CLUBCHARLIE COM INC
10SB12G/A, 2000-01-31
BUSINESS SERVICES, NEC
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                     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

                         Under Section 12(b) or 12(g) of
                       The Securities Exchange Act of 1934

                              CLUBCHARLIE.COM, INC.
             (Exact name of registrant as specified in its charter)


NEVADA                                                                88-0380343
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


10717 Wilshire Boulevard, Suite 1104, Los Angeles, California              90024
(Address of registrant's principal executive offices)                 (Zip Code)


                                  877.882.5822
              (Registrant's Telephone Number, Including Area Code)

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:

             None                                   Not Applicable

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

Common Stock, Par Value $.001
(Title of Class)


                                   Copies to:

                              Thomas E. Stepp, Jr.
                             Stepp & Beauchamp, LLP
                           1301 Dove Street, Suite 460
                         Newport Beach, California 92660
                                  949.660.9700
                             Facsimile: 949.660.9010


                                   Page 1 of 6
                      Exhibit Index is specified on Page 5



                                       1
<PAGE>


                             ClubCharlie.com, Inc.,
                              a Nevada corporation

                     Index to Amendment No. 1 to Form 10-SB


<TABLE>
<CAPTION>
Item Number and Caption                                                                  Page
- -----------------------                                                                  ----


<S>                                                                                <C>
PART I

7.   Certain Relationships and Related Party Transactions                                 3

PART II

1.   Market Price of and Dividends on the Registrant's Common Equity and Related
     Stockholder Matters                                                                  3

2.   Legal Proceedings                                                                    4

3.   Changes in and Disagreements with Accountants                                        4


PART F/S

     Financial Statements                                                          F-1 through F-14

PART III

     Signatures                                                                           6
</TABLE>



                                       2
<PAGE>


                                     PART I

Item 7. Certain Relationships and Related Transactions.

Transactions with Promoters. There were no transactions with promoters.

Related Party  Transactions.  On or about July 13, 1999, the Company and Charlie
Chance Productions,  a Canadian  corporation  ("Charlie Chance") entered into an
Original Screenplay Acquisition Agreement ("Agreement").  According to the terms
of the Agreement,  the Company  purchased from Charlie Chance all rights,  title
and  interest in all  properties,  interests,  rights and claims to the original
story plot entitled "The  Misadventures  of Charlie  Chance".  In exchange,  the
Company  agreed to execute a promissory  note in favor of Charlie  Chance in the
amount of One Hundred Fifty Thousand Dollars ($150,000.00).  The promissory note
includes a repayment  term of six (6) months and bore no  interest.  The Company
also  agreed to execute a royalty  agreement  whereby  Charlie  Chance  would be
entitled to ten percent (10%) of the net profits  (defined more  particularly in
the  Agreement,  attached as Exhibit  10.1 to Form 10-SB  filed on December  13,
1999). Zee Batal, an officer and a director of the Company, is the sole officer,
sole director and sole shareholder of Charlie Chance. The Company's valuation of
$150,000.00 for the screenplay  rights to "The  Misadventures of Charlie Chance"
was subjective in nature and based upon the  negotiations  with Charlie  Chance,
which is typical for literary  properties.  The Company has not yet incurred any
costs that should be charged to production overhead,  as defined in paragraph 17
of SFAS  No.  53,  and  therefore,  no such  expenses  appear  on the  Company's
financial  statements.  The Company  anticipates that any costs incurred will be
charged to  production  overhead if the property is held for three (3) years and
is not set for  production.  Accordingly,  once the costs are charged off by the
Company, the costs will not be reinstated if the property is set for production.

The Company did not pay the $150,000.00 when it was due on January 13, 2000, but
rather  negotiated  a six  month  extension  of the due  date.  The  Company  is
conducting a private placement pursuant to Section 4(2) of the Securities Act of
1933 ("Act") and Rule 506 of  Regulation D  promulgated  pursuant to that Act to
pay the $150,000.00. The date of the private offering is January 5, 2000 and, as
of January 28, 2000, no shares have been purchased pursuant to the offering.

Affiliates  of  director   Thomas   Stringham  have  provided   certain  website
construction  services  to the  Company  which are  currently  the  subject of a
dispute. See "Legal Proceedings".

Employment  Contracts.  The Company has entered into  employment  contracts with
Glenn  Chilton and Zee Batal.  In his capacity as President of the Company,  Mr.
Chilton  receives  $150,000 a year from the  Company.  In his  capacity  as Vice
President of Sales and Marketing,  Zee Batal  receives  $150,000 a year from the
Company.

                                     PART II

Item 1. Market Price of and  Dividends  on the  Registrant's  Common  Equity and
        Related Stockholder Matters.

The Company  participated  in the OTC Bulletin  Board,  an electronic  quotation
medium for  securities  traded  outside of the Nasdaq  Stock  Market,  under the
trading symbol "CLUC".  The Company's  common stock has closed at a low of $1/32
and a high of $2 7/16 for the 52-week  period  ending  January 20,  2000.  As of
January 21, 2000,  the Company  failed to comply with  eligibility  requirements
specified  in Rule 6530 and  therefore  should have been  delisted  from the OTC
Bulletin Board on January 21, 2000.  However,  although the Company has notified
the OTC Bulletin Board Compliance Unit of its failure to so comply,  the Company
has not yet been delisted.  The Company  anticipates that it will participate on
the National Quotation Bureau's Pink Sheets, an electronic  quotation medium for
securities  traded outside of the Nasdaq Stock Market,  under the trading symbol
"CLUC" until  Amendment  No.1 to the  Company's  Registration  Statement on Form
10-SB has cleared comments with the Securities and Exchange Commission.

As of January  28,  2000,  there  were no  warrants  to  purchase  common  stock
outstanding.  There have been no cash dividends declared on the Company's common
stock since the Company's inception.  The Company has not yet adopted any policy
regarding payment of dividends.

Penny  Stock  Regulation.   The  Commission  has  adopted  rules  that  regulate
broker-dealer practices in connection with transactions in "penny stocks". Penny
stocks are generally  equity  securities  with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the Nasdaq  system,  provided  that current  price and volume  information  with
respect to  transactions  in such  securities  is  provided  by the  exchange or
system).  The penny stock rules require a broker-dealer,  prior to a transaction
in a penny stock not otherwise  exempt from those rules,  deliver a standardized
risk  disclosure  document  prepared by the  Commission,  which (i)  contained a
description  of the nature  and level of risk in the market for penny  stocks in
both public offerings and secondary trading; (ii) contained



                                       3
<PAGE>


a  description  of the  broker's or dealer's  duties to the  customer and of the
rights and remedies  available to the customer with respect to violation to such
duties or other  requirements  of  Securities'  laws;  (iii)  contained a brief,
clear,  narrative  description  of a dealer  market,  including  "bid" and "ask"
prices for penny  stocks and  significance  of the spread  between the "bid" and
"ask"  price;  (iv)  contains a  toll-free  telephone  number for  inquiries  on
disciplinary  actions;  (v) defines significant terms in the disclosure document
or in the  conduct of  trading in penny  stocks;  and (vi)  contains  such other
information and is in such form (including language,  type, size and format), as
the Commission shall require by rule or regulation.  The broker-dealer also must
provide,  prior to effecting any  transaction  in penny stock,  the customer (i)
with bid and offer quotations for the penny stock;  (ii) the compensation of the
broker-dealer and its salesperson in the transaction; (iii) the number of shares
to which such bid and ask prices apply, or other comparable information relating
to the depth and liquidity of the market for such stock;  and (iv) month account
statements  showing the market value of each penny stock held in the  customer's
account. In addition,  the penny stock rules require that prior to a transaction
in a penny stock not otherwise exempt from those rules, the  broker-dealer  must
make a  special  written  determination  that  the  penny  stock  is a  suitable
investment for the purchaser and receive the purchaser's written  acknowledgment
of  the  receipt  of  a  risk  disclosure  statement,  a  written  agreement  to
transactions  involving  penny stocks,  and a signed and dated copy of a written
suitably  statement.  These  disclosure  requirements  may  have the  effect  of
reducing the trading  activity in the secondary  market for a stock that becomes
subject to the penny stock  rules.  If any of the  Company's  securities  become
subject  to the  penny  stock  rules,  holders  of  those  securities  may  have
difficulty selling those securities.

Item 2. Legal Proceedings.

The Company is not aware of any pending  litigation  nor does it have any reason
to believe that any such litigation exists, except as follows:

On or about  December 8, 1999,  corporate  counsel  for the  Company  received a
demand letter from Paterson & Associates,  Barristers and Solicitors  located in
Vancouver,  British Columbia.  The demand letter requested  immediate payment of
outstanding  invoices for services  provided to the Company by Thomas Stringham,
Hot Tomali Communications ("HTC"), and others. As specified above, Mr. Stringham
is a director of the company and is also the president and founder of HTC, which
provides Internet marketing and website construction services. Mr. Stringham and
HTC are demanding payment of approximately $38,000CDN  (approximately $25,850US)
and are also  demanding  the Company  provide them with various stock options to
purchase  Company  stock.  In late  December,  1999 the Company  believed it had
settled this matter by the payment of $13,154.33 (U.S. Dollars) and the proposed
issuance of 38,000 options.  However, certain disputes have arisen regarding the
performance  by HTC,  Stringham  and  others  of all the  terms  and  conditions
specified in the settlement agreement,  and various significant issues remain in
dispute. In the event a final settlement in this matter is not reached,  HTC may
take the Company's website offline,  withhold certain copyrighted material,  and
file suit in a Canadian  court.  Moreover,  the  Company  intends to  rigorously
prosecute  its own action for breach of  settlement  agreement if the matters in
dispute are not resolved.

Item 3. Changes in and Disagreements with Accountants.

In August, 1999, the Company's former accountant, the firm of Barry L. Friedman,
P.C. ("Friedman") was dismissed.  Friedman's reports on the financial statements
for  either of the past two (2) years did not  contain  an  adverse  opinion  or
disclaimer of opinion and the reports were not modified as to uncertainty, audit
scope  or  accounting  principals.   The  decision  to  change  accountants  was
recommended  and approved by the Board of Directors  and did not result from any
disagreement regarding the Company's policies or procedures.  There have been no
disagreements with the Company's accountants since the formation of the Company.
In August,  1999, a new  accountant,  Strabala,  Ramirez & Associates,  Inc. was
engaged as the principal accountant to audit the Company's financial statements.

                                    PART F/S

Copies of the financial  statements  specified in Regulation  228.310 (Item 310)
are filed with this Registration Statement, Amendment No.1 to Form 10-SB.



                                       4
<PAGE>


<TABLE>
<CAPTION>
(a)  Index to Financial Statements.                                      Page

<S>  <C>                                                                 <C>
1    Unaudited Balance Sheet for Period Ended September 30, 1999         F-1

2    Unaudited Statement of Operations for Period Ended
     September 30, 1999                                                  F-2

3    Unaudited Statement of Changes in Shareholder's Equity for
     the Period Ended September 30, 1999                                 F-3

4    Unaudited Statement of Cash Flows for the Period Ended
     September 30, 1999                                                  F-4

5    Notes to Financial Statements                                       F-5 through F-6

6    Independent Auditor's Report                                        F-7

7    Audited Balance Sheets
     as at December 31, 1997 and 1998                                    F-8 through F-9
8    Audited Statement of Statement of Operations
     for Periods Ended December 31, 1997 and 1998                        F-10

9    Audited Statements of Stockholders'
     Equity for Period Ended December 31, 1997 and 1998                  F-11

10   Audited Statements of Cash Flows
     for Period Ended December 31, 1997 and 1998                         F-12

11   Notes to Financial Statements                                       F-13 through F-14

</TABLE>



                                       5
<PAGE>


                                   SIGNATURES

     In accordance with the provisions of Section 12 of the Securities  Exchange
Act of 1934, ClubCharlie.com,  Inc., has duly caused this Registration Statement
on Amendment No. 1 to Form 10-SB to be signed on its behalf by the  undersigned,
thereunto duly authorized,  in the City of Los Angeles,  California,  on January
31, 2000.

                                               ClubCharlie.com, Inc.,
                                               a Nevada corporation


                                               By:      /s/
                                                        ------------------
                                                        Glenn Chilton
                                               Its:     President



                                       6
<PAGE>


                              CLUBCHARLIE.COM, INC.
                        (FORMERLY LOTUS ENTERPRISE, INC.)
                          (A Development Stage Company)

                              Financial Statements

                          As of and for the years ended
                           September 30, 1998 and 1999


<PAGE>


TABLE OF CONTENTS

                                                                         Page

INDEPENDENT ACCOUNTANTS REPORT ............................................1

BALANCE SHEET .............................................................2

STATEMENT OF OPERATIONS ...................................................3

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ..............................4

STATEMENT OF CASH FLOWS ...................................................5

NOTES TO FINANCIAL STATAEMENTS ..........................................6-7


<PAGE>

                             CLUBCHARLLIE.COM, INC.
                       (FORMERLY LOTUS ENTERPRISES, INC.)
                           A Development Stage Company


                                  BALANCE SHEET

<TABLE>
<CAPTION>
                                                                    9/30/98      9/30/99
                                                                   ---------    ---------
<S>                                                                <C>          <C>
Assets
     Cash                                                          $       0    $       7

     Screenplay rights, at cost                                            0      150,000

     Organization costs                                                1,860        1,860
     Accumulated amortization                                         (1,860)      (1,860)
                                                                   ---------    ---------
                                                                           0            0

                                                                   ---------    ---------
         Total Assets                                              $       0    $ 150,007
                                                                   =========    =========


Liabilities and Shareholders' Equity
     Accounts payable                                              $   1,550    $  70,043
     Amounts due officers and directors                                    0       34,008
                                                                   ---------    ---------
                                                                       1,550      104,051

     Related party acquisition loan for screenplay                         0      150,000

     Common stock                                                      1,860        3,860
         ($.001 par value; 50,000,000 shares
         authorized; 1,860,000 and 3,860,000 shares
         issued and outstanding at September 30,
         1998 and 1999, respectively.)
     Accumulated deficit                                              (3,410)    (107,904)
                                                                   ---------    ---------
                                                                      (1,550)    (104,044)

                                                                   ---------    ---------
         Total Liabilities and Shareholders' Equity                $       0    $ 150,007
                                                                   =========    =========
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       2
<PAGE>



                             CLUBCHARLLIE.COM, INC.
                       (FORMERLY LOTUS ENTERPRISES, INC.)
                           A Development Stage Company


                             STATEMENT OF OPERATIONS



                                                                     Inception
                                           9 months ended            (1/6/93)
                                      --------------------------      through
                                        9/30/98       9/30/99         9/30/99
                                      -----------    -----------    -----------

Revenue                               $         0    $         0    $         0

Expenses
     Salaries                         $         0    $    52,000    $    52,000
     Marketing                                  0         21,846         21,846
     Research and development                   0         13,992         13,992
     Legal                                      0          5,812          5,812
     General and administrative             1,100         10,844         14,254
                                      -----------    -----------    -----------
                                            1,100        104,494        107,904

                                      -----------    -----------    -----------
Net loss                              $    (1,100)   $  (104,494)   $  (107,904)
                                      ===========    ===========    ===========

Weighted average shares outstanding     1,860,000      3,090,769      1,977,827

Earnings per share                    $     (0.00)   $     (0.03)   $     (0.05)





        The accompanying notes are an integral part of these statements.


                                       3
<PAGE>


                             CLUBCHARLLIE.COM, INC.
                       (FORMERLY LOTUS ENTERPRISES, INC.)
                           A Development Stage Company


                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                Common Stock                 Accumulated       Shareholders'
                                                           Shares           Amount           Deficit            Equity
                                                        -----------       ----------        ----------        -----------
<S>                                                      <C>              <C>               <C>               <C>
Balance, December 31, 1997                               1,860,000        $    1,860        $   (2,310)       $     (450)
     Net loss                                                                                   (1,100)           (1,100)
                                                        ----------        ----------        ----------        ----------

Balance, September 30, 1998                              1,860,000        $    1,860        $   (3,410)       $   (1,550)
     Net loss                                                                                        0                 0
                                                        ----------        ----------        ----------        ----------

Balance, December 31, 1998                               1,860,000        $    1,860        $   (3,410)       $   (1,550)
     Shares issued to officers 4/16/99 for services      2,000,000             2,000                               2,000
     Net loss                                                                                 (104,494)         (104,494)
                                                        ----------        ----------        ----------        ----------

Balance, September 30, 1999                              3,860,000        $    3,860        $ (107,904)       $ (104,044)
                                                        ==========        ==========        ==========        ==========
</TABLE>


        The accompanying notes are an integral part of these statements.


                                       4
<PAGE>


                             CLUBCHARLLIE.COM, INC.
                       (FORMERLY LOTUS ENTERPRISES, INC.)
                           A Development Stage Company


                             STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                 Inception
                                                                9 months ended                    (1/6/93)
                                                         -----------------------------            through
                                                          9/30/98             9/30/99             9/30/99
                                                         ---------           ---------           ---------
<S>                                                      <C>                 <C>                 <C>
Cash flows from operating activities -
     Net loss                                            $  (1,100)          $(104,494)          $(107,904)
         Adjustments to reconcile net loss to cash
         used in operating activities -
            Amortization                                                                             1,860
            Common stock issued for services                                     2,000               3,860

         Changes in assets and liabilities -
            Organization costs                                                                      (1,860)
            Increase in payables                             1,100             102,501             104,051
                                                         ---------           ---------           ---------
Cash provided by operating activities                            0                   7                   7

Cash flows from investing activities -
     Acquisition of screenplay rights                            0            (150,000)           (150,000)
                                                         ---------           ---------           ---------
Cash used in investing activities                                0            (150,000)           (150,000)

Cash flows from financing activities -
     Loan to acquire screenplay rights                           0             150,000             150,000
                                                         ---------           ---------           ---------
Cash provided by financing activities                            0             150,000             150,000

     Net increase in cash                                $       0           $       7           $       7
     Cash, beginning of the period                               0                   0                   0
                                                         ---------           ---------           ---------

     Cash, end of the period                             $       0           $       7           $       7
                                                         =========           =========           =========
</TABLE>


Supplemental information:  No amounts were paid for interest or taxes during the
periods.

        The accompanying notes are an integral part of these statements.


                                       5
<PAGE>


                              Clubcharlie.com, Inc.
                       (Formerly Lotus enterprises, Inc.)
                          (A Development Stage Company)

         As of and for the Nine Months ended September 30, 1998 and 1999


1.   HISTORY AND OPERATIONS OF THE COMPANY

History.  The Company was organized January 6, 1993, under the laws of the State
of Nevada,  as Lotus  Enterprises,  Inc. On February 1, 1993, the Company issued
18,600  shares of its no par value common stock for  $1,860.00.  On December 17,
1997, the State of Nevada approved the restated Articles of Incorporation, which
changed  the no par value  common  shares to a par value of $.001.  The  Company
increased  its   authorized   capitalization   to  25,000,000   common   shares.
Additionally,  the Company  approved a forward stock split on the basis of 100:1
thus  increasing  the  outstanding  common stock from 18,600 shares to 1,860,000
shares.  On April 6, 1999, the State of Nevada approved the restated Articles of
Incorporation,  which  increased  its  authorized  capitalization  to 50,000,000
common shares.  The Company changed its name to  Clubcharlie.com,  Inc. On April
16, 1999, the Company issued  2,000,000  shares of its common stock to the three
board members for services valued at $2,000.

Operations. The Company currently has no operations and, in accordance with SFAS
#7, is  considered  a  development  stage  Company.  However,  the Company  owns
screenplay  rights  to  "The  Misadventures  of  Charlie  Chance"  which  is  in
pre-production  (that is, they are  identifying the players who will direct star
and in the movie.)


2.   ACCOUNTING POLICIES AND PROCEDURES

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

o    The Company uses the accrual method of accounting.

o    Earnings per share are computed using the weighted average number of shares
     of common stock outstanding.  There are no common stock equivalents,  thus,
     basic and diluted EPS are equal.

o    Organization  costs  of  $1,860  were  amortized  over  a 60  month  period
     commencing January 6, 1993 to January 5, 1998.

o    Research  and  development  costs  incurred to  establish  and maintain the
     Company's web site are expensed as incurred.

o    Deferred tax assets have not been  recognized due to the uncertainty of the
     Company's ability to recognize the benefit in the future.


3.   GOING CONCERN

The Companys  financial  statements  are prepared  using the generally  accepted
accounting  principles  applicable to a going concern,  which  contemplates  the
realization  of assets and  liquidation  of  liabilities in the normal course of
business. However, the Company has generated no revenues. Without realization of
additional  capital, it would be unlikely for the Company to continue as a going
concern.  Management  intends  to seek  additional  financing  through a private
placement offering in early 2000.


                                       6
<PAGE>



                             CLUBCHARLLIE.COM, INC.
                       (FORMERLY LOTUS ENTERPRISES, INC.)
                          (A Development Stage Company)

         As of and for the Nine Months ended September 30, 1998 and 1999


4.   SCREENPLAY RIGHTS AND OBLIGATIONS

On July 13,  1999,  the  Company  acquired  the  rights to the  screenplay  "The
Misadventures  of Charlie  Chance" from Charlie  Chance  Productions,  a related
party,  for a $150,000 note and royalties of 10% of net profits  collected.  Net
profits are defined as gross  receipts  collected  reduced by direct  production
services, general studio overhead,  distribution fees and distribution expenses.
The note, due January 13, 2000, is  non-interest  bearing.  No interest has been
imputed  as the note is  between  related  parties,  and is due in less than one
year.

As required  by  Paragraph  17 of SFAS No. 53, the cost  incurred to acquire the
screenplay was  capitalized,  (for cost incurred by the Company,  please see the
1999  Acquisition  Agreement  which  indicates that the Company paid $150,000 by
signing a promissory note. ) As the screenplay was acquired in 1999, the Company
has held the property for less than three years,  and because  management  still
expects   production  to  occur,  the  Company  has  appropriately  not  charged
screenplay costs to overhead production during the current period.

5.   RELATED PARTY TRANSACTIONS

Rent. The officers of the Company currently work out of their own offices and do
not allocate any charges to the Company.

Research and Development.  A director provides research and development services
to the Company, developing and maintaining the Company's web site. In the period
ended  September  30,  1999,  the Company  paid  approximately  $4,000 for these
services.  An  additional  $10,000  has been  accrued.  See  Note 6 for  further
discussion.

Screenplay  acquisition.  The Company  acquired  screenplay  rights from Charlie
Chance  Productions,  a  Canadian  corporation,  as  discussed  in Note  4.  The
screenplay,  written by Zee Batal,  a director and officer of the Company,  owns
Charlie Chance Productions.  The non-interest  bearing $150,000 acquisition loan
between the Company and Charlie Chance  Productions will be repaid from proceeds
raised in the private placement offering discussed in Note 3.

6.   COMMITMENTS AND CONTINGENCIES

Employment Contracts.  In August 1999, the Company executed employment contracts
for two officers providing  management and marketing services and overseeing the
establishment of the Company's operations. Each contract is for a five year term
with each officer earning $150,000 per year. The contract includes an additional
$600 monthly to each officer for a car allowance,  permits annual  increases and
is  renewable.  If the contract is  terminated  "without  cause," the Company is
required  to pay one year  severance.  As of  September  30,  1999,  expenses of
$52,000  were  recorded  of  which  approximately  $24,000  remains  due  to the
officers.

Research and  Development.  In September 1999, the Company entered into a verbal
arrangement  with a director who is developing and maintaining the Company's web
site whereby the director will provide such  services  until  September  2000 in
exchange  for  100,000  shares of stock.  None of the shares have been issued to
date. However, $10,000 has been accrued as discussed in Note 5.

Film Production and Distribution.  The Company intends to produce and distribute
the movie "The  Misadventures  of Charlie  Chance."  While the  Company  has not
entered  into any talent,  production  or  distribution  contracts,  the Company
intends to do so; these costs are not yet determinable.


                                       7
<PAGE>


                             LOTUS ENTERPRISES INC.
                         (A DEVELOPMENT STAGE COMPANY)


                              FINANCIAL STATEMENTS
                               December 31, 1998
                               December 31, 1997
                               December 31, 1996


<PAGE>


                               TABLE OF CONTENTS

                                                                         Page

INDEPENDENT ACCOUNTANTS REPORT ............................................1

ASSETS.....................................................................2

LIABILITIES AND STOCKHOLDERS' EQUITY.......................................3

STATEMENT OF OPERATIONS  ..................................................4

STATEMENT OF STOCKHOLDERS' EQUITY..........................................5

STATEMENT OF CASH FLOWS ...................................................6

NOTES TO FINANCIAL STATAEMENTS ............................................7




<PAGE>


                          INDEPENDENT AUDITORS' REPORT

Board of Directors                                                  May 19, 1999
Lotus Enterprises, Inc.
Las Vegas, Nevada


     I have audited the accompanying  Balance Sheets of Lotus Enterprises,  Inc.
(A Development Stage Company),  as of December 31, 1998,  December 31, 1997, and
December 31,  1996,  and the related  statements  of  operations,  stockholders'
equity and cash flows for the three years ended December 31, 1998,  December 31,
1997, and December 31, 1996. These financial  statements are the  responsibility
of the Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.

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

     In my opinion,  the financial  statements referred to above present fairly,
in all material respects,  the financial position of Lotus Enterprises,  Inc. (A
Development  Stage  Company),  as of December 31, 1998,  December 31, 1997,  and
December  31,  1996,  and the results of its  operations  and cash flows for the
three years ended  December 31, 1998,  December 31, 1997, and December 31, 1996,
in conformity with generally accepted accounting principles.

     The  accompanying  financial  statements  have teen  prepared  assuming the
Company  will  continue  as a  going  concern.  As  discussed  in Note #3 to the
financial statements,  the Company has suffered recurring losses from operations
and has no established  source of revenue.  This raises  substantial doubt about
its ability to continue as a going concern. Management's plan in regard to these
matters are also  described in Note #3. The financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.


/s/ Barry L. Friedman                                               May 19, 1999
- ----------------------------
Barry L. Friedman
Certified Public Accountant`S


<PAGE>


                             LOTUS ENTERPRISES, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                                     ASSETS


                                              December   December   December
                                              31, 1998   31, 1997   31, 1996
                                              --------   --------   --------

CURRENT ASSETS:                                 $  0       $  0       $  0
                                                ----       ----       ----
    TOTAL CURRENT ASSETS                        $  0       $  0       $  0
                                                ----       ----       ----

        OTHER ASSETS:
          Organization Costs (Net)              $  0       $  0       $372
                                                ----       ----       ----
            TOTAL OTHER ASSETS                  $  0       $  0       $372
                                                ----       ----       ----
            TOTAL ASSETS                        $  0       $  0       $372
                                                ====       ====       ====


          See accompanying notes to financial statements & audit report


                                       2
<PAGE>


                             LOTUS ENTERPRISES, INC.
                          (A Development Stage Company)


                                  BALANCE SHEET


                      LIABILITIES All STOCKHOLDERS' EQUITY


                                          December    December    December
                                          31, 1998    31, 1997    31, 1996

CURRENT LIABILITIES
Accounts Payable                           $1,550      $  450      $    0
                                           ------      ------      ------
       TOTAL CURRENT LIABILITIES           $1,550      $  450      $    0
                                           ------      ------      ------

STOCKHOLDERS' EQUITY: (Note 1)

     Common  stock, no par value,
     authorized 25,000 shares,
     issued  and outstanding at
     December 31, 1996-18,600 shs                                  $1,860

     Common stock, $.001 par value,
     authorized 25,000,000  shares,
     issued and outstanding at
     December 31, 1997-1,860,000 shs                   $1,860
     December 31, 1997-8,860,000 shs       $1,860

     Accumulated loss                      -3,410      -2,310      -1,488
                                           ------      ------      ------

     TOTAL STOCKHOLDERS' EQUITY            $ -1,550 $    -450      $  372
                                           ------      ------      ------

     STOCKHOLDERS' EQUITY                  $    0      $    0      $  372
                                           ------      ------      ------


          See accompanying notes to financial statements & audit report


                                       3
<PAGE>

                             LOTUS ENTERPRISES, INC.
                          (A Development Stage Company)


                             STATEMENT OF OPERATIONS

                                 Year         Year         Year      Jan 6, 1993
                                 Ended        Ended        Ended     (inception)
                                Dec. 31,     Dec. 31,     Dec. 31,    Dec. 31,
                                 1998         1997         1996          1998
                               ----------   ----------   ----------   ----------
INCOME:
    Revenue                    $        0            0            0            0
                               ----------   ----------   ----------   ----------

EXPENSES:
    General and
    Administrative             $    1,100   $      450   $        0   $    1,550
    Amortization                        0          372          372        1,860
                               ----------   ----------   ----------   ----------

            Total Expenses     $    1,100   $      822          372        3,410
                               ----------   ----------   ----------   ----------

Net Profit/Loss (-)               $-1,100       $- 822   $    - 372   $   -3,410
                               ==========   ==========   ==========   ==========

Net Profit/Loss (-)
per weighted
share (Note 1)                    $-.0006      $-.0004      $-.0002   $   -.0018
                               ==========   ==========   ==========   ==========

Weighted average
shares outstanding              1,860,000    1,860,000    1,860,000    1,860,000
                               ==========   ==========   ==========   ==========


         See accompanying notes to financial statements & audit report


                                       4
<PAGE>




                             LOTUS ENTERPRISES, INC.
                          (A Development Stage Company)


                       STATEMENT OF' STOCKHOLDERS' EQUITY



                                Common Stock         Additional       Accumu-
                          -----------------------     Paid-in          lated
                            Shares         Amount     Capital         Deficit
                          ---------      --------    ----------       --------


Balance,
December 31, 1995            18,600      $  1,860     $      0        $ -1,116

Net loss year ended
December 31, 1996                                                         -372
                          ---------      --------     --------        --------

Balance,
December 31, 1996            18,600      $  1,860     $      0        $ -1,488

December 17, 1997
Changed from no par
value to par value
of $.00l                                   -1,841       +1,841

December 17, 1997
forward stock split
      100:1               1,841,400        +1,841       -1,84l

Net loss year ended
December 31, 1997                                                         -822
                          ---------      --------     --------        --------
Balance,
December 31, 1997         1,860,000      $  1,860     $      0        $ -2,310

Net loss year ended
December 31, 1998                                                       -1,100
                          ---------      --------     --------        --------


Balance,
December 31, 1998         1,860,000      $  1,860     $      0        $ -3,410
                          =========      ========     ========        ========



             See accompanying notes to financial statements & audit report


                                       5
<PAGE>


                             LOTUS ENTERPRISES1 INC.
                          (A Development stage Company)


                             STATEMENT OF CASH FLOWS


                                       Year       Year     Year     Jan. 6,1993
                                       Ended     Ended     Ended    (inception)
                                     Dec. 31,   Dec. 31,  Dec. 31,    Dec. 31,
                                       1998      1997       1996        1998
                                     --------   -------   -------   -----------

Cash Flows from
Operating Activities;
Net Loss                             $-1,100    $  -822   $  -372     $-3,410
AdjuStment to
reconcile net loss to net cash
provided by operating activities
Amortization                               0       +372      +372      +1,860

Changes in assets and
liabilities:
organization Costs                                                     -1,860
Increase in current
liabilities:                          +1,100       +450         0      +1,550
                                      ------     ------    ------      ------

Neb cash used in
operating activities                 $     0     $    0    $    0     $-1,860

Cash Flows from
investing activities                       0          0         0           0

Cash Flows from
Financing Activities:
Issuance of common
Stock                                      0          0         0      +1,860
                                      ------     ------    ------      ------

Net increase (decrease)
in cash                              $     0     $    0    $    0      $    0

Cash, beginning of
period                                     0          0         0           0
                                      ------     ------    ------      ------
Cash, end of period                  $     0     $    0    $    0      $    0
                                      ======     ======    ======      ======


          See accompanying notes to financial statements & audit report


                                       6
<PAGE>


                             LOTUS ENTERPRISES, INC.
                         (A Development Stage Company)


                          NOTES TO FINANCIAL STATEMENTS
           December 31, 1998, December 31, 1997, and December 31, l$96


NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY

     The Company was organized  January 6, 1993,  under the laws of the State of
Nevada, as Lotus Enterprises,  Inc. The Company currently has no operations and,
in accordance with SFAS #7, is considered a development stage company.

     On February 1, 1993,  the company  issued 18,600 shares of its no par value
common stock for $ 1,860.00

     On December 17, 1997, the State of Nevada approved the restated Articles of
Incorporation,  which  changed the no par value common  shares to a par value of
$.00l. Also, the Company increased it's capitalization from 25,000 common shares
to 25,000,000 common shares.

     On December 17,  1997,  the Company  approved a forward  stock split on the
basis of 100:1 thus increasing the  outstanding  common stock from 18,600 shares
to 1,860,000 shares.

NOTE 2 - ACCOUNTING POLICIES AND PROCEDURES

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

     1. The Company uses the accrual method of accounting.

     2.  Earnings  per share is computed  using the weighted  average  number of
shares of common stock outstanding.

     3.  The  Company  has not yet  adopted  any  policy  regarding  payment  of
dividends. No dividends have been paid since inception.

     4.  Organization  costs of $ 1,860.00 are being  amortized  over a 60 month
period commencing January 6, 1993, to January 5, 1998.

NOTE 3 - GOING CONCERN

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


                                       7
<PAGE>


                             LOTUS ENTERPRISES, INC.
                          (A Development Stage Company)


                      NOTES TO FINANCIAL STATEMENTS (Con't)
           December 31, 1998, December 31, 1997, and December 31, 1996


NOTE 4 - RELATED PARTY TRANSACTION

     The Company neither owns or leases any real property. Office services are
provided  without  charge  by a  director.  Such  costs  are  immaterial  to the
financial  statements and,  accordingly,  have not been reflected  therein.  The
officers and directors of the Company are involved in other business  activities
and may, in the future,  become involved in other business  opportunities.  If a
specific  business  opportunity  becomes  available,  such  persons  may  face a
conflict in selecting  between the Company and their other business  interests.
The Company has not formulated a policy for the resolution of such conflicts.

NOTE 5 - WARRANTS AND OPTIONS

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

NOTE 6 - SUBSEQUENT EVENTS (UNAUDITED)

     On January 5, 1999, a new Board of Directors took over the Company.

     On April 6, 1999,  the state of Nevada  approved the  restated  Articles of
Incorporation, which increased it's capitalization from 25,000,000 common shares
to 50,000,000  common shares.

     On April 6, 1999, the Company changed its name to ClubCharlie. com, Inc.

     On April 16, 1999, the Company issued  2,000,000 shares of its common stock
to the three board meters for services valued at $2,000.00.


                                       8




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