RX TECHNOLOGY HOLDINGS INC, SB-2/A, 2000-07-17

RX TECHNOLOGY HOLDINGS INC
SB-2/A, 2000-07-17
MAILING, REPRODUCTION, COMMERCIAL ART & PHOTOGRAPHY

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 17, 2000.

REGISTRATION NO. 333-35508
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT 2
TO

FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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RX TECHNOLOGY HOLDINGS, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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<TABLE>
<S> <C> <C>
NEVADA 7310 82-0498177
(STATE OR JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NO.) IDENTIFICATION NO.)
</TABLE>

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2264 SEVENTH STREET
MANDEVILLE, LOUISIANA 70471
(504) 727-9412
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
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DONALD REX GAY
CHIEF EXECUTIVE OFFICER
2264 SEVENTH STREET
MANDEVILLE, LOUISIANA 70471
(504) 727-9412
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
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COPIES OF ALL COMMUNICATIONS TO:
GREGORY BARTKO, ESQ.
Law Offices of Gregory Bartko, P.C.
3475 Lenox Road, Suite 400
Atlanta, Georgia 30326
(404) 238-0550

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:

As soon as practicable after the effective date of this Registration Statement.

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

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

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

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

If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
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CALCULATION OF REGISTRATION FEE

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<CAPTION>
PROPOSED MAXIMUM (1)
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED OFFERING AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED PRICE PER SHARE PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
Common Stock, $.001 Par Value Per Share
Underlying Common Stock Warrants....... 501,493 $6.00 $3,008,958 $837.00
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(g) under the Securities Act.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH SECTION 8(A),
MAY DETERMINE.

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SUBJECT TO COMPLETION DATED JULY 17, 2000

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS

501,493 SHARES OF COMMON STOCK
UNDERLYING 501,493 COMMON STOCK
PURCHASE WARRANTS
RX TECHNOLOGY HOLDINGS, INC.

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We are registering:

- 501,493 common stock purchase warrants that we intend to distribute as
soon as practicable after the date of the prospectus, to stockholders of
record as of May 1, 2000; and

- 501,493 shares of common stock, par value $.001 per share, issuable upon
the exercise of the common stock purchase warrants, at $6.00 per share.

The distribution and registration of these securities is for the purpose of
providing our existing shareholders with an opportunity to increase their
ownership of our common stock. One common stock purchase warrant will be
distributed to our stockholders for every 18 shares of common stock they own.
Our board of directors decided that our shareholders of record at May 1, 2000
should be given an opportunity to purchase additional shares of common stock now
that our common stock is quoted in the Pink Sheets. Each common stock purchase
warrant you hold entitles you to purchase one share of our common stock, at any
time up until December 31, 2001. Whether a current prospectus is in effect or
not, we can call and redeem the common stock purchase warrants for $.01 per
warrant, on 30 days notice, at any time after the date of this prospectus. Our
chief executive officer, Mr. Gay, will receive 274,056 of the total common stock
purchase warrants subject to this prospectus. Mr. Gay has made no decision on
exercising the warrants he will receive.

Currently, only a limited public market exists for our common stock. You are
not assured that any public market will continue in the future. Our common stock
is quoted in the Pink Sheets maintained by the National Quotations Bureau, Inc.
under the symbol "RXTX". The bid price quotation in the Pink Sheets for our
common stock as of July 13, 2000 was $2.50 per share. We arbitrarily determined
the exercise and redemption prices of the common stock purchase warrants, which
bear no relationship to our assets, shareholders' equity or any other objective
criteria of value.

SHARES OF COMMON STOCK ISSUED UPON EXERCISE OF THE COMMON STOCK PURCHASE
WARRANTS INVOLVES A HIGH DEGREE OF RISK AND SUBSTANTIAL AND IMMEDIATE DILUTION
AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD TO RISK THE LOSS OF
THEIR ENTIRE INVESTMENT. SEE "RISK FACTORS" BEGINNING ON PAGE 4.

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

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THE DATE OF THIS PROSPECTUS IS JULY 17, 2000.

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You should only rely on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from
that contained in this prospectus. This prospectus does not constitute an
offer or a solicitation of an offer by anyone in any jurisdiction in which
such offer or solicitation is not authorized or is unlawful. The information
contained in this prospectus is accurate only as of the date of this
prospectus, regardless of the time of delivery of this prospectus or of any
distribution of the common stock purchase warrants. We are required,
however, to update this prospectus to include all material information
necessary for the holders of the common stock purchase warrants to make an
informed investment decision.

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TABLE OF CONTENTS

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SUMMARY..................................................... 1

RISK FACTORS................................................ 4

FORWARD-LOOKING STATEMENTS.................................. 10

USE OF PROCEEDS............................................. 11

DIVIDEND POLICY............................................. 11

CAPITALIZATION.............................................. 11

DILUTION.................................................... 12

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION................................................. 13

BUSINESS.................................................... 15

MANAGEMENT.................................................. 24

PRINCIPAL SHAREHOLDERS...................................... 29

DESCRIPTION OF SECURITIES................................... 30

SHARES ELIGIBLE FOR FUTURE SALE............................. 32

PLAN OF DISTRIBUTION........................................ 33

EXPERTS..................................................... 34

LEGAL MATTERS............................................... 35

ADDITIONAL INFORMATION...................................... 35

FINANCIAL STATEMENTS........................................ F-1
</TABLE>

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PROSPECTUS SUMMARY

THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
INVESTORS SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE FINANCIAL
STATEMENTS WHICH ARE A PART OF THIS PROSPECTUS.

OUR COMPANY

We were originally incorporated in Nevada on December 22, 1993 as RXT, Inc.
By amendment to the articles of incorporation dated December 20, 1994, we
changed our corporate name to RX Technology Inc. On February 16, 2000, we
entered into an agreement and plan of reorganization with Valley Excavation and
Trucking, Inc. that provided that all of our outstanding shares of common stock
on that date would be exchanged for shares of common stock issued by Valley.
After the date of this agreement, Valley changed its name to RX Technology
Holdings, Inc., and RX Technology, Inc. became our wholly-owned subsidiary.
References to our company throughout this prospectus include RX Technology
Holdings, Inc., formerly known as Valley Excavation and Trucking, Inc., and our
wholly-owned subsidiary, RX Technology, Inc.

OUR BUSINESS

We are in the business of designing, building, installing, assembling,
servicing, operating and maintaining digital imaging photo systems. Our systems
capture digital images at theme parks and display them on video monitors to
prospective purchasers desiring to purchase photographic copies of the images.
We assemble selected key components for the integration of our photo systems. We
have acquired extensive knowledge and technical know-how to deploy our
technology and photo systems in targeted markets and selected applications. Our
photo systems, and those operated by RX Technology Europe Limited, are widely
used in the theme park, thrill ride and attraction industry in the United
States, Europe, Asia and Latin America. As of June 30, 2000, we provided
products and services at 62 operating sites. 49 of these sites are serviced as
retail operations located at 19 theme park locations within the United States
and 3 theme parks in Argentina, Mexico and Canada. We also had as of June 30,
2000, 13 wholesale operations at which we provide supplies and services to third
parties operating those sites.

The technology used in our photo systems represents 15 years of research and
development primarily conducted in Europe. Our software application gives us,
among other benefits, the flexibility to position our photo systems equipment in
locations that capture photographs at the point of maximum expression and
excitement. We capture that precise moment, digitize the pictures, store them
electronically, display them and instantly print them, in approximately 30 to 60
seconds, only at the time a sale is made.

OUR TECHNOLOGY AND ALLIANCES

By agreement with Mr. Gay, our chief executive officer, European-based
engineers formed a company in April 1994 that is now one of our stockholders, RX
Technology Europe Limited. RX Technology Europe Limited has territorial
marketing rights within Europe and Africa. Through essentially what is based
upon a personal relationship between Mr. Gay and Dr. Marvell, RX Technology
Europe Limited provides us with research and development services and provides
us with specific hardware and software equipment. Both companies benefit from
any new software and hardware developments. We rely heavily on RX Technology
Europe Limited for equipment and software. Although there are alternate sources
for our equipment and software, we believe other sources are less desirable. The
loss of our current relationship with RX Technology Europe Limited could have a
material adverse effect on us and our operations.

We have formed alliances with major corporations such as Polaroid and Kodak,
which increases our exposure in the digital photo systems market. Our alliance
with Polaroid allows us to operate, maintain and market imaging systems in a
theme park where Polaroid has an exclusive right to photographic revenues. Our
alliance with Kodak includes making equipment loans and development services
available to us and RX Technology Europe Limited as well as favorable prices on
Kodak supplies.

OUR PRINCIPAL OFFICES

Our principal executive offices are located at 2264 Seventh Street,
Mandeville, Louisiana 70471. Our telephone and facsimile numbers at that
location are 504-727-9412 and 504-727-9815, respectively. Our website is located
at www.rxtechnology.com.

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THE OFFERING

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<S> <C>
Securities Offered................... 501,493 shares of our common stock, $.001 par value,
underlying 501,493 common stock purchase warrants. See
"Description of Securities."

Offering Prices...................... $6.00 per share underlying the common stock purchase
warrants.

Plan of Distribution................. The shares of common stock will be offered and sold without
any discounts or other commissions, to holders of the common
stock purchase warrants, when they exercise them. See "Plan
of Distribution."

Use of Proceeds...................... We could potentially receive gross proceeds of as much as
$3,008,958 from the sale of the 501,493 shares of common
stock issuable upon exercise of the common stock purchase
warrants, if all warrants are exercised. Any proceeds will
be used generally to provide additional working capital, but
have not been specifically allocated, inasmuch as there is
no assurance any of the common stock purchase warrants will
be exercised.

Transfer Agent....................... Interwest Transfer Company, Inc., 1981 East 4800 South,
Suite 100, Salt Lake City, Utah 84117, (801) 272-9294

Securities Outstanding............... We are authorized to issue up to 50,000,000 shares of common
stock and presently have 9,026,870 shares of common stock
issued and outstanding as of July 14, 2000. We have reserved
from our authorized capital 501,493 shares of common stock
for issuance upon exercise of the common stock purchase
warrants. We are also authorized to issue up to 1,000,000
shares of preferred stock in one or more series with such
rights and preferences as the board of directors may
designate. Our board of directors has not designated any
series of preferred stock.

Common Stock Purchase Warrants....... Each common stock purchase warrant you hold entitles you to
purchase one share of common stock at any time up until
December 31, 2001, provided this prospectus is still current
or has been updated. The exercise price is $6.00 per share
and is subject to adjustment if we declare a share dividend
or otherwise subdivide the number of outstanding shares of
common stock we have into a greater or lesser number of
shares outstanding. Each of the common stock purchase
warrants is callable and can be redeemed by us for $.01 per
warrant on 30 days notice at any time after the date of this
prospectus. See "Description of Securities--Warrants."

Risk Factors......................... An investment in our securities is highly speculative. You
will suffer substantial dilution in the book value per share
of the common stock compared to the purchase price. If
substantial funds are not received from exercise of the
common stock purchase warrants, of which there is no
assurance, we may require additional funding for which we
have no commitments. No person should invest who cannot
afford to risk loss of the entire investment. See "Risk
Factors."
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SUMMARY CONSOLIDATED FINANCIAL DATA

The following table summarizes certain financial data for RX Technology,
Inc. for the periods ended December 31, 1998, 1999 and March 31, 1999 and for
RX Technology Holdings, Inc. for the period ended March 31, 2000. This
information is qualified by reference to, and should be read together with, the
historical financial data for the years ended December 31, 1998 and 1999 and
should be read in conjunction with our audited financial statements included
elsewhere in this prospectus. The historical financial data as of March 31, 2000
and for the three months ended March 31, 1999 and 2000 are derived and should be
read in conjunction with our unaudited financial statements included elsewhere
in this prospectus. The data presented below should also be read in conjunction
with Management's Discussion and Analysis of Financial Condition and Results of
Operations and the financial statements and accompanying notes appearing
elsewhere in this prospectus.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED THREE MONTHS ENDED
--------------------------- MARCH 31,
DECEMBER 31, DECEMBER 31, ----------------------
1998 1999 1999 2000
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<S> <C> <C> <C> <C>
Statement of Operations Data:
Revenue..................................... $4,332,411 $6,028,397 $ 260,399 $ 295,655
Cost of revenue............................. 2,182,860 3,049,454 124,524 135,427
Operating cost and expenses................. 1,976,473 3,207,170 484,076 988,379
---------- ---------- --------- ----------
Income (loss) from operations............... 173,078 (228,227) (348,201) (828,151)
Interest expense............................ (143,098) (595,119) (106,537) (162,921)
Interest income............................. -- -- -- $ 6,833
Income tax expense.......................... 16,431 -- -- --
---------- ---------- --------- ----------
Net Income (loss)............................. $ 13,549 $ (823,346) $(454,738) $ (984,239)
========== ========== ========= ==========
</TABLE>

The following table includes a summary of our balance sheet at March 31,
2000.

- On an actual basis;

- On a proforma basis giving effect to;

- Two loans of $150,000 each subsequent to March 31, 2000.

- An increase of $200,000 in a line of credit to $250,000 subsequent to
March 31, 2000.

<TABLE>
<CAPTION>
AS OF
MARCH 31, 2000 PRO FORMA
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<S> <C> <C>
Balance Sheet Data
Current assets................................... $ 890,267 $1,390,267
Total assets..................................... 4,571,773 5,071,773
Total current liabilities........................ 2,034,333 2,534,333
Total long term debt............................. 40,152 40,152
Total liabilities................................ 2,167,548 2,667,548
Total stockholders' equity....................... 2,404,225 2,382,401
</TABLE>

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RISK FACTORS

AN INVESTMENT IN OUR SECURITIES INVOLVES A HIGH DEGREE OF RISK. IN ADDITION
TO THE OTHER INFORMATION IN THIS PROSPECTUS, YOU SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS BEFORE INVESTING IN OUR SECURITIES.

WE HAVE A LIMITED OPERATING HISTORY AND MAY FACE DIFFICULTIES ENCOUNTERED BY
EARLY STAGE COMPANIES IN NEW AND RAPIDLY EVOLVING MARKETS. We have a limited
operating history and have only been providing our products and services since
1993. As a result, we have a limited operating history upon which you may
evaluate our business and prospects. Our prospects must be considered in light
of the risks, expenses, delays, problems and difficulties frequently encountered
by early stage companies.

WE HAVE INCURRED NET LOSSES SINCE COMMENCING OUR BUSINESS AND WE EXPECT
LOSSES FROM OPERATIONS IN THE FUTURE. We have not achieved profitability and
expect to continue to incur operating losses for the foreseeable future. For our
year that ended December 31, 1999, our net loss was $823,346, and for the three
months ended March 31, 2000 our net loss was $984,239. We expect to continue to
incur significant operating losses and capital expenditures and, as a result, we
expect significant net losses in the future, and we will need to generate
significant revenues to achieve and maintain profitability.

WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS. We have limited
operating capital, and we are dependent upon the receipt of cash from our
operations and elsewhere to develop our business as intended. However, no
assurance can be given that additional financing may not be required by us in
the future. Since the warrants are exercisable only at the election of the
holders, we can not rely on the receipt of any cash proceeds from the exercise
of the warrants. Since the amount of capital available to us is limited,
available financing if any, may not be sufficient to enable us to fully develop
our business without additional capital raising activities. If appropriate
financing is not obtained by us within the next 12 months, we intend to modify
our operations accordingly. We may require additional funding sooner than
anticipated. If we raise additional capital through the sale of equity,
including preferred stock, or convertible debt securities, the percentage of
ownership of our stockholders will be diluted.

WE DEPEND HEAVILY ON OUR FOUNDER AND CHIEF EXECUTIVE OFFICER, D. REX GAY,
AND WE MAY NOT BE ABLE TO REPLACE HIS SERVICES IF HE WERE NO LONGER AVAILABLE TO
US. To date, we have not sought to obtain any key man life insurance coverage
insuring the life of Mr. Gay, and we do not anticipate obtaining such coverage
in the foreseeable future. We have also not yet entered into a written
employment agreement and covenants not to compete with Mr. Gay. The loss of
Mr. Gay's services would have a material adverse effect upon our business, our
technology licensing relationship with RX Technology Europe Limited, our
relationships with customers and on our financial condition and results of
operations. There can be no assurances that we would be able to replace Mr. Gay
in the event his services become unavailable or that our relationship with RX
Technology Europe Limited would continue.

WE MAY NOT BE ABLE TO EFFECTIVELY COMPETE IN THE DIGITAL IMAGING BUSINESS
DUE TO THE FACT THAT MANY OF OUR COMPETITORS ARE BETTER FINANCED, PUBLIC
COMPANIES WITH FAR GREATER FINANCIAL RESOURCES. Some of our competitors include
larger, better financed competitors in the theme park photography business, such
as Kodak, Polaroid, and Fuji. Even though we believe we have discovered a niche
market place that is not currently being directly addressed by our major
competitors, there are other companies pursuing related technology and services
to the theme park ride market and the digital imaging business in general. These
competitors may have greater financial resources, stronger management resources
and a better ability to enhance their share of the market. We cannot provide
investors with any assurances that our competitors will not gain greater market
share in the digital imaging business at our expense, and if they do, that will
have an adverse effect on our business and the results of our operations.

OUR MANAGEMENT WILL CONTROL APPROXIMATELY 66% OF OUR COMMON STOCK AFTER ALL
WARRANTS AND OPTIONS ARE EXERCISED. Through Mr. Gay's current common stock
ownership of 4,933,000 shares, the 274,056 common stock purchase warrants he
will receive when the warrants are distributed to shareholders of

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record as of May 1, 2000 and the 2,959,836 options he received on February 16,
2000, he will be in a position, after exercise of the warrants and options, to
control a total of 8,166,892 shares of our common stock, or approximately 66% of
the total shares of our common stock then outstanding. Accordingly, our chief
executive officer, Mr. Gay, will have substantial control over our affairs if he
exercises his warrants and options. Our management will be in a position to
elect all of our directors and thereby control us. Purchasers of our common
stock underlying the warrants will have only a limited ability to elect any of
our directors or to significantly effect corporate decisions, including
decisions on material events such as mergers and acquisitions.

DUE TO THE AMOUNT OF COMMON STOCK OWNED BY OUR OFFICERS AND DIRECTORS,
COUPLED WITH THE AMOUNT OF COMMON STOCK THEY COLLECTIVELY CAN PURCHASE BY
EXERCISING THEIR WARRANTS AND OPTIONS, THERE MAY BE A CONFLICT OF INTEREST
BETWEEN OUR OFFICERS AND DIRECTORS AND WHAT IS IN OUR OWN BEST INTEREST.
Corporate decisions that effect our financial condition, our plan of operations
and the transactions we enter into may involve inherent conflicts of interest
between us and our management. No assurance can be given that decisions that
effect us and transactions entered into on our behalf will be done so on terms
favorable to us due to a lack of arm's length bargaining, if those decisions or
transactions also effect our officers and directors.

THE EXERCISE PRICE OF THE COMMON STOCK TO BE RECEIVED UPON EXERCISE OF THE
COMMON STOCK PURCHASE WARRANTS WAS DETERMINED ARBITRARILY AND BEARS NO
RELATIONSHIP TO THE PRICE OF OUR COMMON STOCK QUOTED ON THE PINK SHEETS
MAINTAINED BY THE NATIONAL QUOTATIONS BUREAU, INC. The exercise prices of the
warrants were arbitrarily determined by our board of directors at the time they
approved the distribution of the warrants and bears no relationship to the bid
or ask prices of our common stock as quoted on the Pink Sheets maintained by the
National Quotations Bureau, Inc. The exercise prices also bear no relationship
to our assets, book value, net worth or other economic or recognized criteria of
value. In no event should the exercise prices of our warrants be regarded as an
indicator of any future market price of our securities. Even though our common
stock is now being quoted on the Pink Sheets there has been no significant
liquid public market for our common stock. Since there has been no long term
established public trading market for the common stock, there can be no
assurance given that a regular and established market will be developed and
maintained for the common stock if the warrants are exercised. Accordingly,
investors may have difficulty in selling their common stock in the future, and
we can give no assurance that the common stock can ever be resold.

THE MANNER IN WHICH WE OBTAIN FINANCING TO PURCHASE OUR DIGITAL IMAGING
EQUIPMENT INCREASES OUR INTEREST EXPENSE AND DECREASES OUR CASH FLOW. In the
past, we have purchased or leased our digital imaging equipment by financing the
equipment at market financing rates. Borrowing to finance our equipment
purchases increases our risk of loss as opposed to if we financed our equipment
from equity capital or from our revenues. Our risk is increased because we must
satisfy these obligations on specific dates, regardless of our revenues. If we
do not meet our debt service payments when due, we may be forced to forfeit the
equipment securing the debt.

WE RECENTLY DEFAULTED ON AN OUTSTANDING DEBT OBLIGATION DUE TO OUR INABILITY
TO MAKE SCHEDULED INTEREST AND PRINCIPAL PAYMENTS, AND WE MAY BE UNABLE TO MEET
OUR REPAYMENT OBLIGATIONS IN THE FUTURE. On May 15, 2000, we were unable to make
a scheduled interest and principal payment on our debt to KBK Financial, Inc. We
have subsequently paid all amounts due to date, and the loan is no longer in
default. However, no assurance can be given that we will not encounter cash flow
difficulties in the future which could cause us to be unable to meet our
repayment obligations on debt and other amounts owed by us which could cause us
to again be in default and expose us to creditor legal action to collect amounts
due.

SINCE WE OBTAIN OUR RESEARCH AND DEVELOPMENT FROM RX TECHNOLOGY EUROPE
LIMITED, ONE OF OUR STOCKHOLDERS, OUR SUPPLY OF CURRENT PRODUCT AND SERVICE
DEVELOPMENTS WILL BE ADVERSELY AFFECTED IF OUR RELATIONSHIP IS TERMINATED.
Through a long standing personal relationship between our chief executive
officer and RX Technology Europe Limited, we have access to new product updates
and technology

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improvements. This relationship has worked well for us, but if our relationship
was to be terminated or limited for any reason, we would not be able to gain
access to needed software or hardware developments and components that are
needed for new installations and to maintain and improve our products and
services. In the event of a change of control of RX Technology Europe Limited or
us, our continued access to equipment and software from RX Technology Europe
Limited may be restricted or completely unavailable. Without this relationship,
our business may not succeed and our technology may become obsolete, which would
have a significant negative impact on our business and results of operations.

WE MAY BE UNABLE TO RESPOND TO RAPID TECHNOLOGICAL CHANGES IN THE DIGITAL
IMAGING INDUSTRY, WHICH COULD MATERIALLY HARM OUR ABILITY TO CONTINUE AND EXPAND
THE SYSTEMS WE HAVE. The digital imaging business is characterized by rapidly
changing technologies and evolving industry standards. We must continue to
develop, enhance and improve our photo systems to remain competitive in the
event photography industry. We also need to integrate the various software
programs and tools required to enhance and improve our product offerings and
manage our business. We may experience difficulties that could delay or prevent
the successful development, introduction or marketing of new digital imaging
products and services. We could also incur substantial costs if we need to
modify our services or infrastructure to adapt to these changes.

WE MAY DILUTE YOUR CURRENT OWNERSHIP BY ISSUING ADDITIONAL SHARES OF OUR
COMMON AND PREFERRED STOCK. We are authorized to issue up to 50,000,000 shares
of common stock. Without considering the shares of common stock underlying the
warrants, we have 9,026,870 shares of common stock issued and outstanding. To
the extent of such authorization, our board of directors has the ability,
without seeking stockholder approval, to issue additional shares of common stock
in the future for such consideration as the board of directors may consider
sufficient. The issuance of additional common stock in the future, including the
common stock to be issued at the time that existing stockholders exercise their
warrants, will cause substantial immediate dilution and will reduce the
proportionate ownership and voting power of all of our common stock.

We are also authorized to issue up to 1,000,000 shares of preferred stock,
the rights and preferences of which may be designated in series by the board of
directors. To the extent of such authorization, such designations may be made
without stockholder approval. The board of directors has not designated any
series or issued any shares of preferred stock. The designation and issuance of
preferred stock in the future would create additional securities that in all
likelihood would have dividend and liquidation preferences over our common
stock. Furthermore, the grant of additional warrants or options or similar
rights to purchase shares of our capital stock would increase the dilutive
effect to our existing stockholders.

SHARES ELIGIBLE FOR FUTURE SALE COULD IMPAIR OUR STOCK PRICE. The market
price of our common stock as quoted in the Pink Sheets maintained by the
National Quotations Bureau, Inc. could drop due to sales of a large number of
shares of our common stock or the perception that these sales may occur.
Furthermore, the market price of our common stock may be adversely affected when
we distribute the common stock purchase warrants as soon as practicable after
the date of this prospectus. These factors could also make it more difficult to
raise funds through future offerings of common stock. The 501,493 shares of
common stock registered for sale under this prospectus, except 277,148 shares
that are the subject of warrants to be distributed to our officers, directors or
affiliates, will be freely salable in the market. Shares of our common stock
that may be received by our officers, directors or affiliates after exercise of
their warrants are deemed restricted securities as that term is defined under
the Securities Act. In the future these shares may qualify for resale into a
public market under Rule 144 promulgated under the Securities Act of 1933.

Rule 144 also permits, under certain circumstances, the resale of shares
without any quantity limitation by a person who is not an affiliate and who has
satisfied a two-year holding period. At the date of this prospectus, there are
4,988,653 shares of common stock outstanding in the hands of our affiliates that
would qualify for Rule 144 resales if and when all other conditions of Rule 144
are complied with and a public market for our shares of common stock exists.
There can be no assurance as to the market effect of such resales on the market
price of the common stock.

6
<PAGE>
FLUCTUATIONS IN OUR QUARTERLY RESULTS MAY ADVERSELY AFFECT OUR STOCK PRICE.
We expect to experience significant fluctuations in our future quarterly
operating revenues and expenses due to a variety of factors, many of which are
outside our control. As a result, we believe that quarterly comparisons of our
operating results are not necessarily meaningful and that investors should not
rely on the results of one quarter as an indication of our future performance.
We believe it is likely that, in the future, fluctuations in our quarterly
operating results will cause our results to fall below comparable historical
periods and the expectations of securities analysts and investors, which could
cause the price of our common stock to drop. Factors that may negatively affect
our quarterly operating results include:

- our ability to attract new customers;

- the weather trends across the United States that impact the number of
people using theme parks and entertainment facilities;

- the announcement or introduction of new or enhanced products by our
competitors;

- changes in our pricing policies or the pricing policies of our
competitors;

- the amount and timing of operating costs and capital expenditures relating
to expansion of our business, operations and infrastructure; and

- our ability to attract and retain new personnel in a timely and effective
manner.

OUR OPERATING RESULTS DEPEND ON OUR NETWORK INFRASTRUCTURE AND TRANSACTION
POINT-OF-SALE SYSTEMS. The satisfactory performance, reliability and
availability of our products, transaction-processing systems and network
infrastructure are critical to our operating results, as well as to our ability
to attract and retain customers and maintain adequate customer service levels.
Any system interruptions that result in the unavailability of our products or
reduced performance of our transaction systems would reduce the volume of
revenues and the attractiveness of our products and services, which would
seriously harm our business, operating results and financial condition. If the
volume of our business were to increase significantly, we will need to further
expand and upgrade our technology, transaction processing-systems and network
infrastructure. Our transaction processing systems and network infrastructure
may not be able to accommodate increases in traffic in the future. Any inability
to do so could negatively impact our business, operating results and financial
condition.

OUR COMPUTERS AND COMMUNICATIONS SYSTEMS ARE VULNERABLE TO DAMAGE OR
INTERRUPTION WHICH MAY HINDER OUR ABILITY TO DELIVER TIMELY OUR PRODUCTS AND
SERVICES. Our ability to successfully provide our products and services depends
on the efficient and uninterrupted operation of our computers and communications
hardware systems. Our systems and operations are vulnerable to damage or
interruption from fire, flood, power loss, telecommunications failure, break-ins
and similar events. Despite our implementation of network security measures, our
servers are 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 accept and confirm customer information. The occurrence of any
of the foregoing risks could negatively impact our business, operating results
and financial condition.

RAPID TECHNOLOGICAL CHANGES IN THE DIGITAL IMAGING BUSINESS COULD RENDER OUR
PRODUCTS AND SERVICES OBSOLETE. If we are unable, for technical, legal,
financial or other reasons, to adapt in a timely manner in response to changing
market conditions or customer requirements, our business, operating results and
financial condition could be harmed. Our photo systems and our planned
electronic commerce application through our prospective joint venture with
eKiosk.com, a third party internet services company, are characterized by rapid
technological change, sudden changes in customer requirements and preferences,
frequent new product and service introductions embodying new technologies and
the emergence of new industry standards and practices that could render our
existing technology obsolete. The emerging nature of these products and services
and their rapid evolution will require that we continually improve the

7
<PAGE>
performance, features and reliability of our products. Our success will depend,
among other things, on our ability:

- to enhance our existing products and services;

- to develop and license new technologies that address the increasingly
sophisticated and varied needs of our current and prospective customers;
and

- to respond to technological advances and emerging industry standards and
practices on a cost-effective and timely basis.

The development of electronic commerce products and other proprietary
technology entails significant technical and business risks and requires
substantial expenditures and lead time. We may be unable to use new technologies
effectively or adapt our products to customer requirements or emerging industry
standards.

WE WILL HAVE BROAD DISCRETION IN THE USE OF THE PROCEEDS FROM THE EXERCISE
OF THE WARRANTS. THIS WILL INCREASE THE RISK THAT WE WILL NOT USE THE PROCEEDS
EFFECTIVELY OR THAT WE WILL USE THEM IN WAYS THAT YOU DO NOT AGREE. The net
proceeds, if any, from the exercise of the warrants will be added to our working
capital and will be available for general corporate purposes, including
operating expenses and capital expenditures. In addition, we may use a portion
of any such net proceeds to acquire or invest in complementary businesses,
technologies, services or products. We cannot state with certainty particular
uses for the net proceeds from the exercise of the warrants, and will have broad
discretion in the use of the net proceeds. We can give no assurance as to
whether any net proceeds will be obtained from the exercise of the warrants.

EFFECTIVELY MANAGING OUR GROWTH MAY BE DIFFICULT. We expect to grow rapidly
by placing new photo systems in additional theme parks in the United States and
Latin America, including Mexico. We also believe we will grow rapidly by
developing additional applications for our photo systems, such as event
photography. This growth is likely to place a significant strain on our
resources and technology systems. To manage our growth, we must implement new
systems and train and manage our employees. We also will need to hire additional
personnel to service our existing and new photo systems. We cannot assure you
that our management will be able to effectively or successfully manage our
growth.

RISK OF FAILURE OF OUR COMPUTER AND COMMUNICATIONS HARDWARE SYSTEMS
INCREASES WITHOUT REDUNDANT FACILITIES. Our business depends on the efficient
and uninterrupted operation of our computer software and hardware systems. Any
system interruptions may reduce the attractiveness of our products to potential
customers and could materially adversely affect our business, financial
condition and operating results. We do not have back-up or redundant facilities
for our computer systems. Interruptions may also result from natural disasters
as well as power loss, telecommunications failures and similar events. Losses
experienced from such interruptions may be uninsurable or covered by inadequate
insurance coverage.

OUR COMMON STOCK PRICE IN THE PINK SHEETS IS LIKELY TO BE HIGHLY VOLATILE
AND WE CAN GIVE NO ASSURANCE THAT WE WILL REGAIN OUR ABILITY TO HAVE OUR COMMON
STOCK PRICES QUOTED ON THE OVER-THE-COUNTER ELECTRONIC BULLETIN BOARD MAINTAINED
BY THE NASD. Our common stock is not currently eligible for quotation on the
Over-the-Counter Electronic Bulletin Board since we have not yet complied with
the NASD's eligibility rule. The market price of our common stock may be highly
volatile, just as the stock market in general, and the market for technology
companies in particular, have been highly volatile. Investors may not be able to
resell their shares of common stock following periods of volatility because of
the market's adverse reaction to such volatility. The trading prices of many
technology stocks have reached historical highs within the last year and have
reflected relative valuations substantially above historical levels. During the
same period, such companies' stocks have also been highly volatile and have
recorded lows well below such historical highs. We cannot assure you that our
stock will trade at the same levels as other technology stocks or that

8
<PAGE>

technology stocks in general will sustain their current market prices. Factors
that could cause such volatility may include, among other things:

- changes in the prices of the stock market as a whole;

- actual or anticipated variations in quarterly operating results;

- announcements of technological innovations;

- new digital imaging products or services;

- changes in financial estimates by securities analysts;

- conditions or trends in the technology industry;

- changes in the market valuations of other technology companies;

- announcements by us or our competitors of significant acquisitions,
strategic partnerships or joint ventures;

- capital commitments;

- additions or departures of key personnel; and

- substantial sales of common stock by our stockholders.

Many of these factors are beyond our control and they may materially
adversely affect the market price of our common stock, regardless of our
operating performance. Notwithstanding the filing of this registration statement
with the Securities and Exchange Commission, no assurance can be given that we
will be able to comply with the NASD eligibility rule in the future or that our
common stock will again become eligible for quotation on the Over-the Counter
Electronic Bulletin Board.

YOU WILL INCUR IMMEDIATE AND SUBSTANTIAL DILUTION WHEN THE WARRANTS ARE
EXERCISED. Warrant holders who exercise their warrants to purchase the
underlying shares of common stock will suffer approximately 95% dilution in the
purchase price of the shares compared to the net tangible book value per share
immediately after the purchase. The exact amount of dilution will vary depending
upon the total number of options exercised, and will be greater if less than all
the warrants are exercised. The fewer warrants exercised, the greater dilution
will be with respect to the warrants that are exercised.

APPLICABILITY OF LOW-PRICED STOCK RISK DISCLOSURE REQUIREMENTS. Our common
stock may be considered a low-priced security under rules promulgated under the
Securities Exchange Act of 1934. Under these rules, broker-dealers participating
in transactions in low-priced securities must first deliver a risk-disclosure
document which describes the risks associated with such stocks, the
broker-dealer's duties, the customer's rights and remedies, and certain market
and other information. Broker-dealers must also make a suitability determination
approving the customer for low-priced stock transactions based on the customer's
financial situation, investment experience and objectives. Broker-dealers must
also disclose these restrictions in writing and provide monthly account
statements to the customer, and obtain specific written consent of the customer.
With these restrictions, the likely effect of designation as a low-priced stock
is to decrease the willingness of broker-dealers to make a market for the stock,
to decrease the liquidity of the stock and increase the transaction cost of
sales and purchases of such stocks compared to other securities.

CURRENT PROSPECTUS IS REQUIRED IN ORDER TO EXERCISE ANY WARRANTS.

Holders of the warrants may exercise their warrants to acquire the
underlying common stock only if a current prospectus relating to the company is
then in effect and such exercise is qualified or exempt from qualification under
applicable securities laws of the states in which the holders of the warrants
reside. Although we intend to use our best efforts to maintain a current
prospectus and federal and state registration/qualification for such exercise,
there is no assurance that we will be able to do so when a holder may wish to
exercise warrants. The value of the warrants will be greatly diminished if we do
not maintain your ability to exercise them.

9
<PAGE>
FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that address, among
other things, our digital imaging business strategy, our photo systems expansion
strategy, the development and expansion of our products and services, use of
proceeds, projected capital expenditures, liquidity, development of additional
revenue sources, development of marketing and distribution alliances, market
acceptance of our e-commerce application and technological advancements. These
statements may be found in the sections of this prospectus entitled "Prospectus
Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and in
this prospectus generally. Our actual results could differ materially from those
anticipated in these forward-looking statements as a result of various factors,
including all the risks discussed in "Risk Factors" and elsewhere in this
prospectus.

10
<PAGE>
USE OF PROCEEDS

The net proceeds we may receive from the sale of shares of common stock
underlying the warrants will vary depending upon the total number of warrants,
and the timing of and prices at which they are exercised. We can give no
assurances that any warrants will be exercised or that we will obtain any net
proceeds from exercise of the warrants. Regardless of the timing and number of
warrants exercised, we expect to incur offering expenses estimated at
approximately $72,500 for legal, accounting, printing and other costs in
connection with the offering pursuant to this prospectus.

The uses of any proceeds that we may receive from exercise of the warrants
will depend on the amounts received and the timing of their receipt. We will
have broad discretion in applying the net offering proceeds, and we have
presently identified the following categories of expenditures, in the general
order of their priority: (i) purchase of additional software and hardware for
new photo systems and related equipment; (ii) expenses for additional personnel;
(iii) repayment of existing financing for software and hardware; (iv) product
research and development; and (v) working capital and general corporate
purposes.

DIVIDEND POLICY

We have never declared or paid any dividends on our common stock. We do not
anticipate paying any cash dividends in the foreseeable future. We currently
intend to retain future earnings, if any, to finance operations and the
expansion of our business. Any future determination to pay cash dividends will
be at the discretion of the board of directors and will be dependent upon our
financial condition, operating results, capital requirements and such other
factors as the board of directors deems relevant.

CAPITALIZATION

The following table sets forth our actual capitalization as of March 31,
2000. No adjustments have been made to the actual capitalization to reflect the
exercise of the warrants as there can be no assurance that any warrants will be
exercised. No other adjustments to our capitalization were made as no
transactions affecting our capitalization other than in the normal course of
business have occurred since March 31, 2000.

<TABLE>
<CAPTION>
AS OF
MARCH 31, 2000
--------------
<S> <C>
Stockholders' equity
Common stock, $001. par value authorized-50,000,000 shares
issued and outstanding--9,026,870......................... $ 9,027
Additional paid-in capital.................................. 4,067,545
Retained (deficit).......................................... (1,672,347)
-----------
Total stockholders' equity.................................. $ 2,404,225
===========
</TABLE>

Please read the capitalization table with Management's Discussion and
Analysis of Financial Condition and Results of Operations and the financial
statements included in this prospectus.

11
<PAGE>
DILUTION

Dilution is the difference between the price per share being paid for the
common stock upon exercise of the warrants, and the net tangible book value per
share of the common stock immediately after its purchase. Our net tangible book
value per share of common stock is calculated by subtracting total liabilities
from our total assets less any intangible assets and liquidation preferences,
then dividing by the number of shares of common stock then outstanding. Based on
our December 31, 1999 fiscal year end audited financial statements, we had
5,000,000 shares of common stock outstanding with a net tangible book value of
$33,646 or approximately $.006 per share. These amounts do not give effect to
operating results or any other changes in our net tangible book value or to any
obligations to issue shares of common stock after December 31, 1999.

Based upon an assumption that 501,493 shares of our common stock would be
purchased pursuant to 501,493 warrants to be distributed and exercisable at
$6.00 per share (of which there is no assurance), upon the exercise thereof, but
before giving effect to any other obligations to issue shares of common stock,
our estimated net tangible book value after the sale of these shares, on a pro
forma basis (which gives effect to receipt of the estimated net proceeds from
such exercise and issuance of the underlying shares of common stock, but does
not take into consideration any other changes in our net tangible book value
subsequent to December 31, 1999), would be approximately $2,970,104 or $.31 per
share. This would result in dilution to persons exercising warrants at $6.00 per
share of $5.69 per share. Net tangible book value per share would increase to
the benefit of present stockholders from $33,646 prior to the offering to
$2,970,104 after the offering, or an increase of $.31 per share attributable to
the exercise of the warrants.

If less than all the warrants are exercised, dilution to the holders who do
exercise will be greater than the amount shown. The fewer the number of options,
the greater the dilution will be to those who do exercise. The following table
sets forth the estimated net tangible book value per share assuming exercise of
all warrants during the first year, and the dilution to persons purchasing the
underlying shares of common stock:

<TABLE>
<S> <C>
Exercise of all $6.00 warrants:
exercise price per share.................................. $6.00
Net tangible book value per share prior to exercise......... $.006
Pro forma net tangible book value per share after exercise
of $6.00 warrants....................................... $ .31
Dilution per share to new investors for $6.00 warrants...... $5.69
</TABLE>

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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

THE FOLLOWING MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS SHOULD BE READ IN CONJUNCTION WITH OUR FINANCIAL
STATEMENTS AND ACCOMPANYING NOTES AND OTHER FINANCIAL INFORMATION INCLUDED
ELSEWHERE IN THIS PROSPECTUS.

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
------------------------- ----------------------
1998 1999 1999 2000
----------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Statement of Revenues

Revenues....................................... $4,332,411 $6,028,397 $ 260,399 $ 295,655
Cost of goods sold............................. 2,182,860 3,049,454 124,524 135,427
---------- ---------- --------- ----------
Gross profit................................... 2,149,551 2,978,943 135,875 160,228
---------- ---------- --------- ----------
Operating expenses
Photo sales expense.......................... 1,035,576 1,490,270 96,986 381,941
General and administrative................... 728,752 1,330,457 268,524 463,640
Depreciation and amortization................ 212,145 386,443 118,566 142,798
---------- ---------- --------- ----------
Total operating expenses................... 1,976,473 3,207,170 484,076 988,379
---------- ---------- --------- ----------
Income (loss) from operations.................. 173,078 (228,227) (348,201) (828,151)
---------- ---------- --------- ----------
Interest and other income...................... 552 655 -- 6,833
Interest expense............................... (143,650) (595,774) (106,537) (162,921)
---------- ---------- --------- ----------
Income (loss) before income taxes.............. 29,980 (823,346) (454,738) (984,239)
---------- ---------- --------- ----------
Provision for income taxes..................... (16,431) -- -- --
---------- ---------- --------- ----------
Net income (loss).............................. $ 13,549 $ (823,346) $(454,738) $ (984,239)
========== ========== ========= ==========
Basic and Diluted Net Income (Loss) per
Share........................................ $ 0 $ (.16) $ (.09) $ (.14)
========== ========== ========= ==========
Shares Used in Computing Basic and Diluted Net
Income (Loss) per Share...................... 4,933,000 5,000,000 4,944,347 6,867,012
</TABLE>

OVERVIEW

Our primary revenue streams are from sales of digitally captured
photographic images at theme parks. This revenue is primarily generated at the
"thrill rides" at the theme parks, but, for 2000, also includes revenue from
sales of digital images of park guests taken at random locations in the park as
they walk around the park facilities. In addition to these retail operations,
the Company sells supplies and services at wholesale to third parties.

The revenue and cash received by us is highly seasonal in nature. Sales of
digital pictures at the theme parks can only occur during the operating season
of the park. While some theme parks are open year round, the vast majority of
the parks where we have operations are only open during the months of May-
October, with the beginning and ending portions of the season open only on
weekends. Our wholesale revenues are also highly seasonal in nature as our
wholesalers customers' businesses follow the same seasonal pattern. This highly
seasonal nature of our operating periods creates the need for additional
financing during the months when sales are limited.

13
<PAGE>

As of June 30, 2000, we provided products and services at 62 operating
sites. 49 of these sites are serviced as retail operations located at 19 theme
parks in the United States and 3 international theme parks in Argentina, Mexico
and Canada. As of June 30, 2000, we also had 13 wholesale customers to which we
provided supplies and services to third parties operating those sites. Our
historical number of retail operating sites for the years 1996 through 1999 are:
1996--7; 1997--8; 1998--19; and 1999--27.

Currently and at March 31, 2000, we had no available lines of credit or
sources of financing other than credit extended by trade suppliers, which is
limited. In February, 2000, we raised $3.2 million through the sale of our
common stock, and in March 2000 raised an additional $344,000 through the sale
of additional common stock. In May 2000, we obtained a $200,000 increase in a
previously existing line of credit, the funds from which have already been
received. On May 15, 2000, we failed to make a scheduled payment on outstanding
debt causing the debt to be placed in default. All amounts due have been paid
and this loan is no longer in default. In June, 2000, we reached two agreements
to borrow $150,000 each at an effective interest cost of approximately 13% with
principal payments due in installments with final payments due on December 15,
2000. Discussions are in progress to obtain additional debt and equity
financing. Whether we will be able to obtain additional funding to meet our cash
needs and fund future growth expenses associated with installing new photo sales
sites can not be assured; however we are currently in the peak revenue
generation period of our business cycle which lessens the need for additional
funding in the near term.

RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED MARCH 31, 2000 TO THE THREE MONTHS ENDED
MARCH 31, 1999

Net loss for the three months ended March 31, 2000 was $984,239. This is an
increase of $529,501 or 116% from the same period in 1999.

Gross revenues for the three months ended March 31, 2000 were $295,655, an
increase of $35,256 or 13.5% compared to $260,399 for the same period of 1999.
This increase is the net result of higher sales from a higher number of photo
sales booths in operation during the first quarter 2000 and lower wholesale
sales of materials, supplies and services to third party photo operators. Retail
photo sales revenue increased approximately $71,500 in the first quarter 2000 as
compared to the first quarter 1999 due to the addition of new photo booths
becoming operational. These higher sales were partially offset by lower
wholesale sales to third parties of $38,000. Management believes the lower sales
to third parties in the first quarter 2000 are due to the timing of its
wholesale customers' purchases being delayed beyond the first quarter rather
than a loss of wholesale sales.

Cost of sales for retail photo operations is composed of
commissions/royalties paid to the host theme park where our photo booths are
located and direct cost of supplies including the photographic paper that our
pictures are printed on and decorative folders in which the pictures are
displayed. Cost of sales for wholesale operations includes the cost of supplies
and/or services sold at wholesale to third parties.

First quarter 2000 cost of sales was $135,427 an increase of 9% from the
$124,524 in the same period of 1999, and a slight improvement as a percent of
revenues to 45.8% in 2000 from 47.8% in 1999.

Photo sales expenses include labor and other expenses associated with
staffing and maintaining photo booth operations. In the first quarter 2000,
photo booth operation costs were $381,941 or $284,955 higher than in the
comparable period 1999 and a 294% increase over the first quarter 1999. This
increase is caused by a larger number of booths in operation in the first
quarter 2000 and start-up expenses associated with booths becoming operational
in the first quarter 2000 and later in 2000. Such costs include an increase in
labor staffing costs of $92,780, higher booth expense in several other
categories totaling $112,986, higher travel expense of $25,580, and higher
marketing cost of $30,845.

General and administrative costs for the first quarter 2000 were $463,640
compared with $268,524 in the first quarter 1999 resulting in a 73% increase.
Cost increases in the first quarter 2000 versus the first quarter 1999 were:
labor--$13,053; travel--$58,523; the write-off of $45,600 of receivables as
uncollectable; and professional services by third parties--$73,526.

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<PAGE>
Depreciation and amortization increased $24,232 in the first quarter 2000
over the same period in 1999 due to additional operating booths being placed in
service.

Interest expense increased $56,384 in the first quarter 2000 over the same
period in 1999 due to the recognition of $62,500 in expense from the issuance of
common stock.

COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED DECEMBER 31,
1998

For the fiscal year ended December 31, 1999, we had a net loss of $823,346
as compared to net income of $13,549 for the fiscal year ended December 31,
1998.

Gross revenue for the 12 months ended December 31, 1999, was $6,028,397, a
39% increase as compared to $4,332,411 for the same period of 1998. The
$1,695,986 increase in gross revenue was due to the installation of new photo
operations in 1999.

Our 1999 gross profit of $2,978,943 increased 38.6% from $2,149,511 for
1998. Our gross profit margin was stable as a percentage of revenue at 49.4% in
1999 and 49.6% in 1998.

Our photo sales expense of $1,490,270 in 1999 increased 44% from $1,035,576
in 1998, but remained stable as a percent of revenue at 24.7% in 1999 and 23.9%
in 1998.

Our 1999 general and administrative expenses of $1,330,457 increased 83%
from $728,752 in 1998. This increase of $601,705 includes a $156,131 increase in
labor costs, a $94,309 increase in consulting fees, a $56,520 increase in
insurance costs, a $28,753 increase in marketing costs and a $76,930 increase in
travel. These higher costs are due to the increased costs of installing,
managing and administering the larger number of operating sites in service in
1999 compared to 1998. In addition, expenses of $103,430 were associated with
the labor and other costs associated with the installation of new photo systems
in 1999. Non-recurring costs associated with activities to secure additional
financing were $48,099, and non-recurring start-up costs of a major new
accounting system were $27,702.

Our operating expenses for 1999 were $3,207,170 and exceeded gross profit
resulting in a net operating loss of $228,227 for that year. For 1998, our
operating expenses totaled $1,976,473 and were less than gross profit resulting
in an operating income of $173,078 for 1998.

For fiscal year 1999, non-operating items were a $595,119 expense. This was
an unfavorable change of $452,021 from net non-operating income of $143,098 for
1998. This change reflected 1999 interest expense of $445,774 compared to
interest expense of $143,650 for 1998. Additionally, in 1999 we absorbed a
one-time financing fee of $150,000.

For fiscal year 1999, we had a loss before income taxes of $823,346.

There was no reported income tax expense for 1999. This compares to income
before taxes of $29,980 for 1998. For fiscal year 1998, we showed income tax
expense of $16,431 and a net income of $13,549.

BUSINESS

OUR COMPANY

We believe we are a leader in the design, integration, deployment, operation
and support of revenue-generating, digital imaging business sites that
compliment highest-traffic/highest-speed rides at some of the world's premier
theme parks. In real time, our systems capture, digitize, manipulate and display
images of all riders. Those images selected by a given rider for purchase are
reproduced, in 30 to 60 seconds, in full-color hard-copy photo prints.

Our electronic technology illuminates and captures that split second time
slice needed to capture each individual pair or foursome of riders. Our
technology incorporates custom built hardware, developed/ copyrighted software
and extensive experience in theme park photography. Our sites include
computerized customer ordering accounting and service support programs to track
revenue, inventory and cost for monitoring profitability of each site. Over the
last five years, we believe we have become the market share leader in ride
photography theme park imaging in the United States.

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<PAGE>
We have made strides towards establishing ourselves as a premier provider of
pictures in the leisure and entertainment segment of the market especially in
special event imaging. Utilizing portrait quality digital imaging systems
adapted from the theme park industry, we captured images during Christmas with
Santa Clause in Carlsbad, California. This technology was also used at the New
Orleans Jazz & Heritage Festival in 1999, at the Association for Commuter
Transportation International Conference in Washington D.C. and at major
corporate holiday functions in San Antonio, Texas in 1999.

HISTORY

We were founded in December 1993 by our chairman, president and chief
executive officer, Donald Rex Gay. Mr. Gay's business career spans 25 years
during which he founded and managed two businesses; one in medical staffing and
equipment and second in consumer digital imaging. Currently, we have a three-
person board of directors, consisting of Mr. Gay, Dr. Christopher Marvell,
co-managing director of RX Technology Europe Limited and Richard Govatski,
president of a publicly-traded software company.

OUR FACILITIES

Our headquarters is in a modern 4,000-square feet facility located at 2264
7(th) Street, Mandeville, Louisiana 70471 (504-727-9412). As of June 30, 2000,
we employed 21 full-time people, ten of which worked at our Mandeville,
Louisiana facility where the administration, testing and integration facilities
are housed. Nine of these employees travel among the existing sites and new site
locations under development. Two of these employees work at our year around
locations within the United States. We also hire part-time and seasonal
employees to staff facilities we have in various theme park locations. At
June 30, 2000, we had approximately 357 such part-time and seasonal employees.

MAJOR TECHNOLOGY ADVANCES

The following are advances in the computer hardware and/or software
technology used to capture digital images which was developed by RX Technology
Europe.

1995

- FLASH FOR CLOSE-UPS OF ALL RIDERS was used which allowed for clearer,
brighter digital images of each pair of riders and eliminated dark spots
in prior images. This was an industry first.

- FULLY AUTOMATIC LIGHT SENSOR was used which automatically controlled the
amount of light entering the camera taking the digital images. This was an
industry first.

- LASER-TRIGGER was used which allowed for more accurate activation of the
camera which enabled the required pin-point accuracy needed to capture
multiple images in fractions of a second. This was an industry first.

- TWO CAMERAS WITH TWO FLASHES were used by one photo system simultaneously
capturing close-up images of two pair of riders. This was an industry
first.

1996

- PICTURE IN PICTURE PRESENTATION was used with two cameras and two flashes
in which one image (a close-up image of two riders) was super imposed
within, or in the middle of, another image (a long range view of multiple
riders which included two riders shown in the close-up image). This was an
industry first.

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- FOUR CAMERA AND FOUR FLASH SYSTEM was used which allowed the ability to
capture close-up images of both sides of a ride using one photo system
simultaneously operating four cameras and four flashes. This was an
industry first.

1997

- MOVING/SCANNING CAMERA SYSTEM was used in which the camera capturing the
images moved along a specially designed track, captured the images then
was rewound into its original position ready to capture the next ride.

- MOVING/SCANNING CAMERA SYSTEM WITH CHROMA-KEY BACKGROUNDS was used which
instantly combined the moving camera discussed above with a background
image.

1998

- FIVE CAMERA PICTURE-IN-PICTURE WITH THEMED BACKGROUND was used which
allowed the capturing of close-up images with one photo system
simultaneously controlling five cameras and five flashes while combining
the picture-in-picture presentation with background as discussed above.
This was an industry first.

1999

- BARCODE ACTIVATED DIGITAL IMAGING SYSTEM for images generated during an
event or activity are automatically displayed by the would-be-purchaser
brushing a wrist-band carried barcode past a scanner ATC CONFERENCE
(Washington, D.C.)

2000

- WALK-ABOUT PHOTOGRAPHY where our personnel walk through the park digitally
capturing images of guests as they visit various areas/sites. These images
can be displayed and printed by barcode activation--SIX FLAGS FRONTIER
CITY (Oklahoma City, OK)

OUR CORPORATE STRATEGY

We have a seven-facet corporate strategy as follows:

/ / PROPEL SHAREHOLDER VALUE BY DRIVING GROWTH:

Our goals are to create long-term value for shareholders by increasing
revenues and profits. We plan to accomplish this by designing and deploying high
performance, low cost imaging systems that serve as stand alone profit centers.
To achieve these objectives, we will concentrate on high value consumer imaging
markets where we, and RX Technology Europe Limited, can capture a high
percentage of the available market and maintain that market share on a long-term
basis through the use of proprietary technology that captures and sells personal
images at permanent sites and on a walk-about basis, as well as transient or
special events.

/ / TARGET MARKETS THAT OPTIMIZE OUR SYSTEMS CAPABILITIES AND PRODUCT PRICES:

Our profitability and shareholder value objectives are best met in selected
target markets where the photographed subjects are involved in an activity that
confers high emotional value and/or status to the subject. These photo
opportunities are characterized by settings where the subject is actively
involved in a unique activity or event that allows sufficient passiveness to
allow the capturing of the subject's photo image. Such settings involve settings
in which the subject is unlikely to have other photo opportunities or a second
chance to record participation in the event or activity. Addressing the
subject's desire to record the event can command a premium price for such
otherwise unavailable, high value images. Sales of such photo prints are high
impulse purchases and positioning the point of sale immediately after the event
enhances the impulse to purchase our product. We intend to exploit the
advantages our technology provides to create value from our core amusement park
market as well as other target markets.

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/ / DESIGN AND DEPLOY DIGITAL PHOTO SYSTEMS:

We intend to deploy and design digital photo systems and electronic photo
networks to serve multiple imaging markets in the amusement park industry and at
special events. These systems will acquire, manipulate and store the
photographic images. Once captured and stored, these images will be marketed in
a specially designed photo booth or suite through which retail customers (e.g.,
riders on an amusement park attraction) walk to preview images and select those
to be reproduced for purchase. The photo suite houses an end-to-end solution
that not only captures the images but also includes systems that
(1) automatically re-format the images (as well as sending text and video) for
immediate sale and/or electronic delivery at our existing sale locations and/or
via adjoining Internet kiosks, (2) manage sales activities, (3) track and
capture photo material use and costing information, and (4) record sales and
site profitability which interface with accounting systems and are summarized in
management reports.

/ / EFFECT BARRIERS TO ENTRY:

We plan to continuously enhance our technology used in the most technically
challenging imaging market--the ride photography industry and deploy this
technology in multiple markets requiring proprietary technology and uncommon
applications experience. One objectives in maintaining state-of-the-art systems
is to create and maintain strong market share in the amusement park industry so
that our competitors will face increasingly more difficult technological
know-how and cost entry barriers.

/ / STRENGTHEN LEADERSHIP IN THEME PARKS WORLDWIDE:

Our technology, relationships with park management, marketing experience and
implementation know-how have created a platform for continued growth in this
market. We intend to utilize this expertise to own and operate photo booths or
suites to sell premium-priced photo prints directly to retail customers as they
exit thrill rides. In doing so, we can offer value to customers by capturing the
customer in an activity that has limited opportunity for being recorded other
than by us and positions the sale of our product at the optimum moment of
interest immediately after experiencing the activity. We plan to also derive
wholesale revenue by selling or licensing our technology, marketing expertise
and/or photo supplies to third parties where the amusement park is less
attractive to us for direct ownership or operation. We also intend to reduce the
seasonality of our revenues by continuing to expand in the year round amusement
park market and into other under exploited target markets. We also intend to
expand our market share in walk-about, front gate photography.

/ / PENETRATE SPECIAL EVENTS:

Over time, we intend to leverage our technology and imaging expertise gained
in the most technically challenging amusement park market to provide high-value
imaging in other markets such as transient events, for example conventions, and
seasonal and special events, for example Christmas pictures with Santa. One
objective of this diversification effort is to minimize the seasonal nature of
our cash flow caused by the amusement park industry's limited operating periods
in which they are generally closed in the winter.

/ / RE-FORMAT IMAGES FOR RESALE ON THE INTERNET:

We intend to create derivative revenue opportunities for previously captured
images at the time the images are captured by allowing customers to pay to have
the electronic image sent over the internet to a destination of their choosing.
This will also be accomplished by making images available at unattended Internet
kiosks or wireless computers located next to our photo booths or suites. We also
believe additional revenue can be generated from amusement park and special
events sponsors desiring to use our captured images in their promotional
material and advertising.

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OUR PRODUCTS AND SERVICES

EQUIPMENT AND TECHNOLOGY

We design and deploy digital imaging systems, which provide high quality
photo prints in 30 to 60 seconds. In being totally digital, our imaging networks
can add effects, such as logos, overlays, framing, themed backgrounds,
picture-in-picture and 3-D, with no time delay. Additionally, we can instantly
re-format the image for internet sale. We provide controls that ensure only
customer-requested images be reproduced as photo prints, thus avoiding misprints
and the costs associated with speculative selling. This superior image contents
enhancement and real time delivery is a result of our technology and know-how,
incorporating the following functions:

- Multiple burst custom flash units that enable high-speed image capture in
one second under adverse lighting conditions;

- Cameras remotely controlled from sales building with pan, tilt, zoom and
focus capabilities;

- Automatic image capture, display and print operation; and

- On-demand, custom electronic point of sale terminals that produce
management and accounting reports for any time interval

We also intend to use Internet kiosks that allow the guest to send the
images, as well as text and video, over the internet, creating additional
excitement and providing additional revenue outside of our existing product,
through the sale of internet access and other internet kiosk related revenues.
Our imaging system captures images with a high-resolution, non-film, digital
camera. In the theme park industry, this may result in one picture per ride or a
series of pictures. Images are stored in memory and viewable on monitors as
guests exit the ride.

All photo print sales are made at our electronic point of sale units with
the required print(s) served by the imaging system to video printers. A PC is
used to configure and coordinate the imaging unit, electronic point of sale
units, and video printers, as well as to provide sales information and
management reports. We are also implementing a process in which, if a guest
elects to purchase additional images for Internet delivery, this will be
accomplished from the electronic point of sale unit; with a personal
identification number on his receipt the guest is able to access his image and
send it with a message over the Internet.

The guest can choose among a five by seven size photo print in a custom
folder, a four by three in a custom folder or a key chain or magnet with their
picture inserted. Prices may vary depending on the location and the demographics
of the park. Generally a discount is provided to the guest as an incentive to
purchase a second picture given that we can produce two or more photo prints on
the same sheet of print media/special paper.

To help maximize the return on investment for us and for theme park/themed
entertainment centers, we are a one-stop source for site selection, system
design, integration, deployment, field support training and management reports.
Working with planners, architects and operators, our team of on-location
advisors and consultants, insure that the imaging sites envisioned by the client
will have adequate throughput volume for profitability, and will not require
costly retrofits. The minimum life expectancy of our digital imaging systems
installed is five years, although most installations will undoubtedly achieve
ten years or more of active service.

Our typical digital photo system captures, digitizes, and stores images
electronically for display on monitors so that customers may select images, as
photo prints, for purchase.

- Our digital photo systems can print hundreds of pictures per hour, while
maintaining print quality, providing an easy-to-use and maintain system
that is effectively operated by summer or seasonal help.

- Integrated electronic point of sale stations contain customized price
schedules that prevent operators from making a mistake in selling a
product selection.

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- Customized reports can be produced at any time and over any time interval
providing accounting activity level, revenue, cost and profit data for our
management.

- Specially designed custom logos, framing or themed backgrounds are added
to prints without any time delay.

- Resizing, mirroring or selecting an appropriate printer is completely
automatic which eliminates down time and decision making by the operators
of the system.

- Our photo systems include various types of color printers offering A4, A5
and A6 formats giving us flexibility to provide the optimal solution in
meeting the needs of the guests.

OUR MARKETS

Information and statistical data concerning the theme park industry is
limited. The International Association of Amusement Parks and Attractions, an
authoritative industry association, listed 78 theme parks in the United States
at March 2000. In addition to these listed theme parks, we had operational sites
at seven other theme parks. Of this total of 85 theme parks within the United
States, we had operational sites at 19 as of June 30, 2000, resulting in a 22%
market share.

We have exclusive rights to provide our products and services at the rides
and attractions where our operating sites are located, but we do not have
exclusive rights at the entire theme park where our operating sites are located.

MARKETS AND APPLICATIONS BEYOND THEME PARKS

We have developed several areas where our core digital imaging technology
can be used to expand our market share and revenue base. Additionally there are
several markets where we will be able to expand upon our competency in leisure
and entertainment imaging. For example, over the past two years, we have
expanded into special event imaging such as Christmas with Santa Claus, the
Easter Bunny, conventions, and corporate functions. We also participate in the
Christmas imaging market at the Legoland theme park in California as well as a
new, virtual reality/fantasy imaging site in which the customer's picture is
placed on one of several alternative settings selected by the customer.

Additionally, we have introduced a new special event photo system to be used
at business functions, sporting events, special promotions as well as for
walk-about front gate imaging. This photo system was utilized at The New Orleans
Jazz & Heritage Festival in 1999, at the International Convention for the
Association For Commuter Transportation, at The Legoland Christmas Festival and
at USAA Insurance Holiday Events.

This photo system will also be utilized as the foundation for digital
imaging at ski resorts, white water rafting and other sporting venues. In some
instances a hybrid system utilizing high speed systems and walk about systems
will provide a variety of choices for attendees and guests. Several major
partners have been identified, and we are entering negotiations.

We have determined that a viable market exists in the portable and temporary
deployment of our digital imaging technology. We are planning on expanding the
following two markets:

- Selected Event Imaging Sites: Transportable digital imaging systems will
be physically deployed to Special Event locations. The organic nature of
the event selected will provide the context and content necessary to give
the individual a valuable emotional keepsake that cannot be duplicated at
any other place or time. These sites are best suited to one time events
(such as the Super Bowl, local fairs or large reunions); events lasting
several days or weeks (such as the time trials and running of

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the Indianapolis 500, and the Olympic Games); and, seasonal events with
Christmas and Easter being the major holidays.

- Licensed Content Enhanced Imaging Sites: Semi-permanent imaging sites will
be located in high-traffic areas with optimal demographics for periods of
up to a year or more. Sometimes the excitement and hoopla surrounding the
opening of a hot new "entertainment mecca" or tourist site will bring
extremely high levels of traffic for several months before the novelty
wears off and interest wanes. These locations may be well suited for a
semi-permanent placement that can be redeployed as activity/profitability
drops, or upgraded to a permanent installation if so warranted. These
sites will electronically deliver a myriad of "context" settings (such as
key scenes from top movies) that will give the customer a high emotional
value not constrained by the site's physical location.

OUR SOURCES OF REVENUE

One class of customer to which we sell our photo systems, print media,
software licensing, and service/ maintenance is third party owners/operators.
Currently there are 13 of these wholesale customers sites. In 1998, we sold over
1.0 million sheets of digital print media to customers in the United States; in
1999, unit sales of digital print media exceeded 1.5 million sheets in the U.S.
alone. Ongoing support and media supply insures continuing contact with
customers, as well as an ongoing revenue stream.

Revenue sharing agreements with selected themed entertainment centers cover
all of our installation sites. We furnish equipment, manage the photo systems
and in some cases hire the personnel with no up front money from the owner.
Obviously, we will only enter into this type of an arrangement when its analysis
shows the installation will be profitable.

INTERNET DEPLOYMENT

Our company and eKiosk.com are negotiating an agreement whereby we are the
exclusive representative for eKiosk, primarily in the theme park and themed
entertainment park industries. In addition, we are considering representing
eKiosk in the placement of Internet kiosks in malls, airports and the like. We
believe that eKiosk is the leader and pioneer in the design, manufacture and
deployment of public Internet kiosks and their support systems to the travel and
leisure market. They provide public access to a wide variety of Internet,
e-commerce, and conventional messaging capabilities to hotels and resorts.
Services include telephone and data port access, Internet email access and
Internet browsing for corporate and personal use.

We are negotiating placement of internet kiosk units into theme parks and
themed entertainment centers both adjoined to our digital photo system
installations and in freestanding locations throughout the parks. The interface
with the internet through our relationship with eKiosk is a natural path of
distribution for us since we have captured and already stored in digital format
a unique and memorable, high value image. Using the eKiosk.com system, customers
could transmit their digital photo, a streaming video or text message to anyone
anywhere in the world and also receive a high quality photo print.

OUR STRATEGIC ALLIANCES

We have developed strategic relationships with Polaroid and Kodak. Our
alliance with Polaroid allows us to operate, maintain and market imaging systems
in a theme park where Polaroid has an exclusive right to photographic revenues.
Our alliance with Kodak includes making equipment loans and development services
available to us and RX Technology Europe Limited as well as favorable prices on
Kodak supplies. In addition, we have favorable supplier relationships with Sony,
Fuji and other key peripheral device manufacturers and suppliers. These
relationships provide leads, cooperative ventures, and advanced notification and
availability of new technology, new products and competitive pricing.
Additionally, we are often provided with the ability to purchase equipment and
systems at substantial discounts.

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OUR COMPETITION

Our ride photography competitors are small with no significant installation
base and, hence, not well positioned for market expansion. We are not aware of
any competitor that effectively competed with the quality of our high-speed
digital photo systems. In 1998 and 1999 we replaced several ride photo systems
installed by competitions. Another class of competitors primarily are involved
in front gate photography. New entrants to the themed imaging industry, such as
Image ID, Inc. may also aggressively pursue relationships with major parks,
vendors and concessionaires to find-established delivery and distribution
networks.

Competitors Include:

- Freeze Frame (Orlando, FL)--provides front gate systems, taking
pictures of people as they enter a park and for sale within a key chain
viewer, for example as they depart;

- Kodak Themed Entertainment (Los Angeles, CA)--has been somewhat
successful in the very large parks. It is our understanding that they
provide a multi-million dollar sponsorship to the various parks,
negotiating rights of first refusal on any new or available
photographic souvenir sales sites; and

- Jackson Digital (Las Vegas, NV)--integrates various components and
provides some customized software as a part of the integration
solution. Jackson Digital also provides systems for fantasy photographs
and old time photos. The themed entertainment segment is not the major
focus of the company.

RESEARCH, DEVELOPMENT AND OUR RELATIONSHIP WITH RX TECHNOLOGY EUROPE LIMITED

Our need to stay ahead of the competition regarding systems cost, picture
quality, speed of print and other merchandising possibilities encourages the
rapid development of new techniques and services. Research and development takes
place in the United Kingdom by the RX Technology Europe Limited engineering
team. We have exclusive rights to the technology. We offer them sales,
advertising, merchandising and promotional expertise in return for RX Technology
Europe Limited's research and development expertise. RX Technology Europe
Limited is effectively our supplier for all intellectual property, software and
hardware utilized in our operations.

Of it's own initiative, RX Technology Europe Limited continues to push
developments in digital imaging to include the design of custom hardware and
software. We continue to be kept fully informed of these developments, with
access to the technology and resultant new systems. RX Technology Europe Limited
charges us its product cost plus a mark-up to cover the test, supply and support
of the items under warranty (for the hardware items). The software is supplied
by RX Technology Europe Limited on an as is basis without any charge, for our
exclusive use.

In various combinations these custom and/or proprietary items are utilized
within our completed imaging systems, which also includes standard equipment
from other manufacturers. These items are currently manufactured in the United
Kingdom but could be made by subcontract assembly companies elsewhere. Software
and hardware developed by RX Technology Europe Limited and which has been made
available to us includes:

CUSTOM ELECTRONIC HARDWARE

1. Ultra-high-speed multi-trigger photographic flash

2. Camera triggering and control unit

3. PC based multi-monitor display system

4. PC based specialized frame grabber

5. PC based video print server

6. Video Line equalizer and sync corrector

7. PC based specialized network communications unit

8. Specialized electronic point of sale unit

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9. Specialized multiple video printer controller

10. Multiple camera timing and selection unit

11. Other devices are currently under development

CUSTOM SOFTWARE

1. DOS photo system control/electronic point of sale/accounting software

2. Windows specialized digital portrait imaging software

3. Windows remote camera control software

4. Windows complete imaging software

4. Engineering diagnostic and support software

Due to the long term relationship that exists between us and RX Technology
Europe Limited, the companies do not compete and share sales and marketing
information. There exists a territorial split that reflects the given
practicalities of supporting the installed base. We operate the North and South
American continents, and East Asia. RX Technology Europe Limited operates in
Europe, Africa, and the western part of Asia. When a sales opportunity arises in
the other company's territory that lead is passed to RX Technology Europe
Limited or to us, as the case may be.

OUR CREDIT AND FINANCING FACILITIES

We arranged an asset based line of credit in March 1999 with KBK
Financial Inc. Our credit line was initially approved in the amount of
$1,750,000 and is secured by a first priority security interest in our business
equipment located in the various locations where we maintain booths and
concessions. The unpaid balance of the credit facility as of June 30, 2000 was
$929,973. Terms of the line of credit require monthly payments of principal and
interest, which should fully amortize the loan in four years. The variable rate
of interest on the loan is prime plus 4%. The KBK line of credit is also
collateralized by a first priority security interest on our present and future
inventory. Our chief executive officer, Mr. Gay, personally guaranteed the loan.
Due to the non-payment of amounts due on May 15, 2000, this credit line was
placed in default. All amounts currently due have been paid, and this loan is no
longer in default.

LEGAL PROCEEDINGS

We do not have pending any litigation that, separately or in the aggregate,
if adversely determined, would have a material adverse effect on us or our
operations. We may, from time to time, be a party to litigation or
administrative proceedings that arise in the normal course of its business.

EMPLOYEES

At June 30, 2000, we had 21 full-time employees, ten of whom worked at our
executive office in Mandeville, Louisiana, nine of whom travel among our
existing and new sites under construction, and two of whom were employed at
year-round locations within the United States. We also hire part-time and
seasonal employees to staff facilities we have in various theme park locations.
At June 30, 2000, we had approximately 357 such part-time and seasonal
employees. None of these employees are covered by collective bargaining
agreements. We believe we have maintained an excellent relationship with all of
our employees.

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MANAGEMENT

EXECUTIVE OFFICERS, DIRECTORS AND OTHER KEY EMPLOYEES

The following table sets forth certain information regarding our executive
officers, directors and key employees as of June 1, 2000. Each director listed
below has been elected for a period of one year and thereafter serves until his
or her successor is duly elected by the stockholders and they qualify as a
director. Our officers and other key personnel serve at the discretion of the
board of directors.

<TABLE>
<CAPTION>
NAME AGE POSITION
---- -------- ------------------------------------------
<S> <C> <C>
Donald Rex Gay............................ 58 President, Chairman, Chief Executive
Officer and Director

Dr. Chris Marvell......................... 44 Chief Technology Officer and Director

Richard F. Govatski....................... 55 Director

Douglas A. Dunbar......................... 45 Vice President and Chief Financial Officer

S. Beatriz Gay............................ 31 Secretary/Treasurer
</TABLE>

DONALD REX GAY, has been our president, chief executive officer and chairman
of the board since 1994. Mr. Gay founded our business when we were incorporated
in December 1993. Mr. Gay has been involved in the formation and growth of
several entrepreneurial ventures, including founding Amtronics, Inc., Metarie,
Louisiana in 1984 and serving as its president and chief executive officer until
1993, and Amtronics Enterprises, Ltd., Vancouver, B.C. in 1989. In 1980 Mr. Gay
founded Allied Health Services Personnel, Inc., a private medical staffing and
equipment company and served as its president until 1984. Since 1984, Mr. Gay
has been involved in the digital imaging design and manufacturing business. In
1980, Mr. Gay received a certificate licensing him as a certified nurse
anesthetist, from Charity Hospital School of Anesthesia where he attended from
1978 to 1980. From 1971 to 1974, Mr. Gay attended the Dallas County Community
College in Dallas, Texas where he earned his associate's degree in 1980 in
applied sciences--registered nursing. From 1964 to 1967, Mr. Gay attended the
Dallas Institute of Mortuary Science, receiving his diploma as a graduate
funeral director in 1967. From 1960 to 1964, Mr. Gay was in the U.S. Navy
Medical Corps School at the Balboa Navy Hospital located in San Diego,
California. Mr. Gay is married to our secretary/treasurer, S. Beatriz Gay.

DR. CHRISTOPHER MARVELL, PH.D. has been one of our directors since
December 1998. From April 1994 to the present time, Dr. Marvell has been the
managing director of RX Technology Europe Limited located in Derbyshire, England
and is one of the original developers of our digital imaging photo systems.
Between October 1984 to March 1994, Dr. Marvell was the managing director of
Marvell Consultants Limited, Nottinghamshire, England. Between October 1983 and
October 1984, he served as a senior research officer with Memotech, Ltd.,
Witney, Oxfordshire. Prior to that time from October 1979 to October 1993,
Dr. Marvell was a project engineer, senior project engineer and project manager
with TecQuipment Consultans, Ltd. of Nottingham, England. Dr. Marvell obtained a
bachelor of science degree and a Ph.D. degree in electrical and electronic
engineering from the University of Nottingham, England in 1976 and 1979,
respectively. Dr. Marvell conducts ongoing research and development for RX
Technology, Inc. and RX Technology Europe Limited from his facilities in the
United Kingdom.

RICHARD F. GOVATSKI, is the president and chief executive officer of
NMXS.com, Inc., a public company that develops and markets products based on
internet technology based digital asset management software. Prior to founding
NMXAS.com, Inc., Mr. Govatski was the president of Media Publishing
Group, Inc., New York, New York, from July 1988 to June 1994. Mr. Govatski has
been instrumental in the formation and growth of other entrepreneurial
enterprises since 1982. Mr. Gavotaski received his bachelor of sciences degree
in communications from Butler University, Indianapolis, Indiana in 1968.

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DOUGLAS A. DUNBAR, became our vice president and chief financial officer on
May 12, 2000. Mr. Dunbar has over 20 years of financial, banking and insurance
experience and has experience in mergers and acquisitions, valuation and
financing, including in excess of $4 billion of experience in debt, equity and
lease financing. Prior to accepting employment with us, Mr. Dunbar was the
Director--Business Development from March 1999 until May 2000 with American
MetroComm Corporation, a telecommunications firm headquartered in New Orleans,
Louisiana, where he was primarily responsible for joint venture development,
financial planning and special projects, but also managed the customer service
and billing departments on an interim basis. From October 1982 to March 1999,
Mr. Dunbar served in various positions with Entergy Services, Inc., the service
subsidiary of Entergy Corporation, a public utility holding company primarily
serving electric customers in Louisiana, Mississippi, Arkansas and Texas. Prior
to joining Entergy Services, Inc., Mr. Dunbar was the assistant to the
controller at the Bank of New Orleans and Trust Company and a health and
casualty analyst with the actuarial firm of Richard F. Camus and Associates.
Mr. Dunbar is the president of Dunbar Financial Management, Inc., a consulting
firm. He received his masters in business administration from The University of
New Orleans in 1987 and a bachelors in business administration in finance from
Loyola University in 1979.

S. BEATRIZ GAY, has served as our corporate secretary and administers our
policies, procedures, personnel management and sales accounting control since
January, 1996. Between August 1992 to July 1994, Ms. Gay was a legal secretary
at the New Orleans, Louisiana based law firm of Stone, Pigman. Ms. Gay reads,
writes and speaks fluently in Spanish and presently liaisons with our business
connections in Argentina, Mexico and other prospective Latin American countries.
Prior to that from 1989 to February 1992 Ms. Gay was manager for the Hotel Dieu
Hospital Cardiology Department Medical Offices. During this time Ms. Gay's
functions included that of office manager in addition to medical assistant and
technician. Ms. Gay received her training as a legal and medical secretary at
Coastal Training Institute, New Orleans, Louisiana from 1986 to 1987. She also
attended the Delgado Community College in New Orleans, Louisiana from 1994 to
1996 and studied general business courses. Ms. Gay is married to our chief
executive officer, D. Rex Gay.

EMPLOYMENT AGREEMENTS

We entered into an employment agreement with Mr. Dunbar, our vice president
and chief financial officer on May 8, 2000. Mr. Dunbar joined us as of May 12,
2000 and his annual salary is $125,000, plus cash bonuses based on performance
and within the discretion of the board of directors. As a part of his
compensation arrangement, and as a way to attract highly skilled management
employees, we agreed to grant to Mr. Dunbar a total of 130,000 common stock
options exercisable at $1.75 per share. Of these total options, 30,000 options
are immediately exercisable and the balance of 100,000 options vest over the
next four quarters in increments of 25% per quarter.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

At present, we have not entered into any indemnification agreements with our
officers or directors. Our re-stated articles of incorporation dated March 4,
1997, provide a comprehensive indemnification provision that provides that we
shall indemnify, to the fullest extent under Nevada law, our directors and
officers against liabilities incurred with respect to their service in such
capabilities. In addition, our Re-stated Articles of Incorporation provide that
the personal liability of our directors, officers, and our stockholders for
monetary damages will be limited.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended, may be permitted to directors, officers and our controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Securities Act of
1933, as amended and is, therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by us of
expenses incurred by our directors, officers or controlling persons in the
successful

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defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being offered or sold,
we will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933, as amended and will be governed by the
final adjudication of such case.

DIRECTOR'S COMPENSATION

Our directors who are also officers currently do not receive salaries or
fees for serving in their capacity as our directors. We presently have three
directors, one of which is also our chief executive officer. We plan to add one
or two independent directors to our board of directors during the 12 months
following the date of this prospectus. Independent directors will receive $1,000
for attendance at each meeting of our board of directors. We reimburse all
directors for any expense incurred in attending meetings of the board of
directors.

KEYMAN LIFE INSURANCE

We do not presently own life insurance covering the death of any officer,
director or key employee. We are planning to purchase such insurance in order to
provide adequate funding for our repurchase of shares of common stock from the
estate of our principal stockholder and chief executive officer, Mr. Gay in the
event of his death, and to provide us with capital to replace the loss of
Mr. Gay's services to us. We do not presently have such life insurance coverage,
nor has Mr. Gay made an application for such coverage. We can make no assurance
if and when such life insurance coverage will be obtained, and if available,
whether the premiums payable for coverage will be reasonable.

DIRECTORS' AND OFFICERS' INSURANCE

We do not presently maintain directors' and officers' liability insurance.
We can provide no assurance that we will be able to obtain such coverage in the
future, or, if such coverage is obtainable, the premiums will not be
prohibitive.

BOARD COMPOSITION

Our board of directors consists of three members who serve as directors for
one year terms or until their successors are duly elected and are qualified as
directors. Donald Rex Gay, our chief executive officer and a director is the
husband of our secretary/treasurer. Vacancies in the office of any director may
be filled by a majority of the directors then in office. At least one additional
independent director will be added to our board of directors, and our
independent directors will serve as members of both committees.

Our president and chief executive officer is appointed by our board, and all
of our other executive officers are appointed by the president and chief
executive officer.

COMMITTEES OF THE BOARD

We plan to establish two standing committees of our board, an audit
committee and a compensation committee. Our audit committee will recommend to
our entire board of directors the independent public accountants to be engaged
by us, reviews the plan and scope of our annual audit, review our internal
controls and financial management policies with our independent public
accountants and reviews all related party transactions. The compensation
committee will review and recommend to our board, the compensation and benefits
to be paid to our officers and directors, administer our stock option plan,
approve the grant of options under the stock option plan and establish and
review general policies relating to compensation and benefits of our employees.

EXECUTIVE COMPENSATION

The following table sets forth the total compensation paid during our fiscal
year ended December 31, 1999 to our chief executive officer, Donald Rex Gay. No
other executive officer received a salary and bonus in excess of $100,000 in
this year.

26
<PAGE>
SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL
COMPENSATION OTHER COMPENSATION
-------------------- ---------------------------
OTHER ANNUAL ALL OTHER
NAME AND POSITION SALARY($) BONUS($) COMPENSATION COMPENSATION
----------------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C>
Donald Rex Gay chairman, president and chief
executive officer.............................. $96,000 -0- -0- -0-
</TABLE>

The aggregate compensation paid to all persons who served in the capacity as
an executive officer or director during the fiscal year ended December 31, 1999
(3 persons) was $137,139.

OPTIONS GRANTS DURING THE TWO YEARS
ENDED DECEMBER 31, 1999

<TABLE>
<CAPTION>
PERCENT OF TOTAL OPTIONS
--------------------------------------------------------------
NUMBER OF
SECURITIES
UNDERLYING OPTIONS
GRANTED
------------------- GRANTED TO
EMPLOYEES IN EXERCISE EXPIRATION
NAME 1998 1999 FISCAL YEAR 1999 PRICE DATE
---- -------- -------- ---------------- -------- ----------
<S> <C> <C> <C> <C> <C>
Donald Rex Gay chairman, president and -0- -0- -0- -0- -0-
chief executive officer..................
</TABLE>

The were no options granted to all persons who served in the capacity as an
executive officer or director during the fiscal year ended December 31, 1999 (3
persons). The above table does not include 2,959,836 options granted to Donald
Rex Gay at the time that our merger with Valley Excavation and Trucking, Inc.
was completed on February 16, 2000, which are now outstanding and exercisable to
purchase 2,959,836 shares of our common stock at $1.75 per share.

STOCK OPTION PLAN

On February 16, 2000, the board of directors adopted, with the approval of
the shareholders, a stock option plan, pursuant to which the board is authorized
to grant options to purchase up to 5,000,000 shares of our common stock to our
key employees, officers, directors, consultants and other agents and advisors.
Awards under the plan will consist of both qualified and non-qualified stock
options, restricted stock awards, deferred stock awards, stock appreciation
rights and other stock-based awards described in the plan.

The plan is administered by the board of directors which will determine the
persons to whom awards will be granted, the number of awards to be granted and
the specific terms of each grant, including the vesting thereof, subject to the
provisions of the plan. In connection with the qualified stock options to be
granted under the plan, the exercise price of each option may not be less than
100% of the fair market value of the common stock on the date of grant, or 110%
of the fair market value in the case of a grantee holding more than 10% of our
outstanding common stock. The aggregate fair market value of shares for which
qualified stock options granted under the plan are exercisable for the first
time by such a 10% or greater employee during any calendar year may not exceed
$100,000. Non-qualified stock options granted under the plan may be granted at a
price determined by the board of directors, not to be less than the fair market
value of the common stock on the date of grant.

27
<PAGE>
Securities Exchange Act of 1934, including a group as defined in Section 13(d),
but excluding certain of our stockholders, become the beneficial owners of more
than 25% of our outstanding common stock.

We granted 3,000,000 non-qualified common stock options entitling the former
stockholders of RX Technology, Inc. to purchase 3,000,000 shares of our common
stock at an exercise price of $1.75 per share. These options were granted on a
prorata basis with the number of shares of RX Technology, Inc. common stock held
by each shareholder at the time of the agreement and plan of reorganization
entered into with Valley Excavation and Trucking, Inc.

On May 5, 2000, we granted our chief financial officer, Mr. Dunbar, 130,000
options to purchase 130,000 shares of our common stock at $1.75 per share. Of
these total options, 30,000 options were granted as fully-vested and are
immediately exercisable. The remaining 100,000 options vest and become
exercisable quarterly after the date of grant in increments equal to 25% of the
100,000 remaining options. Mr. Dunbar's options were granted under our stock
option plan.

In addition, and as a part of the agreement and plan of reorganization
consummated on February 16, 2000, we granted 1,000,000 non-qualified stock
options to existing stockholders of Valley Excavation and Trucking, Inc.,
exercisable to purchase 1,000,000 shares of our common stock at a price of $1.75
per share.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

Section 78.75 of the Nevada Business Corporation Act provides the power to
indemnify any officer or director acting in his capacity as our representative
who was, is or is threatened to be made a party to any action or proceeding,
whether civil, criminal, administrative or investigative, for expenses,
judgments, penalties, fines and amounts paid in settlement in connection with
such action or proceeding. Generally, the only limitation on our ability to
indemnify our officers and directors is if they acted in good faith and in a
manner which they believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe their conduct was unlawful.

Our bylaws provide a right to indemnification to the full extent permitted
by law for expenses, attorney's fees, damages, punitive damages, judgments,
penalties, fines and amounts paid in settlement actually and reasonably incurred
by any director or officer whether or not the indemnified liability arises or
arose from any threatened, pending or completed proceeding by or in our right by
reason of the fact that such director or officer is or was serving as our
director, officer or employee or, at our request, as a director, officer,
partner, fiduciary or trustee of another corporation, partnership, joint
venture, trust, employee benefit plan or other enterprise, unless the act or
failure to act giving rise to the claim for indemnification is finally
determined by a court to have constituted willful misconduct or recklessness.
Our bylaws provide for the advancement of expenses to an indemnified party upon
receipt of an undertaking by the party to repay those amounts if it is finally
determined that the indemnified party is not entitled to indemnification. Our
bylaws authorize us to take steps to ensure that all persons entitled to the
indemnification are properly indemnified, including, if the board of directors
so determines, purchasing and maintaining insurance.

LIMITATION OF LIABILITY

Our articles of incorporation provide that none of our directors or officers
shall be personally liable to us or our shareholders for monetary damages for a
breach of fiduciary duty as a director or officer, except for liability:

- for acts or omissions involving intentional misconduct, fraud or a knowing
violation of law; or

- for the payment of unlawful dividends prohibited by Nevada corporate law.

At present, there is no pending litigation or proceeding, and we are not
aware of any threatened litigation or proceeding, involving any director,
officer, employee or agent where indemnification will be required or permitted
under the articles of incorporation or our bylaws.

28
<PAGE>
PRINCIPAL SHAREHOLDERS

The following table sets forth information with respect to beneficial
ownership of the our common stock as of July 7, 2000 by (i) each person who
beneficially owns more than 5% of the common stock; (ii) each of our executive
officers; (iii) each of our directors; and (iv) all executive officers and
directors as a group. The number of shares of common stock outstanding used in
calculating the percentage for each listed person includes the shares of common
stock underlying options or warrants held by such person that are exercisable
within 60 days, but excludes shares of common stock underlying options or
warrants held by any other person. The number of shares before consideration of
the offering of the warrants is 12,050,062 and after consideration of the
offering of the warrants fully exercised is 12,383,598. Unless otherwise noted,
each person has the same address as our executive office.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT BENEFICIALLY OWNED
BENEFICIALLY --------------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED BEFORE OFFERING AFTER OFFERING
------------------------------------ ---------------- --------------- --------------
<S> <C> <C> <C>
Donald Rex Gay..................................... 8,166,892 65.5% 66.1%
Lancer Offshore, Inc./Lancer Partners, L.P. ....... 1,015,000 8.4% 8.7%
375 Park Avenue
Suite 2006
New York, New York 10152

RX Technology Europe Limited....................... 92,101 .7% .7%
Draycott Hall
Derwent Street
Draycott, Derbyshire, DE7 3NF,
United Kingdom

Richard F. Govatski................................ -0- -0- -0-

Dr. Chris Marvell.................................. -0- -0- -0-

Douglas A. Dunbar.................................. 30,000 .2% .2%

S. Beatriz Gay..................................... -0- -0- -0-

Total for all officers and directors as a group (5 8,288,993 66.5% 66.9%
persons).........................................
</TABLE>

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

- Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or
investment power with respect to securities. Unless otherwise indicated,
the persons named in the table have sole voting and investment power with
respect to all shares beneficially owned, subject to applicable community
property laws.

- Includes 2,959,836 fully-vested non-qualified common stock options that
expire five years from the date of grant and that are exercisable at $1.75
per share, that were granted to Donald Rex Gay pursuant to our stock
option plan. Includes 274,056 warrants to be received by Mr. Gay on or
about May 1, 2000 as a part of our distribution of 501,493 warrants to our
existing stockholders of record, exercisable until December 31, 2001 at a
price of $6.00 per share.

- Includes 33,356 fully-vested non-qualified common stock options that
expire five years from the date of grant and that are exercisable at $1.75
per share, that were granted to RX Technology Europe Limited, a company
controlled by Dr. Chris Marvel, pursuant to our stock option plan.
Includes 3,092 warrants to be received by RX Technology Europe Limited on
or about May 1, 2000 as a part of our distribution of 501,493 warrants to
our existing stockholders of record, exercisable until December 31, 2001
at a price of $6.00 per share.

- Includes 30,000 fully-vested non-qualified common stock options that
expire May 5, 2005 that are exercisable at $1.75 per share, that were
granted to Mr. Dunbar as a part of his employment agreement, and which
were granted pursuant to our stock option plan. Excludes Mr. Dunbar's
100,000 common stock options that vest quarterly commencing after the
first quarter of his employment date.

- S. Beatriz Gay is the wife of Donald Rex Gay.

29
<PAGE>
CERTAIN TRANSACTIONS

In 1997 when we were formed, we sold 1,800,000 shares of our common stock
for total consideration of $9,000 to its founders, including Darold Moeller and
Lynn Dixon.

Prior to the agreement and plan of reorganization taking effect, we agreed
to dispose of our remaining assets previously used in our excavation, trucking
and snow removal business. These assets, consisting of four pieces of equipment,
were carried on our financial statements at $40,960 net of depreciation expense.
These assets were recently appraised at $26,000 and have been sold to Darold
Moeller, one of our founders, a former director and our former chief executive
officer. The $26,000 purchase price is to be paid by the assumption of an
outstanding lease with a $4,232 payoff due and a $21,768 promissory note issued
by Mr. Moeller which is due in six months and which bears interest at 6% per
year.

We purchase most, if not all, of our photo systems equipment from RX
Technology Europe Limited. RX Technology Limited Europe charges us their own
cost plus a mark-up to cover the test, supply and support of the items under
warranty (for the hardware items). The software developed by RX Technology
Europe Limited is supplied "as is" to us without any charge, to be used by us.
One of the principal owners of RX Technology Europe Limited is Dr. Chris
Marvell, who is also one of our directors. An informal form of license agreement
was entered into between us and RX Technology Europe Limited on January 25,
2000. This agreement has a one-year term and provides for an automatic renewal
for an additional one-year term, but is subject to termination in the event of
the insolvency of either party, or if we do not pay the amounts due to RX
Technology Europe Limited for our equipment purchases when due. In the event of
a change of control in RX Technology Europe Limited or us, the availability to
us of the license agreement with RX Technology Europe Limited could possibly be
jeopardized.

In December 1999, we owed RX Technology Europe Limited $101,424 on equipment
purchases we made during that year. We agreed with RX Technology Europe Limited
to convert the balance of that amount due to 22,539 shares of our common stock
valued at $4.50 per share, which was what we believed to be the fair market
value of our common stock at that time.

In March 2000, we converted advances and receivables to promissory notes
payable by our chief executive officer, Mr. Gay, and a company wholly-owned by
Mr. Gay, The Digital Photo Store, Inc. These advances and receivables are the
subject of a promissory note dated March 29, 2000 issued to us by Mr. Gay
individually and a second promissory note given by The Digital Photo Store, Inc.
dated March 29, 2000. Interest on the unpaid balance of both promissory notes
accrues at the rate of 8% per year, and the balance of all principal and accrued
interest on each promissory note is due in full on or before December 31, 2000.
Both promissory notes are unsecured and on a combined basis, the principal
balance of the notes as of June 30, 2000 was $368,092.

DESCRIPTION OF SECURITIES

OUR COMMON STOCK

We are authorized to issue 50,000,000 shares of common stock. We now have
9,026,870 shares of common stock issued and outstanding.

Holders of our common stock are entitled to receive as, when and if declared
by the board of directors from time to time, such dividends and other
distributions in cash, stock or property from our assets or funds legally
available for such purposes, subject to any dividend preferences attributable to
any preferred stock that may be authorized. Holders of common stock are entitled
to one vote for each share held of record on all matters on which shareholders
may vote. There are no preemptive, conversion, redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are fully paid and non-assessable. In the event of our liquidation,
dissolution or winding up, holders of common stock are entitled to share ratably
in the assets available for distribution.

30
<PAGE>
OUR PREFERRED STOCK

Pursuant to our articles of incorporation, we are authorized to issue
1,000,000 shares of "blank check" preferred stock, which may be issued from time
to time in one or more series upon authorization by our board of directors. The
board, without further approval of the stockholders, is authorized to fix the
dividend rights and terms, conversion rights, voting rights, redemption rights
and terms, liquidation preferences, and any other rights, preferences,
privileges and restrictions applicable to each series of the preferred stock.
The issuance of preferred stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes could, among other things,
adversely affect the voting power of the holders of common stock and, in certain
circumstances, make it more difficult for a third party to gain control of us,
discourage bids for our outstanding common stock at a premium, or otherwise
adversely affect the price of our common stock. At present, we have issued no
shares of preferred stock outstanding.

OUTSTANDING OPTIONS

At the time that we acquired RX Technology, Inc. pursuant to the agreement
and plan of reorganization dated December 27, 1999, we agreed to issue at the
closing of the acquisition, 3,000,000 non-qualified common stock options that
are now outstanding and that are exercisable to purchase 3,000,000 shares of our
common stock at $1.75 per share. These options were issued to existing
stockholders of record of RX Technology, Inc. on February 16, 2000, which is the
date that the acquisition was effective. In addition, and as a part of the
agreement and plan of reorganization, we issued 1,000,000 non-qualified common
stock options that are now outstanding and that are exercisable to purchase
1,000,000 shares of our common stock at $1.75 per share.

On May 1, 1999, RX Technology, Inc. granted to Capstone Partners, L.C. of
Atlanta, Georgia, an NASD-member broker dealer, 246,653 options to purchase
246,653 shares of our common stock at an adjusted exercise price of $.81 per
share. These options expire May 1, 2002 and are now outstanding.

On May 5, 2000, we granted a total of 130,000 options exercisable at $1.75
per share to our chief financial officer Mr. Dunbar, pursuant to our stock
option plan. Of this total, 30,000 options vested immediately on the date of
grant and 100,000 options vest quarterly after the date of grant in equal
increments of 25% each quarter.

Our outstanding options contain anti-dilution provisions with respect to the
occurrence of certain events, such as stock splits or stock dividends. The
anti-dilution provisions do not apply in the event of a merger or acquisition.
In the event of a liquidation, dissolution or winding-up of our company, holders
will not be entitled to participate in our assets. Holders of our options have
no voting, preemptive, liquidation or other rights of a stockholder, and no
dividends may be declared on the options.

The options granted to Capstone Partners, L.C. may be exercised by
surrendering the option certificate evidencing the options to be exercised, with
the exercise form included therein duly completed and executed, and paying to us
the exercise price per share in cash or check. The Capstone Partners, L.C.
options also include a cashless exercise provision allowing the exercise of the
options by delivery to us of a certain number of shares of our common stock
rather than cash or a check.

REGISTRATION RIGHTS

We previously granted registration rights covering the 246,653 shares of
common stock underlying the 246,653 options granted to Capstone Partners, L.C.
The holders of these options have a right to the registration of the underlying
common stock in the event of an underwritten public offering of our securities.
These registration rights provide that we will pay all of the expenses
associated with the registration of the underlying shares of common stock,
except that each holder of the options shall pay a prorata share of the holders'
expenses that relates to the registration, offer and sale of the common stock.
Registration of shares of our common stock pursuant to the exercise of
registration rights under the

31
<PAGE>
Securities Act would result in such shares becoming freely tradable without
restriction under the Securities Act immediately upon the effectiveness of such
registration.

THE WARRANTS

We have declared a distribution of 501,493 common stock purchase warrants to
shareholders of record as of May 1, 2000. The warrants are exercisable at $6.00
per share, prior to December 31, 2001, subject to effectiveness of registration
of the warrants and underlying shares.

- We may redeem all or a portion of the warrants, at $.01 per warrant, at
any time upon 30 day's written notice to the warrant holders. The warrants
may be redeemed whether or not a current registration statement is in
effect with respect thereto. Any warrant holder who does not exercise his
warrants prior to the redemption date, as set forth on our notice of
redemption, will forfeit his right to purchase the shares of common stock
underlying such warrants, and after such redemption date any outstanding
warrants referred to in such notice will become void and be canceled. If
we do not redeem the warrants, they will expire at the conclusion of the
exercise period unless we extended the exercise date.

- We may at any time, and from time to time, extend the exercise period of
the warrants provided that written notice of such extension is given to
the warrant holders prior to the expiration date thereof. Also, we may, at
any time, reduce the exercise price thereof by written notification to the
holders thereof. We do not presently contemplate any extensions of the
exercise period or reduction in the exercise price of the warrants.

- The exercise price for the warrants is subject to adjustment if we declare
a share dividend or subdivide the number of our outstanding shares of
common stock into a greater or lesser number of outstanding shares of
common stock. In such events, the $6.00 per share exercise price will be
reduced or increased proportionately and the number of shares purchasable
under the warrants will be increased or decreased proportionately. Also,
any dividend paid or distributed on our common stock in shares of any
other capital stock will be treated as a dividend paid in our common
stock.

- The warrants contain anti-dilution provisions with respect to the
occurrence of certain events, such as stock splits or stock dividends. The
anti-dilution provisions do not apply in the event of a merger or
acquisition. In the event of liquidation, dissolution or winding-up of our
company, warrant holders will not be entitled to participate in our
assets. Warrant holders have no voting, preemptive, liquidation or other
rights of a our stockholders, and no dividends may be declared on the
warrants.

- The warrants may be exercised by surrendering to us, a warrant certificate
evidencing the warrants to be exercised, with the exercise form included
therein duly completed and executed, and paying to us the exercise price
per share in cash or check payable to us. Stock certificates will be
issued as soon thereafter as practicable.

- The warrants will not be exercisable unless the warrants and the shares of
common stock underlying the warrants are registered or otherwise qualified
in applicable jurisdictions.

- The warrants are nontransferable by their terms, cannot be transferred
without our consent and will be "restricted securities" pursuant to the
definition of that term used in Rule 144. The warrants will be stamped
with a restrictive legend.

SHARES ELIGIBLE FOR FUTURE SALE

Of the 9,026,870 shares of our common stock outstanding prior to the
exercise of any warrants, 7,000,000 shares are available for resale only under
Rule 144 of the Securities Act. Of this number of shares of common stock,
6,003,653 are held by our officers, directors and principal shareholders and are
resaleable under Rule 144 provided certain volume and manner of sale conditions
are complied with. In addition, the 501,493 shares of common stock underlying
the warrants will also be freely tradable into the

32
<PAGE>

public market immediately upon issuance. Sales of substantial amounts of this
common stock in the public market could adversely affect the market price of the
common stock. Furthermore, all of the remaining shares of common stock presently
outstanding are restricted and/or affiliate securities that are not presently,
but may in the future be sold, pursuant to Rule 144, into any public market that
may exist for the common stock. Future sales by current stockholders could
depress the market prices of the common stock in any such market.

In general, under Rule 144 as currently in effect, a person (or group of
persons whose shares are aggregated), including our affiliates, can sell within
any three-month period, an amount of restricted securities that does not exceed
the greater of 1% of the total number of outstanding shares of the same class,
or (if the common stock becomes quoted on a stock exchange), the reported
average weekly trading volume during the four calendar weeks preceding the sale;
provided, that at least one year has elapsed since the restricted securities
being sold were acquired from us or any of our affiliates, and provided further
that certain other conditions are also satisfied. If at least two years have
elapsed since the restricted securities were acquired from us or our affiliates,
a person who has not been an affiliate of ours for at least three months can
sell restricted shares under Rule 144 without regard to any limitations on the
amount.

PLAN OF DISTRIBUTION

This prospectus and the registration statement of which it is part relate to
the offer and sale of 501,493 shares of our common stock issuable upon the
exercise of the warrants at an exercise price of $6.00 per share. The warrants
will be distributed as a dividend with respect to the common stock to
stockholders of record as of May 1, 2000. The warrants are exercisable until
December 31, 2001, provided this prospectus is still current or has been
updated.

We will manage this offering without an underwriter, and the shares of our
common stock will be offered and sold by us, without any discount, sales
commissions or other compensation being paid to anyone in connection with the
offering. In connection therewith, we will pay the costs of preparing, mailing
and distributing this prospectus to the holders of the warrants. Brokers,
nominees, fiduciaries and other custodians will be requested to forward copies
of this prospectus to the beneficial owners of securities held of record by
them, and such custodians will be reimbursed for their expenses.

There is no assurance that all or any shares of our common stock underlying
the warrants will be sold, nor any requirement, or escrow provisions to assure
that, any minimum amount of warrants will be exercised. All funds received upon
the exercise of any warrants will be immediately available to us for our use.

WARRANT EXERCISE PROCEDURES

The warrants may be exercised in whole or in part by presentation of the
warrant certificate, with the purchase form on the reverse side thereof filled
out and signed at the bottom thereof, together with payment of the exercise
price and any applicable taxes at the principal office of Interwest Stock
Transfer Co., 1981 East 4800 South, Suite 100, Salt Lake City, Utah 84117.
Payment of the exercise price shall be made in lawful money of the United States
of America in cash or by cashier's or certified check payable to the order of RX
Technology Holdings, Inc. Warrant Exercise Account.

All holders of warrants will be given an independent right to exercise their
purchase rights. If, as and when properly completed and duly executed notices of
exercise are received by our transfer agent or warrant agent, together with the
certificates being surrendered and full payment of the exercise price in cleared
funds, the checks or other funds will be delivered to us and the transfer agent
or warrant agent will promptly issue certificates for the underlying shares of
common stock. It is presently estimated that certificates for the shares of
common stock will be available for delivery in Salt Lake City, Utah at the close
of business on the 10th business day after the receipt of all required documents
and funds.

33
<PAGE>
TRANSFER AGENT

The transfer agent for our common stock and warrant agent for the common
stock purchase warrants is Interwest Transfer Co., Inc., Salt Lake City, Utah.
As of July 7, 2000 we had 75 shareholders of record.

MARKET FOR COMMON STOCK

The following table sets forth the high and low bid prices for shares of our
common stock for the periods noted, as reported by the Electronic Bulletin Board
maintained by the NASD and in the Pink Sheets maintained by the National
Quotations Bureau, Inc. Quotations reflect the inter-dealer prices, without
retail mark-up, mark-down or commission and may not represent actual
transactions. On February 17, 2000, our common stock began price quotations, a
result of our agreement and plan of reorganization entered into with Valley
Excavation and Trucking, Inc., under the symbols "RXTX." Since February 17,
2000, recent bid and ask quotations for our common stock are as follows:

<TABLE>
<CAPTION>
BID PRICES
-------------------
YEAR PERIOD HIGH LOW
---- ------ -------- --------
<S> <C> <C> <C>
2000 February 2000......................................... $4.125 $4.02
March 2000............................................ $4.25 $4.12
April 2000............................................ $3.35 $2.69
May 2000.............................................. $2.20 $2.20
June 2000............................................. $2.50 $2.50
</TABLE>

Pursuant to NASD Eligibility Rule 6530, issued on January 4, 1999, issuers
who do not make current filings pursuant to Sections 13 and 15(d) of the
Securities Act of 1934 are ineligible for listing on the Over-the-Counter
Electronic Bulletin Board. Pursuant to the rule, issuers who are not current
with such filings are subject to delisting pursuant to a phase-in schedule
depending on each issuer's trading symbol as reported on January 4, 1999. For
purposes of delisting our common stock, our trading symbol is RXTX. Therefore,
pursuant to the phase-in schedule, we were delisted on May 7, 2000 and price
quotations for our common stock have been included in the Pink Sheets since that
date.

We are not currently in compliance with the rule, and in the past, we have
not made any filings pursuant to Sections 13 and 15(d) of the Securities Act of
1934. We have filed this registration statement on Form SB-2 in order to
register the shares of our common stock that underlie the 501,493 warrants being
distributed to our stockholders of record as of May 1, 2000, and if declared
effective by the Securities and Exchange Commission, we will thereafter be a
reporting company and, assuming we file all periodic reports required by
Sections 13 and 15(d) of the Securities and Exchange Act of 1934, we will be in
compliance with the rule. We are not eligible for price quotations on the
Over-the-Counter Bulletin Board until this registration statement becomes
effective on order of the Securities and Exchange Commission and we otherwise
satisfy the eligibility rule to be reinstated on the Over-the-Counter Bulletin
Board.

EXPERTS

Our financial statements as of December 31, 1999 and for the two year period
ended December 31, 1999, included in this prospectus have been so included in
reliance on the report of Wegmann-Dazet & Co., certified public accountants, a
professional corporation, Metarie, Louisiana, independent auditors, given on the
authority of such firm as experts in accounting and auditing.

The financial statements as of December 31, 1999 and for the two year period
ended December 31, 1999, included in this prospectus on behalf of Valley
Excavation and Trucking, Inc. have been so included in reliance on the report of
Pritchett, Siler & Hardy, P.C, of Salt Lake City, Utah, independent certified
public accountants, given on the authority of such firm as experts in accounting
and auditing.

34
<PAGE>
LEGAL MATTERS

The validity of the common stock offered by this prospectus will be passed
upon for us by Gregory Bartko, Esq. of Atlanta, Georgia.

ADDITIONAL INFORMATION

This prospectus constitutes a part of a registration statement on Form SB-2
filed by us with the Commission under the Securities Act with respect to the
securities offered in this prospectus. This prospectus does not contain all the
information which is in the registration statement. Certain parts of the
registration statement are omitted as allowed by the rules and regulations of
the Commission. We refer to the registration statement and to the exhibits to
such registration statement for further information with respect to us and the
securities offered in this prospectus. Copies of the registration statement and
the exhibits to such registration statement are on file at the offices of the
Commission and may be obtained upon payment of the prescribed fee or may be
examined without charge at the public reference facilities of the Commission
described below. Statements contained in this prospectus concerning the
provisions of documents are necessarily summaries of the material provisions of
such documents, and each statement is qualified in its entirety by reference to
the copy of the applicable document filed with the Commission.

After the effective date of this registration statement, we will file
annual, quarterly and special reports and other information with the Commission.
Such reports and information can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street N.W., Washington, D.C. 20549 and at its regional offices located at 7
World Trade Center, New York, New York 10048 and Northwest Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission,
Room 1024, Judiciary Plaza, 450 Fifth Street N.W., Washington, D.C. 20549 at
prescribed rates. Our common stock is quoted in the Pink Sheets maintained by
the National Quotations Bureau, Inc. under the symbol "RXTX." The Commission
maintains a website that will contain all information filed electronically by
us. The address of the Commission's website is (www.sec.gov.).

35
<PAGE>
RX TECHNOLOGY, INC.

CONTENTS

<TABLE>
<CAPTION>
PAGES
--------
<S> <C>
Independent Auditors' Report................................ F-2

Financial Statements

Balance Sheet............................................. F-3

Statements of Operations.................................. F-4

Statements of Changes in Stockholders' Equity............. F-5

Statements of Cash Flows.................................. F-6

Notes to Financial Statements............................. F-7

RX TECHNOLOGY HOLDINGS, INC. AND SUBSIDIARY

Balance Sheets at March 31, 2000 and December 31, 1999
(unaudited)............................................. F-14

Statement of Operations
Three Months Ended March 31, 2000 and 1999
(unaudited)............................................. F-15

Statement of Changes in Stockholders' Equity
Three Months Ended March 31, 2000....................... F-16

Statement of Cash Flows
Three Months Ended March 31, 2000 and 1999
(unaudited)............................................. F-17

Notes to Condensed Consolidated Financial Statements
Three Months Ended March 31, 2000 and 1999
(unaudited)............................................. F-18
</TABLE>

F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT

To the Shareholders of
RX Technology, Inc.

We have audited the accompanying balance sheet of RX Technology, Inc. as of
December 31, 1999, and the related statements of operations and stockholders(1)
equity and cash flows for each of the two years in the period ended
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of RX Technology, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for each
of the two years in the period ended December 31, 1999, in conformity with
generally accepted accounting principles.

WEGMANN-DAZET & CO. APC

Metairie, Louisiana
January 13, 2000

F-2
<PAGE>
RX TECHNOLOGY, INC.

BALANCE SHEET

DECEMBER 31, 1999

<TABLE>
<CAPTION>
1999
----------
<S> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................. $ 109,958
Accounts receivable, trade, less allowance for doubtful
accounts of $2,500 in 1999 286,750
Inventory................................................. 190,055
----------
Total Current Assets.................................... 586,763
Property and equipment, at cost, less accumulated
depreciation of $664,512.................................. 2,538,168
Due from shareholder........................................ 11,341
Other assets................................................ 25,981
----------
TOTAL ASSETS................................................ $3,162,253
==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable............................................. $1,784,366
Advance from Valley Excavation & Trucking, Inc............ 395,000
Line of credit............................................ 48,547
Current portion of long-term debt......................... 40,225
Accounts payable.......................................... 484,333
Accrued expenses.......................................... 185,227
Deferred revenue.......................................... 50,000
----------
Total Current Liabilities............................... 2,987,698

Long-term debt, less current portion........................ 47,846
Deferred income taxes....................................... 93,063
----------
TOTAL LIABILITIES....................................... 3,128,607
----------
STOCKHOLDERS' EQUITY
Common stock, .001 per share par value, 20,000,000 shares
authorized, 2,027,139 shares issued and outstanding..... 2,027
Preferred stock, .001 per share par value, 5,000,000
shares authorized, no shares issued and outstanding..... --
Additional paid-in capital.................................. 719,727
Retained (deficit).......................................... (688,108)
----------
TOTAL STOCKHOLDERS' EQUITY.............................. 33,646
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.............. $3,162,253
==========
</TABLE>

See accompanying Notes to Financial Statements.

F-3
<PAGE>
RX TECHNOLOGY, INC.

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Revenues.................................................... $ 6,028,397 $ 4,332,411

Cost of Revenues............................................ 3,049,454 2,182,860
----------- -----------
Gross Profit............................................ 2,978,943 2,149,551
----------- -----------
Operating Expenses
Photo Sales Expense....................................... 1,490,270 1,035,576
General and Administrative expenses....................... 1,330,457 728,752
Depreciation and Amortization............................. 386,443 212,145
----------- -----------
Total Operating Expenses.............................. 3,207,170 1,976,473
----------- -----------
Net Operating (Loss) Income............................. (228,227) 173,078
----------- -----------
Other Income (Expense)
Interest Income........................................... 425 --
Interest Expense.......................................... (445,774) (143,650)
Financing Fee............................................. (150,000) --
Other..................................................... 230 552
----------- -----------
Other Income (Expense), Net............................. (595,119) (143,098)
----------- -----------
(Loss) Income Before Income Taxes........................... (823,346) 29,980

Income tax expense........................................ -- (16,431)
----------- -----------
Net (Loss)Income............................................ $ (823,346) $ 13,549
=========== ===========
</TABLE>

See accompanying Notes to Financial Statements.

F-4
<PAGE>
RX TECHNOLOGY, INC.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- ---------- --------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1997......................... $2,000 $373,046 $ 121,689 $496,735

Net income......................................... -- -- 13,549 13,549
------ -------- --------- --------
Balance at December 31, 1998......................... 2,000 373,046 135,238 510,284

Forgiveness of related-party debt.................. -- 95,279 -- 95,279
Net loss........................................... -- -- (823,346) (823,346)
Stock issued for cash--4,600 shares................ 5 -- -- 5
Stock warrants issued for 222,733 shares of common
stock............................................ -- 150,000 -- 150,000
Conversion of debt for 22,539 shares of stock...... 22 101,402 -- 101,424
------ -------- --------- --------
Balance at December 31, 1999......................... $2,027 $719,727 $(688,108) $ 33,646
====== ======== ========= ========
</TABLE>

See accompanying Notes to Financial Statements.

F-5
<PAGE>
RX TECHNOLOGY, INC.

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) income........................................... $ (823,346) $ 13,549
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation............................................ 386,443 212,145
Increase in provision for bad debts..................... 1,354 1,146
Deferred taxes.......................................... -- 16,431
Issuance of stock warrants.............................. 150,000 --
(Increase) decrease in operating assets:
Accounts receivable, trade.............................. (215,823) (39,397)
Inventory............................................... (190,055) 451,700
Prepaid expenses........................................ 27,724 (27,724)
Other assets............................................ (16,311) (8,420)
Increase (decrease) in operating liabilities:
Accounts payable........................................ (191,713) 280,533
Accrued expenses........................................ 69,445 133,319
Due to related-parties.................................. 38,934 157,769
Deferred revenue........................................ 50,000 --
---------- ----------
Net Cash (Used) Provided by Operating Activities............ (713,348) 1,191,051
---------- ----------
Cash Flows From Investing Activities:
Acquisitions of property and equipment.................. (800,508) (1,601,186)
---------- ----------
Net Cash (Used) by Investing Activities..................... (800,508) (1,601,186)
---------- ----------

Cash Flows From Financing Activities:
Advances on short-term notes payable.................... 2,327,683 631,912
Repayments on short-term notes payable.................. (1,181,237) --
Advances on line of credit.............................. 15,400 44,082
Repayments on line of credit............................ (10,935) --
Repayments on long-term notes payable................... (33,840) (134,347)
Advance from Valley Excavation & Trucking, Inc.......... 395,000 --
Due from shareholder.................................... 18,046 (42,265)
---------- ----------
Net Cash Provided by Financing Activities................... 1,530,117 499,382
---------- ----------
Net Increase in Cash and cash equivalents............... 16,261 89,247
Cash and cash equivalents at Beginning of the Year...... 93,697 4,450
---------- ----------
Cash and cash equivalents at the end of the year...... $ 109,958 $ 93,697
========== ==========
</TABLE>

See accompanying Notes to Financial Statements.

F-6
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 1999 AND 1998

1) NATURE OF THE COMPANY

RX Technology, Inc. (the Company), a Nevada corporation, is an international
company that markets and services digital image processing equipment and
specializes in the electronic capture, presentation and sale of pictures of
guests on amusement park ride attractions. The Company currently operates in the
United States of America and in Argentina.

2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed by the Company are summarized
as follows:

(a) DEPRECIATION

For financial statement purposes the straight-line method is used to
determine depreciation. Depreciation is taken over the following useful lives
for financial reporting purposes:

<TABLE>
<S> <C>
Buildings................................................... 7-15 years
Park equipment.............................................. 7-10 years
Computers................................................... 7 years
</TABLE>

(b) INCOME TAXES

Income taxes are provided for the tax effects of transactions reported in
the financial statements and consist of taxes currently due plus deferred taxes.
The deferred tax assets and liabilities represent the future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled.

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

(d) INVENTORY

Inventory is stated at the lower of cost or market. Cost is determined
principally on the average cost method. The inventory consists of finished goods
and supplies.

(e) REVENUE RECOGNIZATION

The Company recognizes revenues from the sale of pictures as the pictures
are sold to the customers. Revenues on the sale of product are recognized when
shipped to the customer. Approximately 82% of the revenues are from the sale of
pictures and 18% from the sale of product.

The Company furnishes and installs photosystem equipment to numerous
amusement parks worldwide. The Company and the amusement parks share the
revenues generated. The Company's percentage of revenue varies from 40% to 70%,
depending on the agreement with the amusement park.

F-7
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

3) FINANCIAL INSTRUMENTS

Estimated fair values of the Company's financial instruments (all of which
are held for nontrading purposes) are as follows:

<TABLE>
<CAPTION>
1999
-----------------------
CARRYING FAIR
AMOUNT VALUE
---------- ----------
<S> <C> <C>
Assets:
Cash and cash equivalents.......................... $ 109,958 $ 109,958
Accounts receivable................................ 286,750 286,750
Due from shareholder............................... 11,341 11,341
Liabilities:
Short-term and long-term debt...................... $3,035,544 $3,035,544
</TABLE>

Fair values were determined as follows:

The carrying amounts of cash and cash equivalents, receivables, accounts
payable and accrued expenses, deferred income, short-term debt and current
installments of long-term debt approximate fair value because of the short-term
maturity of these instruments.

The fair value estimates of long-term debt were based upon quotes from major
financial institutions taking into consideration current rates offered to the
Company for debt of the same remaining maturities.

4) CASH AND CASH EQUIVALENTS

Cash and cash equivalents include approximately $80,465 held in
interest-bearing money market funds at December 31, 1999. Interest earned on
investments in money market funds varies in accordance with market rates of
interest. The Company maintains fluctuating cash balances with financial
institutions in excess of insured levels.

The Company considers money market funds and certificates of deposit with
maturities of 90 days or less to be cash equivalents.

5) PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
1999
----------
<S> <C>
Buildings................................................... $ 229,767
Park equipment.............................................. 2,937,262
Computers................................................... 35,651
----------
3,202,680
Less accumulated depreciation............................... (664,512)
----------
$2,538,168
==========
</TABLE>

F-8
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

6) INCOME TAXES

The provision for income taxes consists of the following:

<TABLE>
<CAPTION>
1999 1998
-------- --------
<S> <C> <C>
Current taxes:
Deferred tax expense.................................... $ -- $16,431
======= =======
</TABLE>

Temporary differences giving rise to the deferred tax assets and liabilities
are due to the reporting of certain items differently for tax and financial
reporting purposes. The items consist primarily of depreciation, amortization,
allowance for doubtful accounts, and net operating loss carryforwards. At
December 31, 1999, the Company recorded a valuation allowance of $266,730 on the
deferred tax assets.

The following is a reconciliation of income tax benefit (expense) at the
federal statutory rate to the provision for income taxes.

<TABLE>
<CAPTION>
1999 1998
--------- --------
<S> <C> <C>
Tax at statutory rate of 34%........................... $ 279,938 $(10,193)
Valuation allowance.................................... (266,730) --
Other.................................................. (13,208) (6,238)
--------- --------
$ 0 $(16,431)
========= ========
</TABLE>

The following is a summary of the significant components of deferred tax
assets and liabilities as of December 31, 1999:

<TABLE>
<S> <C>
Deferred tax assets......................................... $ 266,730
Less: valuation allowance................................... (266,730)
---------
Net deferred tax assets..................................... --
Deferred tax liability...................................... 93,063
---------
Net deferred tax liability.................................. $ 93,063
=========
</TABLE>

The Company has net operating loss carryforwards available to offset future
income which expire as follows:

<TABLE>
<CAPTION>
NET OPERATING
YEAR ENDING DECEMBER 31 LOSS
----------------------- -------------
<S> <C>
2018........................................................ $ 24,009
2019........................................................ 872,087
</TABLE>

F-9
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

7) LINE OF CREDIT

<TABLE>
<S> <C>
The Company has a $50,000 revolving line of credit with a
bank, with interest at a variable rate. At December 31,
1999, the rate was 10.25%. Interest is payable monthly, and
the line is unsecured....................................... $48,547
=======
</TABLE>

8) NOTES PAYABLE

<TABLE>
<S> <C>
On April 1, 1999, the Company entered into a finance
transaction with Banc One Capital BIDCO-1998, LLC ("Banc
One") that provided $500,000 to the Company for equipment
financing purposes. The note is a senior subordinated
promissory note due on April 15, 2000 with interest
accruing thereon at the rate of 21% per year. The Company's
chief executive officer and majority stockholder personally
guaranteed the repayment of the principal and interest under
the note. In addition, the majority stockholder has executed
a stock pledge agreement dated April 1, 1999, agreeing to
pledge his 2,000,000 shares of the Company's common stock as
additional security for the repayment of the promissory
note. The note is secured by certain assets of the
Company..................................................... $ 500,000
Note payable to a finance company dated March 26, 1999, with
monthly payments of $82,175 including interest at a variable
rate. The rate at December 31, 1999 was 12.5%. The note is
secured by all accounts, inventory and equipment and the
personal guarantee of the majority stockholder. The note
matures on April 15, 2000. The maximum amount available
under the agreement is $1,750,000........................... 1,133,549
Note payable to a vendor dated July 20, 1999, with monthly
payments of $10,000 including 10% interest until the balance
is paid in full. The note is unsecured...................... 84,623
Note payable to a vendor dated March 31, 1999, with monthly
payments of $10,000 including 10% interest until the balance
is paid in full. The note is unsecured...................... 66,194
-----------
$ 1,784,366
===========
</TABLE>

9) LONG-TERM DEBT

<TABLE>
<S> <C>
Note payable to a finance company dated May 8, 1997, with
monthly installments of $1,033 including interest at 12%.
The note matures on May 8, 2002. This note is collateralized
by park equipment purchased through this note............... $25,123
Note payable to a finance company dated June 9, 1997, with
monthly installments of $1,001 including interest of 12%.
The note matures on June 9, 2002. This nots is
collateralized by park equipment purchased through this
note........................................................ 25,096
Note payable with a finance company dated August 15, 1997,
with monthly installments of $1,036 including interest of
18.44%. The note matures on July 15, 2002. This note is
collateralized by park equipment purchased through this
note........................................................ 25,397
Note payable with a finance company dated December 15, 1997,
with monthly installments of $1,187 including interest of
25.58%. The note matures on October 15, 2000. The note is
collateralized by park equipment and computer equipment
purchased through this note................................. 12,455
-------
88,071
Less current portion...................................... (40,225)
-------
$47,846
=======
</TABLE>

F-10
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

9) LONG-TERM DEBT (CONTINUED)
Maturities of long-term debt are as follows:

<TABLE>
<S> <C>
Year ending December 31, 2000............................... $40,225
2001................................. 32,029
2002................................. 15,817
</TABLE>

10) CONTINGENCIES

The Company is a defendant in a civil action in which an individual asserts
that the Company breached a contract. The claim is for $47,500. The Company
intends to vigorously defend this action. The ultimate resolution of this matter
is not ascertainable at this time. No provision has been made in the financial
statements related to this claim.

11) RELATIONSHIP WITH RX TECHNOLOGY LIMITED, EUROPE

RX Technology Limited, Europe is the exclusive supplier of custom designed
electronic hardware and software for RX Technology, Inc. RX Technology Limited,
Europe is the inventor of these items and continually performs research and
development to enhance, update and expand the functionality of these items.

The relationship between RX Technology Limited, Europe and RX Technology,
Inc. comes down to a personal relationship between the owners of both companies.

RX Technology Limited, Europe will investigate new developments in the field
of digital photography and design custom hardware and software to exploit these
new developments. RX Technology, Inc. will then be kept fully informed of these
developments and freely offered them. RX Technology Limited, Europe will charge
RX Technology, Inc. their own cost plus a mark-up to cover the test, supply and
support of the items under warranty (for the Hardware Items). The Software will
be supplied "as is" to RX Technology, Inc., without any charge, to be used by RX
Technology, Inc.

RX Technology, Inc., on encountering an application or opportunity, may
request that RX Technology Limited, Europe develops specific hardware and
software to meet these requirements. RX Technology Limited, Europe is committed
(within reason and time constraints) to comply with these requests and will
perform the necessary research and development at its own expense. Naturally,
both RX Technology Limited, Europe and RX Technology, Inc. will then mutually
benefit from the new development.

In summary, RX Technology Limited, Europe acts as the research and
development vendor of RX Technology, Inc. Intellectual property in the software
and hardware developed remains with RX Technology Limited, Europe, but RX
Technology, Inc. is free to use the developments in any way it sees fit.

In 1999, a loan in the amount of $101,424 to the Company from RX Technology
Limited, Europe was converted to equity through the issuance of 22,539 shares of
common stock at $4.50 per share.

12) CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentrations
of credit risk consist of trade accounts receivable. The Company grants credit,
which is unsecured, to customers all of whom are involved in the amusement park
industry.

F-11
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

13) SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Interest paid for December 31, 1999 and 1998, was $343,262 and $143,650,
respectively.

Noncash investing and financing activities:

<TABLE>
<CAPTION>
1998
--------
<S> <C>
Acquisition of computer equipment with debt................. $30,882
=======
</TABLE>

14) SUBSEQUENT EVENT

On December 7, 1999, the Company entered into an Agreement and Plan of
Reorganization (the "Agreement") with Valley Excavation and Trucking, Inc., a
Nevada corporation ("Valley"), that is listed for price quotations on the
NASD(1)s Over-the-Counter Electronic Bulletin Board ("OTCBB") under the symbols
"VETI." The Agreement contemplates that all of the outstanding shares of common
stock of the Company will be exchanged at closing for a certain number of shares
of the common stock of Valley. As of the closing date of the Agreement, the
2,027,139 shares of the Company's outstanding common stock will be exchanged for
5,000,000 shares of Valley common stock. In addition, and as an additional term
of the Agreement, the shareholders of the Company on the date of the closing,
will be granted an option on a prorata basis to their current ownership, to
purchase 3,000,000 additional shares of the Company(1)s common stock at an
exercise price of $1.75 per share. Also, options to purchase up to 1,000,000
shares of Valley at $1.75 per share will be made available for grants to
employees of the Company under an employee stock option plan to be approved by
the directors of the Company.

The closing of the transactions contemplated by the Agreement are subject to
several conditions. The most important of these conditions is that Valley shall
first have completed a Regulation D, Rule 506 offering of its common stock
structured to offer 1,830,000 shares of its common stock at an offering price of
$1.75 per share for an aggregate offering amount of $3,202,500. The Company has
already received $375,000 in loans as of December 31, 1999 which are expected to
be converted to equity in the purchase of shares in the private offering. If
these debt holders convert to stock they will do so at $1.50 per share and will
receive 250,000 shares. In connection with this conversion, the Company will
record interest expense of $62,500 in the first quarter of 2000.

At the closing of the transactions contemplated by the Agreement, existing
management of Valley will resign as such and the existing management of the
Company will become the officers and directors of Valley. After the closing, the
Company intends to forthwith prepare and file a Form SB-2 registration statement
with the United States Securities and Exchange Commission ("SEC") in order to
become a fully reporting company as required for eligibility to continue price
quotations on the OTCBB.

The parties to the Agreement expect the transactions to close not later than
February 16, 2000.

15) RELATED-PARTY TRANSACTIONS

The Company had a related-party debt owed to Phototech which has been
forgiven. Total debt forgiven at December 31, 1999, was $95,279 and has been
recorded as additional paid-in capital.

F-12
<PAGE>
RX TECHNOLOGY, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

YEARS ENDED DECEMBER 31, 1999 AND 1998

16) FOREIGN OPERATIONS

The Company operates in Argentina. The net book value of the assets in
Argentina at December 31, 1999, was $126,000. The equipment in Argentina
contributed $197,600 of the total operating revenues of the Company for the year
ended December 31, 1999.

17) WARRANTS

The Company granted certain common stock purchase warrants associated with a
$500,000 note dated April 1, 1999. The warrants allow the holder to purchase
222,733 shares of the Company's common stock for $50. The warrants expire at the
earliest of (a) the occurrence of a public offering, (b) ten (10) years after
the closing date or (c) six (6) years after repayment of the debt. The warrants
have put rights at any time after five (5) years of closing date. The estimated
fair value of these warrants at the date issued was $150,000.

The Company also granted a five-year option to a consultant on May 1, 1999,
to purchase 100,000 shares of the Company's common stock at an exercise price of
$2.00 per share. The estimated fair value of these options at the date issued
was less than the exercise price. The Company calculated the fair value of this
option using the Black-Scholes Model which calculated the fair value to be $0.

The Company used the following assumptions for the calculation on the date
of grant:

<TABLE>
<S> <C>
Stock price.......................... $1.50

Exercise price....................... $2.00

Term................................. 3 years

Volatility........................... 0.0

Dividend rate........................ 0.0

Discount rate........................ 6%
</TABLE>

F-13
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
<S> <C> <C>
ASSETS

Current assets
Cash...................................................... $ 596,416 $2,486,998
Accounts receivable, less allowance for doubtful accounts
of $2,500
and $2,500.............................................. 126,715 286,750
Inventories............................................... 167,136 190,055
----------- ----------
Total current assets.................................... 890,267 2,963,803

Property and equipment--at cost, less accumulated
depreciation and amortization............................. 3,320,214 2,538,168

Notes receivable............................................ 307,500 --

Due from shareholder........................................ 11,114 11,341

Other assets................................................ 42,678 46,758
----------- ----------
Total assets............................................ $ 4,571,773 $5,560,070
=========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities
Notes payable............................................. $ 1,262,668 $1,313,471
Accounts payable and accrued expenses..................... 721,665 667,226
Other current liabilities................................. 50,000 50,000
----------- ----------
Total current liabilities............................... 2,034,333 2,030,697

Debt obligations, less current maturities................... 40,152 47,846

Deferred income taxes....................................... 93,063 93,063
----------- ----------

Total liabilities........................................... $ 2,167,548 $2,171,606
Stockholders' equity
Common stock, $.001 par value, 50,000,000 shares
authorized,
9,026,870 issued and outstanding........................ 9,027 9,027
Preferred stock, $.001 par value; 1,000,000 shares
authorized, no shares issued and outstanding............

Additional paid in capital................................ 4,067,545 4,067,545
Retained (deficit)........................................ (1,672,347) (688,108)
----------- ----------
Total stockholders' equity................................ $ 2,404,225 $3,388,464
----------- ----------
Total liabilities and stockholders' equity.............. $ 4,571,773 $5,560,070
=========== ==========
</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

F-14
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
---------- ----------
<S> <C> <C>
Revenues.................................................... $ 295,655 $ 260,399

Cost of Revenues............................................ 135,427 124,524
---------- ----------
Gross profit............................................ 160,228 135,875
---------- ----------
Operating expenses
Photo sales expense....................................... 381,941 96,986
General and administrative................................ 463,640 268,524
Depreciation and amortization............................. 142,798 118,566
---------- ----------
Total Operating Expenses................................ 988,379 484,076
---------- ----------
Loss from Operations........................................ (828,151) (348,201)
Other income (expense):
Interest income........................................... 6,833 --
Interest expense.......................................... (162,921) (106,537)
---------- ----------
Net income (loss)....................................... $ (984,239) $ (454,738)

Basic and diluted earnings (loss) per share................. $ (.14) $ (.09)
========== ==========

Shares used in the calculation of earnings per share........ 6,867,012 4,944,347
========== ==========
</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

F-15
<PAGE>

RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2000

<TABLE>
<CAPTION>
ADDITIONAL
COMMON PAID-IN RETAINED
STOCK CAPITAL EARNINGS TOTAL
-------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Balance at December 31, 1999--Prior to Reverse
Acquisition................................... $2,000 $ 756,705 $ (688,108) $ 70,597
Transaction in connection with February 16, 2000
Reverse Acquisition:
Exchange of stock on February 16, 2000...... 5,000 -- -- 5,000
Disposal of discontinued operations assets...... -- (20,183) -- (20,183)
Purchase of warrant for 222,733 shares of common
stock......................................... -- (150,000) -- (150,000)
Issued 1,830,000 shares of common stock for cash
and loans net of issue cost of 63,975......... 1,830 3,136,695 -- 3,138,525
Issued 196,870 shares of common stock for
cash.......................................... 197 344,328 -- 344,525
------ ---------- ----------- ----------
Balance as of December 31, 1999 as if Reverse
Merger had occurred as of this date........... 9,027 4,067,545 (688,108) 3,388,464

Net loss for three months ended March 31,
2000.......................................... -- -- (984,239) (984,239)
------ ---------- ----------- ----------
$9,027 $4,067,545 $(1,672,347) $2,404,225
====== ========== =========== ==========
</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

F-16
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)

<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
----------- ---------
<S> <C> <C>
Cash flows used in operating activities..................... $ (914,546) $(311,805)

Cash flows used in investing activities..................... 2,414,168 (71,158)

Cash flows provided by (used in) financing activities....... (1,013,164) 416,874
----------- ---------
Net increase (decrease) in cash............................. 486,458 33,911

Cash, beginning of period................................... 109,958 93,697

Cash, end of period......................................... $ 596,416 $ 127,608

Supplemental cash flow disclosures
Interest paid............................................. $ 254,482 $ 106,537

Noncash investing and financing activities
Equipment acquired under capital leases...................

Common stock issued in exchange for advances payable.... $ 375,000 $ --
=========== =========
</TABLE>

See accompanying notes to Condensed Consolidated Financial Statements.

F-17
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1) BASIS OF PRESENTATION

The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. However, the Company believes that the disclosures are adequate to
make the information presented not misleading. The condensed consolidated
financial statements should be read in conjunction with the financial statements
and notes thereto included in the Company's report on Form SB-2.

The unaudited condensed consolidated financial statements included herein
reflect, in the opinion of management, all adjustments (consisting primarily
only of normal recurring adjustments) necessary to present fairly the results
for the interim periods. The results of operations for the three months ended
March 31, 2000 are not necessarily indicative of results to be expected for the
entire year ending December 31, 2000, due among other reasons to the seasonal
nature of the Company's business.

2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

RX Technology Holdings, Inc. is the successor consolidated entity formed by
the merger, on February 16, 2000, of RX Technology, Inc. (The "Company") and
Valley Excavation and Trucking, Inc. ("Valley"). Valley was originally
incorporated in Nevada on September 26, 1997. The Company was incorporated in
Nevada on December 22, 1993, as RXT, Inc. and by amendment to the Articles of
Incorporation dated December 20, 1994, changed its name to RX Technology, Inc.

Concurrent with the merger, Valley, a publicly held company and the legally
surviving parent company, changed its name to RX Technology Holdings, Inc. For
accounting purposes, the merger has been treated as a reverse acquisition, with
the Company as the acquiror, and is accounted for as a purchase.

The Company consummated the reverse acquisition of Valley on February 16,
2000. The Company's stockholders were issued 5,000,000 Valley shares on a
prorata basis in exchange of 2,027,139 shares of the Company.

The accompanying consolidated balance sheet as of March 31, 2000 includes
the accounts of the Company and Valley. The related accompanying consolidated
statements of operations and cash flows include the results of operations and
cash flows of the Company for the entire year and of Valley for the period
beginning February 17, 2000. All significant intercompany balances and
transactions have been eliminated. The consolidated balance sheet as of
December 31, 1999 is shown as if the transactions described in Note 3 had
occurred as of December 31, 1999.

The Company designs, installs, operates and services digital image
processing equipment, which performs the electronic capture and presentation of
pictures of guests at theme parks. In most theme parks where the Company has
operations, the Company hires and manages sales staff. The Company has
operations in the United States and Argentina and is currently installing
equipment in Mexico.

F-18
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE

Basic earnings per common share is calculated by dividing net income (loss)
available to common stockholders by the average number of common shares
outstanding during the year. Diluted earnings per common share is calculated by
adjusting outstanding shares, assuming conversion of any potentially dilutive
securities, such as stock options or warrants. Potentially dilutive securities
have been excluded from the calculation of diluted loss per share for the three
months ended March 31, 2000, as their effect would have been antidilutive.

STOCK-BASED COMPENSATION

The Company accounts for stock-based employee compensation arrangements in
accordance with provisions of Accounting Principles Board ("APB") Opinion
No. 25, "Accounting for Stock Issued to Employees," and complies with the
disclosure provisions of SFAS No. 123, "Accounting for Stock-Based
Compensation." Under APB Opinion No. 25, compensation expense for employees is
based on the excess, if any, on the date of grant, between of fair value of the
Company's stock over the exercise price.

The Company accounts for equity instruments issued to non-employees in
accordance with the provisions of SFAS No. 123 and Emerging Issues Task Force
Issue No. 96-18, "Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services." All transactions in which goods or services are the consideration
received for the issuance of equity instruments are accounted for based on the
fair value of the consideration received or the fair value of the equity
instrument issued, whichever is more reliably measurable. The measurement date
of the fair value of the equity instrument issued is the earlier of the date on
which the counterparty's performance is complete or the date on which it is
probable that performance will occur.

3) CAPITAL STOCK TRANSACTIONS

On February 16, 2000, the Company's stockholders were issued 5,000,000
shares on a pro-rata basis in exchange for 2,027,139 shares of the Company.

On February 16, 2000, the Company issued 1,830,000 shares of its common
stock at a price of $1.75 per share for gross proceeds to the Company of
$3,202,500.

On March 24, 2000, the Company issued 196,870 shares of its common stock at
a price of $1.75 per share for gross proceeds to the Company of $344,523.

4) SUBSEQUENT EVENTS

Subsequent to March 31, 2000, the Company was in default of an interest
payment on a note payable to its major lendor. The lendor has increased the
interest rate from 13.5 to 18.0 until the default is cured.

In June 2000, the Company reached two agreements to borrow $150,000 each at
an effective interest rate of 13% with principal payments due in installments
and final payments due on December 15, 2000.

In May 2000, the Company increased an existing line-of-credit with a bank by
$200,000.

5) NOTES RECEIVABLE

The Company converted certain advances and receivables from related parties
to notes during March 2000. The full balance of the notes, plus interest at 8%
per annum, is due on December 31, 2000.

F-19
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED BALANCE SHEET AND INCOME STATEMENTS
(UNAUDITED)

The following unaudited proforma combined balance sheet and statement of income
aggregates the balance sheet and statement of operations of RX Technology
Holdings, Inc. formerly Valley Excavation and Trucking, Inc. (Parent) (A Nevada
Corporation) as of December 31, 1999 and the balance sheet and statement of
income of RX Technology, Inc. (Subsidiary) (A Nevada Corporation) as of
December 31, 1999 giving effect to a transaction completed on February 16, 2000,
wherein Parent acquired Subsidiary as a wholly-owned subsidiary (the
"Acquisition"). This business combination is treated as a reverse acquisition
and as a recapitalization of Subsidiary. Parent issued common stock in exchange
for all of the issued and outstanding shares of Subsidiary. The following
proforma balance sheet and statement of income uses the assumptions as described
in the notes and the historical financial information available at December 31,
1999. The financial statements of Parent at December 31, 1999 are audited. The
financial statements of Subsidiary at December 31, 1999 are also audited.

The unaudited proforma combined balance sheet and statement of income should
be read in conjunction with the separate financial statements and related notes
thereto of Parent and Subsidiary. The unaudited proforma condensed combined
balance sheet and statement of income are not necessarily indicative of the
condensed combined balance sheet and statement of income which might have
existed for the periods indicated or the results of operations as they may
appear now or in the future.

F-20
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED BALANCE SHEET
(UNAUDITED)

GIVING EFFECT TO AN ACQUISITION ON FEBRUARY 16, 2000 AND COMMON STOCK ISSUED ON
MARCH 24, 2000

Current Assets:
Cash and cash equivalents................. $ 5,887 $ -- $ 5,887 $ 109,958 $ 344,525 (5) $2,486,998
126,000 (1)
2,826,500 (2)
(63,975)(2)
(715,870)(3)
(146,027)(4)
Accounts receivable, net.................. -- -- -- 286,750 -- 286,750
Inventory................................. -- -- -- 190,055 -- 190,055
------- -------- ------- ---------- ---------- ----------
Total Current Assets........................ 5,887 -- 5,887 586,763 2,371,153 2,963,803
Property and Equipment, net................. -- -- -- 2,538,168 -- 2,538,168
Assets of discontinued operations........... 40,960 -- 40,960 -- -- 40,960
Due from shareholder........................ -- -- -- 11,341 -- 11,341
Other assets................................ -- -- -- 25,981 -- 25,981
------- -------- ------- ---------- ---------- ----------
Total Assets................................ $46,847 $ -- $46,847 $3,162,253 $2,371,153 $5,580,253
======= ======== ======= ========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Notes payable............................. $ -- $ -- $ -- $1,784,366 $ 126,000 (1) $1,224,699
(126,000)(2)
(559,667)(3)
Advance from Valley Excavation & Trucking, -- -- -- 395,000 (250,000)(2) --
Inc..................................... (145,000)(4)
Line of credit............................ -- -- -- 48,547 -- 48,547
Current portion of long-term debt......... -- -- -- 40,225 -- 40,225
Accounts payable.......................... -- -- -- 484,333 -- 484,333
Accrued expenses.......................... -- -- -- 185,227 -- 185,227
Liabilities of discontinued operations.... 4,896 -- 4,896 -- -- 4,896
Deferred revenue.......................... -- -- -- 50,000 -- 50,000
------- -------- ------- ---------- ---------- ----------
Total Current Liabilities................... 4,896 -- 4,896 2,987,698 (954,667) 2,037,927
Long-term debt, less current portion........ -- -- -- 47,846 -- 47,846
Deferred income taxes....................... -- -- -- 93,063 -- 93,063
------- -------- ------- ---------- ---------- ----------
Total Liabilities........................... 4,896 -- 4,896 3,128,607 (954,667) 2,178,836
------- -------- ------- ---------- ---------- ----------
Stockholders' Equity
Preferred stock; $.001 par value, -- -- -- -- --
1,000,000 shares authorized, no shares
issued and outsanding...................
Common stock; $.001 par value, 50,000,000 2,000 5,000 (1) 7,000 2,027 1,830 (2) 9,027
shares authorized, 8,830,000 shares (2,027)(6)
issued and outstanding.................. 197 (5)
Additional paid-in capital................ 60,698 (5,000)(1) 34,951 719,727 3,200,670 (2) 4,087,728
(20,747)(2) (63,975)(2)
(150,000)(3)
2,027 (6)
344,328 (5)
Retained earnings (deficit)............... (20,747) 20,747 (2) -- (688,108) (6,203)(3) (695,338)
(1,027)(4)
-- -- -- -- -- --
------- -------- ------- ---------- ---------- ----------
</TABLE>

F-21
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED BALANCE SHEET
(UNAUDITED)

The accompanying notes are an integral part of this balance sheet.

F-22
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED STATEMENT OF INCOME
(UNAUDITED)

GIVING EFFECT TO AN ACQUISITION ON FEBRUARY 16, 2000 AND COMMON STOCK ISSUED ON
MARCH 24, 2000

<TABLE>
<CAPTION>
PROFORMA
RX REVERSE
TECHNOLOGY ACQUISITION RX RX PROFORMA
HOLDINGS, INCREASE TECHNOLOGY TECHNOLOGY, INCREASE PROFORMA
INC. (DECREASE) HOLDINGS, INC. INC. (DECREASE) COMBINED
---------- ----------- -------------- ----------- ---------- ----------
(YEAR (YEAR ENDED (YEAR
ENDED 12-31-99) ENDED
12-31-99) 12-31-99)
<S> <C> <C> <C> <C> <C> <C>
Revenues.................................... $ -- $ -- $ -- $6,028,397 $ -- $6,028,397
Cost of Goods Sold.......................... -- -- -- 3,049,454 -- 3,049,454
------- -------- ------- ---------- ---------- ----------
GROSS PROFIT................................ -- -- -- 2,978,943 -- 2,978,943
------- -------- ------- ---------- ---------- ----------
Operating Expenses
Photo Sales Expenset...................... -- -- -- 1,490,270 -- 1,490,270
General and administrative................ -- -- -- 1,330,457 6,203 (3) 1,337,687
1,027 (4)
Depreciation and amortization............. -- -- -- 386,443 -- 386,443
------- -------- ------- ---------- ---------- ----------
Total operating expenses.................... -- -- -- 3,207,170 7,230 3,214,400
------- -------- ------- ---------- ---------- ----------
INCOME (LOSS) FROM OPERATIONS............... -- -- -- (228,227) (7,230) (235,457)
INTEREST AND OTHER INCOME................... -- -- -- 655 -- 655
INTEREST EXPENSE............................ -- -- -- (595,774) -- (595,774)
------- -------- ------- ---------- ---------- ----------
LOSS BEFORE INCOME TAXES.................... -- -- -- (823,346) (7,230) (830,576)
PROVISION FOR INCOME TAXES.................. -- -- -- -- -- --
------- -------- ------- ---------- ---------- ----------
LOSS FROM CONTINUING OPERATIONS............. -- -- -- (823,346) (7,230) (830,576)
Loss from operation of excavation and (5,505) -- (5,505) -- -- (5,505)
hauling operations......................
------- -------- ------- ---------- ---------- ----------
NET INCOME (LOSS)........................... $(5,505) $ -- $(5,505) $ (823,346) $ (7,230) $ (836,081)
======= ======== ======= ========== ========== ==========
</TABLE>

The accompanying notes are an integral part of this statement of income

F-23
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED)

RX TECHNOLOGY HOLDINGS, INC. (THE COMPANY)--(Formerly Valley Excavation and
Trucking, Inc.) was incorporated under the laws of the State of Nevada on
September 26, 1997. At the organizational meeting of the board of directors the
Company authorized the issuance of 1,000,000 shares of the Company's common
stock to its founders for $9,000. During 1997, the Company completed an offering
of 200,000 shares of its common stock, offering price $.25 per share, pursuant
to an exemption from registration under the Securities Act of 1933, provided by
Regulation D, Rule 504. The Company was organized for the purpose of excavation,
trucking, snow removal and related contracting services. The Company was not as
successful in this business as anticipated and recently began winding down its
business and completed an acquisition of RXT ("Acquisition") on February 16,
2000.

RX TECHNOLOGY, INC. (RXT)--a Nevada corporation, is an international company
that markets and services digital image processing equipment and specializes in
the electronic capture, presentation and sale of pictures of guests on amusement
park ride attractions. The Company currently operates in the United States of
America and in Argentina. Presently, RX Technology, Ltd. (RX Technology Europe
Limited) owns the technology used by RXT in its business operations and RXT has
the rights to market the technology in North and South America and to enter Asia
on a non-exclusive basis with RX Technology Europe Limited. RXT purchases
equipment from RX Technology Europe Limited at a price that is contractually
limited to between 20% and 80% of the cost of the third party manufacturer.
Historically, such costs have been equal to actual cost of production plus
approximately 25% of such cost. This markup is in essence a licensing fee to RX
Technology Europe Limited. RXT is currently formalizing its relationship with RX
Technology Europe Limited into a formal licensing agreement.

PROFORMA ADJUSTMENTS--REVERSE ACQUISITION--(1) The Company acquired all of
the issued and outstanding shares of RXT in exchange for 5,000,000 restricted
shares of previously authorized but unissued shares of its common stock. The
business combination is a reverse acquisition and is treated as a
recapitalization of RXT. (2) This is part of the recapitalization transaction
and entry. It eliminates the retained deficit of the Company accounting for the
transaction as if the shares were exchanged by RXT for the net assets of the
Company. OTHER PROFORMA ADJUSTMENTS--(1) Subsequent to December 31, 1999, RXT in
anticipation of the acquisition was loaned $126,000. (2) The Company sold
1,830,000 shares of common stock for $1.75 per share for $3,202,500. The
$3,202,500 consisted of cash of $2,826,500 and the conversion of $375,000 in
debt to stock. Costs of the offering were $63,975. (3) Net cash from the
offering was used to pay a bank lender the following; $559,667 for a loan
payoff, $6,203 for interest and $150,000 to purchase back warrants held by the
bank. The warrants allowed the bank to purchase 222,733 shares of RXT common
stock for $50. (4) Also, net cash from the offering was used to payoff two loans
that totaled $145,000 and interest of $1,027. (5) The Company sold 196,870
shares of common stock at $1.75 per share for a total aggregate of $344,525 on
March 24, 2000.

STOCK OPTION PLAN--The Company has adopted, with the approval of its
stockholders, a Stock Option Plan (the "Plan"), pursuant to which it is
authorized to grant options to purchase up to 5,000,000 shares of common stock
to the Company's key employees, officers, directors, consultants, and other
agents and advisors. Awards under the Plan will consist of stock options (both
non-qualified options and options intended to qualify as "Incentive Stock
Options" under Section 422 of the Internal Revenue Code of 1986, as amended),
restricted stock awards, deferred stock awards, stock appreciation rights and
other stock-based awards, which are described in the Plan.

F-24
<PAGE>
RX TECHNOLOGY HOLDINGS, INC.
(FORMERLY VALLEY EXCAVATION AND TRUCKING, INC.)

RX TECHNOLOGY, INC.

PROFORMA COMBINED NOTES TO THE FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)

The Plan will be administered by the Board of Directors which will determine
the persons to whom awards will be granted, the number of awards to be granted
and the specific terms of each grant, including the vesting thereof, subject to
the provisions of the Plan. In connection with qualified stock options, the
exercise price of each option may not be less than 100% of the fair market value
of the common stock on the date of grant (or 110% of the fair market value in
the case of a grantee holding more than 10% of the outstanding stock of the
Company). The aggregate fair market value of shares for which qualified stock
options are exercisable for the first time by such employee (10% shareholder)
during any calendar year may not exceed $100,000. Non-qualified stock options
granted under the Plan my be granted at a price determined by the Board of
Directors, not to be less than the fair market value of the common stock on the
date of grant.

The plan also contains certain change in control provisions which could
cause options and other awards to become immediately exercisable and
restrictions and deferral limitations applicable to other awards to lapse in the
event any "person," as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, including a "group" as defined in
Section 13(d), but excluding certain stockholders of the Company, became the
beneficial owners of more than 25% of the Company's outstanding shares of common
stock.

The Company has granted options to purchase 3,000,000 shares of its common
stock to RXT stockholders and 1,000,000 shares of its common stock to RXT
employees and others, all exercisable for five years at $1.75 per share.

CONSULTANT'S OPTIONS--On May 1, 1999, RXT granted Capstone Partners, L.C.
the option to purchase 100,000 shares of RXT common stock at $2.00 per share at
any time through May, 2002. The options contain the obligation of the issuer to
register the underlying shares in the event of an underwritten public securities
offering. The Company has granted an option to acquire 246,653 shares of its
common stock at $.81 per share in exchange for this option.

F-25
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999

PRITCHETT, SILER & HARDY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS

F-26
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

CONTENTS

<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Independent Auditors' Report................................ F-28

Balance Sheet, December 31, 1999............................ F-29

Statements of Operations, for the years ended December 31,
1999 and 1998 and for the period from inception on
September 26, 1997 through December 31, 1999.............. F-30

Statement of Stockholders' Equity, from inception on
September 26, 1997 through December 31, 1999.............. F-31

Statements of Cash Flows, for the years ended December 31,
1999 and 1998 and for the period from inception on
September 26, 1997 through December 31, 1999.............. F-32

Notes to Financial Statements............................... F-33
</TABLE>

F-27
<PAGE>
[LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

Board of Directors
VALLEY EXCAVATION & TRUCKING, INC.
Swan Valley, Idaho

We have audited the accompanying balance sheet of Valley Excavation &
Trucking, Inc. at December 31, 1999, and the related statements of operations,
stockholders' equity and cash flows for the years ended December 31, 1999 and
1998 and for the period from inception on September 26, 1997 through
December 31, 1999. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

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

In our opinion, the financial statements audited by us present fairly, in
all material respects, the financial position of Valley Excavation & Trucking,
Inc. as of December 31, 1999, and the results of its operations and its cash
flows for the years ended December 31, 1999 and 1998 and for the period from
inception through December 31, 1999, 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 6 to the
financial statements, the Company has incurred losses since inception and has
discontinued its operations, raising substantial doubt about its ability to
continue as a going concern. Management's plans in regards to these matters are
also described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

/s/ Pritchett, Siler & Hardy, P.C.

PRITCHETT, SILER & HARDY, P.C.

January 14, 2000
Salt Lake City, Utah

F-28
<PAGE>
VALLEY EXCAVATION AND TRUCKING, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
1999
------------
<S> <C>
ASSETS

CURRENT ASSETS:
Cash in bank.............................................. $ 5,887
--------
Total Current Assets.................................... 5,887
--------
ASSETS OF DISCONTINUED OPERATIONS........................... 40,960
--------
$ 46,847
--------

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Liabilities of discontinued operations.................... 4,896
--------
Total Current Liabilities............................... 4,896
--------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value, 1,000,000 shares
authorized, no shares issued and outstanding............ --
Common Stock, $.001 par value, 24,000,000 shares
authorized, 2,000,000 shares issued and outstanding..... 2,000
Capital in excess of par value............................ 60,698
Deficit accumulated during the development stage.......... (20,747)
--------
Total Stockholders' Equity.............................. 41,951
--------
$ 46,847
========
</TABLE>

The accompanying notes are an integral part of this financial statement.

F-29
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

STATEMENTS OF OPERATIONS

OPERATING EXPENSE...................................... -- -- --
------- -------- --------

GROSS PROFIT........................................... -- -- --
------- -------- --------
EXPENSES:
General and Administrative........................... -- -- --
------- -------- --------

LOSS FROM OPERATIONS BEFORE INCOME TAXES............... -- -- --
------- -------- --------

CURRENT TAX EXPENSE.................................... -- -- --

DEFERRED TAX EXPENSE................................... -- -- --
------- -------- --------
(Loss) From continuing operations.................... -- -- --

DISCONTINUED OPERATIONS
(Loss) From operation of discontinued excavation and
hauling operations................................. (5,505) (14,472) (20,747)
(Loss) On disposal of discontinued operations........ -- -- --
------- -------- --------

LOSS FROM DISCONTINUED OPERATIONS...................... (5,505) (14,472) (20,747)
------- -------- --------

NET LOSS............................................... $(5,505) $(14,472) $ 20,747
------- -------- --------

LOSS PER COMMON SHARE:
Continuing operations................................ $ (.00) $ (.00) $ (.00)
Discontinued operations.............................. $ (.00) $ (.01) $ (.01)
------- -------- --------

Loss Per Common Share.............................. $ (.00) $ (.01) $ (.01)
------- -------- --------
</TABLE>

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

F-30
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

STATEMENT OF STOCKHOLDERS' EQUITY

FROM THE DATE OF INCEPTION ON SEPTEMBER 26, 1997
THROUGH DECEMBER 31, 1999

<TABLE>
<CAPTION>
DEFICIT
COMMON STOCK CAPITAL IN ACCUMULATED
-------------------- EXCESS OF DURING THE
SHARES AMOUNT PAR VALUE DEVELOPMENT STAGE
--------- -------- ---------- -----------------
<S> <C> <C> <C> <C>
BALANCE, September 26, 1997..................... -- $ -- $ -- $ --

Issuance of 1,800,000 shares common stock for
cash, November 4, 1997 at $.005 per share..... 1,800,000 1,800 7,200 --

Issuance of 15,000 shares common stock for cash,
December 1997 at $.30 per share............... 15,000 15 4,485 --

Net loss for the period ended December 31,
1997.......................................... -- -- -- (770)
--------- ------ ------- --------

BALANCE, December 31, 1997...................... 1,815,000 1,815 11,685 (770)

Issuance of 185,000 shares common stock for
cash, January - February 1998 at $.30 per
share, net of offering costs of $6,302........ 185,000 185 49,013 --

Net loss for the year ended December 31, 1998... -- -- -- (14,472)
--------- ------ ------- --------

BALANCE, December 31, 1998...................... 2,000,000 $2,000 $60,698 $(15,242)

Net loss for the year ended December 31, 1999... -- -- -- (5,505)
--------- ------ ------- --------

BALANCE, December 31, 1999...................... 2,000,000 $2,000 $69,698 $(20,747)
--------- ------ ------- --------
</TABLE>

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

F-31
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

STATEMENTS OF CASH FLOWS

NET INCREASE (DECREASE) IN CASH

<TABLE>
<CAPTION>
FOR THE FROM INCEPTION ON
YEARS ENDED SEPTEMBER 26,
DECEMBER 31 1997 THROUGH
----------------------- DECEMBER 31,
1999 1998 1999
-------- -------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss............................................ $ (5,505) $(14,472) $(20,747)
Adjustments to reconcile net loss to net cash used
by operating activities:
Non-cash expense.................................. -- 1,000 1,000
Depreciation and amortization..................... 12,340 8,349 20,742
Change in assets and liabilities:
Increase in accounts payable.................... (2,735) 1,919 --
(Decrease) in accounts payable--related party... -- (3,398) --
Increase (decrease) in accrued payroll and
payroll taxes................................. (723) 1,328 587
Increase (decrease) in accrued interest......... (122) (51) --
Increase in leases payable...................... -- 646 --
-------- -------- --------
Net Cash Provided (Used) by Operating
Activities.................................. 3,255 (4,679) 1,582
-------- -------- --------

CASH FLOWS TO INVESTING ACTIVITIES:
Payment of organization costs....................... -- -- (1,000)
Payments for equipment.............................. -- (38,051) (38,051)
-------- -------- --------
Net Cash (Used) by Investing Activities....... -- (38,051) (39,051)
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from common stock issuance................. -- 55,500 69,000
Deferred stock offering costs....................... -- (4,986) (6,302)
Payments on capital lease........................... (10,314) (6,820) (19,342)
-------- -------- --------
Net Cash Provided (Used) by Financing
Activities.................................. (10,314) 43,694 43,356
-------- -------- --------

NET INCREASE IN CASH.................................. (7,059) 964 5,887

CASH AT BEGINNING OF PERIOD........................... 12,946 12,000 --
-------- -------- --------
CASH AT END OF PERIOD................................. $ 5,887 $ 12,964 $ 5,887
-------- -------- --------

SUPPLEMENT DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest.......................................... $ 1,085 $ 1,628 $ 3,257
Income taxes...................................... $ -- $ -- $ --

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
For the period ended December 31, 1999:
None

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
For the period ended December 31, 1998:
None
</TABLE>

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

F-32
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION--Valley Excavation & Trucking, Inc. (the Company) was organized
under the laws of the State of Nevada on September 26, 1997. The Company has
entered into an agreement to acquire all of the outstanding stock of RX
Technologies, Inc. [See Note 8]. In connection therewith the company has
discontinued the business of residential foundation and sewer excavation, the
hauling of top soil, sand and gravel, and seasonal snow removal and other
related contracting services in the areas of: Swan Valley & Victor, Idaho, and
Jackson Hole, Wyoming. The Company has, at the present time, not paid any
dividends and any dividends that may be paid in the future will depend upon the
financial requirements of the Company and other relevant factors.

ORGANIZATION COSTS--During the year ended 1998, the Company fully amortized
its organization costs in accordance with statement of position 98-5, "Reporting
on the Costs of Start-Up Activities."

LOSS PER SHARE--The computation of loss per share is based on the weighted
average number of shares outstanding during the period presented in accordance
with FASB 128 "Earnings Per Share". [SEE NOTE 7]

CASH AND CASH EQUIVALENTS--For purposes of the statement of cash flows, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents.

ACCOUNTING ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles required management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date of
the financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimated by
management.

RECENTLY ENACTED ACCOUNTING STANDARDS--Statement of Financial Accounting
Standards (SFAS) No. 132, "Employer's Disclosure about Pensions and Other
Postretirement Benefits", SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities', SFAS No. 134, "Accounting for Mortgage-Backed
Securities . . ." and SFAS No. 135, "Rescission of FASB Statement No. 75 and
Technical Corrections" were recently issued. SFAS No. 132, 133, 134 and 135 have
no current applicability to the Company or their effect on the financial
statements would not have been significant.

PROPERTY AND EQUIPMENT--Property and equipment are stated at cost.
Expenditures for repairs and maintenance are charged to operating expense as
incurred. Expenditures for additions and betterments that extend the useful
lives of property and equipment are capitalized, upon being placed in service.
When assets are sold or otherwise disposed of, the cost and related accumulated
depreciation or amortization are removed from the accounts and any resulting
gain or loss is included in operations.

DEPRECIATION--Depreciation of equipment is computed using the straight-line
method over the estimated useful lives of the assets. Leasehold improvements are
amortized over the lease period or the estimated useful life of the
improvements, whichever is less.

NOTE 2--DISCONTINUED OPERATIONS

The accompanying financial statements as of December 31, 1999, have been
reclassified to reflect management's decision to discontinue the Company's
operations in the Excavation and Trucking Industry. The long-term assets and
current liabilities related to the previous operations are included on the
Company's December 31, 1999 balance sheets as "assets of discontinued
operations" and "liabilities of discontinued operations", respectively. The
estimated gain or loss expected upon ultimate disposal of zero ($0.00) has been
accrued at December 31, 1999.

F-33
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 2--DISCONTINUED OPERATIONS (CONTINUED)
Assets of discontinued operations consisted of the following at
December 31, 1999:

<TABLE>
<CAPTION>
DECEMBER 31
1999
-----------
<S> <C>
PROPERTY AND EQUIPMENT, net................................. $40,960
-------
Totals.................................................. $40,960
-------
</TABLE>

Assets are shown at their net book value.

Liabilities of discontinued operations consisted of the following at
December 31, 1999:

<TABLE>
<CAPTION>
DECEMBER 31
1999
-----------
<S> <C>
CAPITAL LEASE PAYABLE....................................... $4,896
------
Totals.................................................. $4,896
------
</TABLE>

CAPITAL LEASES--The Company is the lessee of a backhoe under a capital lease
expiring in September of 2000. The asset and liability under the capital lease
was recorded at $23,651. The remaining balance of $4,896 is due in monthly
payments through September 2000.

NOTE 3--CAPITAL STOCK

COMMON STOCK--During November, 1997, in connection with its organization,
the Company issued 1,800,000 shares of its previously authorized, but unissued
common stock. Total proceeds from the sale of stock amounted to $9,000 (or $.005
per share).

PUBLIC OFFERING OF COMMON STOCK--During 1997, the Company commenced a public
offering of 200,000 shares of its previously authorized but unissued common
stock of which 15,000 shares had been sold at December 31, 1997 for proceeds of
$4,500 (or $.30 per share). During 1998, in connection with the public offering
of its common stock, the Company issued the remaining 185,000 shares of its
previously authorized but unissued common stock for proceeds of $55,500 (or $.30
per share).

PREFERRED STOCK--The Company has authorized 1,000,000 shares of preferred
stock, $.001 par value with such rights, preferences and designations and to be
issued in such series as determined by the board of directors. No shares are
issued and outstanding at December 31, 1999.

NOTE 4--INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes". FASB 109
requires the Company to provide a net deferred tax asset/liability equal to the
expected future tax benefit/expense of temporary reporting differences between
book and tax accounting methods and any available operating loss or tax credit
carryforwards.

The Company has available at December 31, 1999, unused operating loss
carryforwards of approximately $20,000 which may be applied against future
taxable income and which expire in various years through 2019. The amount of and
ultimate realization of the benefits from the operating loss carryforwards

F-34
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 4--INCOME TAXES (CONTINUED)
for income tax purposes is dependent, in part, upon the tax laws in effect, the
future earnings of the Company, and other future events, the effects of which
cannot be determined. Because of the uncertainty surrounding the realization of
the loss carryforwards the Company has established a valuation allowance equal
to the amount of the loss carryforwards and, therefore, no deferred tax asset
has been recognized for the loss carryforwards. The net deferred tax assets are
approximately $6,800 as of December 31, 1999, with an offsetting valuation
allowance at year end of the same amount resulting in a change in the valuation
allowance of approximately $1,500 during 1999.

NOTE 5--RELATED PARTY TRANSACTIONS

MANAGEMENT COMPENSATION--The Company has not paid any compensation to its
officers and directors.

OFFICE SPACE--The Company has not had a need to rent office space. An
officer/shareholder of the Company is allowing the Company to use his home as a
mailing address, as needed, at no expense to the Company.

NOTE 6--GOING CONCERN

The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplate continuation of the
Company as a going concern. However, the Company has incurred losses since its
inception and has discontinued its current operations. These factors raise
substantial doubt about the ability of the Company to continue as a going
concern. In this regard, management is proposing to raise any necessary
additional funds not provided by operations through loans and/or through
additional sales of its common stock. There is no assurance that the Company
will be successful in raising additional capital or achieving profitable
operations. The financial statements do not include any adjustments that might
result from the outcome of these uncertainties.

NOTE 7--LOSS PER SHARE

The following data show the amounts used in computing loss per share and the
effect on loss and the weighted average number of shares of common stock for the
year ended December 31, 1999 and 1998 and for the period from inception through
December 31, 1999:

<TABLE>
<CAPTION>
FROM INCEPTION
YEARS ENDED SEPTEMBER 26,
DECEMBER 31 1997 THROUGH
------------------------- DECEMBER 31,
1999 1998 1999
--------- --------- --------------
<S> <C> <C> <C>
Loss from continuing operations available to common
shareholders......................................... $(5,505) $(14,472) $(20,747)

Less: preferred dividends.............................. -- -- --
--------- --------- ---------
Income (loss) available to common stockholders used in
earnings (loss) per share............................ $(5,505) $(14,472) $(20,747)
--------- --------- ---------
Weighted average number of common shares outstanding
used in earnings (loss) per share for the period..... 2,000,000 1,983,274 1,896,500
--------- --------- ---------
</TABLE>

F-35
<PAGE>
VALLEY EXCAVATION & TRUCKING, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 8--SUBSEQUENT EVENTS

PROPOSED ACQUISITION--The Company has entered into an agreement to acquire
all of the issued and outstanding common stock of RX Technology, Inc., a Nevada
corporation, in exchange of 5,000,000 shares of the Company's common stock. In
connection with the proposed acquisition, the Company will amend its Articles of
Incorporation to increase its authorized shares of common stock to 50,000,000
shares and will change its corporate name. The Company will appoint new
management and change the location of its offices. Also, as a negotiated term of
the proposed acquisition, the Company is required to dispose of its existing
operating assets.

The proposed acquisition is contingent upon the Company raising $3,202,500
in a private placement of common stock at $1.75 per share. The proposed
acquisition is scheduled to be completed on February 14, 2000, subject to a
thirty day extension.

F-36
<PAGE>
INDEX TO FINANCIAL STATEMENTS
FOR RX TECHNOLOGY HOLDINGS, INC.

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The statutes, charter provisions, bylaws, contracts or other arrangements
under which controlling persons, directors or officers of the registrant are
insured or indemnified in any manner against any liability which they may incur
in such capacity are as follows:

A. Section 78.751 of the Nevada Business Corporation Act provides that each
corporation shall have the following powers:

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

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

3. To the extent that a director, officer, employee or agent of a corporation
has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in subsections 1 and 2, or in defense of any
claim, issue or matter therein, he must be indemnified by the corporation
against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense.

4. Any indemnification under subsections 1 and 2, unless ordered by a court or
advanced pursuant to subsection 5, must be made by the corporation only as
authorized in the specific case upon a

II-1
<PAGE>
determination that indemnification of the director, officer, employee or
agent is proper in the circumstances. The determination must be made:

(a) By the stockholders;

(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the act, suit or proceeding;

(c) If a majority vote of a quorum consisting of directors who were not
parties to the act, suit or proceeding so orders, by independent legal
counsel, in a written opinion; or

(d) If a quorum consisting of directors who were not parties to the act,
suit or proceeding cannot be obtained, by independent legal counsel in a
written opinion.

5. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that 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. The provisions of this subsection do not
affect any rights to advancement of expenses to which corporate personnel
other than director of officers may be entitled under any contract or
otherwise by law.

6. The indemnification and advancement of expenses authorized in or ordered by
a court pursuant to this section:

(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the
articles of incorporation or any bylaw, agreement, vote of stockholders
or disinterested directors or otherwise, for either an action in his
official capacity or an action in another capacity while holding his
office, except that indemnification, unless ordered by a court pursuant
to subsection 2 or for the advancement of expenses made pursuant to
subsection 5, may not be made to or on behalf of any director or officer
if a final adjudication establishes that his acts or omissions involved
intentional misconduct, fraud or a knowing violation of the law and was
material to the cause of action.

(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.

B. The Registrant's articles of incorporation limit liability of its
officers and directors to the corporation for monetary damages for any breach of
fiduciary duty subject to certain exceptions.

ITEM 25. OTHER EXPENSES OF THE ISSUANCE AND DISTRIBUTION

The following table sets forth all estimated costs and expenses, other the
underwriting discounts, commissions and expense allowances, payable by the
registrant in connection with the maximum offering for the securities included
in this registration statement:

<TABLE>
<S> <C>
SEC registration fee........................................ $ 837
Blue sky fees and expenses.................................. 5,000
Printing and shipping expenses.............................. 15,000
Legal fees and expenses..................................... 35,000
Accounting fees and expenses................................ 15,000
Miscellaneous expenses and Transfer Agent................... 1,663
-------
Total..................................................... $72,500
=======
</TABLE>

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

(1) All expenses are estimated except the Commission filing fee.

II-2
<PAGE>
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

Commencing in December 1998, we offered and sold a total of 4,600 shares of
our common stock at a price of $2.50 per share to four private placement
investors. A total of $11,500 in aggregate amount of offering proceeds was
received in this private placement. This transaction was not registered under
the Securities Act of 1933 in reliance on exemptions from registration provided
under Section 4(2) of the Securities Act of 1933 and in further reliance on
Rule 506 of Regulation D promulgated under the Securities Act of 1933, as a
transaction not involving any public offering. All shares of our common stock
issued in this private placement were issued as restricted securities and were
stamped with a restrictive legend to prevent any resales without registration
under the Securities Act or in compliance with an exemption therefrom.

On February 16, 2000, we consummated the terms of our acquisition of RX
Technology, Inc. in accordance with the agreement and plan of reorganization we
entered into on December 27, 1999 with the stockholders of RX technology, Inc.
Pursuant to that transaction, we issued a total of 5,000,000 shares of our
common stock on a prorata basis in exchange for the common stock held by the
stockholders of RX Technology, Inc. This transaction was not registered under
the Securities Act of 1933, as amended (the "Act"), in reliance on the exemption
provided by Section 4(2) of the Act, as a transaction not involving any public
offering. The shares of common stock were issued as restricted securities and
the certificates were stamped with a restrictive legend to prevent any resale
without registration under the Act or in compliance with an exemption therefrom.

On February 16, 2000, we consummated the terms of our acquisition of RX
Technology, Inc. in accordance with the agreement and plan of reorganization we
entered into on December 27, 1999 with the stockholders of RX Technology, Inc.
Pursuant to that transaction, and to consummate the private placement of shares
of our common stock in order to raise capital for our use on a post-acquisition
basis, we issued 1,830,000 shares of our common stock at $1.75 per share raising
total aggregate gross offering proceeds of $3,202,500. These shares were offered
and sold solely to accredited investors. This transaction was not registered
under the Securities Act of 1933, as amended (the "Act"), in reliance on the
exemption provided by Section 4(2) of the Act, as a transaction not involving
any public offering and were claimed as exempt from registration pursuant to
Rule 506 of Regulation D promulgated under the Act. The shares of common stock
were issued as restricted securities and the certificates were stamped with a
restrictive legend to prevent any resale without registration under the Act or
in compliance with an exemption therefrom.

On March 24, 2000 we offered and sold additional shares of our common stock
to some of our existing shareholders on the same terms and conditions as the
private placement we consummated on February 16, 2000. Pursuant to this
additional offering, we issued an additional 196,870 shares of our common stock
at $1.75 per share raising additional total aggregate gross offering proceeds of
$344,525. These shares were offered and sold solely to accredited investors.
This transaction was not registered under the Securities Act of 1933, as amended
(the "Act"), in reliance on the exemption provided by Section 4(2) of the Act,
as a transaction not involving any public offering and were claimed as exempt
from registration pursuant to Rule 506 of Regulation D promulgated under the
Act. The shares of common stock were issued as restricted securities and the
certificates were stamped with a restrictive legend to prevent any resale
without registration under the Act or in compliance with an exemption therefrom.

II-3
<PAGE>
ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
2.0 Agreement and Plan of Reorganization between RX Technology,
Inc. and Valley Excavation and Trucking, Inc. dated
December 27, 1999.**

3.0 Articles of Incorporation of Valley Excavation and Trucking,
Inc. dated September 26, 1997.**

3.1 Amended Articles of Incorporation of Valley Excavation and
Trucking, Inc. dated February 17, 2000.**

3.2 Articles of Incorporation of RX Technology, Inc. dated
December 22, 1993.**

3.3 Amended and Restated Articles of Incorporation dated
February 7, 1997.**

3.4 Amended and Restated Articles of Incorporation of Rx
Technology, Inc. dated February 7, 1997.**

3.5 Bylaws of the Registrant dated September 26, 1997.**

4.0 Form of Warrant Agreement with Interwest Transfer Co.,
Inc.**

4.1 Specimen Form of Common Stock Purchase Warrant.**

4.2 Specimen Form of Common Stock Certificate.**

5.0 Opinion of Gregory Bartko, Esq. dated June , 2000.*

10.0 Concession Lease Agreement between Paramount Parks, Inc. and
RX Technology, Inc. dated February 15, 2000 Regarding
Outer Limits.**

10.1 Concession Lease Agreement between Paramount Parks, Inc. and
RX Technology, Inc. dated February 15, 2000 Regarding
Vortex.**

10.2 Concession Lease Agreement between Paramount Parks, Inc. and
RX Technology, Inc. dated February 15, 2000 Regarding The
Beast.**

10.3 Concession Lease Agreement between Paramount Parks, Inc. and
RX Technology, Inc. dated February 15, 2000 Regarding
Taxi.**

10.4 Concession Lease Agreement between Paramount Parks, Inc. and
RX Technology, Inc. dated February 15, 2000 Regarding
Stealth.**

10.5 Agreement Between RX Technology, Inc. and Six Flags
St. Louis, a division of Six Flags Theme Parks, Inc. dated
February 14, 2000.**

10.6 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000.**

10.7 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding The Riddler.**

10.8 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Wile E. Coyote.**

10.9 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Goliath.**

10.10 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Eagle.**

10.11 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Spacely Sprockets.**

10.12 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Shockwave.**
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.13 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Batman The Ride.**

10.14 License Agreement Between RX Technology, Inc. and Six Flags
Magic Mountain, a division of Six Flags Theme Parks, Inc.
dated January 1, 2000 Regarding Raging Bull.**

10.15 Products and Services Agreement Between The Poloroid
Corporation and RX Technology, Inc. dated November 5,
1998.**

10.16 Services Agreement by and among Poloroid Corporation,
LEGOLAND California and RX Technology, Inc. dated
December 10, 1998.**

10.17 Services Agreement by and among Poloroid Corporation,
LEGOLAND California and RX Technology, Inc. dated
December 10, 1998 Regarding Joust.**

10.18 License Agreement Between Six Flags Great Adventure, a
division of Six Flags Theme Parks, Inc. and
RX Technology, Inc. dated January 22, 1999 Regarding
Chiller.**

10.19 License Agreement Between Six Flags Great Adventure, a
division of Six Flags Theme Parks, Inc. and
RX Technology, Inc. dated January 22, 1999 Regarding
Medusa.**

10.20 Amendment One To License Agreement between Park Management
Corp., Inc. and RX Technology, Inc. dated April 12, 1999
Regarding Marine World.**

10.21 Agreement Between RX Technology, Inc. and Tren de la
Costa, S.A. dated May 5, 1997 Regarding Boomerang.**

10.22 Agreement Between RX Technology, Inc. and Tren de la
Costa, S.A. dated May 5, 1997 Regarding Dragon.**

10.23 Agreement Between RX Technology, Inc. and Silverwood dated
April 22, 1999 Regarding Tremors.**

10.24 Agreement Between RX Technology, Inc. and Visionland dated
February 4, 1999 Regarding Rapid River.**

10.25 Agreement Between RX Technology, Inc. and Kennywood
Entertainment Partners, L.P. dated December 15, 1999
Regarding Log Jammer.**

10.26 Agreement Between RX Technology, Inc. and North Myrtle Beach
Grand Prix, LLC dated January 21, 2000 Regarding Crazy
Horse.**

10.27 Agreement Between RX Technology, Inc. and North Myrtle Beach
Grand Prix, LLC dated January 21, 2000 Regarding Big
Splash.**

10.28 Agreement Between The Great Escape Theme Park, LLC, a
division of Premier Parks, Inc. and RX Technology, Inc.
dated April 1, 2000 Regarding Alpine Bobsled.**

10.29 Agreement Between The Great Escape Theme Park, LLC, a
division of Premier Parks, Inc. and RX Technology, Inc.
dated April 1, 2000 Regarding Comet and Front Gate.**

10.30 Agreement Between Frontier City Theme Park, a division of
Six Flags Theme Parks, Inc. and RX Technology, Inc. dated
January 13, 2000 Regarding Wildcat and Front Gate.**

10.31 Agreement Between Frontier City Theme Park, a division of
Six Flags Theme Parks, Inc. and RX Technology, Inc. dated
January 13, 2000 Regarding Renegade Rapids.**

10.32 Agreement Between Oakmont Financial Services and
RX Technology, Inc. dated July 17, 1997.**

10.33 Business Equipment Lease Between Imperial Business Credit
and RX Technology, Inc. dated January 15, 1997.**

10.34 Equipment Lease Agreement Between Sony Electronics and
RX Technology, Inc. dated July 9, 1997.**
</TABLE>

II-5
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
10.35 Equipment Lease Agreement Between Sony Electronics and
RX Technology, Inc. dated June 3, 1997 and Assignments
Thereof.**

10.36 Agreement Between RX Technology, Inc. and Ventas Y Servicios
Al Consumidor S.A. De C.V. dated March 22, 2000.**

10.37 Agreement Between RX Technology Europe Limited and Rx
Technology, Inc. dated January 25, 2000.**

10.38 Promissory Note dated June 9, 2000.**

10.39 Employment Agreement Between RX Technology Holdings, Inc.
and Douglas A. Dunbar dated May 8, 2000.**

10.40 Promissory Note by RX Technology Holdings, Inc. dated
June 23, 2000.

10.41 Promissory Note by D. Rex Gay dated March 29, 2000.

10.42 Promissory Note by The Digital Photo Store dated March 29,
2000.

21.0 Subsidiary of the Registrant.**

23.0 Consent of Wegmann-Dazet & Co., certified public
accountants, dated June 12, 2000.

23.1 Consent of Pritchett, Siler & Hardy, P.C., certified public
accountants, dated June 16, 2000.

24.0 Power of Attorney (included in Part II of the Registration
Statement under the caption "Signatures")**

27.0 Financial Data Schedule.
</TABLE>

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

* To be filed by amendment

** Previously filed

ITEM 28. UNDERTAKINGS.

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

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

(b) The undersigned Registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by the undersigned Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be
deemed to be part of the registration statement as of the time it was
declared effective; and

(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration

II-6
<PAGE>
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.

(d) The undersigned Registrant hereby undertakes that it will:

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

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and

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

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

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

II-7
<PAGE>
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City in Mandeville, Louisiana on July 17, 2000.

<TABLE>
<S> <C> <C>
RX TECHNOLOGY HOLDINGS, INC.

By: /s/ DONALD REX GAY
-----------------------------------------
Donald Rex Gay,
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE
OFFICER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated. Each person whose signature appears below
hereby authorizes Donald Rex Gay with the full power of substitution, to execute
in the name and on behalf of such person any amendment or any post-effective
amendment to this Registration Statement, and any registration statement
relating to any offering made in connection with the offering covered by this
Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same,
with exhibits thereto, and other documents in connection therewith, making such
changes in this Registration Statement as the Company deems appropriate, and
appoints Donald Rex Gay with full power of substitution, attorney-in-fact to
sign any amendment and any post-effective amendment to this Registration
Statement and to file the same, with exhibits thereto, and other documents in
connection therewith.

<TABLE>
<CAPTION>
NAME CAPACITY DATE
---- -------- ----
<C> <S> <C>
/s/ DONALD REX GAY
------------------------------------------- Chairman, president and chief July 17, 2000
Donald Rex Gay executive officer and director

/s/ DR. CHRIS MARVELL
------------------------------------------- Director July 17, 2000
Dr. Chris Marvell

/s/ D.A. DUNBAR
------------------------------------------- Vice-president and chief July 17, 2000
D.A. Dunbar financial officer

/s/ RICHARD F. GOVATSKI
------------------------------------------- Director July 17, 2000
Richard F. Govatski
</TABLE>

<PAGE>
RX TECHNOLOGY
EXHIBITS

<TABLE>
<CAPTION>
EXHIBITS
---------------------
<C> <S> <C>
2.0 Agreement and Plan of Reorganization between RX Technology,
Inc. and Valley Excavation and Trucking, Inc. dated
December 27, 1999.**

3.0 Articles of Incorporation of Valley Excavation and Trucking,
Inc. dated September 26, 1997.**

3.1 Amended Articles of Incorporation of Valley Excavation and
Trucking, Inc. dated February 17, 2000.**

3.2 Articles of Incorporation of RX Technology, Inc. dated
December 22, 1993.**

3.3 Certificate of Amendment of Articles of Incorporation of RX
Technology, Inc. dated January 5, 1995.**

3.4 Amended and Restated Articles of Incorporation of Rx
Technology, Inc. dated February 7, 1997.**

3.5 Bylaws of the Registrant dated September 26, 1997.**

4.0 Form of Warrant Agreement with Interwest Transfer Co.,
Inc.**

4.1 Specimen Form of Common Stock Purchase Warrant.**

4.2 Specimen Form of Common Stock Certificate.**

5.0 Opinion of Gregory Bartko, Esq. dated April , 2000.*