DIGS INC
10SB12G/A, 1999-10-29
BUSINESS SERVICES, NEC
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<PAGE>


                     U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                 Amendment No. 1

                                       To

                                   Form 10-SB


                   GENERAL FORM FOR REGISTRATION OF SECURITIES
                            OF SMALL BUSINESS ISSUERS

                         DIGS, INC.
                    ------------------
                 (Name of Small Business Issuer in its charter)

     Delaware                           95-4603237
- -----------------------               -------------
(State  or other  jurisdiction        (I.R.S.  Employer Identification No.)
of incorporation or organization)

17327 Ventura Boulevard, Suite 200      Encino, California 91316
- -----------------------------------   ------------------------------
(Address of principal executive offices)

Issuer's telephone number:     (818) 995 - 3650
                          --------------------------------------
Securities to be registered under Section 12(b) of the Act:

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

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

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


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

                                     Common
                              --------------------
                                (Title of class)


                              --------------------
                                (Title of class)










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                                     PART I

Forward Looking Statements

     The sections of this Report on Form 10-SB  containing such  forward-looking
statements include "Description of Business," "Historical Background," "Growth,"
"Acquisitions,"   "Products  and   Services,"   "Marketing  and  Sales,"  Patent
Development,"  "Markets" and "Competition" under Item 1 below, and "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 2 below. Statements in this Form 10-SB which address activities,  events or
developments that the registrant expects or anticipates will or may occur in the
future,  including  such topics as future  issuances of shares,  future  capital
expenditures  (including  the amount and nature  thereof),  expansion  and other
development  and  technological   trends  of  industry  segments  in  which  the
registrant  is  active,   business   strategy,   expansion  and  growth  of  the
registrant's and its competitors' business and operations and other such matters
are   forward-looking   statements.   Although  the   registrant   believes  the
expectations   expressed  in  such  forward-looking   statements  are  based  on
reasonable  assumptions  within the bounds of its knowledge of its  business,  a
number of factors  could cause actual  results to differ  materially  from those
expressed in any forward-looking statements, whether oral or written, made by or
on behalf of the registrant.

     The registrant's operations are subject to factors outside its control. Any
one, or a combination,  of these factors could materially  affect the results of
the registrant's  operations.  These factors  include:  (a) changes in levels of
competition from current competitors and potential new competition;  (b) loss of
a  significant  customer;  and (c) changes in  availability  or terms of working
capital  financing from vendors and lending  institutions.  The foregoing should
not be  construed as an  exhaustive  list of all factors that could cause actual
results to differ materially from those expressed in forward-looking  statements
made by the registrant.  Forward-looking  statements made by or on behalf of the
registrant are based on a knowledge of its business and the environment in which
it operates,  but because of the factors listed above, actual results may differ
from those anticipated  results described in these  forward-looking  statements.
Consequently,  all of the forward-looking statements made are qualified by these
cautionary  statements  and there can be no assurance that the actual results or
developments  anticipated  by the  registrant  will  be  realized  or,  even  if
substantially  realized,  that they will have the  expected  consequences  to or
effects on the registrant or its business or operations.

ITEM 1.  DESCRIPTION OF BUSINESS.

General

     Digs, Inc. (the "Company" or "DIGS") provides comprehensive  multimedia and
Internet communication  solutions for public companies to proactively tell their
story to the investment community, its stockholders and employees. The Company's
CD-ROM  program is a state of the art story telling tool creating a virtual road
show of a company's  story.  The program tells a client's "story" on a specially
designed  Internet  linked  CD-ROM  and  delivers  it, in an  attention  getting
package,  to the  computer  screens  of the  client's  shareholders,  interested
investors, the business community and the media.

     The Company's  primary product is the Investor  Relations  CD-ROM ("IRCD").
The IRCD program tells a corporate story by integrating the traditional  printed
report approach with the latest CD-ROM and Internet  interactive  video,  audio,

                                       2
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and animation technology.  IRCD presents a company's story on an Internet-linked
multimedia  CD-ROM.  IRCD describes the business of a company  utilizing  video,
audio,  animated  graphics and text. The company's  message is communicated  via
CD-ROM  linked to the  Internet.  The  approach  makes the  often-dry  corporate
profile  come  alive,  by using  video,  audio,  text and  graphics to present a
company's  corporate story,  including  financial  highlights,  product data and
other information.  The IRCD is user-friendly and  Internet-linked.  A number of
specialized  IRCD  packages and  programs,  including a compacted  Annual Report
package as well as an Environmental, Health and Safety CD-ROM which offers a new
multimedia  approach  to  tell a  company's  Environmental,  Health  and  Safety
policies,  current  results and  achievements  are available.  All IRCD packages
offer savings to companies over  traditional  written reports in both production
and mailing costs. In addition, once an IRCD has been received by a shareholder,
additional  CD's  are  never  sent as  updates,  rather,  any  new  and  updated
information  and  statistics  can be added to the  existing  CD through a simple
Internet uplink, thus, further reducing costs of handling and mailing.

     Traditional paper reports require new paper and packaging for every update,
which adds expense to both production and postage. While traditional reports are
still required by law, a condensed version can be inserted into the IRCD jacket,
thereby decreasing the cost of expensive postage.

     The  Company   believes  that  this  means  of  delivery   information   is
particularly  important in an era when millions of investors worldwide are using
their computers and Internet as investment tools.

     The  Company  is not  dependent  on long  term  clientele,  rather it is in
constant  recruitment  of new  accounts.  While  annual  revenues  appear  to be
generated  from a particular  group of clients,  the customers  will change on a
yearly basis.

Products

     IRCD.  The Company's  principal  product is the Investor  Relations  CD-ROM
     ----
("IRCD").  Companies  can use this easy CD-ROM  format to  communicate  with its
stockholders,  market makers and investment  analysts.  One CD-ROM is capable of
providing   information  that  would  require  more  than  1,000  pages  if  the
traditional  written  report  was  prepared.   Complete  financial  information,
including  financial  statements,  schedules  and notes,  together  with  yearly
comparison graphs of revenues, sales, profits, earnings per share, etc., are all
set forth in a colorful and creative  manner.  Audio not only includes music and
sound effects but  conversation  by company  executives,  such as its President,
Chief Financial Officer or Chief Scientist,  explaining the company's  business,
financial  success  and/or  new  products  and  inventions.  The  IRCD  makes an
excellent  alternative to a written  annual report or other written  information
companies  periodically send to its  stockholders.  Through a direct link to the
Internet,  financial  statements  and  other  corporate  happenings  can be kept
current by accessing that company's Website.


     Each IRCD is equipped with a link, which connects to the Internet, and will
access the particular  company's  website.  This feature is available as long as
the computer in use has Internet capabilities.

     EHSCD.  The Company  developed its  Environmental  Health and Safety CD-ROM
     -----
("EHSCD")  for those  companies  that are  primarily  in the  natural  resources

                                       3
<PAGE>

business. The EHSCD utilizes text, graphics, video and audio in a dynamic manner
to describe and explain a company's environmental, health and safety and natural
resource preservation to investors,  environmental groups, media, the public and
to  governmental  agencies.  The  Company  has  produced  an EHSCD for  Atlantic
Richfield  Corporation  ("ARCO")  who is  using  it  primarily  for  information
regarding  their efforts in the  environmental,  health and safety areas. In May
1999, the Company launched its new Website,  EHSREPORTS.COM.  This Website helps
Internet  users search by company,  or industry,  for  environmental  health and
safety reports  available in print,  online and interactive  CD-ROM formats from
hundreds of leading international corporations.

     EOCD.  The Company,  using a similar  format as its IRCD,  has developed an
     ----
Employee Orientation CD-ROM ("EOCD"). The EOCD was developed for internal use by
companies.  It is designed to  familiarize  new employees  with their company by
providing a comprehensive look at the company's people,  products,  services and
policies.  The  production  uses video,  audio,  graphics  and text in a lively,
informative and fun presentation.

Marketing and Customers

     The Company markets its products to large public  companies who are seeking
unique,  efficient  and  inexpensive  distribution  of  corporate  business  and
financial  information.  The Company  markets these  services  through  personal
contacts with customers and investment relations firms.

     The Company  employs two full time  employees to market its  products.  The
Company's  sales  persons   solicit   business  from  existing  and  prospective
customers.  The sales person also acts as service  representative to ensure that
the Company's  production  staff promptly  respond to customer  instructions and
meets customer needs.

     Since  beginning  full time  operations in December,  1998, the Company has
provided its IRCD products for customers ranging from The Cheesecake  Factory to
Mikohn Corp., a  manufacturer  and developer of systems and games for the gaming
industry.  The first two customers  utilizing the Company's EOCD product are The
Limited,  Inc. and  Intimate  Brands,  Inc.,  the parent  company of  Victoria's
Secrets,  Inc.  The  Company's  EHSCD  product was chosen by Atlantic  Richfield
Corporation  to  communicate  their  commitment  to a clean  environment  to its
shareholders, government agencies and the media.

Production

     The Company creates or accepts a client's videos, pictures, copy ("assets")
and, using the Company's  proprietary  application  software,  produces a Master
CD-ROM of the client's story.

     The basic package  includes filming three corporate  executive  interviews,
                                         ---------------------------------------
programming a 10-page corporate profile section, a financial Bottom Line section
              -------------------------            ---------------------
featuring charts  illustrating  all financial aspect of the company,  a products
                                                                        --------
and services  section,  a research  library  section,  and a proprietary  Uplink
- ------------              -----------------                  -------------------
function with an update feature.
- --------

                                       4
<PAGE>

     Once  the  "master"  is  produced,   the  Company  contracts  with  outside
replication houses and printers to produce the final product.

Reorganization

     Prior to the reorganization with Digital Corporate Profiles,  Inc. ("DCP"),
DIGS, Inc. (the "Company"),  formerly known as Advanced Laser Products,  Inc. (a
Delaware  corporation),  has one inactive  subsidiary,  Advanced Laser Products,
Inc. ("ALP") (a Nevada  corporation).  Effective November 9, 1998, in connection
with the agreement of reorganization (the "Reorganization"),  the Company issued
5,194,968  shares of its common  stock at $.001 par value per share in  exchange
for all of the  outstanding  common stock of DCP. DCP then became a wholly owned
subsidiary  of the  Company  based on a  conversion  ratio  of 3  shares  of the
Company's  common  stock for each share of DCP's stock.  For further  discussion
relating to the  accounting  for  reorganization,  See Note 9 of DIGS,  Inc. and
Subsidiaries' Notes to Consolidated  Financial  Statements.  The shareholders of
DCP became  the owners of  approximately  99% of the  outstanding  shares of the
Company after the reorganization.

Employees

     The Company currently employs seven full time employees of which two are in
management and administration, two in marketing, two in computer programming and
research,  and one in finance.  The employees  are not unionized and  management
believes the Company's relationship with its employees is good.

     The Company is a Delaware corporation, its executive offices are located at
17327 Ventura Boulevard,  Suite 200, Encino, California 91316, and its telephone
number is 818-995-3650.

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

Overview:

     Effective   November  9,  1998,   in   connection   with  an  agreement  of
reorganization, the Company issued 5,194,968 shares of its common stock at $.001
par value per  share in  exchange  for all of the  outstanding  common  stock of
Digital Corporate Profiles, Inc., a California corporation ("DCP"), in which DCP
became a wholly-owned  subsidiary of the Company based on a conversion  ratio of
three shares of the  Company's  common stock for each share of DCP's stock.  The
merger qualified for a tax-free  reorganization  and has been accounted for as a
pooling  of  interests.   Accordingly,   the  Company's  consolidated  financial
statements have been restated for all periods prior to the business  combination
to include the combined revenues of DIGS,  Inc.(formerly known as Advanced Laser
Products,  Inc.),  a  Delaware  corporation,  and  DCP.  DCP  provides  complete
multimedia  and  internet  communications  solutions  for  public  companies  to
proactively tell their story to the worldwide investment community. DCP produces
investor  relations  CD-ROM  (IRCD)  packages  for its  corporate  and  investor
relations  clients.  DCP also offers the environmental  health and safety CD-ROM
(EHSCD) to  dynamically  tell the  environmental,  health  and  safety  story to
investors,  environmental  groups,  media  and the  public.  DIGS,  Inc.  has no
revenues for the years ended December 31, 1998 and 1997. The Company operates in
only one business  segment.  During the year ended  December 31, 1998,  sales to
three customers accounted for approximately 96% of total revenues. All share and
per share amounts have been adjusted to reflect the 1 for 10 reverse stock split
effective April 20, 1998 and the 1 for 20 reverse stock split effective  October
16, 1998.

                                       5
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Years Ended December 31, 1998 and 1997:

     Revenues  increased to $171,694  for the year ended  December 31, 1998 from
$110,107 for the year ended December 31, 1997. The increase was primarily due to
the overall increase of sales volume and activity during the year ended December
31, 1998.

     Cost of sales  increased  to $96,980 for the year ended  December  31, 1998
from  63,745 for the year ended  December 31, 1997.  The increase was  primarily
due to the Company's overall increase of sales volume  and  activity  during the
year ended December 31, 1998.

     Operating  expense  increased to $535,231  for the year ended  December 31,
1998 from  $233,620  for the year ended  December  31,  1997.  The  increase was
primarily due to hiring additional staff to manage and support the growth during
1998.  In 1998,  the  Company  entered  into an  employment  agreement  with its
President,  which accounts for an increase of officer  salaries by $83,489.  The
total increases in salaries and related personnel costs accounted for 85% of the
increase in operating expense. Increase in sales commission,  professional fees,
outside services, and rent expense also contributed to the increase of operating
expense.

     Other income and (expense) increased to $21,169 for the year ended December
31, 1998 from  ($1,991) for the year ended  December 31, 1997.  The increase was
primarily  due to the  increase  of sublease  rental  income of $23,000 in 1998.
Interest expense decreased to ($1,831) for the year ended December 31, 1998 from
($2,814)  for the year  ended  December  31,  1997.  Interest  expense  consists
primarily of interest expense on the note payable to stockholder.

     As a result of operating losses and the Company's  inability to recognize a
benefit from its  deferred tax assets,  the Company has not recorded a provision
for  federal  income  taxes  for the years  ended  December  31,  1998 and 1997;
however, the Company incurred a minimum state income tax expense of $800 in 1998
and 1997.  As of December  31, 1998,  the Company had $711,466 of net  operating
loss  carry forwards  for federal income tax purposes, which expire beginning in
2011.  The Company has provided a full  valuation  allowance on its deferred tax
assets,  consisting  primarily of net operating loss  carry forwards, due to the
likelihood  that the Company may not generate  sufficient  taxable income during
the carry-forward period to utilize the net operating loss carry forwards.

     Unrealized loss on investment in equity securities  increased to $7,850 for
the year ended  December 31, 1998 from $0 for the year ended  December 31, 1997.
The unrealized loss was  contributed by the decrease in market value,  comparing
to historical cost of investment securities as of December 31, 1998.

Three Months Ended March 31, 1999 and 1998:

     Revenues  increased  to $291,964  for the three months ended March 31, 1999
from  $37,543  for the three  months  ended March 31,  1998.  The  increase  was
primarily  due to the overall  increased  sales volume and  activity  during the
first quarter of 1999. The increase in revenues is primarily attributable to the
increase in the marketing effort.

     The Company currently  anticipates that its revenue for 1999 would increase
by approximately 250%. However, the Company anticipates that it would generate a
net loss from 1999 due to the increase in marketing expenses,  personnel related
costs, and outside service costs of 780%, 71%, and 167%, respectively.

                                       6
<PAGE>

     Cost of sales  increased  to $26,009 for the three  months  ended March 31,
1999 from  $17,477 for the three  months  ended March 31 1998.  The increase was
primarily  due to the  significant  increase  in  marketing  expense,  personnel
related costs, and outside service costs.

     Operating  expense  increased  to $239,836 for the three months ended March
31, 1999 from $56,190 for the three  months  ended March 31, 1998.  The increase
was primarily due to the significant  increase in marketing  expense,  personnel
related costs, and outside service costs.

     Other income (and  expense)  increased to $1,950 for the three months ended
March 31, 1998 from ($1,203) for the three months ended  December 31, 1997.  The
increase was primarily due to net changes in sublease  rental  income,  interest
expense,  and  realized  loss on  sale of  securities.  Sublease  rental  income
increased to $9,800 for the three months ended December 31, 1998 from $0 for the
year ended December 31, 1997. Interest expense decreased to $0 from ($1,203) for
the three  months  ended  March 31,  1999 and 1998,  respectively.  The  Company
recognized a realized  loss on sale of investment  securities,  which was offset
against unrealized loss, recorded as of December 31, 1998.

     As a result of operating losses and the Company's  inability to recognize a
benefit from its  deferred tax assets,  the Company has not recorded a provision
for federal  income  taxes for the three  months  ended March 31, 1999 and 1998;
however,  the Company  paid a minimum  state  income tax expense of $800 for the
first quarter of 1998. As of December 31, 1998,  the Company had $711,466 of net
operating  loss  carry forwards  for federal  income tax  purposes, which expire
beginning in 2011.  The Company has provided a full  valuation  allowance on its
deferred tax assets, consisting  primarily of net operating loss carry forwards,
due to the  likelihood  that the Company  may not  generate  sufficient  taxable
income  during  the  carry-forward  period to  utilize  the net  operating  loss
carry forwards.

Liquidity and Capital Resources:

     Since  1996,  the  Company  has funded its  operations  and met its capital
expenditure  requirements  through  private sale of equity  securities,  through
short-term  loans from  stockholders  and  unrelated  parties,  and through cash
generated from sale of its CD-ROM  products and annual service  contracts of its
Internet  Website.  Proceeds  from sale of common  stock  through  March 31 1999
totaled approximately $1,306,000.

     The Company had negative cash flows from operating  activities  since 1997.
Net cash used in operating  activities  was $135,084 in 1997,  $383,189 in 1998,
and  $181,177  in the first  three  months of 1999.  Net cash used in  operating
activities  in each of these  periods was  primarily the result of net operating
losses.  These operating cash outflows were partially offset by the increases in
deferred  rent credit and  accounts  receivable,  and the  decreases in accounts
payable and accrued expenses.

     Net cash used by investing activities was $51,750 in 1997, $88,042 in 1998,
and $0 in the  first  three  months  of 1999.  To date,  the  Company  investing
activities  have consisted of purchases of property and equipment and investment
in program development.  Capital expenditures for property and equipment totaled
$12,615 in 1997, $79,042 in 1998, and $7,475 for the first three months of 1999.
Capital  expenditures  for program  development  totaled  $39,135 in 1997, $0 in
1998, and $13,500 for the first three months of 1999.

                                       7
<PAGE>

     As of December 31, 1998, the Company's principal commitments consisted of a
two-year  operating  lease of the  corporate  office and a  one-year  employment
agreement with the Company's President.

     As of March 31,  1999,  the  Company  had  $314,918  in cash.  The  Company
anticipates  that the existing cash and any cash generated from  operations will
be sufficient to fund its operating  activities,  capital expenditures and other
obligations through at least December 31, 1999. However, the Company may need to
raise  additional  funds in order to fund more  rapid  expansion,  to expand its
marketing  activities,  to develop and enhance existing products,  or to acquire
businesses  or  technologies.  If the company is not  successful  in  generating
sufficient cash flow from operations,  it may need to raise  additional  capital
through public or private financing or other  arrangements.  If additional funds
were raised  through the issuance of equity  securities,  the  percentage of the
stock owned by the then current stockholders would be reduced. Furthermore, such
equity might have rights,  preferences  or privileges  senior to current  common
stock.

Year 2000 Issue:

     The Year 2000 Issue refers  generally to the  problems  that some  computer
systems may have in determining  the correct year for the century.  For example,
software with  date-sensitive  functions that is not Year 2000 compliant may not
be able to  distinguish  whether  "00" means  1900 or 2000,  which may result in
failures or the creation of erroneous results.

     The  Company's  primary  management  information  and business  systems are
running on third party  software  packages  purchased and  implemented  in 1997.
These  software  packages  are  maintained  and  upgraded  annually.  Management
anticipates  that these packages are Year 2000 compliant;  however,  the Company
will  obtain Year 2000  compliance  statements  from the  software  makers.  The
Company believes that the total cost of Year 2000 compliance efforts will not be
material;  however, if the Company experiences  unforeseen problems with respect
to the Year 2000,  the Company could incur  additional  expense to correct these
problems.

     In addition,  the Company intends to obtain Year 2000 compliance statements
from other third  parties,  including  the  landlord,  banks,  Internet  service
providers,  customers,  and  major  suppliers.  Failure  to  achieve  Year  2000
readiness by any of the  Company's  vendors and third  parties could disrupt its
operations and hurt its business.

New Accounting Pronouncements:

     In June 1997, the Financial Accounting Standards Board issued Statement No.
130, "Reporting  Comprehensive  Income" ("SFAS No. 130"), which is effective for
financial  statements issued for fiscal years beginning after December 15, 1997.
SFAS  No.  130   establishes   standards   for  the  reporting  and  display  of
comprehensive  income, its components and accumulated  balances in a full set of
general purpose financial statements.  SFAS No. 130 defines comprehensive income
to include all changes in equity  except those  resulting  from  investments  by
owners  and  distributions  to owners.  Among  other  disclosures,  SFAS No. 130
requires  that all  items  that are  required  to be  recognized  under  current
accounting  standards as  components  of  comprehensive  income be reported in a
financial  statement  that is  presented  with  the  same  prominence  as  other
financial  statements.  The  Company  adopted  SFAS No. 130 for its fiscal  year
beginning January 1, 1998, and does not anticipate that adoption of SFAS No. 130
                                       8
<PAGE>

will  have  a  material  effect  on its  financial  statement  presentation  and
disclosures.

     In June 1997, the Financial Accounting Standards Board issued Statement No.
131,  "Disclosures  about  Segments of an Enterprise  and Related  Information "
("SFAS No.  131"),  which  supersedes  SFAS No.  14,  "Financial  Reporting  for
Segments  of a  Business  Enterprise,"  and  which is  effective  for  financial
statements  issued for fiscal years  beginning after December 15, 1997. SFAS No.
131 establishes  standards for the way that public companies report  information
about operating  segments in annual financial  statements and requires reporting
of selected information about operating segments in interim financial statements
issued to the public. SFAS No. 131 also establishes standards for disclosures by
public companies  regarding  information about their major customers,  operating
segments, products and services, and the geographic areas in which they operate.
SFAS No. 131 defines  operating  segments as components  of an enterprise  about
which separate financial information is available that is evaluated regularly by
the chief operating  decision maker in deciding how to allocate resources and in
assessing performance. SFAS No. 131 requires comparative information for earlier
years to be  restated.  The  Company  adopted  SFAS No. 131 for its fiscal  year
beginning  January  1,  1998.  Adoption  of SFAS No. 131 did not have a material
effect on the Company's financial statement presentation and disclosures.

     In February 1998, the Financial Accounting Standards Board issued Statement
No.  132,  "Employers'  Disclosures  about  Pensions  and  Other Post retirement
Benefits" ("SFAS No. 132"),  which is effective for financial  statements issued
for fiscal  years  beginning  after  December  15,  1997.  SFAS No. 132  revises
employers'  disclosures  about pension and other post retirement  benefit plans.
SFAS No. 132 requires comparative  information for earlier years to be restated.
The Company adopted SFAS No. 132 for its fiscal year beginning  January 1, 1998.
Adoption  of SFAS No.  132 did not have any  effect on the  Company's  financial
statement presentation and disclosures.

     In June 1998, the Financial Accounting Standards Board issued Statement No.
133,  "Accounting for Derivative  Instruments and Hedging Activities" ("SFAS No.
133"),  which is effective for financial  statements for all fiscal  quarters of
all fiscal years beginning after June 15, 2000.  SFAS No. 133  standardizes  the
accounting for derivative instruments,  including certain derivative instruments
embedded in other  contracts,  by requiring that an entity recognize those items
as assets or liabilities in the statement of financial position and measure them
at  fair  value.  SFAS  No.  133  also  addresses  the  accounting  for  hedging
activities.  The Company  will adopt SFAS No. 133 for its fiscal year  beginning
January 1, 2000, and does not anticipate that adoption of SFAS No. 133 will have
any effect on its financial statement presentation and disclosures.



ITEM 3.  DESCRIPTION OF PROPERTY.

     The Company  presently  leases,  from a third  party,  6,153 square feet of
office space at 17327 Ventura  Boulevard,  Suite 200, Encino,  California 91316,
pursuant to a lease with a term ending July 31, 2000, providing for monthly rent
of $7,691.  The lease provides options to renew for an additional three and five
years. The Company does not anticipate changing its present leasing situation or
purchasing any real property in the near future.


ITEM 4.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT.

                                       9
<PAGE>

         (a)  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS:

     The following table sets forth certain information  regarding the ownership
of the Company's Common Stock known by the Company to be the beneficial owner of
more than 5% of the Common  Stock of the Company as of May 31,  1999.  Except as
otherwise  indicated,  the Company has been advised that all individuals  listed
below have the sole power to vote and  dispose of the number of shares set forth
opposite  their names.
                                           Beneficial
                                           Ownership of
Name and Address                           Common Stock        Percent of Class
- -------------------------------------------------------------------------------

Allen Kelsey Grammer Trust                 450,000                      6.8.
c/o Donald J. Miod
Miod & Company
15456 Ventura Boulevard, Suite 500
Sherman Oaks, CA 91403

First Capital Network, 1                   439,992                       6.6

Worldwide Insurance Consultants, 1         439,992                       6.6

Jamie Mazur1, 2                            219,996                       3.3

Jennifer Mazur1, 2                         219,996                       3.3

Emily Mazur1, 2                            219,996                       3.3

Trent Mazur1, 2                            219,996                       3.3

1      The address of each of the beneficial  owners identified is c/o Corporate
       Financial Enterprises, 2224 Main Street, Santa Monica, CA 90405.
2      Jamie,  Jennifer,  Emily and Trent Mazur are siblings  and their  parents
       disclaim beneficial ownership of  these shares. Emily and Trent Mazur are
       minors, and  their shares are  held  by  Michelle Mazur, their mother, as
       custodian.



         (b)  SECURITY OWNERSHIP OF MANAGEMENT:

     The following table sets forth certain information  regarding the ownership
of the  Company's  Common Stock which are deemed under the current  rules of the
Securities  and Exchange  Commission to be  beneficially  owned by the Company's
executive officers and directors,  individually,  and all executive officers and
directors as a group,  as of May 31, 1999.  Except as otherwise  indicated,  the
Company has been advised that all  individuals  listed below have the sole power
to vote and dispose of the number of shares set forth opposite their names.


Name, Title and Address                     Number of Shares    Percent of Class
- -----------------------                     ------------------------------------

Peter B. Dunn                               1,330,500                     20.0
President and Director
17327 Ventura Boulevard, Suite 200
Encino, CA 91316

                                       10
<PAGE>
Allen Dunn                                    165,000                      2.5
Vice President, COO and Director
17327 Ventura Boulevard, Suite 200
Encino, CA 91316


David L. Fleming                              120,000                      1.8
Secretary and Director
17327 Ventura Boulevard, Suite 200
Encino, CA 91316


Officers and Directors as a Group
  (3 Persons)                               1,615,500                     24.3

         (c)  CHANGES IN CONTROL:

     There are no arrangements known to the Company which may result in a change
in control of the Company.




ITEM 5.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.

     (a)  OFFICERS AND  DIRECTORS:  The  following  table  provides  information
concerning  each  executive  officer and director of the Company.  All directors
hold  office  until the next  annual  meeting  of  shareholders  or until  their
successors have been elected and qualified.

                           Age               Title
                           ---               -----
Peter B. Dunn              59               President,
                                            Chief Financial Officer and Director

Allen Dunn                 32               Chief Operating Officer and Director

David L. Fleming           48               Secretary and Director



     PETER  B.  DUNN  founded  Digital  Corporate  Profiles,   Inc.  ("DCP"),  a
wholly-owned  subsidiary of the Company, in July 1996 and has served as Chairman
of the Board,  President,  Chief Executive officer,  Chief Financial Officer and
Treasurer of DCP since that time, and as President and Chief  Financial  Officer
for the Company since November  1998.  From 1987 to 1996, Mr. Dunn was President
of Lucky Dog  Productions  where he produced,  directed  and/or wrote 12 Golf TV
shows/videos, one commercial, two cable TV pilots and a made-for-video movie for
such  clients as  Paramount  Home Video,  Classic  Golf  International,  British
Broadcasting Corp.,  Lifetime Vision, Ltd, and Best of British Film and TV, Ltd.
From 1980 to 1987, he was President of International Special Promotions (ISP), a
special events  marketing  company  serving  companies  such as Coca-Cola,  R.J.
Reynolds,  and  Proctor  and  Gamble.  From  1972 to 1980,  Mr.  Dunn was  Chief
Executive Officer of Western Corporate Services, Inc., which he founded in 1972.
Western  Corporate  Services is the owner of U.S.  Stock  Transfer  Corporation,
which is the third  largest  independent  stock  transfer  agency in the  United
States.  Mr.  Dunn  remains  a major  shareholder  and  member  of the  Board of
                                       11
<PAGE>

Directors of Western Corporate Services.  Mr. Dunn received his Bachelor of Arts
in Industrial Management from Clarkson University,  and attended graduate school
at the  University  of  California,  Los  Angeles,  where  he  studied  Math and
Business.

     ALLEN DUNN joined Digital Corporate Profiles,  Inc. ("DCP"), a wholly-owned
subsidiary  of the  Company  at its  inception,  in July 1996,  in its  computer
department and, since November 1998, has been serving as Chief Operating Officer
and director of both the Company and DCP. Mr. Dunn has been  responsible for the
Company's web page design and Html coding, as well as website maintenance of the
Company's  UNIX operating  system.  From August 1997 to March 1998, Mr. Dunn was
director  of sales and  marketing.  From  June 1994 to January  1996,  Mr.  Dunn
freelanced as a computer  programmer and a children's  self-defense  instructor.
During this time, the primary focus of Mr. Dunn's  athletic career was competing
in national Tae Kwon Do tournaments highlighted in an attempt to qualify for the
U.S.  National  Tae  Kwon Do Team at the  Olympic  Training  Center  located  in
Colorado Springs,  Colorado. Mr. Dunn received his Bachelor of Arts in Economics
from California State University at Northridge in 1993, and is an alumnus of the
University of Colorado School of Astrophysics and Atmospherics.  He is currently
pursuing an advanced degree in Computer  Science at California  State University
at  Northridge,  as well as  completing  a  Microsoft  certified  program at New
Horizons  Computer  School in Los  Angeles,  California.  Mr. Dunn is the son of
Peter Dunn.

     DAVID L.  FLEMING  joined  the  Board of  Directors  of  Digital  Corporate
Profiles,  Inc., a wholly-owned  subsidiary of the Company, in July 1996 and has
been a director and Secretary of the Company since  November  1998.  Since 1991,
Mr.  Fleming  has been a managing  partner in DG&F  Design,  a  privately  owned
graphic arts company.


ITEM 6.  EXECUTIVE COMPENSATION.

     (a) SUMMARY  COMPENSATION TABLE: The following  information is provided for
the Company's Chief Executive officer during the Company's last completed fiscal
year. The Company had no executive  officers whose total annual salary and bonus
exceeded $100,000 for such year.

              Annual Compensation               Long Term Compensation
              -------------------              -------------------------
                                                  Awards          Payouts
                                              -----------------------------
                                                        Secur-
                                                        ities
                                     All       Rest-    Under-           All
                                     Other     ricted   lying            Other
Name and                             Compen-   Stock    Options/ LTIP    Compen-
Position     Year   Salary   Bonus   sation    Awards   SARs     Payouts sation
- --------------------------------------------------------------------------------

Peter B.
 Dunn, CEO   1998   $80,000   -0-     -0-        -0-      -0-      -0-     -0-
             1997   $ 5,000   -0-     -0-        -0-      -0-      -0-     -0-
             1996     -0-     -0-     -0-        -0-      -0-      -0-     -0-
- --------------------------------------------------------------------------------



                                       12
<PAGE>

     OPTIONS/SAR GRANTS in Last Fiscal Year: None. On January 2, 1999,  pursuant
to a 1999 Stock  Incentive  Plan, the Company  granted options to Peter Dunn and
Allen Dunn to  purchase  100,000  shares and 80,000  shares,  respectively.  The
exercise price for Peter Dunn was $5.50 per share,  and for Allen Dunn $5.00 per
share. For Peter Dunn, the options expire five years from date of grant and, for
Allen Dunn, the options expire ten years from date of grant. As of May 31, 1999,
no options have been exercised.


ITEM 7.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     In 1997 and  1998,  the  Company  borrowed  monies  from  Peter  Dunn,  its
President,  evidenced by a demand loan agreement with interest at 10% per annum.
In December  1998,  the Company  repaid  $47,321 to Mr. Dunn,  representing  all
amounts owed to Mr. Dunn, including interest.


ITEM 8.  DESCRIPTION OF SECURITIES.

         (a)  GENERAL:

     The Company has  authorized  100,000,000  shares  consisting  of 80,000,000
shares of Common  Stock,  $.001 par value,  and  20,000,000  shares of Preferred
Stock,  $.01 par value.  There are issued and  outstanding,  as of May 31, 1999,
6,648,631 shares of Common Stock (258 holders of record). No Preferred Stock has
been issued.

         (b)  COMMON STOCK:

     Each share of Common Stock entitles the holder thereof to one vote,  either
in  person or by  proxy,  at a meeting  of  shareholders.  The  holders  are not
permitted to vote their shares  cumulatively.  Accordingly,  the holders of more
than 50% of the issued and  outstanding  shares of Common Stock can elect all of
the directors of the Company.

     All shares of Common Stock are entitled to participate ratably in dividends
when and as  declared  by the  Company's  Board of  Directors  out of the  funds
legally available therefore. Any such dividends may be paid in cash, property or
additional  shares of Common Stock. The Company has not paid any dividends since
its inception and presently  anticipates  that no dividends  will be declared in
the foreseeable  future.  Any future dividends will be subject to the discretion
of the Company's  Board of Directors  and will depend upon,  among other things,
future  earnings,  the  operating and  financial  condition of the Company,  its
capital  requirements,  general  business  conditions and other pertinent facts.
Therefore, there can be no assurance that any dividends on the Common Stock will
be paid in the future.

     Holders of Common Stock have no  preemptive or other  subscription  rights,
conversion  rights,  redemption or sinking fund provisions.  In the event of the
dissolution,  whether  voluntary or involuntary,  of the Company,  each share of
Common  Stock  is  entitled  to  share  ratably  in  any  assets  available  for
distribution  to  holders  of  the  equity   securities  of  the  Company  after
satisfaction of all liabilities.

         (c)  PREFERRED STOCK:

     The Company is  authorized  to issue up to  20,000,000  shares of Preferred
Stock, $.01 par value, of which no shares are issued and outstanding.

                                       13
<PAGE>

     The Board of  Directors  has  authority to issue the  authorized  Preferred
Stock in one or more series,  each series to have such designation and number of
shares as the Board of Directors  may fix prior to the issuance of any shares of
such series. Each series may have such preferences and relative,  participating,
optional or other  special  rights,  with such  qualifications,  limitations  or
restrictions,  as are stated in the resolution or resolutions  providing for the
issue  of such  series  as may be  adopted  from  time to time by the  Board  of
Directors prior to the issuance of any shares of such series.

         (d)  1999 STOCK INCENTIVE PLAN:

     On January 2, 1999, the Company's Board of Directors  approved a 1999 Stock
Incentive Plan (the "1999 Plan"), subject to approval,  within twelve months, by
the  stockholders.  The  purpose  of the 1999 Plan is to enable  the  Company to
recruit and retain  selected  officers and other  employees by providing  equity
participation in the Company to such individuals.  Under the 1999 Plan,  regular
salaried employees,  including  directors,  who are full time employees,  may be
granted  options  exercisable  at not less than 100 percent of the fair value of
the shares at the date of grant.  The exercise price of any option granted to an
optionee who owns stock  possessing more than ten percent of the voting power of
all classes of stock of the Company must be 110 percent of the fair market value
of the common  stock on the date of grant,  and the duration may not exceed five
years.  Options  generally  become  exercisable  at a rate of 33  percent of the
shares subject to option one year after grant.  The remaining  shares  generally
become exercisable ratably over an additional 24 months. The duration of options
may not exceed ten years.  Options under the Plan are  nonassignable,  except in
the case of death and may be  exercised  only while the  optionee is employed by
the Company, or in certain cases, within a specified period after termination of
employment  (within three months) or death (within twelve months).  The purchase
price and number of shares that may be  purchased  upon  exercise of options are
subject   to   adjustment   in   certain   cases,    including   stock   splits,
recapitalizations and reorganizations.

     The number of options  granted and to whom,  are determined by the Board of
Directors, at their discretion.

     Under the 1999 Plan,  there were 750,000 shares  available for grant. As of
May 31, 1999,  287,000 options have been granted and are  outstanding  under the
1999 Plan, leaving a balance of 463,000 shares available for grant.

         (e)  TRANSFER AGENT:

     The  Transfer  Agent for the  Company's  common  stock is  Signature  Stock
Transfer, Inc., 14675 Midway Road, Suite 229, Dallas, Texas 75244.














                                       14
<PAGE>

                                     PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER STOCKHOLDER MATTERS.

Market Information

     The  Common  Stock of the  Company is traded  under the symbol  DIGS in the
over-the-counter  market  through  the  NASD's  electronic  OTC  Bulletin  Board
service. The following table sets forth the range of high and low bid prices per
share of the Common Stock for each of the periods  indicated.  These  quotations
reflect inter-dealer prices,  without retail mark-up,  mark-down or commissions,
and may not necessarily  represent actual  transactions.  In November  1998  the
Company acquired  Digital Corporate  Profiles, Inc. ("DCP").  For a period of at
least  two  years  prior  thereto,  the  Company was inactive and trading in its
common  stock  was  very  sporadic.  There  was very little liquidity due to the
low  volume.  Therefore,  any  quotations  prior to the DCP transaction would be
meaningless and misleading.

                                                               Bid Prices
                                                     -------------------------
                                                            High      Low
                                                            ----      ---

Quarter  ended:
- ---------------

December 31, 1998                                           $6.87     $4.87*

March 31, 1999                                              $7.00     $3.00
June 30, 1999                                               $8.50     $8.50
September 30, 1999                                          $7.75     $7.75
Through October 25, 1999                                    $8.25     $8.00

*   Reflects a 1 for 20 reverse stock split.


Holders of Common Stock

    As of May 31, 1999, the number of holders of record of common stock was 258.

Dividends

     To date,  the company has not paid any cash  dividends  on its common stock
and does not anticipate  paying cash dividends in the  foreseeable  future.  The
Company  anticipates that all earnings,  if any, for the foreseeable future will
be retained for development of the Company's business.


ITEM 2.  LEGAL PROCEEDINGS.

     On November 20, 1998, a Complaint  was filed against the Company and others
in the United States District Court in Los Angeles, California by Jason Nelbert,


                                       15
<PAGE>

a shareholder of the Company.  The Complaint  alleges,  among other things,  the
sale to plaintiff,  in May of 1996,  of  unregistered  securities  and breach of
contract.   Plaintiff  requests,  among  other  things,  damages  in  an  amount
unascertained,  according  to proof and an award of common  stock  alleged to be
owned by Plaintiff  and in an amount to be proved at trial.  The Company  denies
any liability and is diligently  defending this matter. The Company's investment
banking  firm has agreed to hold the Company  harmless  for any and all damages,
including,  but not  limited  to,  the cost of  litigation  resulting  from this
lawsuit.

ITEM 3.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.

     None.

ITEM 4.  RECENT SALES OF UNREGISTERED SECURITIES.

     (1)      On November 9, 1998,  in  connection  with a Plan and Agreement of
              Reorganization  (the "Plan"),  the Company issued 5,194,968 shares
              of its Common Stock in exchange for all of the outstanding  common
              stock of Digital Corporate Profiles,  Inc. ("DCP"). Upon the close
              of the Plan, DCP's  shareholders  owned  approximately  99% of the
              outstanding Common Stock of the Company. as a Result, DCP became a
              wholly-owned subsidiary of the Company.

     (2)      On November 10, 1998, the Company sold 1,400,000  shares of Common
              Stock to four  individuals  pursuant to a Rule 504  offering.  The
              shares  were  sold at  $0.71  per  share  for  gross  proceeds  of
              $994,000.  The Company had reasonable grounds to believe that each
              purchaser  was capable of  evaluating  the merits and risks of his
              investment and bearing the economic risks of his  investment.  The
              Company had not raised,  over the prior twelve  months,  more than
              one million dollars  inclusive of the proceeds from this offering.
              Accordingly, the Company believes that this transaction was exempt
              from the registration provisions of the Securities Act of 1933, as
              amended, pursuant to the exemption under Regulation D of that Act,
              and the Rules and Regulations promulgated thereunder.


     (3)      On January 2, 1999,  the Board of  Directors  duly adopted a stock
              option plan,  subject to shareholder  approval,  pursuant to which
              options to purchase up to 750,000  shares of the Company's  Common
              Stock may be granted by a committee of directors to key  employees
              and others.  Each option will have a term not to exceed ten years,
              or such shorter period as is determined by the Board of Directors,
              and will be  exercisable at the per share fair market value of the
              Company's  Common  Stock  as at the date of  grant.  As of May 31,
              1999,  option to purchase 287,000 shares of Common Stock have been
              granted.



ITEM 5.  INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Section 145 of the General  Corporate  Law ("GCL") of the State of Delaware
empowers a Delaware corporation, such as the Company, to indemnify its directors
and  officers  under  certain   circumstances.   The  Company's  Certificate  of
                                       16
<PAGE>

Incorporation  provides  that the Company  shall  indemnify  such persons to the
fullest extent permitted by Delaware law.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors  and officers and  controlling  persons of
the Company pursuant to the provisions of Delaware law or otherwise, the Company
has been advised that, in the opinion of the Securities and Exchange Commission,
such  indemnification  is against public policy as expressed in said Act and is,
therefore,  unenforceable. In the event that a claim for indemnification against
such liabilities  (other than the payment by the Company of expenses incurred or
paid  by a  director,  officer  or  controlling  person  of the  Company  in the
successful  defense  of any  action,  suit,  or  proceeding)  is  asserted  by a
director,  officer or controlling person in connection with the securities being
registered,  the Company  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 in said Act and will be governed by the final adjudication of such
issue.

     Article Seventh of the Company's Certificate of Incorporation provides that
the Company shall,  to the full extent  permitted by Section 145 of the Delaware
General  Corporation  Law, as amended from time to time,  indemnify  all persons
whom it may indemnify pursuant thereto.
































17
<PAGE>
PART F/S

     The  following  financial  statements  are  included as a separate  section
following the signature page to this Form 10-SB and are  incorporated  herein by
reference.


                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                            Page
                                                            ----
 Audited Financial Statements:

 Independent Auditors' Report                               F-2

 Prior Independent Auditors' Report                         F-3 - F-4

 Consolidated Balance Sheet as of December 31, 1998         F-5

 Consolidated Statements of Operations - Years Ended
  December 31, 1998 and 1997                                F-6

 Consolidated Statements of Stockholders' Equity -
  Years Ended December 31, 1998 and 1997                    F-7

 Consolidated Statements of Cash Flows - Years Ended
  December 31, 1998 and 1997                                F-8

 Notes to Consolidated Financial Statements                 F-9 - F-16


 Unaudited Financial Statements

 Consolidated Balance Sheet - Three Months Ended
  March 31, 1999                                            F-17

 Consolidated Statements of Operations - Three
  Months Ended March 31, 1999 and 1998                      F-18

 Consolidated Statements of Cash Flows - Three
  Months Ended March 31, 1999 and 1998                      F-19

 Notes to Consolidated Financial Statements                 F-20





















                                       18
<PAGE>

                                    PART III

ITEM 1.  INDEX TO EXHIBITS.

     Item     Description

     2.       Plan and Agreement of  Reorganization  between the  Registrant and
              Digital Corporate Profiles, Inc. dated October 3, 1998.*

     3.(i)    Articles of Incorporation and Amendments thereto.*

      (ii)    By-Laws of Registrant.*

     10.(i)   Registrant's 1999 Stock Incentive Plan.*

      (ii)    Employment Agreement between Registrant's  wholly-owned subsidiary
              and Peter Dunn.*

23. Subsidiaries of Registrant.


- -------------------
* Previously filed.







                                   SIGNATURES


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

                                                     DIGS, INC.

Date:  October  26, 1999

                            By: /s/ Peter B. Dunn
                            ----------------------------------------------------
                            Peter B. Dunn, President and Chief Financial Officer
















                                       19
<PAGE>




















                           DIGS, INC. AND SUBSIDIARIES

                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)

                        CONSOLIDATED FINANCIAL STATEMENTS

                                DECEMBER 31, 1998
































<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                        CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998







                          INDEX TO FINANCIAL STATEMENTS

                                                                 Pages
                                                           ------------------

Independent Auditors' Report                                      F - 2

Prior Independent Auditors' Reports                            F - 3 - F - 4

Consolidated Balance Sheet as of December 31, 1998                F - 5

Consolidated Statements of Operations
    For the Years Ended December 31, 1998 and 1997                F - 6

Consolidated Statements of Stockholders' Equity
    For the Years Ended December 31, 1998 and 1997                F - 7

Consolidated Statements of Cash Flows
    For the Years Ended December 31, 1998 and 1997                F - 8

Notes to Consolidated Financial Statements                     F - 9 - F - 16



Unaudited Financial Statements

Consolidated Balance Sheet - Three Months Ended
    March 31, 1999                                          F-17

Consolidated Statements of Operations - Three
    Months Ended March 31, 1999 and 1998                    F-18

Consolidated Statements of Cash Flows - Three
    Months Ended March 31, 1999 and 1998                    F-19

Notes to Consolidated Financial Statements                  F-20










                                      F - 1
<PAGE>










                          INDEPENDENT AUDITORS' REPORT


April 5, 1999


To the Board of Directors
DIGS, Inc. and Subsidiaries
Encino, California

     We have audited the accompanying  consolidated  balance sheet of DIGS, Inc.
(a  Delaware  corporation)  and  subsidiaries  as of  December  31, 1998 and the
related consolidated  statements of operations,  stockholders'  equity, and cash
flows for the year then ended. These consolidated  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  consolidated  financial  statements  based on our  audit.  The
financial  statements of Digital  Corporate  Profiles,  Inc.  (Subsidiary) as of
December  31, 1997 were audited by other  auditors  whose report dated April 10,
1998, expressed an unqualified opinion on those statements.

     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 and reports of other  auditors  provide a  reasonable
basis for our opinion.

     In our opinion,  the 1998  consolidated  financial  statements  referred to
above present fairly, in all material respects,  the financial position of DIGS,
Inc.  and  subsidiaries  as of  December  31,  1998,  and the  results  of their
operations  and their  cash  flows for the year then  ended in  conformity  with
generally accepted accounting principles.




CALDWELL, BECKER, DERVIN, PETRICK & CO., L. L. P.









                                      F - 2
<PAGE>

                                JAAK (JACK) OLESK
                           Certified Public Accountant
                        270 North Canon Drive, Suite 203
                         Beverly Hills, California 90210
                                 (310) 288-0693

                          INDEPENDENT AUDITOR'S REPORT

To the Shareholders and Board of directors
Advanced Laser Products, Inc.

     I have audited the  accompanying  balance sheet of Advanced Laser Products,
Inc. as of August 31, 1998 and December 31, 1997 and the related  statements  of
operations,  stockholders'  equity (deficit) and cash flows for, each of the two
years in the period  ended  December  31,  1997,  and for the eight month period
ended August 31, 1998. These financial  statements are the responsibility of the
company's  management.  My  responsibility  is to  express  an  opinion on these
financial statements based on my audits.

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

     In my opinion,  the financial  statements referred to above present fairly,
in all material  respects,  the financial  position of Advanced Laser  Products,
Inc.  as of August  31,  1998,  and  December  31,  1997 and the  results of its
operations  and its cash  flows  for each of the two years in the  period  ended
December 31, 1998 in conformity with generally accepted accounting principles.

     The accompanying  financial statements have been prepared assuming that the
company  will  continue  as a  going  concern.  As  discussed  in  Note 2 to the
financial statements,  the company has suffered recurring losses from operations
that raises  substantial doubt about its ability to continue as a going concern.
Management's  plans in regard to these matters are also described in Note 2. The
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

(X)  JAAK OLESK, CPA
signature

Beverly Hills, California

September 14, 1998








                                      F-3
<PAGE>

KELLOGG & ANDELSON
ACCOUNTANCY CORPORATION







Board of Directors
Digital Corporate Profiles, Inc.
(Formerly known as StockNet, Inc.)
Encino, California


                          Independent Auditor's Report


We have audited the accompanying  balance sheet of Digital  Corporate  Profiles,
Inc. (formerly known as StockNet,  Inc.) as of December 31, 1997 and the related
statements of  operations  and  accumulated  deficit and cash flows for the year
then ended.  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  the  test  basis,  evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  evaluating  the  overall  financial  statement
presentation.  We believe  that our audit  provides a  reasonable  basis for our
opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Digital Corporate  Profiles,
Inc. (formerly known as StockNet, Inc.), as of December 31, 1997 and the results
of its operations and its cash flows for the year then ended in conformity  with
generally accepted accounting principles.


/s/ Kellogg & Andelson
signature

April 10, 1998


MEMBERS AMERICAN  INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS
CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS
C.P.A. ASOCIATES OFFICES IN PRINCIPLE CITIES

14724 VENTURA BOULEVARD. SECOND FLOOR, SHERMAN OAKS, CALIFORNIA 91403
PHONE (818) 971-5100 FAX (818) 971- 5155


                                      F - 4
<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                           CONSOLIDATED BALANCE SHEET
                                DECEMBER 31, 1998

                                     ASSETS

CURRENT ASSETS
   Cash (Note 2)                                                    $   515,920
   Marketable equity securities (Notes 2 and 3)                           1,150
   Accounts receivable - trade                                            3,183
                                                             ------------------
         Total Current Assets                                           520,253

PROPERTY AND EQUIPTMENT,
  net of accumulated depreciation (Notes 2 and 5)                        90,552

PROGRAM DEVELOPMENT COSTS,
  net of accumulated amortization (Notes 2 and 6)                        47,755

LONG-TERM ASSETS
   Deferred tax assets (Note 4)                                              --
                                                             ------------------
         Total Assets                                               $   658,560
                                                             ==================

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                                 $    20,912
   Payroll tax liabilities                                               11,339
   Accrued vacation pay                                                   4,635
   Sub-lease deposits                                                     3,000
                                                             ------------------
         Total Current Liabilities                                       39,886

OTHER LIABILITIES
   Deferred rent credit (Note 7)                                         31,667
                                                             ------------------
         Total Liabilities                                               71,553
                                                             ------------------
STOCKHOLDERS' EQUITY
   Preferred  stock,  par value $.01 per  share;  20,000,000
     shares authorized, 0 shares issued and outstanding                      --
   Common  stock,  par  value  $.001 per  share;  80,000,000
     shares   authorized,   6,648,631   shares   issued  and
     outstanding                                                          6,649
   Additional paid-in capital                                         2,965,840
   Accumulated other comprehensive income (loss)                         (7,850)
   Retained (deficit)                                                (2,377,632)
                                                             ------------------
         Total Stockholders' Equity                                     587,007
                                                             ------------------
         Total Liabilities and Stockholders' Equity                 $   658,560
                                                             ==================

The Accompanying  Notes are an Integral Part of the Consolidated  Financial
Statements

                                      F - 5
<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997

                                               1998                   1997
                                       -----------------       ----------------
REVENUE (Notes 2 and 8)
    Investor relations CD-ROM (IRCD)    $       166,564        $        82,770
    Stocknet-USA directories                      5,130                 27,337
                                      -----------------       ----------------
        Total Revenue                           171,694                110,107
                                      -----------------       ----------------
COST OF SALES
    IRCD production costs                        72,972                 59,815
    Others                                       24,008                  3,930
                                      -----------------       ----------------
        Total Cost of Sales                      96,980                 63,745
                                      -----------------       ----------------
        Gross Profit                             74,714                 46,362
                                      -----------------       ----------------
OPERATING EXPENSES
    Auto expense                                 18,282                  7,624
    Depreciation  and amortization (Note 12)     14,717                 17,767
    Commissions                                  17,974                  3,124
    Marketing                                    14,400                 34,358
    Outside services                             43,817                 27,025
    Printing                                     19,824                  5,122
    Professional services                        33,126                 13,916
    Rent (Note 7)                                44,445                 18,000
    Salaries - officers                         121,989                 38,500
    Salaries - other                            113,257                 16,000
    Taxes - payroll                              20,565                 14,740
    Others                                       72,835                 37,444
                                      -----------------       ----------------
        Total Operating Expenses               (535,231)              (233,620)
                                      -----------------       ----------------
        (Loss) from Operations                 (460,517)              (187,258)
OTHER INCOME (EXPENSE)
    Rental income (Note 7)                       23,000                     --
     Other income                                    --                    823
     Interest expense                            (1,831)                (2,814)
                                      -----------------       ----------------
        (Loss) Before Income Taxes             (439,348)              (189,249)

PROVISION FOR INCOME TAX (Note 4)                  (800)                  (800)
                                      -----------------       ----------------
        Net (Loss)                             (440,148)              (190,049)
OTHER COMPREHENSIVE INCOME, net of tax:
  Unrealized holding(loss)arising during period
                   (Notes 2 and 3)               (7,850)                    --
                                      -----------------       ----------------
        Comprehensive Income (Loss)    $       (447,998)       $      (190,049)
                                      =================       ================
(Loss) per common share and common
        share equivalent (Note 2)      $           (.10)       $          (.06)
                                      =================       ================
    The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
                                      F - 6
<PAGE>
                          DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<S>                  <C>           <C>     <C>             <C>        <C>                 <C>          <C>              <C>
                   Preferred Stock             Common Stock            Additional         Other          Retained
                 ------------------ ---------------------------------    Paid-In      Comprehensive      Earnings
                  Shares    Amount         Shares       Amount          Capital          Income         (Deficit)         Total
                 --------- -------- ----------------- ---------------- ------------- ---------------- ----------------- ----------
Balance as
  previously
  reported
  Dec. 31, 1996                            3,135,000    $  3,135   $    197,453                     $     (81,269)  $    119,319
  (Note 9)

Stock sales
  April 8, 1997                              300,000         300         99,700                                          100,000
  (Note 10)

Net(loss)for the                                                                                         (167,504)      (167,504)
  year ended
  Dec. 31, 1997

Prior period
  adjustment
  Dec. 31, 1997 (Note 12)                                                                                 (22,545)       (22,545)
                  -------- ----------   ------------- ---------- --------------  ---------------  ---------------  -------------
Balance at
  Dec. 31, 1997         --         --      3,435,000       3,435        297,153               --         (271,318)        29,270

Stock sales
 Sept. 15, 1998 (Note 10)                  1,759,968       1,760          9,975                                           11,735

Reorganization
 with DIGS, Inc.                              53,663          54      1,666,112                        (1,666,166)             0
 Nov. 9, 1998
 (Note 9)

Stock sales
 Nov. 10, 1998
 (Note 11)                                 1,400,000       1,400        992,600                                          994,000

Net(loss)for the
  year ended
  Dec. 31, 1998                                                                                          (440,148)      (440,148)

Unrealized holding (loss)
  Dec. 31, 1998                                                                           (7,850)                         (7,850)
  (Notes 2 and 3)
                  --------- ----------  ------------  ---------- --------------  ---------------  ---------------   ------------
Balance at
  Dec. 31, 1998         --  $       --     6,648,631  $    6,649   $  2,965,840    $      (7,850)  $   (2,377,632)   $   587,007
                  ========= ========== =============  ========== ==============  ===============  ===============   ============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
                                   Statements

                                      F - 7
<PAGE>

                           DIGS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<S>                                                                              <C>                    <C>
                                                                                 1998                   1997
                                                                       ---------------------  -------------------
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
  Net loss                                                              $        (440,148)     $        (190,049)
  Adjustments to reconcile net (loss) to net cash provided (used)
    by operating activities:
    Amortization and depreciation                                                  31,607                 17,766
    (Increase) in accounts receivable                                              (3,183)                    --
    (Decrease) Increase in current liabilities and accrued expenses                (6,102)                37,199
    Increase in deposits                                                            3,000                     --
    Increase in deferred rent credit                                               31,667                     --
                                                                       -------------------    -------------------
        Net Cash Flows (Used) by Operating Activities                            (383,159)              (135,084)
                                                                       -------------------    -------------------
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
    Acquisition of property and equipment                                         (79,042)               (12,615)
    (Increase) in program development cost                                             --                (39,135)
    Acquisition of marketable equity securities                                    (9,000)                    --
                                                                       -------------------    -------------------

        Net Cash Flows (Used) by Investing Activities                             (88,042)               (51,750)
                                                                      -------------------    -------------------
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
    Proceeds from issuance of long-term debt                                           --                100,200
    Issuance of common stock (Notes 10 and 11)                                  1,005,735                100,000
    (Decrease) in note payable to stockholders                                    (47,321)                    --
    Payment of long-term debt                                                          --                (52,879)
                                                                       -------------------    -------------------
        Net Cash Flows Provided by Financing Activities                           958,414                147,321
                                                                       -------------------    -------------------
NET INCREASE (DECREASE) IN CASH                                                   487,213                (39,513)

CASH AT THE BEGINNING OF THE YEAR                                                  28,707                 68,220
                                                                       -------------------    -------------------
CASH AT THE END OF THE YEAR                                             $         515,920      $          28,707
                                                                       ===================    ===================
ADDITIONAL DISCLOSURES:
    Cash paid during the year for:
    Interest                                                            $           1,831      $           2,814
                                                                       ===================    ===================
    Income Taxes                                                        $             800      $             800
                                                                       ===================    ===================
NON-CASH INVESTING AND FINANCING TRANSACTIONS:
    Common stock issued in exchange for subsidiary's common stock
                                                                        $         312,322      $              --
                                                                       ===================    ===================
</TABLE>
   The Accompanying Notes are an Integral Part of the Consolidated Financial
                                   Statements


                                      F - 8
<PAGE>

                           DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

NOTE 1 - DESCRIPTION OF BUSINESS

     DIGS, Inc. (the Company),  formerly known as Advanced Laser Products, Inc.,
a Delaware  corporation,  was  incorporated  on June 27,  1986 as Skin  Research
Laboratories,  Ltd. On  September  25,  1990,  the  Company  changed its name to
Medipak  Corporation.  On  February  l, 1995,  the  Company  changed its name to
Advanced Laser Products,  Inc. In the late 1980's, the Company was attempting to
enter the medical  receivables  financing  business.  On  November 9, 1998,  the
Company  acquired  Digital  Corporate  Profiles,  Inc.  (DCP)  (see Note 9). DCP
provides complete  multimedia and Internet  communications  solutions for public
companies to proactively tell their story to the worldwide investment community.
DCP produces  investor  relations  CD-ROM (IRCD)  packages for its corporate and
investor relations clients.  DCP also offers the environmental health and safety
CD-ROM (EHSCD) to dynamically tell the environmental, health and safety story to
investors, environmental groups, media and the public.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation
- ----------------------
     The consolidated  financial  statements  include the accounts of DIGS, Inc.
and its wholly owned  subsidiaries,  Digital Corporate  Profiles,  Inc. (DCP), a
California corporation,  and Advanced Laser Products, Inc., a Nevada corporation
(inactive).  All significant  intercompany  accounts and transactions  have been
eliminated in consolidation.

Reclassifications
- -----------------
     Certain  prior year  balances  have been  reclassified  to conform with the
current year presentation.

Cash and Cash Equivalents
- -------------------------
     The Company and its subsidiaries consider cash on hand and cash in banks as
cash and cash equivalents.

     As of December 31, 1998,  the Company funds held in its operating  checking
account exceeded FDIC limit by $415,920.

Marketable Securities
- ---------------------
     Marketable  securities consist of common stock.  Marketable  securities are
stated at market value as determined  by the most recently  traded price of each
security at the balance sheet date, with the unrealized gains and losses, net of
tax, reported as a separate  component of stockholders'  equity.  All marketable
securities  are defined as  available-for-sale  securities  under  provisions of
Statement of Financial  Accounting  Standards ("SFAS") No. 115,  "Accounting for
Certain Investments in Debt and Equity Securities."

Revenue Recognition
- -------------------
     Design and  development  contract  revenues  are billed in equal  one-third
installments  as the  contracts  progress.  All payments are  nonrefundable  and
                                      F - 9
<PAGE>
                          DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue Recognition (continued)
- -------------------------------
revenue is recognized when earned.  Revenue is deemed to be earned when there is
no future performance obligation.  Future performance obligation ceases when the
product is approved by client and shipped.  The average  length of a contract is
approximately two months.

     Annual service contract revenues are recognized when earned. Annual service
contracts  are billed at the  beginning  of each quarter and  recognized  on the
straight-line  basis over the contract life, which is twelve months. The advance
charges are recorded and presented as deferred revenue until earned.

As of December 31, 1998 and 1997, the Company did not have any open contracts.

Earnings Per Share
- ------------------
     Earnings per share are computed on the basis of the weighted average number
of common  shares  outstanding  during the year.  The  weighted  average  shares
outstanding  for the years ended  December 31, 1998 and 1997 were  4,024,105 and
3,355,274,  respectively  (see Note 9).  Fully  diluted  per  share  data is not
presented, as the effects would be antidilutive.

Property and Equipment
- ----------------------
     Depreciation  of equipment and  amortization  of leasehold  improvements is
calculated by the straight-line  and accelerated  methods based on the following
estimated useful lives:
                                                                       Years
                                                                   ------------
         Computer                                                        5
         Furniture and fixtures                                          7
         Organizational costs                                            5
         Computer software                                               5
         Leasehold improvements                                          10

Long-Lived Assets
- -----------------
     In 1998, the Company  adopted SFAS 121,  "Accounting  for the Impairment of
Long-Lived  Assets and for  Long-Lived  Assets to be Disposed of." In accordance
with SFAS 121,  long-lived  assets held and used by the Company are reviewed for
impairment  whenever  events or  changes  in  circumstances  indicated  that the
carrying  amount of an asset  might not be fully  recoverable.  For  purposes of
evaluating the  recoverability of long-lived  assets,  the estimated future cash
flows associated with the asset would be compared to the asset's carrying amount
to determine if a write-down  to market value or  discounted  cash flow value is
required.  The  adoption  of SFAS 121 had no impact on the  Company's  financial
position or on its results of operations.

Program Development Costs
- -------------------------
                                     F - 10
<PAGE>
                          DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

     In March 1998, the Company adopted Statement of Position 98-1,  "Accounting
for  Costs of  Computer  Software  Developed  or  Obtained  for  Internal  Use."
Capitalized  program  development  costs consist of consulting  and  programming
costs. The Company  capitalizes  internally  developed software costs based on a
project-by-project  analysis of each project's  significance  to the Company and
its estimated  useful life.  All  capitalized  software costs are amortized on a
straight-line method over a period of five years.

Income Taxes
- ------------
     This Company has adopted SFAS No. 109, "Accounting for Income Taxes", which
requires a liability  approach to financial  accounting and reporting for income
taxes.  The difference  between the financial  statement and tax bases of assets
and  liabilities  is  determined  annually.   Deferred  income  tax  assets  and
liabilities are computed for those differences that have future tax consequences
using the  currently  enacted  tax laws and rates that  apply to the  periods in
which they are  expected to affect  taxable  income.  Valuation  allowances  are
established,  if necessary, to reduce deferred tax asset accounts to the amounts
that will more  likely than not be  realized.  Income tax expense is the current
tax payable or  refundable  for the period,  plus or minus the net change in the
deferred tax asset and liability accounts.

Use of Estimates
- ----------------
     The  preparation  of financial  statements  in  conformity  with  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions that affect certain  reported amounts and disclosures.  Accordingly,
actual results could differ from those estimates.

Year 2000 Compliance
- --------------------
     In general,  management  believes its  computerized  systems used to report
financial  information are year 2000 compliant.  Management does not foresee any
material year 2000 problems with the Company's vendors,  service  providers,  or
other third parties which affect the Company's financial information.

Name Change
- -----------
     On March 17,  1998,  Digital  changed its name from  Stocknet-USA,  Inc. to
Digital Corporate Profiles, Inc.

     On  October 8, 1998,  the  Company  changed  its name from  Advanced  Laser
Products, Inc. (a Delaware corporation) to DIGS, Inc.

NOTE 3 - MARKETABLE EQUITY SECURITIES

     Cost and fair value of  marketable  equity  securities at December 31, 1998
are as follows:
                                     F - 11
<PAGE>
                          DIGS, INC. AND SUBSIDIARIES
                (FORMERLY KNOWN AS ADVANCED LASER PRODUCTS, INC.)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                DECEMBER 31, 1998

                                      Gross            Gross
                                    Unrealized      Unrealized
                          Cost        Gains           Losses         Fair Value
                       ---------  ---------------  --------------- ------------
Available for Sale
     Equity securities   $ 9,000   $        --     $    (7,850)       $  1,150
                        ========   ===========     ===========        ========

     Gross unrealized losses during the year ended December 31, 1998 amounted to
$7,850.

NOTE 4 - INCOME TAXES

     The  Company has  available  at  December  31,  1998,  net  operating  loss
carryforwards  totaling  $711,466 that may be offset against future taxable.  If
not used, the net operating loss carryforwards will expire as follows:

     Operating Losses
         Year 2011                                            $          81,269
         Year 2012                                                      190,049
         Year 2018                                                      440,148
                                                             ------------------

                                                              $         711,466
                                                             ==================

     The net  deferred  tax  assets,  resulting  from  the net  operating  loss,
included in the  accompanying  balance sheet  include the  following  amounts of
deferred tax assets and liabilities at December 31, 1998:

     Deferred Tax Asset - Current                             $              --
     Deferred Tax Asset - Non-Current                                   224,237
                                                             ------------------
                                                                        224,237
     Valuation allowance                                               (224,237)
                                                             ------------------

                                                              $              --
                                                             ==================

     For the year ended  December 31,  1998,  valuation  allowance  increased by
$156,530.  Due to the  uncertainty of the  realization of the net operating loss
carryforwards,  the Company has  established a valuation  allowance  against the
carryforward benefits in the amount of $224,237.

The components of the provision for income taxes are as follows:
                                                    1998                1997
                                        -------------------  ------------------
Current
     State                                $             800   $             800
                                        ===================  ==================


                                     F - 12
<PAGE>
NOTE 5 - PROPERTY AND EQUIPMENT

     Computer                                                 $          47,032
     Furniture and fixtures                                               4,691
     Organizational costs                                                 4,996
     Computer software                                                   21,180
     Leasehold improvements                                              43,524
                                                              -----------------
                                                                        121,423
     Less accumulated amortization and depreciation                    ( 30,871)
                                                              -----------------
                                                              $          90,552
                                                              =================

     Amortization  and  depreciation  expenses for the years ended  December 31,
1998  and  1997  were  $18,356  and  $12,515,  respectively.   Depreciation  and
amortization expense for the year ended December 31, 1997 included an $835 prior
year  adjustment  (see Note 12).  In 1998,  the Company  allocated  amortization
expense to cost of sales in an amount of $3,639.

NOTE 6 - PROGRAM DEVELOPMENT COSTS

     Program development costs                                $          66,257
     Less accumulated amortization                                      (18,502)
                                                             ------------------
                                                              $          47,755
                                                             ==================

     Amortization  expense  for the years ended  December  31, 1998 and 1997 was
$13,251  and  $5,252,  respectively.  Amortization  expense  for the year  ended
December  31, 1997  included a $4,670  prior year  adjustment  (see Note 12). In
1998, the Company allocated  amortization  expense to cost of sales in an amount
of $13,251.

NOTE 7 - COMMITMENTS

     As of September 1, 1997,  the Company  entered into an operating  lease for
its offices  expiring on August 31, 2007. The lease agreement  contains  certain
terms and  conditions,  which include,  but are not limited to,  property taxes,
insurance,  rent increases,  and repairs and maintenance.  As of August 1, 1998,
the above lease  commitment  was  terminated  at the request of the lessor.  The
Company was discharged of any future lease payment obligation.

     In August 1998, the Company  entered in a new two-year  operating  lease on
its current  premises,  expiring July 31, 2000, for the monthly lease payment of
$7,691.  The  lease  agreement  contains  certain  terms and  conditions,  which
include,  but are not limited to,  property  taxes,  insurance,  rent increases,
repairs and  maintenance.  There is an option to renew the lease for  additional
three and five years.

     The  following is a schedule of future  minimum  rental  payments  required
under the above operating leases as of December 31, 1998:

                                     F - 13
<PAGE>
                Year Ending December
                        31,                                          Amount
              ------------------------                       ------------------
                       1999                                   $          92,295
                       2000                                              53,837
                                                             ------------------
                                                              $         146,132
                                                             ==================

     The above  rental  expenses  will be offset by $21,000 in  sublease  rental
income through July 31, 1999.

     For the years  ended  December  31,  1998 and 1997,  rental  expenses  were
$44,445 and $18,000, respectively. Rentals under the subleases expiring July 31,
2000 amounted to $23,000 in 1998. (See Note 14).

     In 1998, the lessor  compensated  DCP in an amount of $40,000 for moving to
its  current  facility.  As of  December  31,  1998,  the above  amount has been
classified as deferred  rental credit and  amortized on a  straight-line  method
over the term of the lease.  In 1998, the amortized  credit of $8,333 was offset
against rental expense.

     On  March  1,  1998,  DCP  entered  into an  employment  contract  with its
president  that  provides  for an  annual  salary of  $96,000  as well as annual
vacation,  sick pay, bonus,  and  miscellaneous  reimbursement  of out-of-pocket
costs. The contract expires on February 28, 2000.

NOTE 8 - MAJOR CUSTOMERS

     For the years ended  December 31, 1998 and 1997,  sales to three  customers
accounted for  approximately  96% and 87% of total  revenue,  respectively.  The
total revenue received from these customers in 1998 and 1997 was as follows:

                                          For the Years Ended December 31,
                         -------------------------------------------------------
                                       1998                           1997
                         ------------------------        -----------------------

       Customer A         $     29,045     16.9%        $           0       .0%
       Customer B               27,541     16.0                18,325     16.6
       Customer C              107,500     62.6                30,000     27.2
       Customer D                    0        0                47,427     43.0
                       --------------- --------        -------------- --------

                          $    164,086     95.5%        $      95,752     86.8%
                       =============== ========        ============== ========

NOTE 9 - AGREEMENT OF REORGANIZATION

     Effective   November  9,  1998,  in   connection   with  the  agreement  of
reorganization, the Company issued 5,l94,968 shares of its common stock at $.001
par value per share,  in exchange  for all of the  outstanding  common  stock of
Digital  Corporate  Profiles,  Inc.  (DCP),  in which DCP became a wholly  owned
subsidiary  of the  Company  based on a  conversion  ratio  of 3  shares  of the
Company's common stock for each share of DCP's stock. The merger qualified for a
tax-free  reorganization  and has been  accounted for as a  recapitalization  of
Digital Corporate Profiles, Inc. at book value.

                                     F - 14
<PAGE>
NOTE 10 - SALE OF DCP'S STOCK

     In 1997, DCP issued  100,000  shares of its common stock,  an equivalent of
300,000 shares of the Company, no par, to two unrelated individuals at the price
of $1 per share.  The net proceeds were $100,000.  These shares were outstanding
at the time of the reorganization with the Company (see Note 9).

     On March 20, 1998, pursuant to a short-term loan agreement,  DCP's Board of
Directors  authorized  the issuance of 586,656  shares of its common  stock,  an
equivalent  of  1,759,968  shares of the Company,  no par, to various  unrelated
individuals at the price of $.02 per share. All  transactions  were finalized on
September 15, 1998. The net proceeds were $11,734. These shares were outstanding
at the time of the reorganization with the Company (see Note 9).

NOTE 11 - SALE OF DIGS' STOCK

     On November 10, 1998, the Company issued  1,400,000  shares of common stock
through a 504 offering,  which is available to non-reporting and  non-investment
companies  for  offerings  of not more  than  $1,000,000  of  securities  in the
12-month  period  under  section  3(b) of the  (1933)  Securities  Act.  The net
proceeds of the offering  were  $994,000.  The Company used  $600,000 of the net
proceeds to repay outstanding short-term debts.






NOTE 12 - PRIOR PERIOD ADJUSTMENT

     Due to the discovery of unrecorded  liabilities and the  miscalculation  of
depreciation  as of December 31, 1997,  the following  adjustments  were made to
DCP's beginning retained earnings as of January l, 1998:

     Amortization and depreciation                           $           5,505
     Commission                                                          3,124
     Accounting fees                                                    13,916
                                                            ------------------

                                                             $          22,545
                                                            ==================

     The above changes  increased DCP's net loss for the year ended December 31,
1997 from $167,504 to $190,049.

NOTE 13 - LITIGATION

     The  Company is a  defendant  in a suit in which the  plaintiff  is seeking
recovery of approximately  $85,000.  The dispute arose as to the investment made
by the  plaintiff  and  the  non-delivery  of the  shares  by the  Company.  The
Company's  investment  banking  firm agreed to hold the Company and DCP harmless
for any and all damages  including,  but not limited,  to the cost of litigation
resulting  from  this  suit.  Consequently,  no  provision  has been made in the
accounts for any liability from this suit.

NOTE 14 - RELATED PARTY TRANSACTIONS
                                     F - 15
<PAGE>
     For the first eight months of 1997, the Company leased its facilities  from
the majority stockholder. The amount of rent paid to the stockholder during 1997
was $18,000.

     For the year ended  December  31,  1998,  the  Company  paid its  Secretary
approximately  $9,000 for  services in  connection  with the  production  of its
products.

     For the year ended  December  31,  1998,  DCP repaid the  president  of the
Company the  short-term  note in an amount of $47,321.  This amount was on DCP's
books since December 31, 1997.

NOTE 15 - SUBSEQUENT EVENTS

     On March 2,  1999,  DCP paid a  commission  in an amount of $3,124 to U. S.
Stock Transfer for referring  customers during the year ended December 31, 1997.
The  president  of DCP  is  also  a  member  of the  Board  of  Directors  and a
shareholder of U.S. Stock Transfer.

     On January 2, 1999,  pursuant to a 1999 Stock  Incentive  Plan, the Company
granted 287,000 options to the following individuals:

                                                      Exercise      Expire From
                                     Options           Price      Date of Grant
                                  -------------  --------------- ---------------

    Peter Dunn, President              100,000   $         5.50          5 yrs.
    Allen Dunn, Vice President          80,000             5.00         10 yrs.
    Various other individuals          107,000             5.00         10 yrs.
                                 -------------

                                       287,000
                                 =============

























                                     F - 16
<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1999
                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS
     Cash                                                 $         314,918
     Accounts receivable - trade                                    203,011
                                                          ------------------
              Total Current Assets                                  517,929

PROPERTY AND EQUIPTMENT,
  net of accumulated depreciation                                    93,437

PROGRAM DEVELOPMENT COSTS,
  net of accumulated amortization                                    57,943

LONG-TERM ASSETS
     Deferred tax assets                                                 --

                                                          -----------------
              Total Assets                                $         669,309
                                                          =================

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable and accrued expense                 $          17,517
     Sub-lease deposits                                               3,000
                                                          -----------------

              Total Current Liabilities                              20,517
                                                          -----------------
OTHER LIABILITIES
Deferred rent credit                                                 26,666
                                                          -----------------

STOCKHOLDERS' EQUITY                                                 47,183
                                                          -----------------
  Preferred  stock,  par value $.01 per share;  20,000,000
    shares authorized, 0 shares issued and outstanding                   --
  Common  stock,  par value  $.001 per  share;  50,000,000
    shares   authorized,   6,648,631   shares  issued  and
    outstanding                                                       6,649
  Additional paid-in capital                                      2,965,840
  Retained (deficit)                                             (2,377,632)
  Income                                                             27,269
                                                          -----------------

              Total Stockholders' Equity                            622,126
                                                          -----------------

              Total Liabilities and Stockholders' Equity  $         669,309
                                                          =================
      See Accompanying Notes to Unaudited Consolidated Financial Statements
F-17

<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                FOR THE THREE MONTHS PERIOD ENDED MARCH 31, 1999
                                   (UNAUDITED)
                                                      For the Quarter Ended
                                                            March 31,
                                               -------------------------------
                                                       1999            1998
                                              -------------------------------
REVENUE
    CD-ROM                                      $     291,964   $     33,981
    Stocknet-USA directories                                0          3,612
                                                --------------  ------------
        Total Revenue                                 291,964         37,543
                                               --------------   ------------
COST OF SALES
    IRCD production costs                              18,790         12,800
    Others                                              7,219          4,677
                                               --------------   ------------
        Total Cost of Sales                            26,009         17,477
                                               --------------   ------------
        Gross Profit (Loss)                           265,955         20,066
                                               --------------   ------------
OPERATING EXPENSES
     Marketing                                         64,118            315
    Outside services                                   30,500              0
    Payroll expenses                                   66,150         20,664
     Rent Expense                                      19,123          6,300
    Tax - payroll                                       6,456          3,277
    Others                                            136,730         32,249
                                               --------------   ------------
        Total Operating Expenses                      239,836         56,190
                                               --------------   ------------
        Income (Loss) From Operations                  26,119        (36,184)

OTHER INCOME (EXPENSE)
    Rental income                                       9,800              0
    Interest expense                                        0         (1,203)
    Realized (loss) on sale of securities              (7,850)             0
                                               --------------   ------------
         Income (Loss) Before Taxes                    28,069        (37,387)

(PROVISION) FOR INCOME TAX                               (800)             0
                                               --------------   ------------
         Net Income (Loss)                             27,269         (1,203)

OTHER COMPREHENSIVE INCOME, net of tax:
    Add reclassification adjustment for (loss)
      included in net income                            7,850              0
                                               --------------   ------------
         Comprehensive Income (Loss)            $      35,119        (37,387)
                                               ==============   ============
(Loss) per common share and common share equivalent
                                                $        0.01   $      (0.01)
                                               ==============   ============
Weighted average common shares outstanding          5,272,280      3,435,000
                                               ==============   ============
      See Accompanying Notes to Unaudited Consolidated Financial Statements
F-18

<PAGE>
                           DIGS, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998


<TABLE>
<S>                                                                            <C>                    <C>
                                                                               1999                   1998
                                                                       ---------------------  -------------------
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES:
  Net income loss                                                       $          27,269      $         (37,327)
  Adjustments to reconcile net (loss) to net cash provided (used)
    by operating activities:
    Amortization and depreciation                                                   7,902                  7,902
    (Increase) in accounts receivable                                            (199,828)               (26,785)
    (Decrease) Increase in current liabilities and accrued expenses               (19,369)                (3,790)
     Realized loss on sale of marketable equity securities                          7,850                     --
     (Decrease) in deferred rent credit                                            (5,001)
                                                                       -------------------    -------------------

        Net Cash Flows (Used) by Operating Activities                            (181,177)               (60,000)
                                                                       -------------------    -------------------

CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES:
    Acquisition of property and equipment                                          (7,475)                (1,248)
    (Increase) in program development cost                                        (13,500)                    --
    Sale of marketable equity securities                                            1,150                     --
                                                                       -------------------    -------------------

        Net Cash Flows (Used ) by Investing Activities                            (19,825)                (1,248)
                                                                       -------------------    -------------------

CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES:
    Proceeds from issuance of short-term debts                                         --                 71,085
                                                                       -------------------    -------------------

        Net Cash Flows Provided by Financing Activities                                --                 71,085
                                                                       -------------------    -------------------

NET INCREASE (DECREASE) IN CASH                                                  (201,002)                 9,837

CASH AT THE BEGINNING OF THE YEAR                                                 515,920                 28,707
                                                                       -------------------    -------------------

CASH AT THE END OF THE PERIODS                                          $         314,918      $          38,544
                                                                       ===================    ===================

ADDITIONAL DISCLOSURES:
    Interest paid                                                       $              --      $           1,203
                                                                       ===================    ===================

    Income taxes paid                                                   $             800      $              --
                                                                       ===================    ===================

NON-CASH INVESTING AND FINANCING TRANSACTIONS
     Realized (loss) on sale of marketable equity securities            $          (7,850 )   $              --
                                                                       -------------------    ------------------
</TABLE>
      See Accompanying Notes to Unaudited Consolidated Financial Statements
F-19

<PAGE>

                           DIGS, INC. AND SUBSIDIARIES
                              SELECTED INFORMATION

     Substantially All Disclosures Required By Generally Accepted Accounting
             Principles are Not Included MARCH 31, 1999 (UNAUDITED)





NOTE 1 - MANAGEMENT'S STATEMENT

     In the  opinion of the  management  the  accompanying  unaudited  financial
statements  contain all  adjustments  (all of which are normal and  recurring in
nature)  necessary to present  fairly the financial  position of DIGS,  Inc. and
subsidiaries  (the Company) at March 31, 1999, and the results of operations and
the cash flows for the quarter  periods ended March 31, 1999 and 1998. The notes
to the  Consolidated  Financial  Statements  which are incorporated by reference
into the 1998 Form 10-SK should be read in conjunction  with these  Consolidated
Financial Statements.

NOTE 2 - AGREEMENT OF REORGANIZATION

     Effective   November  9,  1998,  in   connection   with  the  agreement  of
reorganization, the Company issued 5,l94,968 shares of its common stock at $.001
par value per share,  in exchange  for all of the  outstanding  common  stock of
Digital  Corporate  Profiles,  Inc.  (DCP),  in which DCP became a wholly  owned
subsidiary  of the  Company  based on a  conversion  ratio  of 3  shares  of the
Company's common stock for each share of DCP's stock. The merger qualified for a
tax-free  reorganization  and has been  accounted for as a  recapitalization  of
Digital Corporate Profiles, Inc. at book value.

     For periods preceding the merger,  there were no intercompany  transactions
that required  elimination from the combined  consolidated results of operations
and there were no adjustments  necessary to conform the accounting  practices of
the two companies.



















    See Accompanying Notes to Unaudited Consolidated Financial Statements
F-20

<PAGE>





EXHIBIT 23


Subsidiaries of Registrant



       Name                                           State of Incorporation
       ----                                           ----------------------

       Advanced Laser Products, Inc.                         Nevada











































<PAGE>

<TABLE> <S> <C>

<ARTICLE>        5


<S>                                   <C>                      <C>
<PERIOD-TYPE>                         3-MOS                    12-MOS
<FISCAL-YEAR-END>                     DEC-31-1999              DEC-31-1998
<PERIOD-END>                          MAR-31-1999              DEC-31-1998
<CASH>                                    314,918                  515,920
<SECURITIES>                                    0                    1,150
<RECEIVABLES>                             203,011                    3,183
<ALLOWANCES>                                    0                        0
<INVENTORY>                                     0                        0
<CURRENT-ASSETS>                          517,929                  520,253
<PP&E>                                    208,655                  187,680
<DEPRECIATION>                             57,275                   49,373
<TOTAL-ASSETS>                            669,309                  658,560
<CURRENT-LIABILITIES>                      20,517                   39,886
<BONDS>                                         0                        0
                           0                        0
                                     0                        0
<COMMON>                                    6,649                    6,649
<OTHER-SE>                                615,777                  580,358
<TOTAL-LIABILITY-AND-EQUITY>              669,309                  658,560
<SALES>                                   291,964                  171,694
<TOTAL-REVENUES>                          291,964                  171,694
<CGS>                                      26,009                   96,980
<TOTAL-COSTS>                             265,845                  632,211
<OTHER-EXPENSES>                                0                        0
<LOSS-PROVISION>                            7,850                        0
<INTEREST-EXPENSE>                              0                    1,831
<INCOME-PRETAX>                            28,069                 (439,348)
<INCOME-TAX>                                  800                      800
<INCOME-CONTINUING>                        27,269                 (440,148)
<DISCONTINUED>                                  0                        0
<EXTRAORDINARY>                                 0                        0
<CHANGES>                                       0                        0
<NET-INCOME>                               27,269                 (440,148)
<EPS-BASIC>                                0.01                    (0.10)
<EPS-DILUTED>                                0.00                     0.00


</TABLE>


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