability
asserted against such person and incurred in any such capacity or arising out of
such status,  whether or not the  corporation  would have the power to indemnify
such person.

The Board of Directors may from time to time adopt  further  Bylaws with respect
to  indemnification  and may amend these and such Bylaws to provide at all times
the fullest  indemnification  permitted  by the General  Corporation  Law of the
State of Nevada."


                                       35


                                    Part F/S

Item 1.  Financial Statements

The following documents are filed as part of this report:

a)   Card-Smart Corp


Report of Barry L. Friedman, CPA

                                        36

<PAGE>

FINANCIAL STATEMENTS

                                TABLE OF CONTENTS
                                -----------------
<TABLE>
<CAPTION>
                                                                    PAGE #

     <S>                                                               <C>
     INDEPENDENT AUDITORS REPORT                                       F-1

     ASSETS                                                            F-2

     LIABILITIES AND STOCKHOLDERS' EQUITY                              F-3

     STATEMENT OF OPERATIONS                                           F-4-5

     STATEMENT OF STOCKHOLDERS' EQUITY                                 F-6

     STATEMENT OF CASH FLOWS                                           F-7-8

     NOTES TO FINANCIAL STATEMENTS                                     F-9-10




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


Barry L. Friedman
Certified Public Accountant
1582 Tulita Drive
Las Vegas, NV 89123
(702) 361-8414


INDEPENDENT AUDITORS' REPORT

August 14, 2000

Board of Directors
CARD-SMART CORP.
Minden, Nevada

I have audited the accompanying Balance Sheet of CARD-SMART CORP.
(A Development Stage Company), as of June 30, 2000, and December 31, 1999, and
the related statement of stockholders' equity for June 30,
2000, and December 31, 1999, and statements of operations and cash
flows for the three months ended June 30, 2000, and June 30, 1999,
for the six months ended June 30, 2000, and June 30, 1999, the year
ended December 31, 1999, the period May 26, 1998 to December 31, 1998,
and the period May 26, 1998 (inception), to June 30, 2000.  These
Financial Statements are the responsibility of the Company's management.
My responsibility is to express an opinion on these Financial Statements
based on my audit.

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

In my opinion, the Financial Statements referred to above present fairly,
in all material respects, the financial position of CARD-SMART CORP. (A
Development Stage Company), as of June 30, 2000, and December 31, 1999,
and the related statement of stockholders' equity for June 30, 2000, and
December 31, 1999, and statements of operations and cash flows for the
three months ended June 30, 2000, and June 30, 1999, for the six months
ended June 30, 2000, and June 30, 1999, the year ended December 31, 1999,
the period May 26, 1998 to December 31, 1998, and the period May 26, 1998
(inception), to June 30, 2000, in conformity with generally accepted
accounting principles.

The accompanying Financial Statements have been prepared assuming the
Company will continue as a going concern.  As discussed in Note #5 to the
Financial Statements, the Company has had no operations and has no
established source of revenue. This raises substantial doubt about its
ability to continue as a going concern. Management's plan in regard to these
matters is described in Note #5. These financial statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/  Barry L. Friedman
-----------------------
Barry L. Friedman, CPA

 ......................................F-1

<PAGE>

                             CARD-SMART CORP.
                      (A Development Stage Company)

                             Balance Sheets
                           for the six months
                          ending June 30, 2000
                           and the year ended
                              Dec. 31, 1999


</TABLE>
<TABLE>
<CAPTION>

BALANCE SHEET

ASSETS

                                        6 Mos. Ending    Year Ended
                                        June 30, 2000    Dec. 31, 1999
                                        -------------    -------------
CURRENT ASSETS

<S>                                     <C>              <C>
Cash                                    $   192          $    0
                                        -------          ------
TOTAL CURRENT ASSETS                    $   192          $    0


OTHER ASSETS                            $     0          $    0
                                        -------          ------

TOTAL OTHER ASSETS                      $     0          $    0


TOTAL ASSETS                            $   192          $    0
                                        =======          ======
</TABLE>

The accompanying notes are an integral part of these financial statements

 ......................................F-2

<PAGE>

                              CARD-SMART CORP.
                       (A Development Stage Company)

                             Balance Sheets
                           for the six months
                          ending June 30, 2000
                           and the year ended
                              Dec. 31, 1999

<TABLE>
<CAPTION>

LIABILITIES AND STOCKHOLDERS' EQUITY


                                        6 Mos. Ending    Year Ended
                                        June 30, 2000    Dec. 31, 1999
                                        -------------    -------------
CURRENT LIABILITIES

<S>                                     <C>              <C>
Officers Advances (Note #8)             $     30         $     0
                                        --------         -------
TOTAL CURRENT LIABILITIES               $     30         $     0

STOCKHOLDERS EQUITY (Note #4)

Common stock, $.001 par value
authorized 25,000,000 shares
issued and outstanding at
December 31, 1999 - 3,000,000 shares                      $ 3,000
June 30, 2000 - 9,360,000 shares        $ 9,360

Additional paid in Capital               41,640            24,000

Accumulated loss during
the development stage                   (50,838)          (27,000)

TOTAL STOCKHOLDERS' EQUITY              $   162           $     0
                                        -------           -------
TOTAL LIABILITIES AND
STOCKHOLDERS EQUITY                     $   192           $     0
                                        =======           =======
</TABLE>

The accompanying notes are an integral part of these financial statements

 ......................................F-3

<PAGE>

                              CARD-SMART CORP.
                       (A Development Stage Company)

                          Statements of Operations
                    for the three and six month periods
                           ending June 30, 1999
                            and June 30, 2000

<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS

                   3 Mos. Ended   3 Mos. Ended    6 Mos. Ended   6 Mos. Ended
                   June 30, 2000  June 30, 1999   June 30, 2000  June 30, 1999
                   -------------  -------------   -------------  -------------

<S>                <C>            <C>             <C>            <C>

REVENUE            $     0        $     0         $     0        $     0

EXPENSES
General,
Selling
& Admin.           $     0        $     0         $23,838        $     0
                   -------        -------         -------        -------

Total Expenses     $     0        $     0         $23,838        $     0
                   -------        -------         -------        -------

Net Profit/
Loss (-)
from Operations    $     0        $     0         ($23,838)      $     0
                   =======        =======         =========      =======

Net Loss
per share-
Basic &
diluted
(Note #2)         $NIL            $NIL            ($.0025)       $NIL


Weighted ave.
# of common
shares
outstanding    9,360,000       9,360,000       9,360,000      9,360,000
               =========       =========       =========      =========

</TABLE>

The accompanying notes are an integral part of these financial statements


 ......................................F-4

<PAGE>

                              CARD-SMART CORP.
                       (A Development Stage Company)

                          Statements of Operations
                                (Continued)

<TABLE>
<CAPTION>

STATEMENT OF OPERATIONS
(Continued)

                                       May 1, 1998         May 1, 1998
                        Year Ended     (Inception) to      (Inception) to
                        Dec. 31, 1999  Dec, 31, 1998       June 30, 2000
                        -------------  -------------       -------------
<S>                     <C>            <C>                 <C>
REVENUE                 $     0        $     0             $     0

EXPENSES
General, Selling
and Administrative      $     0        $27,000             $50,838
                        -------        -------             -------
TOTAL EXPENSES          $     0        $27,000             $50,838
                        -------        -------             -------
Net Profit/Loss (-)
from operations         $     0       ($27,000)           ($50,838)
                        =======       =========           =========

Net Loss per share -
Basic and diluted
(Note #2)               $NIL           ($.0029)            ($.0054)

Weighted average
number of common
shares outstanding      9,360,000      9,360,000          9,360,000
                        =========      =========          =========
</TABLE>

The accompanying notes are an integral part of these financial statements

 ......................................F-5

<PAGE>

                              CARD-SMART CORP.
                       (A Development Stage Company)
                           Statement of Changes
                          in Stockholder's Equity

<TABLE>
<CAPTION>

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

                                                  Additional      Accum-
                         Common     Stock         paid-in         ulated
                         Shares     Amount        Capital         Deficit
                         ------     ------        ----------      -------
<S>                      <C>        <C>           <C>             <C>

May 15, 1998
Issued For Services      2,000,000  $2,000        $     0

July 15, 1998
Stock Issued For Cash    1,000,000  +1,000        $24,000

Net Loss May 1, 1998
(Inception) to
December 31, 1998                                                  (27,000)
                        ---------------------------------------------------
Balance,
December 31, 1998       3,000,000   $3,000        $24,000         ($27,000)
                        ===================================================
Net loss year ended
December 31, 1999                                                        0
                        --------------------------------------------------
Balance,
December 31, 1999       3,000,000   $3,000        $24,000         ($27,000)
                        ===================================================
January 11, 2000
Stock Issued For Cash     120,000     +120        +23,880

May 25, 2000
Forward Stock Split
3:1                     6,240,000   +6,240        (6,240)

Net loss
January 1, 2000 to
June 30, 2000                                                     (23,838)
                        --------------------------------------------------
Balance,
June 30, 2000           9,360,000  $9,360        $41,640         ($50,838)
                        ==================================================
</TABLE>

The accompanying notes are an integral part of these financial statements


 ......................................F-6

<PAGE>

                              CARD-SMART CORP.
                        (A Development Stage Company)
                          Statement of Cash Flows,
                                 Continued

<TABLE>
<CAPTION>

STATEMENT OF CASH FLOWS

                                       May 1, 1998         May 1, 1998
                        Year Ended     (Inception) to      (Inception) to
                        Dec. 31, 1999  Dec, 31, 1998       June 30, 2000
                        -------------  -------------       -------------
<S>                     <C>            <C>                 <C>
Cash Flow from
Operating Activities
Net Loss                $0             ($27,000)           ($50,838)

Adjustment to
reconcile net loss to
net cash provided by
operating activities

Issued stock
for services             0               +2,000              +2,000

Changes in Assets
and Liabilities

Increase in current
Liabilities

Officers Advances        0                    0                 +30

Net cash used in
operating Activities    $0             ($25,000)           ($48,808)

Cash Flows from
Investing Activities     0                    0                   0

Cash Flows from
Financing Activities
Issuance of Common
Stock                    0              +25,000             +49,000

Net increase
(decrease)
in cash                 $0             $      0                $192
</TABLE>
 ......................................F-7

<PAGE>

                              CARD-SMART CORP.
                        (A Development Stage Company)
                          Statement of Cash Flows,
                                 Continued

<TABLE>
<CAPTION>

STATEMENT OF CASH FLOWS (Continued)

                                       May 1, 1998         May 1, 1998
                        Year Ended     (Inception) to      (Inception) to
                        Dec. 31, 1999  Dec, 31, 1998       June 30, 2000
                        -------------  -------------       -------------
<S>                     <C>            <C>                 <C>
Cash,
beginning of period      0              0                     0

Cash,
end of period           $0             $0                  $192


</TABLE>


The accompanying notes are an integral part of these financial statements

 ......................................F-8

<PAGE>

                              CARD-SMART CORP.
                        (A Development Stage Company)
                        Notes to Financial Statements
                    June 30, 2000, and December 31, 1999


NOTE #1 - HISTORY AND ORGANIZATION OF THE COMPANY

The Company was organized May 1, 1998, under the laws of the State of
Nevada as CARD-SMART CORP. The Company currently has no operations and
in accordance with SFAS #7, is considered a development company.

On May 15, 1998, the company issued 2,000,000 shares of its $0.001 par
value common stock for services of $2,000.00.

On July 15, 1998, management completed a securities offering to obtain
additional funding in the amount of $25,000.00. The securities offering
was at $0.025 per share and the Company sold 1,000,000 shares of common
stock. The proceeds of the offering were used for general corporate
purposes.

On January 11, 2000, management completed a securities offering to obtain
additional funding in the amount of $24,000.00. The securities offering
was at $0.20 per share and the Company sold 120,000 shares of common stock.
The proceeds of the offering were used for general corporate purposes.

On May 25, 2000, the Company approved a forward stock split on the basis
of 3 for 1, thus increasing the common stock from 3,120,000 shares to
9,360,000 shares.


NOTE #2 - ACCOUNTING POLICIES AND PROCEDURES

Accounting policies and procedures have not been determined except as
follows:

1. The Company uses the accrual method of accounting.
2. Earnings per share are computed using the weighted average number of
   common shares outstanding.
3. The Company has not yet adopted any policy regarding payment of
   dividends. No dividends have been paid since inception.
4. The Company has adopted December 31st as its year-end.

 ......................................F-9

<PAGE>

                              CARD-SMART CORP.
                        (A Development Stage Company)
                        Notes to Financial Statements
                    June 30, 2000, and December 31, 1999
                                (Continued)


NOTE #3 - GOING CONCERN

The Company's financial statements are prepared using the generally
accepted accounting principles applicable to a going concern, which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business.  However, the Company has no current
source of revenue.  Without realization of additional capital, it would
be unlikely for the Company to continue as a going concern.  It is
management's plan to seek additional capital through a merger with an
existing operating company.


NOTE #4 - WARRANTS AND OPTIONS

There are no warrants or options outstanding to acquire any additional
shares of common stock.


NOTE #5 - RELATED PARTY TRANSACTION

The Company neither owns nor leases any real or personal property. A
director provides office services without charge. Such costs are
immaterial to the financial statements and accordingly, have not been
reflected therein. The officer and directors of the Company are involved
in other business activities and may, in the future, become involved in
other business opportunities. If a specific business opportunity becomes
available, such persons may face a conflict in selecting between the
Company and their other business interests. The Company has not formulated
a policy for the resolution of such conflicts.


NOTE #6 - OFFICER'S ADVANCES

While the Company is seeking additional capital through a merger with an
existing operating company, an officer of the Company has advanced funds
on behalf of the Company to pay for any costs incurred by it.  These funds
are interest free.



                                  F-10
<PAGE>


                               Part III

Item 1.  Exhibit Index
-----------------------------------------------------------------------------

(3)  Articles of Incorporation & By-Laws

     3.1  Articles of Incorporation*

     3.2  By-Laws*

(4)

     4.1  Instrument Defining the Rights of Security Holders
          Sample Stock Certificate

(10) Material Contracts

     10.1  Georgios Polyhronopoulos Employment Agreement*


(23) Consent Experts

     23.1  Consent of Barry L. Friedman, P.C., CPA*


(27) Financial Data Schedule

     27.1  Financial Data Schedule*


* Previously filed as an exhibit to the Company's Form 10-SB.


                                       37

SIGNATURES

     In accordance  with Section 12 of the Securities  Exchange Act of 1934, the
     registrant caused this registration statement to be signed on its behalf by
     the undersigned, hereunto duly authorized.


                                 Card-Smart Corp
                              --------------------
                                  (Registrant)

Dated:  October 23, 2000

By:  /s/ Georgios Polyhronopoulos
---------------------------------------------------------
Georgios Polyhronopoulos, Chairman of the Board, President
and Chief Executive Officer


Dated:  October 23, 2000

By:  /s/ Larry L. Richardson
---------------------------------------------------------
Larry L. Richardson, Director, Corporate Secretary


                                     38
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