SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
|_| Preliminary Proxy Statement
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
Global Entertainment Holdings/Equities, Inc.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1. Amount Previously Paid: -----------------------------------------------
2. Form, Schedule or Registration Statement No.: -------------------------
3. Filing Party: ---------------------------------------------------------
4. Date Filed: -----------------------------------------------------------
1.
<PAGE>
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
6235 South 90th Street
Omaha, NE 68127
--------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on August 30, 2000
-------------------------
August 14, 2000
Pursuant to a vote of the Board of Directors, an Annual Meeting of
Shareholders of Global Entertainment Holdings/Equities, Inc. is hereby called to
be held on August 30, 2000 at 10:00 a.m. at Harvey's Hotel and Casino, at 1
Harveys Blvd., Council Bluffs, IA 51501 for the following purposes:
1. To elect the Board of Directors for the ensuing year;
2. To ratify and approve the selection by the Board of Directors of
Clyde Bailey, P.C. as the Company's independent accountants for
the current year; and
3. To transact such other business as may properly come before the
meeting or any adjournment of the meeting.
All shareholders are invited to attend the meeting, although only
shareholders of record at the close of business on July 14, 2000 will be
entitled to notice of and to vote at the meeting or any adjournment thereof.
By order of the Board of Directors
David Wintroub, President
Those who cannot attend the meeting are urged to sign, date, and otherwise
complete the enclosed Proxy and return it promptly in the enclosed envelope. Any
shareholder giving a proxy has the right to revoke it any time before it is
voted.
Omaha, Nebraska
August 14, 2000
<PAGE>
GLOBAL ENTERTAINMENT HOLDINGS/EQUITIES, INC.
6235 South 90th Street
Omaha, NE 68127
--------------------------
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To Be Held on August 30, 2000
-------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Global Entertainment Holdings/Equities,
Inc., a Colorado Corporation (the "Company"), for use at the Annual Meeting of
Shareholders of the Company to be held at Harvey's Hotel and Casino, at 1
Harveys Blvd., Council Bluffs, IA 51501, at 10:00 a.m. on August 30, 2000, and
at any and all adjournments of such meeting.
If the enclosed proxy is properly executed and returned in time to be voted
upon at the meeting, the shares represented will be voted in accordance with the
instructions contained therein. Executed proxies that contain no instructions
will be voted for management's proposal; for each nominated Director named on
this proxy, for the CPA named on this proxy, and each other proposal therein
specified, unless a contrary choice is specified.
Shareholders who execute proxies for the Annual Meeting may revoke their
proxies at any time prior to their exercise, buy delivering written notice of
revocation to the Company, by delivering a duly executed proxy bearing a later
date, or by attending the meeting and voting in person.
The cost of the meeting, including the cost of preparing and mailing the
Proxy Statement and Proxy, will be borne by the Company. The Company may, in
addition, use the services of its directors, officers and employees to solicit
proxies, personally or by telephone, but at no additional salary or
compensation. The Company will also request banks, brokers and others who hold
shares of the Company in nominee names, to distribute proxy soliciting materials
to beneficial owners and will reimburse such banks and brokers for reasonable
out of pocket expenses which they may incur in so doing.
The Company's executive offices are located at 6235 South 90th Street,
Omaha, Nebraska 68127.
DESCRIPTION OF BUSINESS
This report on Form 10-KSB contains forward-looking statements that involve
risks and uncertainties. Global Entertainment Holdings/Equities, Inc.'s
("Global") actual results may differ significantly from the results discussed in
the forward-looking statements.
Forward-Looking Information-General
<PAGE>
This report contains a number of forward-looking statements, which reflect
Global's current views with respect to future events and financial performance
including statements regarding Global's projections, and the internet gaming
industry. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates", "believes", "expects", "intends", "future", "plans", "targets"
and similar expressions identify forward-looking statements. Readers are
cautioned to not place undue reliance on the forward-looking statements
contained herein, which speak only as of the date hereof Global undertakes no
obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that may arise after the date hereof.
Additionally, these statements are based on certain assumptions that may
prove to be erroneous and are subject to certain risks including, but not
limited to, Global's dependence on limited cash resources, and its dependence on
certain key personnel within Global. Accordingly, actual results may differ,
possibly materially, from the predictions contained herein.
1:1 Company Description
Global Entertainment Holdings/Equities, Inc. (the "Company") was
incorporated in the State of Colorado as Masadi Resources, Inc. ("Masadi"), on
July 10, 1997. On February 10, 1998, Masadi filed with the State of Colorado,
Articles of Amendment to its Articles of Incorporation and changed its name to
International Beverage Corporation. On August 27, 1998, pursuant to a Merger
Agreement, International Beverage Corporation, merged into Global Entertainment
Holdings/Equities, Inc. (Global). International Beverage Corporation became the
surviving corporation and on August 27, 1998, changed its name to Global
Entertainment Holdings/Equities, Inc. which is now known as the Company.
On June 30, 1998, Global entered into an Agreement of Purchase and Sale
whereby Global acquired 100% of the issued and outstanding shares of Interactive
Gaming and Wagering NV ("IGW"), a Netherlands Antilles Corporation and is
currently a wholly owned subsidiary of the Company. Interactive Gaming and
Wagering, was incorporated in Curacao, Netherlands, Antilles on May 19, 1997,
and is engaged in the business of conception of software programs for the gaming
and wagering industry.
Masadi's purpose for incorporation was to pursue its business activity in
the oil and gas exploration and production business within the geographical
boundaries of the North American Continent with emphasis on the Continental
United States. On November 15, 1997, Masadi's shareholders voted to change its
business direction and pursue opportunities in the Beverage Industry and on
February 10, 1998, changed its name to International Beverage Corporation.
Pursuant to the change in business direction, International Beverage Corporation
entered into a Purchase and Sale Agreement with Beverage Source Worldwide, Inc.
whereby Beverage Source Worldwide, Inc. became a wholly owned subsidiary. The
Purchase and Sale Agreement with Beverage Source Worldwide, Inc. was
subsequently rescinded for non-performance by International Beverage Corporation
and Beverage Source Worldwide, Inc.
<PAGE>
International Beverage Corporation began trading on the OTC Bulletin Board
on March 18, 1998, under the symbol "IBVC". The Company, to better reflect its
name change to Global Entertainment Holdings/Equities, Inc., changed its trading
symbol on September 9, 1998, to "GAMM".
The Company's stock is presently traded on the Over The Counter Bulletin
Board under the trading symbol "GAMM". The Company is a holding company that
concentrates its efforts in the area of Internet related companies, with special
attention to the online gaming software sector. The Company provides financial
advisory services including; mergers and acquisitions , capital investment and
general investment banking services to emerging Internet related companies.
Currently, the Company owns 100% of the issued and outstanding stock of
Interactive Gaming and Wagering (IGW) and as of the September 20, 1999, acquired
100% of the issued and outstanding stock of Prevail Online, Inc. a Colorado
Corporation with principal offices in San Francisco, CA that provides Web
publishing related services.
Interactive-Gaming & Wagering N.V.
Interactive Gaming & Wagering, NV (IGW) is engaged in the development,
licensing and hosting of proprietary Internet and telephony based gaming
software. IGW's corporate Web site is www.interactive-gaming.com. IGW offers a
turnkey service solution to its software licensees, including gaming license
consulting, facilities services, online casino and sportsbook software, 800 call
center sportsbook software, training, application hosting services, web site
design, development and hosting, and internet telecommunications services.
At June 30, 1998, IGW completed the testing and implementation of its
proprietary online sportsbook software through a licensee, www.VIPsports.com. As
a result, www.VIPsports.com has experienced significant business growth which
can be directly attributed to the successful testing and implementation program
provided by IGW.
As of the date of this filing, IGW has entered into licensing contracts
with several software licensees for its gaming software. The following is a
current list of the Company's eleven fully operational software licensee Web
sites.
1. www.vipsports.com
2. www.vipcasinos.com
3. www.5cardcharlie.com
4. www.fairdealsports.com
5. www.fairdealcasino.com
6. www.gamedaycasino.com
7. www.gamedaysportsbook.com
8. www.wssbcasino.com
9 www.wallstreetsuperbook.com
10. www.fivecardcharlie.com
1.
<PAGE>
11. www.vipsoccer.com
Prevail Online, Inc.
On September 20, 1999, the Company completed an agreement of purchase and
sale for the purchase and acquisition of 100% of the issued and outstanding
stock of Prevail Online, Inc., a Colorado Corporation with its principle office
in San Francisco, CA. Pursuant to the terms of the acquisition, the Company
conducted a tax-free exchange of 163,500 shares of its common stock for 100 % of
the issued and outstanding shares of Prevail Online. Prevail Online will operate
as a wholly owned subsidiary of Global.
Prevail Online operates three independent online services that attract
consumers with a combination of highly focused content and superior marketing
techniques which has made its sites among the most popular on the Web. Prevail
Online's services deliver gaming directory information through its Website
www.wheretobet.com, real time sports gaming news and statistics through
www.thesportsdaily.com, and mainstream online wagering information via
www.netbet.org.
1:2 Products and Services
Through its wholly owned subsidiaries, the Company develops and provides
its software products, Web publishing services and Web hosting services to the
independent licensees. To its licensees, the Company provides:
Set-up
1. Assistance in procuring gaming license with the host government.
2. Concept development and design of virtual casino "theme."
3. Customization and system integration.
4. Hosting of servers.
5. Assistance in establishing e-commerce systems.
Software Features
1. Real-time functionality.
2. Advanced graphical user interface for enhanced visual and audio effects.
3. Preservation and analysis of all gaming data, including win/loss, game
preferences and monitoring of player activities.
4. Accurate reporting of return on advertising Investment to optimize marketing
resources
5. Provision of credit card processing e-commerce and other banking services.
Java Casino Games
<PAGE>
IGW's Java games utilize the Java programming language to provide easily
accessible online games to the Company's licensees' Web sites. The
cross-platform nature of Java makes it possible to play these games on all major
operating systems, online, with no download requirements. IGW software currently
provides four (4) casino style Java Games (Videopoker, Blackjack, Roulette,
Slots) for players to wager on, with several additional Java games projected to
be released throughout FY2000.
1:3 Growth Strategy
The development of telecommunications and the emergence of new technology
have created opportunities to develop new, efficient and secure ways to deliver
information and entertainment to consumers. The Company intends to capitalize on
its technological niche and expertise to become a world leader in online gaming
software systems. The Company's key strategic objectives are to: (i) continue
supporting core holdings of Internet gaming software development and licensing;
(ii) expand to other Internet markets, through acquisitions in the content and
publishing markets; and (iii) pursue opportunities in e-commerce through the
Company's wholly owned subsidiary, IGW. The Company will develop the software to
integrate the banking operation for e-commerce. The Company will continue to
develop software that enables e-commerce through their licensee's web sites as
part of the Company's software solution. The Company proposes to seek a joint
venture partner to facilitate credit card transactions, for their licensee web
sites. However, currently no acquisitions or joint ventures have been
identified.
The Company intends to implement its business strategy by: (i) continuing
to enhance its technology; (ii) seeking key strategic alliances with companies
that are in the Internet/Technology/Software based industries, that are
technologically advanced, currently solvent, beyond the development stage with
positive operating cash flows, have a seasoned management team, and are
efficiently staffed; and; (iii) developing brand name recognition through cross
marketing and merchandising. Currently, no acquisitions or strategic alliances
have been identified.
Expand Market Integration
<PAGE>
The Company intends to capitalize on its technological niche and early
market entry to capture a significant share of the Internet gaming software
market. The Company believes that because of the level of satisfaction from its
clients and the history of IGW in the industry as a leader (co-founding member
and board member of the Interactive Gaming Council), it has established brand
recognition. The Company believes that it has accomplished brand recognition
through: (i) the development of eleven (11) licensed web sites using its ITSCS
(Internet & Telephony Sportsbook & Casino System); (ii) creating market exposure
over the Internet; (iii) developing and licensing software to one of the first
operating sportsbooks on the Web, www.VIPsports.com.; (iv) its attendance and
exposure at gaming and software expositions; and (v) favorable reviews from both
financial and industry publications and sources (i.e. CNNfn, USA Today, multiple
national radio interviews, television exposure, Channel 22 Business News, CNN
Financial, Today's Investor, Internet interviews, Internet Banner Advertising,
and other Internet Advertising.
Maintain High Quality, Innovative Products and Services
The Company is focused on designing a gaming experience by using leading
edge technology. Additionally, licensees may benefit from other methods of
revenue generation, which traditional gaming machines cannot offer, such as
advertising, data collection and user analysis.
Continue Technology Development
The Company has achieved its technological niche through the development of
its proprietary software. Furthermore, the Company has made a strong commitment
to continue research and development activities to enhance its software and to
develop new applications for new markets. The Company will continue to use such
methods to protect its technology and moderate competition from current and
future entrants.
Sales and Marketing Strategy
The Company's sales and marketing functions are conducted through Curacao
and San Francisco offices. As of September 20, 1999, the sales and marketing
team was comprised of three (3) sales and marketing professionals. The managers
hired to date are experienced professionals with in-depth knowledge of Internet
software and the gaming industries.
The Company is committed to maintaining a customer-driven organization and
continues to aggressively recruit and train additional staff for the marketing
department to assist the Company in achieving its sales goals.
Competitive Environment
The Company estimates that there are currently over 30 online gaming
software developers and over 650 gaming web sites. Competition in the gaming
software development and licensing markets comes from five primary segments:
1. Traditional Land-based Gaming
2. Internet Gaming
3. Electronic Gaming
4. Internet Service Providers
5. Other Entertainment / Media
<PAGE>
The Company estimates the following list of companies represent the major
competition in the licensing of Internet gaming software: Starnet
Communications, Microgaming, Atlantic International Entertainment, Ltd.,
Chartwell Technology, Inc., Cryptologic, Inc. and Boss Media AB.
1:4 Technology
Redundant High-Speed Network
IGW has constructed a transaction-oriented server hosting facility in
Curacao. Tightly integrated with the Internet connection, the server farm offers
a dedicated, fully duplexed gateway into the global Internet. Taking advantage
of newly implemented connectivity hardware and security software, the facility
guarantees an unprecedented level of performance and availability. The system is
composed of high speed Dell and Compaq servers and top of the line Cisco and
Nokia networking equipment. The mission critical system components, such as the
database and web servers, are fully fault tolerant, load-balanced, mirrored and
redundant, which protects the licensees from failures due to malfunctioning
equipment.
The highly scalable nature of IGW's system design makes provisioning for
additional capacity seamless. The network monitoring and security staff tracks
the system at all times to maintain constant awareness of the system's operating
parameters. New equipment and bandwidth will be procured as necessary to
compensate for increased activity or anticipated peak demands.
The high quality Internet connection at IGW's network facility in Curacao
is provided by Antelecom and Teleglobe and contributes to responsive game play
and uptime for the licensees. Each gaming transaction is stored on a database
that is replicated for redundancy and backed up online to prevent data loss.
In addition to IGW's digital network serving gaming content for its
licensees, the Company uses a state of the art proprietary e-commerce solution
that provides a high level of security and integrity for transmission of funds
over the Internet. IGW uses Secure Sockets Layer (SSL) to encrypt and protect
transmission of sensitive data like credit card information.
DIRECTORS & EXECUTIVE OFFICERS
Name Age Position
---- --- --------
Bryan Abboud 29 Director, Chairman/Treasurer
David S. Wintroub 33 Director, President/CEO
R. Scott Van Kirk 38 Director
Donald J. Lisa 65 Director
Thomas Hawkins 48 Secretary
<PAGE>
All Directors of the Company hold office until the next annual meeting
of shareholders of the Company or until successors are duly elected and
qualified.
The Officers of the Company are elected by the Board of Directors at
the first meeting after each annual meeting of the Company's shareholders, and
hold office until their death, or until they shall resign or have been removed.
Each outside Director receives no compensation for attending meetings
of the Board of Directors and all Directors are reimbursed for out-of-pocket
expenses incurred in connection with the Company's business.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's common stock currently trades on the NASD Pink Sheets
under the symbol "GAMM." The Company's high and low trading price and volume for
the past six (6) quarters as "GAMM," and during the period the Company traded
under the symbol "GAMME" from November 5, 1999 to December 2, 1999 during the
4th Quarter, 1999, are listed in the following table:
Quarterly GAMM Stock Trading Summary
------------------ --------------- --------------- ------------ ----------------
Quarter High Low Close Volume
3rd Quarter 1998 $6.50 $5.0625 $5.375 10,400
4th Quarter 1999 4.00 1.125 1.50 80,200
GAMME
4th Quarter 1999 2.625 1.3125 1.50 50,100
1st Quarter, 2000 5.00 1.00 1.5625 255,900
2nd Quarter, 2000 2.00 1.00 1.35 57,700
----------------- --------------- --------------- ------------ ----------------
* 3:1 forward stock split executed on August 23, 1999.
<PAGE>
As of the date of this filing, the Company has outstanding options to
purchase 700,500 shares of its $0.001 par value common stock as follows;
Date of Option Grant Options Price Option Expiration Date
Dec. 31, 1998 225,000 $1.50 Dec. 31, 2001
Dec. 31, 1999 422,000 $1.25 Dec. 31, 2002
Dec. 31, 1999 5,300 $1.50 Dec. 31, 2002
Dec. 31, 1999 48,200 $1.67 Dec. 31, 2002
As of December 31, 1999, there were 9,194,271.86 shares of restricted
Common Stock, pursuant to Rule 144 under the Securities Act of 1933, as amended
(the "Securities Act").
Holders of Record:
As of December 31, 1999, there were one hundred thirty two (132)
holders of record of the Company's Common Stock, and the number of beneficial
holders was approximately four (4).
Dividends
Since inception, the Company has never paid dividends on its common
stock and it does not expect to do so at any time in the future.
<PAGE>
Independent Auditors Report
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple #300
Salt Lake City, Utah 84111
(801) 521-2392
Board of Directors
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
I have audited the accompanying consolidated balance sheets of Global
Entertainment Holdings/Equities, Inc., & Subsidiaries, as of December 31, 1999,
1998 and 1997, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the years then ended December 31, 1999,
1998 and 1997. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit. As described in Note #18, to the
financial statements, subsequent to the issuance of the report the financial
statements of the Company for the year ended December 31, 1999 were restated.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. 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 the significant estimates made by
management, as well as evaluating the overall financial statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned consolidated financial statements present
fairly, in all material respects, the financial position of Global Entertainment
Holdings/Equities, Inc., & Subsidiaries, as of December 31, 1999, 1998 and 1997,
and the consolidated results of their operations and their cash flows for the
years ended December 31, 1999, 1998 and 1997, in conformity with generally
accepted accounting principles.
/s/Darrell Schvaneveldt
Salt Lake City, Utah
March 10, 2000
Except as to Note #18 which is May 10, 2000
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Consolidated Balance Sheets
<CAPTION>
December 31, 1999, 1998 and 1997
December December December
31, 1999 31, 1998 31, 1997
Assets
Current Assets
<S> <C> <C> <C> >
Cash & Cash Equivalents (Note #2) $ 236,184 $ 122,422 $ 129,476
Accounts Receivable (Note #12) Net of
Provision for Bad Debts of $71,800 1,511,226 962,249 -0-
Prepaid Expenses 67,941 3,484 -0-
Loan Receivable - Related Party -0- -0- 125,000
Interest Receivable 2,632 -0- -0-
Employee Accounts Receivable 51,312 -0- -0-
Total Current Assets 1,869,295 1,088,155 254,476
Property & Equipment (Note #6)
Automobile - Net 59,484 -0- -0-
Package Software - Net 108,951 4,859 -0-
Office Improvements - Net 21,696 1,970 -0-
Computer Equipment - Net 590,819 40,664 -0-
Furniture & Fixtures - Net 121,288 15,430 -0-
Websites (Note #9) 737,897 -0- -0-
Total Property & Equipment 1,640,135 62,923 -0-
Other Assets
Security Deposit 17,220 13,626 -0-
Software Design & Development - Net (Note #4) 117,975 216,798 -0-
Receivable BSW - Net (Note #3) -0- 50,000 200,000
Investment - BSW (Note #3) -0- -0- 1,375
Total Other Assets 135,195 280,424 201,375
Total Assets $3,644,625 $1,431,502 $ 455,851
</TABLE>
F-1
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Consolidated Balance Sheets -Continued-
December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
Liabilities & Stockholders' Equity
Current Liabilities
<S> <C> <C> <C>
Accounts Payable $ 304,021 $ 23,844 -0-
Accrued Expenses 13,471 -0- -0-
Accrued Interest 40,170 12,565 -0-
Accrued Wages 49,930 17,800 -0-
Customer Deposits 35,880 -0- -0-
Current Portion - Capital Leases (Note #7) 31,285 9,558 -0-
Current Portion - Notes Payable (Note#7) 240,000 165,000 250,000
Note Payable - Line of Credit 35,693 -0- -0-
Income Taxes Payable 11,571 -0- -0-
Total Current Liabilities 762,021 228,767 250,000
Long Term Liabilities
Notes Payable (Note #7) 565,000 215,000 -0-
Less Current Portion (Note #7) (240,000) (165,000) -0-
Total Long Term Notes Payable 325,000 50,000 -0-
Capital Lease Payable (Note #7) 35,395 3,468 -0-
Net Long Term Liabilities 360,395 53,468 -0-
Total Liabilities 1,122,416 282,235 250,000
Stockholders' Equity
Preferred Stock, 25,000,000 Shares Authorized,
at $.001 Par Value, None Issued
Common Stock 100,000,000 Shares Authorized,
Par Value of $.001; 9,940,353; 9,455,682 &
891,963 Shares Issued & Outstanding
Respectively Retroactively Restated 9,940 9,456 891
Paid In Capital 2,854,948 1,450,313 236,883
Retained Earnings (Deficit) (342,679) (310,502) (31,923)
Net Stockholders' Equity 2,522,209 1,149,267 205,851
Total Liabilities &
Stockholders' Equity $3,644,625 $1,431,502 $ 455,851
</TABLE>
F-2
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Consolidated Statement of Operations
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Revenues
License Fees $ 445,000 $ 150,000 $ -0-
Royalty Fees 1,983,773 812,018 -0-
Hosting Income 159,090 18,545 -0-
Advertising Revenues 233,736 -0- -0-
Total Revenues 2,821,599 980,563 -0-
Expenses
Bad Debt Provision 71,800 -0- -0-
Uncollectible Fees Written Off 180,030 -0- -0-
Amortization 191,696 110,592 -0-
Depreciation 233,857 35,299 -0-
Rents 225,593 78,855 1,041
Professional Fees 138,058 61,864 30,342
Travel 57,904 47,551 -0-
Financial & Investor Relations 149,829 -0- -0-
Administrative Expenses 461,797 153,103 1,865
Consulting 749,334 148,116 -0-
Advertising 72,906 -0- -0-
Write Off Impaired Asset (Note #3) -0- 607,844 -0-
Litigation Settlement (Note #15) 75,000 -0- -0-
Bandwidth Expenses 125,091 -0- -0-
Options Issued Expense (Note #5) 68,625 -0- -0-
Total Expenses 2,801,520 1,243,224 32,948
Income (Loss) from Operations 20,079 (262,661) (32,948)
Other Income (Expenses)
Interest (Expense) (59,353) (21,220) (500)
Interest Income 3,928 782 1,525
Forgiveness of Debt -0- 4,520 -0-
Total Other Income (Expenses) (55,425) (15,918) 1,025
</TABLE>
F-3
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Consolidated Statement of Operations -Continued-
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Income (Loss) Before Taxes (20,606) (278,579) (31,923)
Provisions for Income Tax (Note #10) (11,571) -0- -0-
Net (Loss) $ (32,177) $ (278,579) $ (31,923)
Basic Earnings (Loss) Per Share $ N/A $ (.03) $ (.04)
Diluted Earnings Per Share $ N/A N/A N/A
Weighted Average Shares Outstanding
Retroactively Restated 10,338,897 7,855,533 799,998
Weighted Average Shares & Options
Outstanding 10,338,897 7,855,533 799,998
</TABLE>
F-4
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
Balance, July 10, 1997 -0- $ -0- $ -0- $ -0-
09/11/97
Shares Issued to Incorporators
for Cash at $.002 Per Share
Retroactively Restated 257,142 257 343
09/11/97
Shares Issued for Cash at $0.23
Per Share Retroactively Restated 621,429 621 134,379
12/31/97
Shares Issued for Cash at $9.33
Per Share Retroactively Restated 13,392 13 124,987
Cost of Shares Sold (22,826)
Net Loss for the Year Ended
December 31, 1997 (31,923)
Balance, December 31, 1997 891,963 891 236,883 (31,923)
02/27/98
Shares Issued for Cash at $9.33
Per Shares Retroactively Restated 40,821 41 380,959
02/27/98
Shares Issued to Directors at
$0.001 Per Share 5,694 6
02/27/98
Shares Issued Pursuant to
Agreement of Purchase & Sale
of Beverage Worldwide, Inc. 589,287 589
03/11/98
Shares Issued to Directors at
$0.001 Per Share 4,287 4
</TABLE>
F-5
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
03/26/98
Shares Issued for Cash at $9.33
Per Share Retroactively Restated 14,142 14 131,986
04/06/98
Shares Issued to Incorporators of
Global Entertainment Holdings, Inc.
(Private Corporation) $0.0003 Per Share 1,423,500 1,423 (949)
04/06/98
Shares Issued for Directors Fees at
$0.0003 Per Share Retroactively Restated 105,674 106 (77)
06/25/98
Shares Issued for Cash at $0.22 Per
Share Retroactively Restated 720,000 720 159,280
06/30/98
Shares Issued to Acquire Interactive
Gaming & Wagering, Inc., NV, by
Global Entertainment Holdings/Equities,
Inc., (Private Corporation) at $0.029
Per Share 5,134,500 5,135 143,752
08/13/98
Shares Canceled for Rescission of
Beverage Source Worldwide, Inc. (589,287) (589)
08/27/98
Shares Issued for Programming Services
at $0.25 Per Share Retroactively Restated 888,696 889 221,475
08/27/98
Shares Issued for Cash at $0.61 Per Share
Retroactively Restated 107,670 108 65,695
08/28/98
Shares Issued for Legal Services at $0.33
Per Share Subsequent to Reverse Merger
Takeover Retroactively Restated 8,160 8 2,715
</TABLE>
F-6
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
11/03/98
Shares Issued for Cash at $0.42 Per
Share Retroactively Restated 45,000 45 18,705
12/14/98
Shares Issued for Services at $0.33
Per Share Retroactively Restated 15,000 15 4,940
12/30/98
Shares Issued for Cash at $1.67 Per
Share Retroactively Restated 51,000 51 84,949
Rounding Adjustment (425)
Net Loss for the Year Ended
December 31, 1998 (278,579)
Balance, December 31, 1998 9,455,682 9,456 1,450,313 (310,502)
01/18/99
Shares Returned & Canceled (22,839) (23) 23
03/05/99
Shares Issued for Consulting
Fees at $3.00 Per Share 9,000 9 26,991
04/19/99
Shares Issued for Cash at $2.25
Per Share 30,000 30 67,470
04/19/99
Shares Issued for Cash at $2.50
Per Share 9,000 9 22,491
04/19/99
Shares Issued for Cash at $4.66
Per Share 13,497 13 62,972
</TABLE>
F-7
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
04/20/99
Shares Returned by Terminated
Employee (9,999) (10) 10
05/10/99
Shares Issued for Cash at $2.66
Per Share 89,100 89 237,511
06/17/99
Shares Issued for Prepaid Public
Relations at $3.33 Per Share 39,000 39 129,944
06/21/99
Shares Issued for Note Payable
Incentive at $0.375 Per Share 6,000 6 2,244
06/25/99
Shares Issued for Consulting
Services at $3.33 Per Share 3,000 3 9,997
08/19/99
Shares Issued for Furniture at $3.33
Per Share Retroactively Restated 690 2,300
08/19/99
Shares Issued for Legal Services at
$3.33 Per Share Services Retroactively
Restated 6,000 6 19,996
08/19/99
Shares Issued for Cash at $3.25
Per Share Retroactively Restated 30,000 30 97,470
08/27/99
Shares Issued for Cash at $2.67
Per Share Retroactively Restated 30,000 30 79,970
08/27/99
Shares Issued for Cash at $0.89 Per
Share Retroactively Restated 9,000 9 7,991
</TABLE>
F-8
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
09/22/99
Shares Issued for Legal Services
at $4.00 Per Share 1,000 1 3,999
09/23/99
Shares Issued for Technology at
$4.00 Per Share 1,500 1 5,999
09/23/99
Issued Share to Acquire Prevail
Online, Inc., and Websites at
$2.45 Per Share 163,500 163 399,837
10/19/99
Issued Shares for Cash at $1.83
Per Share 3,000 3 5,497
11/05/99
Issued Shares for Consulting at
$3.81 Per Share 500 1 1,904
11/05/99
Issued Shares for Accounting
Services at $2.85 Per Share 700 1 1,999
11/05/99
Issued Shares for Accrued Interest
Expenses at $2.37 Per Share 9,000 9 21,311
11/05/99
Issued Shares for Cash at $2.75
Per Share 5,000 5 13,745
11/05/99
Issued Shares for Miscellaneous
Services at $3.25 Per Share 500 1 1,624
12/31/99
Issued Shares for Employee
Bonuses at $1.00 Per Share 16,300 16 16,284
</TABLE>
F-9
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statement of Stockholders' Equity -Continued-
For the Period July 10, 1997 to December 31, 1999
<CAPTION>
Common Stock Paid In Retained
Shares Amount Capital Earnings
<S> <C> <C> <C> <C>
12/31/99
Issued Shares for Technology at
$0.66 Per Share 15,012 15 9,985
12/31/99
Issued Shares for Technology at
$0.75 Per Share 34,903 35 26,140
Shares Returned to Company
and Canceled (7,613) (7) 7
Rounding Adjustment (80)
Paid In Capital - Options 53,885
Contributed Capital 75,039
Net Profit for Year Ended
December 31, 1999 (32,177)
Balance, December 31, 1999 9,940,353 $ 9,940 $ 2,854,948 $ (342,679)
</TABLE>
F-10
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net (Loss) $ (46,917) $ (278,579) $ (31,923)
Adjustment to Reconcile Net Income (Loss) to
Net Cash Provided by Operating Activities;
Amortization 191,696 110,592 -0-
Depreciation 233,857 35,299 -0-
Write off of Impaired Asset -0- 607,844 -0-
Forgiveness of Debt -0- (4,520) -0-
Non Cash Expenses 131,654 8,194 -0-
Rounding -0- 2 (1)
Provisions for Bad Debt 71,800 -0- -0-
Write Off Uncollectible Fees Receivable 180,030 -0- -0-
Options Issued Expense 68,625 -0- -0-
Change in Operating Assets & Liabilities;
(Increase) Decrease in Fees Receivable (548,977) (962,249) -0-
(Increase) Decrease in Prepaid Expenses (64,457) (3,448) -0-
(Increase) Decrease in Security Deposits (3,594) (13,626) -0-
(Increase) Decrease in Interest Receivable (2,632) -0- -0-
(Increase) Decrease in Employee Receivable (51,312) -0- -0-
Increase in Accounts Payable 280,177 23,844 -0-
Increase in Accrued Expenses 13,471 -0- -0-
Increase in Taxes Payable 11,571 -0- -0-
(Decrease) Increase in Accrued Interest 27,605 12,565 -0-
(Decrease) Increase in Accrued Wages 32,130 17,800 -0-
Increase in Loan Receivable -0- -0- (125,000)
Increase in Customer Deposits 35,880 -0- -0-
Net Cash Provided (Used) in Operating Activities 560,607 (446,286) (156,924)
Cash Flows from Investing Activities
Purchase of Websites (Note #9) (402,813) -0- -0-
Purchase of Software Design & Development (27,957) (70,956) -0-
Purchase of Automobile (70,949) -0- -0-
Purchase of Package Software (110,151) (7,289) -0-
Purchase of Office Improvements (23,931) (1,970) -0-
Purchase of Computer Equipment (725,035) (67,173) -0-
Purchase of Furniture & Fixtures (131,780) (21,790) -0-
Loan to BSW -0- (456,844) (201,000)
Cash from Interactive Gaming & Wagering, Inc.,
NV, Purchase Acquisition by Stock Issued -0- 99,675 -0-
Net Cash (Used) in Investing Activities (1,492,616) (526,347) (201,000)
</TABLE>
F-11
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statements of Cash Flows -Continued-
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Cash Flows from Financing Activities
Increase in Capital Lease Liabilities 66,414 19,608 -0-
Payments on Capital Lease Liabilities (12,760) (6,582) -0-
Increase in Notes Payable 525,000 110,000 240,000
Payment on Notes Payable (175,000) -0- -0-
Sale of Common Stock 595,335 842,553 247,400
Contributed Capital 46,782 -0- -0-
Net Cash Provided by Financing Activities 1,045,771 965,579 487,400
Increase (Decrease) in Cash & Cash
Equivalents 113,762 (7,054) 129,476
Cash & Cash Equivalents at Beginning
of Period 122,422 129,476 -0-
Cash & Cash Equivalents at End of Period $ 236,184 $ 122,422 $ 129,476
Disclosures from Operating Activities
Interest Expense $ 59,353 $ 21,220 $ 500
Taxes -0- -0- -0-
Significant Non Cash Transactions
Issued 5,134,500 Shares to Acquire
Interactive Gaming & Wagering, Inc., NV. $ -0- $ 148,887 -0-
Issued 1,423,500 Shares to Incorporators -0- 474 -0-
Issued 8,160 Shares for Legal Services -0- 2,720 -0-
Issued 117,651 Shares for Director Fees -0- 118 -0-
Issued 888,696 Shares for Programing Services -0- 222,174 -0-
Issued 15,000 Shares for Services -0- 5,000 -0-
Issued 39,000 Shares for Prepaid Public Relations 129,983 -0- -0-
Issued 6,000 Shares for Interest Expense 2,250 -0- -0-
Issued 9,000 Shares for Consulting Services 27,000 -0- -0-
Issued 3,000 Shares for Consulting Services 10,000 -0- -0-
Issued 690 Shares for Furniture 2,300 -0- -0-
Issued 6,000 Shares for Legal Services 20,000 -0- -0-
Issued 1,000 Shares for Legal Services 4,000 -0- -0-
Issued 1,500 Shares for Technology 6,000 -0- -0-
Issued 163,500 Shares for Acquisition of
Prevail OnLine, Inc. 400,000 -0- -0-
Issued 500 Shares for Consulting Services 1,905 -0- -0-
</TABLE>
F-12
The accompanying notes are an integral part of these financial statements
<PAGE>
<TABLE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Statements of Cash Flows -Continued-
For the Years Ended December 31, 1999, 1998 and 1997
<CAPTION>
December December December
31, 1999 31, 1998 31, 1997
<S> <C> <C> <C>
Significant Non Cash Transactions -Continued-
Issued 700 Shares for Accounting Services 2,000 -0- -0-
Issued 9,000 Shares for Accrued Interest Payable 21,320 -0- -0-
Issued 500 Shares for Miscellaneous Services 1,625 -0- -0-
Issued 16,300 Shares for Employee Bonuses 16,300 -0- -0-
Issued 15,012 Shares for Technology 10,000 -0- -0-
Issued 34,903 Shares for Technology 26,175 -0- -0-
</TABLE>
F-13
The accompanying notes are an integral part of these financial statements
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement
NOTE # 1 - Organization
The Company was incorporated on July 10, 1997, under the laws of the state of
Colorado using the name Masadi Resources, Inc. On February 10, 1998, Articles of
Amendment were filed changing the name to International Beverage Corporation.
Pursuant to a Merger Agreement dated August 27, 1998, International Beverage
Corporation merged with Global Entertainment Holdings/Equities, Inc., and
subsequently the surviving corporation became known as Global Entertainment
Holdings/Equities, Inc.
The purpose of the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the laws of the state of Colorado. The
Company currently has two wholly owned subsidiaries; Interactive Gaming and
Wagering NV, (IGW), a Netherlands Antilles Corporation in Curacao, Netherlands
Antilles, and Prevail Online, Inc., (Prevail), a Colorado Corporation. IGW, is
engaged in the conception and creation of computer software programs for the
gaming and wagering industry. Prevail, was purchased in August of 1999 and it is
engaged in the creation and operation of websites and derives its revenues from
banner advertising.
NOTE # 2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period in
which they occur. Revenues and related expenses are recognized from the
sale of the licenses when persuasive evidence of an arrangement exists,
delivery of access to the software has occurred, the license fee has been
determined and collectability of the license fee is probable. License fees
are billed to be paid in three installments over a relatively short period
of time, usually within ninety days.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents. D. Basic
Earnings Per Shares are computed by dividing income available to common
stockholders by the weighted average number of common shares outstanding
during the period. Diluted Earnings Per Share shall be computed by
including contingently issuable shares with the weighted average shares
outstanding during the period. When inclusion of the contingently issuable
shares would have an antidilutive effect upon earnings per share no diluted
earnings per share shall be presented.
E. Consolidation Policies: The accompanying consolidated financial statements
include the accounts of the company and its wholly-owned subsidiaries.
Inter-company transactions and balances have been eliminated in
consolidation.
F. Depreciation: The cost of property and equipment is depreciated over the
estimated useful lives of the related assets. The cost of leasehold
improvements is amortized over the lesser of the length of the lease of the
related assets of the estimated lives of the assets. Depreciation and
amortization is computed on the straight line method.
G. Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
F-14
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 2-Significant Accounting Policies -Continued-
H. Foreign Currency: All cash transactions in the Netherlands Antilles are
conducted from the Antilles Banking Corporation in United States dollars.
I. Stock Options are valued at the difference in the market price of the
shares on the day of the grant and the present value of the shares at a
risk free discounted rate for the option period. When restricted shares are
to be acquired by exercise of the options the Company may apply a
marketability discount to the deemed value of the options.
J. Websites: Internal and external costs incurred to develop websites are
capitalized. Costs are capitalized when its probable that the website will
be completed and will be used to perform the function intended. When it is
probalbe that upgrades and enhancements will result in additional
functionality such costs are capitalized. Websites will be considered to be
impaired that it no longer provides substantial service potential, or
significant changes occur in the extent or manner in which the website is
used. Impairmant write off will be recognized in the period when impairment
is deemed by management to have occurred.
NOTE # 3 - Acquisition and Rescission of Beverage Source Worldwide, Inc.
Pursuant to an Agreement of Purchase between Masadi Resources, Inc.,
and Beverage Source Worldwide, Inc., dated November 26, 1997, the Company issued
589,287 shares of its $.001 par value common stock in exchange for 1,500 shares
of Beverage Sources Worldwide, Inc. At December 31, 1997, the Company had
advanced to its subsidiary, Beverage Source Worldwide, Inc., $200,000 and in the
early months of 1998 the Company advanced an additional $457,844 to Beverage
Source Worldwide, Inc. Minutes of an Emergency Meeting of the Board of Directors
of the Company dated April 2, 1998, noted that Beverage Source Worldwide, Inc.,
was without funds and was currently facing bankruptcy if the Company did not
advance substantial working capital funds. On May 5, 1998, the Company filed a
Complaint in the Superior Court of California, County of San Diego, alleging
that from the closing of the Agreement of Purchase, officers of Beverage Source
Worldwide, Inc., have breached their respective duties, obligations and
agreements with the Company, secreting and/or attempting to secret the Companies
assets, moving, transferring, assigning conveying encumbrances, sequestering,
using, disposing of, or shifting, any and all of the assets and property of the
Company, wrongfully withdrawing monies from the Corporate bank accounts,
misappropriating company funds, co-mingling the operating expenses and cost of
International Beverage Corporation or its wholly owned subsidiary Beverage
Source Worldwide, Inc., with independent business of the officers and directors
named in the suit. Further, that the named defendant officers engaged in an
extensive pattern of discussion with various entities for the specific purpose
of merging one or all of the said entities, without disclosing to such entities
and their representatives that Beverage Source Worldwide, Inc., was a wholly
owned subsidiary of the Company. In addition to the above general categories of
the complaint there are numerous specific allegations of Malfeasance and Breach
of Fiduciary Duty. The complaint specifically intends that service of the
summons and complaint serve as notice of rescission of the agreement dated
November 26, 1997.
F-15
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
The rescission action taken with the filing of the complaint on May 5,
1998, and the cessation of business activities by Beverage Source Worldwide,
Inc., the Company beleives its control of Beverage Source Worldwide, Inc. was
temporary and that the cessation of business activities by the Officers of
Beverage Source Worldwide, Inc., cast significant doubt on the Company, as the
parent comapny, to control the Subsidiary.
In March 2000, the Company has reached an agreement with the former
Officers of Beverage Source Worldwide, Inc., whereby for $75,000 he has
withdrawn his objection to the rescission of the agreement dated May 26, 1997.
NOTE # 4 - Software Development for Licensing & Recognition of Income from
Software Licensing
The Company has expensed costs to internally create computer software
until such time as technological feasibility was established. Technological
feasibility is considered to be established when a detail program design is
completed. After the detailed program design has been established the Company
has capitalized the costs of its software products it intends to license to the
gaming and wagering industry. Software development costs will be amortized on a
ratio of the current revenue to anticipated total revenue from the sales of the
product or a straight line amortization of the product cost over the estimated
three years useful life of the product master. Because the product is subject to
rapid technological advances the Company has elected to amortize its computer
programs software held for licensing over a three year period.
Revenue from the licensing of software programs is recognized when
there is persuasive evidence of an arrangement, delivery of access to the
software, the fee is fixed and determined and collectability is probable. The
license arrangements are not multiple elements and license fees are recorded
when the four conditions above are achieved. Once the arrangement has been
contractually agreed upon there are no customer cancellation privileges. Fees
that the Company may be entitled to are referred to as royalties and are not
recognized until such time as the licensee has actually earned revenues through
the use of the software and in accordance with the licensing agreement has
notified the Company of its sales. Once the Company has been notified that
royalties are due from the licensing of its software and collectability is
probable, royalty income is recognized. Revenues earned from efforts to assist a
purchaser establish and maintain a base for operations are known as hosting
revenues and are recognized upon receipt of funds. Costs incidental to royalty
income and hosting activities are recognized in the same period as the related
revenues are recognized.
The Company does not engage in any gaming or wagering activities.
NOTE # 5 - Stockholders' Equity
Preferred Stock;
The Company has 25,000,000 shares of preferred stock $.001 par value
authorized. These preferred shares may be issued in one or more series at the
discretion of the Board of Directors.
F-16
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 5 - Stock Holders' Equity - Continued -
Common Stock;
The Company has 100,000,000 shares of common stock $.001 par value
authorized. Each shareholder of record shall have one vote for each share of
common stock outstanding in his or her name on the books of the Corporation.
Cumulative voting shall not be allowed. No shareholder shall have pre-emptive or
similar rights.
Stock Options;
The Company will issue to the Managing Director of Interactive Gaming &
Wagering, NV, Stock Purchase Options, to be assigned at his discretion, which
vest according to the following: At year end 1998, if Interactive Gaming and
Wagering, Inc., had net earnings of $207,000, a three (3) year option to
purchase 225,000 shares of the Company's $.001 non-assessable, par value common
stock at a price not less than $1.50 per share. At year end 1999, if Interactive
Gaming and Wagering, Inc., has net earnings of $5,666,000, a three (3) year
option to purchase 1,800,000 shares of the Company's $.001 non- assessable, par
value common stock at a price not less than $1.50 per share. At year end 2000,
if Interactive Gaming and Wagering, Inc., has net earnings of $14,959,000, a
three (3) year option to purchase 2,475,000 shares of the Company's $.001
non-assessable, par value common stock at a price not less than $1.50 per share.
The Company agreed to grant to the Managing Director of Interactive Gaming and
Wagering, NV, (IGW) options for 225,000 post split shares of its common stock if
net income of $207,000 was attained. IGW attained that net income for 1998.
Pursuant to a Board of Directors Resolution dated April 24, 2000 effective
December 31, 1999, 225,000 options were issued. The term net earnings is
presented in the financial statements as net income.
The Company recognized cost of options issued of $22,027 as expense in
1999 with an offset increase to paid in capital of $22,027. The value of the
option was derived by taking the market price of the shares at December 31, 1999
which was $1.00, applying a discount rate of 5.5%. The present value of the
shares is $.8516 (1.00 divided by 1.055(3rd power) = .8516). The deemed value of
the options is the current market price minus the present value ($1.00 - .8516 =
$.1484). Because shares to be received will be restricted shares, the option
cost has been discounted by 34% to $0.0979 per option. If options are not
exercised by December 31, 2001 no adjustment to future earnings would be made
and paid in capital will remain as presented immediately following the grant of
the options.
At December 31, 1999, the Company granted 475,500 options to purchase
422,000 shares of common stock at $1.25, 5,300 shares of common stock at $1.50
and 48,200 shares of common stock at $1.67. All of the options expire December
31, 2002. The Company booked as an expense for the options $46,598. The cost was
computed using the following methodology. A discount rate of .055% was used to
compute the present value of the shares to be acquired no later than December
31, 2002. Using the discount rate and the market price of $1.00 per shares the
present value of the shares was $.8985. The value of the options is therefore
$.1015. Because any shares acquired by exercise of the options will be
restricted, shares the $.1015 value was discounted by 34% and the value of each
options was $.067.
F-17
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 5 - Stockholder's Equity - Continued -
Stock Split;
On August 19, 1998, International Beverage Corp., effected a one for
seven reverse stock split of its outstanding shares. Effective August 27, 1999,
all outstanding common shares of stock were split on a three for one basis. In
the financial statements presented at December 31, 1999 retroactive restatement
of the outstanding shares on the balance sheet, statement of stockholders'
equity, and the shares used to compute basic earnings per share and fully
diluted earnings per share has been made.
Non Cash Investing & Financing Activities;
At December 31, 1998, the Company had issued; 1,423,500 post split
shares of stock to incorporators for services valued at $474; 8.160 post split
shares to an attorney for legal fees valued at $2,720; 15,000 shares for sundry
services valued at $5,000; and 888,696 shares for capitalized programming
services valued at $222,174.
During the year ended December 31, 1999, the Company issued; 12,500
shares for consulting fees valued at $38,925; 6,000 shares for interest expense
valued at $2,250; and 39,000 shares for current public relations expense valued
at $10,827 and $119,172 in prepaid public relations cost; 7,000 shares for legal
fees valued at $24,000; 700 shares for accounting services valued at $2,000;
16,300 shares for employee bonuses valued at $16,300; 49,915 shares for expensed
technology services valued at $36,175; 500 shares for miscellaneous expenses
valued at $1,625; 9,000 shares in settlement of accrued interest valued at
$21,320; 690 shares for furniture valued at $2,300, 1,500 shares for capitalized
technology services valued at $6,000 and 163,500 shares to acquire Prevail
Online, Inc., and the websites valued at $400,000.
NOTE # 6 - Property, Equipment and Depreciation
The Company capitalized the purchase of equipment for purchase in
excess of $300 per item. Capitalized amounts are depreciated over the estimated
useful life of the asset using the straight line method of depreciation. At
December 31, 1999 and 1998, the Company had property and equipment as follows:
<TABLE>
Depreciation Expenses Accumulated Depreciation
<CAPTION>
Assets 1999 Cost 1998 Cost Life 1999 1998 1999 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Office Improvements $25,901 $1,970 3-5 $4,205 $ -0- $ 4,205 $ -0-
Computer Equipment 801,234 67,173 2-3 183,906 26,509 210,415 26,509
Furniture & Fixtures 155,870 21,790 3 28,222 6,360 34,582 6,360
Packages Software 117,440 7,289 3 6,059 2,430 8,489 2,430
Automobiles 70,949 -0- 4 11,465 -0- 11,465 -0-
Totals $ 1,171,394 $98,222 $ 233,857 $ 35,299 $269,156 $ 35,299
Software Design for
Licensing $ 355,347 $327,3903 $ 126,780 $110,592 $237,372 $110,592
Websites 802,813 -0- 3 64,916 -0- 64,916 -0-
</TABLE>
F-18
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 7 - Notes Payable
<TABLE>
The Company has the following notes payable obligations.
<CAPTION>
1999 1998 1997
<S> <C> <C> <C>
Note Payable to an Individual, Interest at 10%,
Due Date March 31, 2001 $ 100,000 $ 100,000 $ -0-
Note #1 to an Officer at 8% Interest, Due on Demand 20,000 20,000 -0-
Note #2 to an Officer at 8% Interest, Due on Demand 20,000 20,000 -0-
Note #3 to a Related Party at 8% Interest, Due on Demand 75,000 75,000 115,000
Note #4 to a Related Party 0% Interest -0- -0- 135,000
Note #5 to a Related Party 10% Interest, Due March 31, 2001 225,000 -0- -0-
Note #6 to a Unrelated Party, No Interest, Due June 2000 125,000 -0- -0-
Total Notes Payable $ 565,000 $ 215,000 $ 250,000
Less Current Portion (240,000) (165,000) (250,000)
Net Long Term Debt $ 325,000 $ 50,000 $ -0-
</TABLE>
During 1997, the Company issued a $125,000 Note Payable to a Stockholder for
25,000 Shares of Restricted Stock. As a result of the restriction the estimated
fair value of the stock cannot be determined at December 31, 1997. Management
lected to record the Restricted Shares at the same value as the note. The
Company intended to sell the securities in 1998 when the restriction period
expired in July. If the proceeds of the sale exceeded $196,000, which would be
paid to the stockholder, and the Company would keep the excess. As a result of
the rescission of the Beverage Source Worldwide, Inc., Agreement, (Note #3), the
Restricted Shares were returned to the shareholders and the note payable was
canceled.
The Company has lease assets as follows;
Asset Cost Balance
Pentium Computer $ 14,348 $ 6,000
Dell Computer 5,260 3,717
Automobile 43,949 41,117
Dell Computer 21,085 15,846
------ ------
Total $ 84,642 $66,680
Current Portion $31,285
Long Term Portion 35,395
Following are maturities of long term debt for each of the next five years.
Year Capital Lease Note Payable
2000 $ 240,000 $ 31,285
2001 325,000 17,556
2002 -0- 13,454
2003 -0- 4,385
Total $ 565,000 $ 66,680
F-19
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 8 - Acquisition of Global Entertainment Holdings/Equities, Inc.
Pursuant to an Agreement of Purchase and Sale between Masadi Resources,
Inc., (MRI) and Beverage Source Worldwide, Inc., (BSW) dated November 26, 1997,
MRI committed to issue 589,287 post-split shares to acquire 100% of BSW,
(1,375,000 pre-split shares, split 1 for 7 on August 13, 1998 and forward split
3 for 1 on August 23, 1999). On December 1, 1997, the Board of Directors changed
the name of Masadi Resources, Inc., to International Beverage Corporation,
(IBC).
On February 27, 1998, IBC issued 589,287 shares to the shareholders of BSW.
In March 1998, IBC suspended financing for BSW and the Board of Directors
authorized a Rescission of the Agreement of Purchase and Sale. On August 13,
1998, IBC believes it only had temporary control of BSW and in accordance with
FASB 94, paragraph 13, has not presented consolidated financial statements to
include BSW.
Global Entertainment Holdings/Equities, Inc., a privately held corporation,
was incorporated on April 6, 1998, under the laws of the state of Colorado.
Interactive Gaming and Wagering, Inc., NV, (IGW), a privately held corporation,
was incorporated on May 16, 1997, under the laws of the Netherlands Antilles,
domiciled in Curacao. Pursuant to an Agreement of Purchase and Sale dated June
30, 1998, the shareholders of IGW exchanged 100% of the issued and outstanding
shares of IGW for 5,134,500, post 3 for 1 split, shares of Global Entertainment
Holdings/Equities, Inc., (a privately held corporation). At the date of the
stock exchange neither corporation had any established market for its shares and
no shares had been publicly traded.
Pursuant to a Merger Agreement dated August 27, 1998, Global Entertainment
Holdings/Equities, Inc., the Legal Acquiree and a privately owned corporation,
agreed to exchange one share of its issued and outstanding stock for 1.5 of
International Beverage Corporation, (IBC), a publicly held corporation. From
April 6, 1998 to August 27, 1998, Global Entertainment Holdings/ Equities, Inc.,
had issued 5,586,688 shares (retroactively restated) under the terms of the
Merger Agreement these shares become 8,380,040 retroactively restated shares.
The exchange of the shares gave the shareholders of Global Entertainment
Holdings/Equities, Inc., control of IBC, the Legal Acquirer. For statement
presentation Global Entertainment Holdings/Equities, Inc., has been considered
to be the accounting acquirer. On September 30, 1998, IBC changed its name to
Global Entertainment Holdings/Equities, Inc.
The share exchange of a private operating Company, (Global Entertainment
Holdings/Equities, Inc.,) into a non-operating public shell corporation
(International Beverage Corporation), with no significant assets or liabilities
resulted in the shareholders of the private company having actual operating
control of the combined company after the transaction, and the shareholders of
the former public shell continuing only as passive investors.
This transaction is considered to be a capital transaction in substance,
rather than a business combination. That is, the transaction is equivalent to
the issuance of stock by the private company for the net monetary assets of the
shell corporation, accompanied by a recapitalization. The accounting is
identical to that resulting from a reverse acquisition, except no goodwill of
other intangible is recorded.
F-20
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 8 - Acquisition of Global Entertainment Holdings/Equities, Inc.
-Continued-
ABP, No., 16, paragraph 70, states that, "Presumptive evidence of the
acquiring corporation in combinations effected by an exchange of stock is
obtained by identifying the former common stockholder interest of a combined
company which either retains or receives the larger portion of the voting rights
of the combined corporation. That corporation should be treated as the acquirer
unless other evidence clearly indicates that another corporation is the
acquirer."
Staff Accounting Bulletin Topic 2A, affirms the above principle and gives
guidelines that the post reverse-acquisition comparative historical financial
statements furnished for the Legal Acquirer should be those of the Legal
Acquiree.
In accordance with this guideline the outstanding shares of Global
Entertainment Holdings/Equities, Inc., have been retroactively restated on the
balance sheet, and the statement of stockholders' equity. The retroactively
restated shares have been used in the Computations for Earnings (Losses) Per
Share to preserve comparability of those figures.
NOTE # 9 - Acquisition of Prevail OnLine, Inc., and Websites Purchase
On August 20, 1999, Global Entertainment Holdings/Equities, Inc., (Global),
issued 43,500 shares of its common stock to acquire 100% of the issued and
outstanding shares of Prevail OnLine, Inc., (Prevail), a Colorado Corporation,
incorporated on July 21, 1999. Concurrent with issuance of the 43,500 shares of
stock to acquire Prevail, Global issued 120,000 shares to an unrelated party to
acquire a website known as wheretobet.com and a domain name known as netbet.org.
In 1999, the Company entered into an agreement with an independent third
party to design and develop a Website page known as "Sports Daily". The Sports
Daily Website Page is intended to give the Company's current clientele, sport
enthusiast and future customers information about the all major sports events,
game times, statistics, weather conditions, injury report, major sports events,
and current sports news. The Sports Daily Website is not a gaming or wagering
activity. The Company estimates that the Website as designed and developed at
June 30, 1999 will have a useful life of three years.
Prevail, has used the wheretobet.com, website to sell banner advertising as
its source of revenue since the acquisition of the website.
The wheretobet.com website and the netbet.org domain name where acquired
from an unrelated party for a total sum of $700,000. At the acquisition date
Prevail paid a down payment of $75,000 and signed a non interest bearing note of
$225,000 payable in nine monthly installments commencing one month from the
closing date of the Agreement. In addition, Global issued 120,000 shares of its
common stock for a value of $400,000. The asset purchase and sale agreement
contains the following provision; The stock that is to be transferred to Sellers
will contain therewith a put and call provision as follows; (i) Sellers will
have the right to put the stock to the Purchaser anytime after six (6) months
F-21
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE# 9 - Acquisition of Prevail OnLine, Inc., and Websites Purchase -Continued-
from the closing, but before twelve (12) months from the closing at the net
price of $400,000 (US); (ii) The Purchaser will have the right to call the stock
from Sellers anytime after six (6) months from the closing but before twelve
(12) months from closing at the net price of $800,000 (US).
NOTE # 10 - Income Taxes
The Company has incurred losses that can be carried forward to offset
future earnings if all provisions of the Internal Revenue Code are met. These
losses are as follows:
Year of Loss Expiration Amount Date
1997 $31,923 2017
1998 278,579 2018
1999 733,239 2019
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of the net operating
loss carryforward, an evaluation allowance has been made to the full extent of
any tax benefit that net operating losses may generate.
12-31-99 12-31-98
Deferred Tax Asset Balance Beginning of Period $ -0- $ -0-
Net Operating Loss Carryforwards 540,357 296,473
540,357 296,473
Valuation Allowance (540,357) (296,473)
Net Deferred Tax Asset $ -0- $ -0-
Deferred Tax Liability $ -0- $ -0-
Netherlands
TOTAL USA Antilles
Net Income (Loss) $ (46,917) $ (765,016) $ 718,099
Add Non Deductible Permanent Adjustments 4,352 4,352 -0-
Net Operating Loss Carryforwards (856,193) (856,193) -0-
Adjusted Taxable Income $ (898,758) $(1,616,857) $(718,099)
Current Income Taxes Payable $11,571 $ -0- $ 11,571
Income earned by the wholly-owned subsidiary in the Netherlands Antilles is
not considered to be Sub-Part F Income under Internal Revenue Code Section 951
and is therefore not subject to U.S. Income Taxes.
F-22
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 10 - Income Taxes - Continued -
The Company has computed U.S. federal income taxes on the revenue of its
wholly owned foreign subsidiary. Federal taxes are computed on current period
revenues net of net operating losses carried forward from proceeding period and
credit for foreign taxes. The Company has also recorded $11,571 in taxes due to
the Netherlands Antilles based on earnings in Curacao.
NOTE # 11 - Operating Lease Obligations
The Company leases office facilities in Omaha, Nebraska. The lease
commenced February 1, 1999 and terminates January 31, 2004. Lease obligations
for the term of the lease are as follows;
Year Amount
2000 $15,850
2001 16,150
2002 16,450
2003 16,750
2004 1,400
---- -----
Total $66,600
The subsidiary leases office facilities in Curacao, Netherlands Antilles.
The lease commences January 1, 1999 and terminates December 31, 2002. Lease
obligations for the term of the lease are as follows:
Year Amount
2000 $124,760
2001 124,760
2002 69,698
---- --------
Total $ 319,218
NOTE # 12 - Accounts Receivable
<TABLE>
The Company has the following accounts receivable as follows;
<CAPTION>
Software License Bandwidth &
Current Total Royalties Maintenance Fees Fees Advertising
<S> <C> <C> <C> <C> <C>
Current $ 585,245 $ 430,970 $ 26,600 $ -0- $ 127,675
0-30 Days 196,991 194,491 2,500 -0- -0-
31-60 Days 288,031 288,031 -0- -0- -0-
61-90 Days 172,446 172,446 -0- -0- -0-
91-120 Days -0- -0- -0- -0- -0-
121-150 Days 144,993 69,993 -0- 75,000 -0-
151-180 Days 80,714 80,714 -0- -0- -0-
181-210 Days 88,979 88,979 -0- -0- -0-
211-240 Days 25,627 25,627 -0- -0- -0-
------------ ------- ------- ---------- -------- -----------
Total $1,583,026 $ 1,351,251 $29,100 $ 75,000 $ 127,675
</TABLE>
The Company has provided a provision of $71,800.
F-23
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 13 - Commitments and Contingencies
Effective October 20, 1999 and expiring on October 20, 2000, IGW signed an
agreement with Antelcom, N.V., for a 2 Mb digital offshore leased line
connection, between Curacao and Canada Teleglobe. The contract is written for
payment in U.S. dollars at $35,500 per month. The contract is payable as
follows;
Payments in 1999 $ 82,833
Payments in 2000 343,167
Total Contract $426,000
NOTE # 14 - Related Party Transactions
The Managing Director of Interactive Gaming & Wagering, N.V., has loaned
the Company $20,000. The Company has accrued interest on the loan at 8% interest
per annum. The President of Global Entertainment Holdings/Equities, Inc., has
loaned to Interactive Gaming and Wagering, Inc., NV, $20,000 and interest has
been accrued at 8% per annum.
A related party of the Managing Director of Interactive Gaming & Wagering,
NV and the President of Global Entertainment Holdings/Equities, Inc., has loaned
to Interactive Gaming & Wagering, NV $75,000 at 8% interest per annum. This loan
is due on demand. In addition this related party has loaned to Global
Entertainment Holdings/Equities, Inc., $225,000 with interest at 10% per annum
due March 31, 2001.
NOTE # 15 - Litigation
On November 26, 1997, the Company as Masadi Resources, Inc. ("Company")
entered into an Agreement of Purchase and Sale ("Agreement") to purchase
Beverage Source Worldwide, Inc. ("BSI"). On May 5, 1998, the Company filed a
Complaint in the Superior Court of California, County of San Diego, asking the
Court to declare the Agreement rescinded. The Company further alleged that
various individuals including Mark Darnell ("Darnell") had breached the
Agreement and alleged, the individuals, including Darnell had breached their
fiduciary duties and had committed other malfeasance and illegal acts. All
parties to the lawsuit other than Darnell were dismissed prior to Trial. The
trial was held on November 8-10, 1999, in the Superior Court of San Diego. In a
Minute Order dated December 23, 1999, the Court ruled against the Company on all
counts and further ordered that a rescission had not taken place and ordered
that Darnell retained all previously held stock interest in the company.
Subsequent to the Court's ruling, the Company and Darnell entered into a
Settlement Agreement and Mutual Release of all Claims ("Settlement Agreement")
wherein the Company paid Darnell $75,000 and Darnell agreed to rescind the
Agreement. The $75,000 per the Settlement Agreement was to be paid as follows:
$35,000 on 2/23/00; $20,000 on 5/18/00; and $20,000 on 8/18/00. The first two
payments have been made by the Company and the final payment will be made when
due per the Agreement, on 8/18/00. This final payment will resolve all aspects
of this litigation.
The Company has accrued the $75,000 Settlement as expense in the year ended
December 31, 1999.
The Company is not a party to any other litigation at December 31, 1999.
F-24
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE # 16 - Economic Dependency
IGW receives a substantial portion of its royalty fees revenues from one
customer. In 1999 and 1998, royalties and other fees from that customer were
$1,861,267 and $812,018 respectively. At December 31, 1999 and 1998, accounts
receivable from that customer were $1,270,205 and $814,467. Payments received
are applied to the oldest outstanding amounts.
NOTE # 17 - Segment Information
The Company has adopted FASB Statement No. 131, "Disclosures About Segments
of a Business Enterprise and Related Information." The Company is managed in two
geographical Segments; The United State of America and Curacao, Netherlands
Antilles.
<TABLE>
<CAPTION>
Prevail Global Netherlands
USA USA Antille Total
<S> <C> <C> <C> <C> <C>
License Fees 1999 $ -0- $ -0- $ 445,000 $ 445,000
1998 -0- -0- 150,000 150,000
1997 -0- -0- -0- -0-
Royalty Fees 1999 -0- -0- 1,983,773 1,983,773
1998 -0- -0- 812,018 812,018
1997 -0- -0- -0- -0-
Hosting Income 1999 -0- -0- 159,090 159,090
1998 -0- -0- 18,545 18,545
1997 -0- -0- -0- -0-
Advertising Income 1999 233,736 -0- -0- 233,736
Operating Expenses 1999 196,322 658,329 1,910,102 2,764,753
1998 -0- 842,083 401,141 1,243,224
1997 -0- 32,948 -0- 32,948
Other Income (Expenses) 1999 107 (59,353) 3,821 (55,425)
1998 -0- (15,918) -0- (15,918)
1997 -0- 1,025 -0- 1,025
Provisions for Taxes 1999 -0- -0- 11,571 11,571
1998 -0- -0- -0- -0-
1997 -0- -0- -0- -0-
Net Income (Loss) 1999 37,521 (755,939) 686,241 (32,177)
1998 -0- (840,057) 561,477 (278,579)
1997 -0- (31,923) -0- (31,923)
Cash 1999 19,625 2,921 213,638 236,184
1998 -0- 80,444 41,978 122,422
1997 -0- 129,476 -0- 129,476
Accounts Receivable 1999 $ 7,200 $ -0- $ 1,504,026 $ 1,511,226
1998 -0- -0- 962,249 962,259
1997 -0- -0- -0- -0-
Property of Equipment (Net) 1999 579,893 66,300 993,942 1,640,135
1998 -0- 1,099 61,824 62,923
Other Assets 1999 -0- -0- 135,195 135,195
1998 -0- 50,000 230,424 280,424
1997 -0- 201,375 -0- 201,375
</TABLE>
F-25
<PAGE>
Global Entertainment Holdings/Equities, Inc., & Subsidiaries
Notes to Financial Statement -Continued-
NOTE #18 - Restatement
Subsequent to the issuance of the Company's 1999 financial statements,
management determined that it should restate its 1999 financial statements and
related disclosures to reflect options issued pursuant to commitments made to
the managing directors of IGW for net income achievements in 1998.
A summary of the significant effects of the restatement is as follows;
As Previously Reported As Restated
Options Expense 31,858 68,625
Income (Loss) from Operations (10,150) (46,917)
Paid In Capital 2,832,921 2,869,688
F-26
<PAGE>
Votes Required
The presence at the Annual Meeting, in person or by proxy, of the holders
of a majority of the total number of shares of the Company's only class of
outstanding securities, its common stock, taken together shall constitute a
quorum for the transaction of business at the Annual Meeting.
The affirmative votes of a plurality of the total votes cast are necessary
to elect a Director. No cumulative voting is permitted. In the case of the
proposals to ratify the appointment of Clyde Bailey, P.C. as the Company's
independent public accountants for the fiscal year ending December 31, 2000, the
affirmative votes of a majority of the total votes cast at the Annual Meeting on
each proposal in person or by proxy are required to approve such proposal.
The total number of votes cast "for" will be counted for purposes of
determining whether sufficient affirmative votes have been cast to approve each
proposal. Abstentions from voting on a proposal by a shareholder at the Annual
Meeting, as well as broker non-votes, will be considered for purposes of
determining the number of total votes present at the Annual Meeting. Abstentions
will have the same effect as votes against the proposals, but will not affect
the election of Directors. Broker non-votes will not be considered as votes
"for" or "against" the proposals, and will therefore not be considered in
determining the election of Directors or whether the proposal to ratify the
appointment of Clyde Bailey P.C. have passed.
DESCRIPTION OF MATTERS
TO BE ACTED ON AT THE MEETING
As set forth in the Notice of Meeting:
Proposal 1: To elect directors to the Board of Directors until the next
Annual Meeting of Shareholders.
Bryan Abboud: Mr. Bryan Abboud is a co-founder and has been a Director and
Chairman of the Board of Directors of the Company since September of 1998, and
is the founder of Interactive Gaming & Wagering, N.V. (IGW), a wholly owned
subsidiary of Global Entertainment Holdings/Equities, Inc. Mr. Abboud also is a
co-founder and current board member of the Interactive Gaming Council, the
online gaming industry's premier trade association. Mr. Abboud, since 1995, has
assembled personnel, arranged financing, and led the company into the Internet
Gaming Software Industry. Prior to founding IGW, Mr. Abboud was a Senior Vice
President and a Director of Multi-Vision electronics, a start-up company in the
high-tech consumer electronics industry. Mr. Abboud increased company sales
200%, represented his company at trade shows, created strategies and managed all
persons in sales, public relations and graphic design. Mr. Abboud also served as
Vice President of Marketing and co-founder of Vista International, Inc. where he
was responsible for all U.S. sales, advertising and promotions. Mr. Abboud
successfully created and implemented marketing and public relation strategies
for Vista International, Inc., focusing on both the consumer and the industry.
Mr. Abboud earned a Masters in International Management at the American Graduate
School of International Management (Thunderbird). He also received a Bachelor of
Science Degree in Commerce accelerating in Marketing, at Santa Clara University.
Mr. Abboud also attended Sup de Co in Rouen, France.
<PAGE>
David S. Wintroub: Mr. Wintroub was appointed the CEO/President of the
Company on January 18, 2000. Mr. Wintroub from 1995 to the present has worked
with the firm of, Wintroub, Rinden, Sens & McCreary, with offices in Omaha,
Chicago, Minneapolis, Des Moines and Austin, Texas, as an attorney and
specialized in Corporate and Internet Law. Mr. Wintroub has had significant
experience with many start-up internet companies, including on-line gaming,
on-line lottery, on-line sports handicapping, on-line news, on-line broadcasting
and many on-line retail sites selling items ranging from women's shoes to wine.
Mr. Wintroub's experience in on-line gaming included the initial legal research
into the legality of on-line gaming for several on-line gaming clients all of
whom have active and prosperous sites. Mr. Wintroub has also had significant
experience working on capitalization projects for his on-line clients.
Additionally, Mr. Wintroub has been heavily involved in lottery projects and
on-line lottery start-ups on the continent of Africa for one of his corporate
clients. Mr. Wintroub also has experience representing land-based and online
gaming clients like Harvey's Resorts and Casino, Inc. Mr. Wintroub earned his
undergraduate degree in English from the University of Nebraska at Lincoln in
1990 and his Juris Doctor from Creighton University in 1995.
R. Scott Van Kirk . Mr. Van Kirk has been a Director of the Company since
January of 2000. Since 1997 Mr. Van Kirk has been a chief developer for
Interactive Gaming and Wagering which is a wholly owned subsidiary of Global
Entertainment. In 1998 he directed the team which designed and implemented the
successful Java based casino games currently licensed by IGW clients. He has 20
years professional experience in software engineering and brings with him
extensive knowledge of the technical sector including knowledge of hardware,
operating systems, database systems and software engineering. Mr. Van Kirk
worked as an independent consultant for 10 years from 1987 to 1997 and
spearheaded and developed many diverse projects. Among these projects were a
commodity analysis and charting package (which was an ongoing project over the
course of these 10 years) for CTS Financial publishing of Palm Beach Florida, a
windows-based point of sale system designed for small business owners (also
ongoing project during the course of these 10 years), a membership rewards
package for Govnor's Park Restaurant in Denver in 1996, an image capturing and
filing system for Technical Instruments in Denver Colorado from 1995 - 1997, and
a Java based on-line annotation system of Autocad files for The Pigeon Hole of
Denver Colorado in 1997. Mr. Van Kirk obtained his Bachelors of Arts in Computer
Science, Mathematics and Classics from the University of Colorado in May of
1990.
Donald J. Lisa. Mr. Lisa was appointed as a Director of the Company in
August 2000. Since 1987, Mr. Lisa has continued his own intellectual property
law firm and his own mergers and acquisitions consulting business, Lisa &
Company, both of which businesses has been diligently pursued for the last 13
years. From 1974 through 1987, Mr. Lisa worked for Motorola, Inc in Schaumburg,
Illinois, where he held positions of Division Patent Counsel to the Automotive
Products Division, Executive Director Technology Asset Management, Vice
President Patent Department and Corporate Staff General Patent Counsel, Vice
President and Proprietary Rights Litigation Counsel, and finally, Vice President
and Director of Acquisitions where he was responsible for all acquisitions,
joint ventures, and divestiture activities, and for coordination of appropriate
corporate support functions and sector/group representation in such activities,
including accounting, international and domestic finance, human resources, and
law. From 1965- 1974, Mr. Lisa rose to become a general partner in the New York
City based patent law firm of Kenyon & Kenyon. Mr. Lisa received his Masters of
Business Administration Degree from the University of Chicago Graduate School of
Business in 1987, his Juris Doctor Degree from Harvard Law School in 1965, and
his Bachelor Of Science in Engineering Degree from the U.S. Naval Academy in
1957. Mr. Lisa was a U.S. Naval Officer between 1957 -1962 serving as an
all-weather jet fighter pilot rising to the rank of Lieutenant and accumulating
1200 hours of first pilot time in high performance military jet aircraft with
350 total carrier landings (150 at night) aboard the USS Forrestal and USS
Independence.
Proposal 2: The approval of the independent CPA selected by management will
also be sought.
A vote in favor of this proposal will give the Board of Directors the
authority to retain the accounting firm of Clyde Bailey, P.C. as the Company's
independent auditors for the fiscal year ending December 31, 2000.
Proposal 3: To ratify such other business as may properly come before the
meeting or any adjournment thereof.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
Only shareholders of record at the close of business on July 14, 2000 will
be entitled to vote at the Annual Meeting. On the record date, July 14, 2000,
the Company had 10,352,109 outstanding shares of its $0.001 par value Common
Stock. Each issued Common Share entitles its record owner to one vote on each
matter to be voted upon at the meeting. There are no cumulative voting rights.
The presence, in person or by proxy, of at least 5,176,055 shares will
constitute a quorum.
<PAGE>
OTHER BUSINESS
The Board of Directors is not aware of any business to come before the
meeting other than those matters described above in this proxy statement. If,
however, any other matters should properly come before the meeting, it is
intended that holders of proxies will act in accordance with their judgement on
such matters.
SHAREHOLDER PROPOSALS
Shareholders who wish to present proposals for action at the 2001 Annual
Meeting of Shareholders should submit their proposals in writing to the
Secretary of the Company at the address of the Company set forth on the first
page of this Information/Proxy Statement. The Secretary must receive proposals
no later than March 31, 2001, for inclusion in next year's proxy statement.
BY THE ORDER OF THE BOARD OF DIRECTORS:
/s/ David Wintroub
-------------------------------
David Wintroub-President
Omaha, Nebraska
August 14, 2000
<PAGE>
Global Entertainment Holdings/Equities, Inc.
The Board of Directors solicits this Proxy
for an Annual Meeting of Shareholders
to be held on August 30, 2000
The undersigned hereby constitutes and appoints David Wintroub with full
power of substitution and revocation, the true and lawful attorney and proxy of
the undersigned at the Annual Meeting of Shareholders (the "Meeting") of Global
Entertainment Holdings/Equities, Inc., (the "Company") to be held August 30,
2000 at 10:00 a.m., Central Standard Time, at Harvey's Hotel and Casino, at 1
Harveys Blvd., Council Bluffs, Iowa 51501, or any adjournments thereof, to vote
the shares of Common Stock of the Company standing in the name of the
undersigned on the books of the Company, or such shares of Common Stock of the
Company as the undersigned may otherwise be entitled to vote on the record date
for Meeting with all powers the undersigned would possess if personally present
at the Meeting, with respect to the matters set forth below and described in the
Notice of the Annual Meeting of Shareholders dated August 14, 2000, and the
accompanying Proxy Statement of the Company.
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1. Election of the Board of Directors until the next Annual Shareholders
Meeting
|_| For all nominees listed below (except as marked to the contrary)
For the nominee Against the nominee Abstain
1. Bryan Abboud |_| |_| |_|
2. David Wintroub |_| |_| |_|
3. Scott Van Kirk |_| |_| |_|
4. Don Lisa |_| |_| |_|
2. Ratify the employment of Clyde Bailey, P.C. as the Company's independent
auditor for the fiscal year ending December 31, 2000
|_| For Proposal 2 |_| Against Proposal 2 |_| Abstain
3. Any other business as may properly come before the meeting or any
adjournment thereof.
|_| For Proposal 3 |_| Against Proposal 3 |_| Abstain
In Their Discretion, the Proxies Are Authorized to Vote upon Such Other
Business That May Properly Come Before the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS LISTED. IF NO
DIRECTIONS ARE GIVEN BY THE PERSON(S) EXECUTING THIS PROXY, THE SHARES WILL BE
VOTED IN FAVOR OF ALL LISTED PROPOSALS.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER, AND UNLESS OTHERWISE SPECIFIED, THE
SHARES WILL BE VOTED FOR ALL PROPOSALS.
Dated , 2000
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Shareholder's Signature Shareholder's Signature Number of Shares Voted
PLEASE SIGN AND RETURN TO THE ADDRESSEE IN THE ENCLOSED STAMPED ENVELOPE.
Please sign exactly as your name appears on the shareholder records of the
Company. If shares are held in the names of more than one person, each joint
owner should sign. Executors, administrators, trustees, guardians, and attorney
should indicate the respective capacities in which they sign. Attorney should
submit powers of attorney.
