<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB12(g)
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) of 12(g) of the Securities Act of 1934
EVERGREEN NETWORK.COM, INC.
(Name of Small Business Issuer in Its Charter)
Colorado 68-0166841
(State or Other Jurisdiction of (I.R.S. Employer Identification
Incorporation or Organization) Number)
3336 NORTH 32ND STREET, SUITE 106
PHOENIX, ARIZONA 85018
(Address of Principal Executive Offices) (Zip Code)
(602) 956-5694
Issuer's Telephone Number
Securities to be registered pursuant to Section 12(b) of the Act:
None
Title of Each Class to be so registered: N/A
Name of exchange on which each class is to be registered: N/A
Securities to be registered pursuant to Section 12(g) of the Act:
$.01 Per Share Par Value Common Stock
<PAGE> 2
PART I
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements set out herein constitute forward-looking
statements. These statements involve known and unknown risks, uncertainties and
other factors that may cause the Company's actual results, levels of activity,
performance and achievements, to be materially different from any future
results, levels of activity, performance or achievements, expressed or implied
by such forward-looking statements.
Forward-looking statements relate to future events or the Company's
future financial performance. In some cases, forward-looking statements can be
identified by terminology such as "may", "will", "should", "expects", "plans",
"projected" "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of such terms or comparable terminology. These
statements are only predictions. Actual events or results may differ materially.
In evaluating these statements, potential investors should specifically consider
various factors, including the risks outlined under RISK FACTORS. These factors
may cause actual results to differ materially from any forward-looking
statements.
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance or achievements. Moreover, neither the
Company nor any other person assumes responsibility for the accuracy and
completeness of such statements.
ITEM 1. DESCRIPTION OF THE BUSINESS
Summary of Parent Operations.
Evergreen Network.com, Inc. ("Company") conducts operations in the
charitable gaming industry. It provides the TabForce(TM) Pull-Tab Ticket
Validation System ("TabForce(TM) System") to qualified charitable or fraternal
organizations (such as American Legion or Veterans of Foreign Wars Chapters) or
charitable bingo hall operations. The Company is also offering the Tab Force(TM)
System to casino operators on Indian Reservations. The Company has entered into
an agreement with The McDowell-Yavapai Nation for the addition of the Tab
Force(TM) System to the casino on the Fort McDowell Indian Reservation in
Arizona. It is anticipated that these operations will commence before November
1, 2000. The Company is negotiating with four other Indian Tribes operating
casinos in Arizona for the installation of the Tab Force(TM) System in their
casinos.
The Tab Force(TM) System is a recreational game played by the user
utilizing Tab Force(TM) Pull-Tab Tickets ("Pull-Tabs") and Tab Force(TM)
Validation Machines ("Validation Machines"). The user purchases a Pull-Tab from
the cashier, pulls apart the Pull-Tab and inserts the bottom portion of the
Pull-Tab into the Validation Machine for validation. Each Pull-Tab has one play
on the Validation Machine for each $.25 of its purchase price (20 plays on a
$5.00 Pull-Tab). The results of each play are displayed on the Validation
Machine in a Las Vegas entertainment style manner. When all the plays are
completed in the Pull-Tab, the Validation Machine displays the results and
prints out a paper voucher which the player returns to the cashier for payout.
The Company rents the Validation Machines to the location organizations
and sells them the Pull-Tabs. The Company is operating in Colorado with over 80
Validation Machines in operation for over 70 charitable and fraternal
organizations. Under its agreement with the manufacturer of the Validation
Machines and Pull-Tabs, it has the right to distribute and operate them in
Arizona, Colorado, California and Nebraska. It is in the process of initiating
operations: (i) in Arizona on the Indian Reservation and with charitable or
fraternal organizations; and (ii) with charitable organizations in California.
It has applied for the necessary licenses to operate in the charitable gaming
industry in Nebraska.
The following sections set forth information on the history of the
Company, its present and proposed operations, its competition, regulation,
facilities and employees.
2
<PAGE> 3
History of the Company
The Company was organized as a Colorado corporation on May 27, 1987
under the name SEFCO, Inc. It was formed for the purpose of acquiring capital
funds to invest in an existing business. After completing a public offering in
September of 1989, it entered into a merger acquisition transaction with an
Arizona corporation and changed its name to "The Members Financial Service
Bureau, Inc.". From the fall of 1989 to the spring of 1998, the Company was
engaged in the telecommunications business (the Company's name was changed to
"Shared Use Network Services, Inc." in August of 1995). The Company operated as
an interchange carrier provided value added voice communications and data
communications and data processing services. In March of 1996, it became a
majority-owned subsidiary of a publicly held Delaware corporation. The Company
continued its telecommunications business with its efforts concentrated in the
area of the development, sale and electronic servicing of prepaid debit cards
and, in particular, prepaid telephone cards. In the spring of 1998, due to the
inability of its then parent company to provide the necessary funding, the
Company ceased its business operations. The transaction with the Delaware
corporation was then reversed and approximately 89% of the Company's then
outstanding Common Stock was returned by the Delaware Corporation in exchange
for shares of the parent which were returned to it.
The Company then concentrated its efforts on finding a new business
opportunity. In the summer of 1998, it entered into unsuccessful negotiations
for a corporate affiliation with Trilogy Gaming Corp., a Delaware corporation
engaged in the gaming business in Arizona, California and New York. Although the
transaction with Trilogy was never completed, the Company has concluded to make
available to certain shareholders of Trilogy a total of 681,102 shares of the
Company's Common Stock held in its treasury. These shares will be distributed to
them under a Registration Statement to be filed under the Securities Act of
1933.
In the fall of 1999, the Company began the formation of its present
organization and business plan. The President of the Company who had received
back the approximately 89% of the Common Stock of the Company when the
transaction with the Delaware parent was reversed returned 2,494,774 shares of
Common Stock to the treasury of the Company in exchange for 100,000 shares of
its Series A Preferred Stock. When the Company's previous operations were
suspended in the spring of 1998, the Company had outstanding tax obligations to
the Internal Revenue Service. The Company has sold 388,000 shares of its common
stock held as treasury shares for $ 60,164.00 which funds were used to liquidate
the tax liability.
During the period from December of 1999 through February of 2000, the
Company raised debt capital to finance the commencement of its operations in the
net amount of $230,000 through the sale of promissory notes in that total
principal amount. A total of 220,000 shares of the Company's treasury Common
Stock were issued for prepaid interest on these notes. As of September 12, 2000,
$200,000 had been paid on principal of these notes leaving a balance of $30,000.
On April 14, 2000, the Company began a private placement of 650,000
shares of its common stock at 2.00 a share. As of September 12, 2000, 277,000
shares had been sold in the placement resulting in $544,000 in gross proceeds.
On February 23, 2000 the Company entered into a Master Distributorship
Agreement with Infinity Group, Inc., the owner of the trade name Tab Force(TM)
and the exclusive manufacturer of the Validation Machines and Pull-Tabs included
in the Tab Force(TM) System. This agreement gives the Company the right to sell
all of Infinity's Tab Force(TM) products in the states of Arizona, Colorado,
Nebraska and the charitable jurisdictions in California. On March 1, 2000 the
Company finalized a written agreement under which it is purchasing 235
Validation Machines from Colorado Tab Force(TM), LLC, a Colorado limited
liability company which had been selling the Tab Force System(TM) in Colorado
since 1997. This agreement provided for the payment by the Company of $710,000
for the machines. As of September 12, 2000, the Company has paid $ 200,000.00 on
the agreement for the purchase of 235 machines and assumed the liability of
Colorado Tab Force(TM), LLC on a lease covering 120 machines. The remaining
Validation Machines are subject to a lease-purchase arrangement between Colorado
Tab Force(TM), LLC and the Lessor. Under arrangement with Colorado Tab
Force(TM), LLC, the Company took over the operations of the Tab Force(TM) System
in Colorado in January of 2000.
3
<PAGE> 4
Present and Proposed Operations
As of September 12, 2000, the Company has over 80 Validation Machines
operating for over 70 fraternal and charitable organizations in Colorado. The
Colorado operations are conducted through three distributors who are responsible
to place and service the Validation Machines and deliver the Tab Force(TM)
System products. The Company derives revenue from rentals on the Validation
Machines and from the sale of the Tab Force(TM) Pull-Tabs. The Company intends
to continue its efforts to expand the Colorado operations.
The Company has initiated its marketing efforts in the charitable
gaming industry in Arizona and California. In these states the Company intends
to provide the Validation Machines and Tab Force(TM) products directly without
the use of distributors. The marketing efforts in Arizona will be aimed at
charitable and fraternal organizations that are just now installing raffle
programs to raise funds. The California marketing efforts will be concentrated
on charitable organizations using bingo hall operations and card games. As of
September 12, 2000, the Company is in the process of installing Validation
Machines for charitable organizations in Arizona and California and plans to
continue its efforts to enter into and expand its operations in these markets.
The Company has filed application for the necessary license to be able
to offer the Tab Force(TM) System in Nebraska. If and when the licenses are
obtained, the Company intends to initiate a direct marketing program to Nebraska
charitable organizations.
The Company has implemented a program of marketing the Tab Force(TM)
System for installation in gaming casinos operated in Indian Reservations in
Arizona.
The Company has an oral agreement with respect to the installation of
machines at the Fort McDowell Indian Reservation and is in the process of
applying for the necessary license to make the installation and of reducing the
understanding to a written agreement. The Company is presently negotiating with
four other Arizona Indian Reservation casino operators for the sale of the Tab
Force(TM) System. The Company also intends to pursue negotiations for similar
arrangements with other Indian Reservations in the other states in which the
Company operates.
The Validation Machines are manufactured by Infinity Group, Inc.
("Infinity") of Albuquerque, New Mexico which also owns the Tab Force(TM)
trademark. Infinity has also dome extensive work to establish that the Tab
Force(TM) System may be legally marketed in the charitable gaming industry. The
Company has a Master Distributorship Agreement with Infinity to market the Tab
Force(TM) System in the states of Arizona, Colorado and Nebraska and to the
charitable jurisdictions in California. This includes the Validation Machines,
Pull-Tabs and all other Tab Force(TM) products of Infinity. The Company has
experienced some difficulty in obtaining sufficient quantities of Pull-Tabs form
Infinity on a timely basis. The Company has made arrangements with the producer
of the Pull-Tabs for direct delivery of Pull-Tabs to the Company if necessary to
alleviate this problem.
The Company is working with Infinity in its efforts to bring to market
a new desktop smaller style Validation Machine. The Company's market research
indicates that the market will be receptive to these new machines. Although the
Company is presently dependent upon Infinity as the sole provider of its Tab
Force(TM) System products, its management is of the opinion that these products
will be available as reasonably needed.
The Company is continuing its effort to raise additional equity through
the sale of common stock in the private placement being made under Rule 506 of
Regulation D adopted under the Securities Act of 1933. The Company's management
is of the opinion that it has developed sufficient business to enable it to fund
continued operations from revenues; however, it will need additional capital to
adequately fund any material expansion of operations on an expedited basis.
Competition
The Company competes directly with and faces potential competition with
many sources for the consumers' expenditure of recreational and discretionary
funds, including legal gaming operations. There is limited legalized
4
<PAGE> 5
gaming in Colorado, legalized charitable gaming operations and legalized gaming
on American Indian Reservations in all of the concerned states. In addition, the
Company directly competes with other charitable gaming operations (such as bingo
and non-electronic pull-tab games) in its territories. Many of the Company's
competitors are established organizations with established trade names and
goodwill and far greater resources and capital.
Regulation
All of the states in which the Company proposed to operate have
extensive prohibitions and/or regulations upon gambling and gaming operations.
The Company's charitable gaming business is allowed to operate under specific
statutory and/or regulatory provisions which limit or regulate its operations in
greater detail. The Company has been advised by counsel that it may sell the Tab
Force(TM) System in the four states in which it intends to operate; provided it
complies with the applicable legal restrictions. At the present time, Colorado
authorities have affirmatively indicated that the Tab Force(TM) System may be
used in Colorado for the benefit of licensed charitable and fraternal
organizations. In California, charitable gaming operations are regulated by
local city and county authorities. The Company's counsel is presently working
with these authorities in areas in which it is initiating operations. It should
be noted that there is a risk that future legal regulatory provisions may
adversely effect the Company's operations or potential profitability.
Facilities and Employees
The Company presently operates out of leased office facilities in
Phoenix, Arizona. The facilities contain approximately 1,000 square feet. The
lease is for one year commencing January 1, 2000 at a monthly rental of $1,500.
The Company also leases 1,000 square feet of warehouse facilities at the same
Phoenix location for $1,000 a month. This lease expires February 28, 2001.
Mr. Howard E. Tooke, President of the Company, presently spends full
time as a management consultant to the Company. The Company presently has four
other consultants working for it in the areas of office administration, sales
and product installation and servicing. If the Company's operations expand, it
may be anticipated that additional personnel will be required.
Company Risk Factors
The securities of Evergreen Network.com, Inc. ("Company") are
speculative and subject to investment risks including those set out in this
Item.
OUR BUSINESS IS ESPECIALLY VULNERABLE TO ECONOMIC DOWNTURN. Our
charitable gaming business essentially involves our customers' recreation and
entertainment and their expenditures therefore are discretionary in nature.
Accordingly, it may be anticipated that a slump or downturn in the economy where
we operate would more adversely affect our operations than businesses involving
non-discretionary expenditures.
PREVIOUS COLORADO OPERATIONS NOT PROFITABLE. Under the purchase
agreement for the initial 240 Validation Machines, we took over the locations
and operations of the seller which had been selling the Tab Force(TM) System in
Colorado since 1997. These previous Colorado operations were unprofitable. We
believe that we can develop and expand the Colorado operations and make them
profitable. However, there is no assurance such profitability will be achieved.
OUR EXPANSION INTO NEW MARKETS MAY ADVERSELY AFFECT POTENTIAL
PROFITABILITY. We just initiated operations in the states of Arizona and
California and have applied for authority to operate in Nebraska. It may be
anticipated that the expenses of these start-up operations will exceed their
income until a significant amount of business has been developed, of which there
is no assurance.
WE ARE DEPENDENT UPON DEVELOPMENT OF ADDITIONAL BUSINESS AND/OR
ACQUISITION OF ADDITIONAL CAPITAL. We are of the opinion that the proceeds from
the sale of our present private placement, if obtained, will be sufficient to
finance our business development activities and we will
5
<PAGE> 6
not need to acquire additional debt or equity capital in the next 12 months.
However, there is no assurance that: (i) a sufficient amount of these proceeds
will be received; (ii) we will be able to achieve profitable operations; or
(iii) any needed additional capital will be available.
WE HAVE NO TRADING MARKET FOR OUR SHARES. There is presently no trading
market for the Common Stock of the Company. Since we are in the business
development stage and most of our outstanding stock and the shares being sold in
the private placement will be subject to the transferability restrictions under
the securities and tax laws, it is unlikely any material trading market will
develop for a significant period of time. Upon completion of this registration
of our Common Stock under Section 12(g) of the Exchange Act we intend to take
the necessary actions to qualify our Common Stock for trading in the
over-the-counter market. There is no assurance that these actions will result in
the development of a viable trading market for the Common Stock.
THE PROPOSED REGISTRATION OF SHARES FOR SALE BY SHAREHOLDERS MAY
ADVERSELY EFFECT OUR ABILITY TO RAISE ADDITIONAL CAPITAL. We intend to file a
Registration Statement under the Securities Act of 1933 for the sale of shares
held by shareholders and for the distribution of 681,102 shares of Common Stock
to the shareholders of Trilogy Gaming Corp. The actual and potential
distribution of these shares into the marketplace may have a material adverse
effect upon the potential market for the Company's stock and upon the Company's
ability to raise any needed additional capital.
OUR BOARD OF DIRECTORS AND MANAGEMENT'S STOCK OWNERSHIP ASSURE
CONTINUED CONTROL BY PRESENT GROUP. Our Articles of Incorporation provide that
the members of the Board of Directors shall be divided into three classes, as
evenly divided as possible, with one class being elected each year for a
three-year term. The present officers and directors of the Company will own
1,000,475 shares (26.9%) of the 3,036,232 shares of Common Stock outstanding
after distribution of the 681,102 shares to the Trilogy shareholders. As a
result of these factors it should be assumed that the present management has the
ability to maintain control of the Company for an indefinite period.
WE OPERATE IN A HEAVILY REGULATED ENVIRONMENT. All of the states in
which we operate or proposed to operate have legal prohibitions or restrictions
upon gambling and/or gaming operations. The Company's charitable gambling
business is allowed to operate under specific statutory and/or regulatory
provisions which limit or regulate its operations in great detail. We have been
advised by counsel that we may sell the Tab Force(TM) System in the four states
in which we intend to operate, provided we comply with the applicable legal
restrictions. It should be noted that there is a risk that future regulatory
provisions may adversely affect the Company's operations or potential
profitability.
WE FACE EXTENSIVE COMPETITION. We face actual and potential competition
from many sources, including established companies and companies with greater
resources and capital. Although we are not involved in the for-profit gaming or
gambling industry except on Indian Reservations, we do compete with those
entities that are for the customers' discretionary expenditures. There is
limited legalization gambling in Colorado, legalized charitable gaming
operations, and legalized gambling on American Indian Reservations in all of the
concerned states. In addition, we directly compete with other charitable gaming
operations (such as bingo and non-electronic pull-tab games) in our territories.
6
<PAGE> 7
ITEM 3 DESCRIPTION OF PROPERTY
The Company presently operates out of leased office facilities in
Phoenix, Arizona. The facilities contain approximately 1,000 square feet. The
lease is for one year commencing January 1, 2000 at a monthly rental of $1,5000.
The Company also leases 1,000 square feet of warehouse facilities at the same
Phoenix location for $1,000 a month. This warehouse lease expires February 28,
2001.
ITEM 4 SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS
Information with respect to the ownership of shares of each class of
the Company's outstanding stock as of September 12, 2000 by each shareholder who
owns 5% or more of each class and by the officers and directors of the Company
and by all its officers and directors as a group is set forth in the tables
below.
This table sets out information as to each shareholder who owns 5% or
more of each class.
<TABLE>
<CAPTION>
NAME AND AMOUNT AND
TITLE ADDRESS OF NATURE OF PERCENT
OF BENEFICIAL BENEFICIAL OF
CLASS OWNER OWNER(1) CLASS(1)
----- ---------- ---------- --------
<S> <C> <C> <C>
200 Series A
Preferred Stock Howard E. Tooke
3336 N. 32nd Street, Suite 106 100,000.00 100.0%
Phoenix, AZ 85018
Common Stock Howard E. Tooke 200,000.00 5.4%(1)
3336 N. 32nd Street, Suite 106
Phoenix, AZ 85018
Jim T. Boyle 253,500(1) 6.8%(1)
4202 E. Phelps
Phoenix, AZ 85032
Joseph M. Imhoff, Sr. 228,500(1) 6.1%(1)
2999 N. 44th Street, Suite 100
Phoenix, AZ 85018
Robert G. Rettig 269,375(1) 7.2%(1)
102 Burr Ridge Cl. Dr.
Burr Ridge, IL 60521
All Officers & Directors as a Group
</TABLE>
(1) These stated number of shares and percentages assumes that the
681,102 shares of common stock reserved for distribution to
certain shareholders of Trilogy Gaming Corp. have been
distributed and added to the 3,036,232 shares outstanding as
of September 12, 2000. In that case, of the 681,102 shares so
distributed, shares would have been distributed to the above
persons as follows: (i) Jim T. Boyle - 51,200; (ii) Joseph M.
Imhoff, Sr. - 26,000; and (iii) Robert G. Rettig - 66,875.
This table sets of the information on the beneficial ownership of each
class of the Company's outstanding stock as of September 12, 2000 by the
officers and directors of the Company and by all of the officers and directors
as a group.
7
<PAGE> 8
<TABLE>
<CAPTION>
NAME AND AMOUNT AND
TITLE ADDRESS OF NATURE OF PERCENT
OF BENEFICIAL BENEFICIAL OF
CLASS OWNER OWNER(1) CLASS(1)
----- ---------- ---------- --------
<S> <C> <C> <C>
200 Series A
Preferred Stock Howard E. Tooke
President
3336 N. 32nd Street, Suite 106 100,000.00 100.0%
Phoenix, AZ 85018
Common Stock Howard E. Tooke 200,000.00 5.4%(1)
President
3336 N. 32nd Street, Suite 106
Phoenix, AZ 85018
Jim T. Boyle 253,500(1) 6.8%(1)
Secretary-Treasurer and Director
4202 E. Phelps
Phoenix, AZ 85032
Bonnie J. Andrikopoulos 49,100(1) 1.3%(1)
Director
1165 Pennsylvania, #20
Denver, CO 80203
Joseph M. Imhoff, Sr. 228,500(1) 6.1%(1)
Director
2999 N. 44th Street, Suite 100
Phoenix, AZ 85018
John E. Mulligan 269,375(1) 6.1%(1)
Director
2999 N. 44th Street, Suite 100
Phoenix, AZ 85018
Robert G. Rettig 269,375(1) 7.3%(1)
Director
102 Burr Ridge Cl. Dr.
Burr Ridge, IL 60521
All Officers & Directors as a Group 1,000,475(1) 26.9%(1)
</TABLE>
(1) These stated number of shares and percentages assumes that the
681,102 shares of common stock reserved for distribution to
certain shareholders of Trilogy Gaming Corp. have been
distributed and added to the 3,036,232 shares outstanding as
of September 12, 2000. In that case, of the 681,102 shares so
distributed, shares would have been distributed to the above
persons as follows: (i) Jim T. Boyle - 51,200; (ii) Bonnie J.
Andrikopolos - 19,100 shares; (iii) Joseph M. Imhoff, Sr. -
26,000; and (iv) Robert G. Rettig - 66,875.
8
<PAGE> 9
ITEM 5 DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Certain information with respect to the directors and officers of the
Company is as follows:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Howard E. Tooke 64 President
Jim T. Boyle 64 Secretary, Treasurer and
Director
Bonnie J. Andrikopoulos 65 Director
Joseph M. Imhoff, Sr. 66 Director
John E. Mulligan 54 Director
Robert G. Rettig 70 Director
</TABLE>
The Company's Articles of Incorporation provide for the members of the
Board to be divided into three classes with one class of directors standing for
election each year for a three-year term. The classification of the present
Board of Directors and their respective terms of office are as follows:
<TABLE>
<CAPTION>
Term Expires
Name Class Annual Meeting
---- ----- --------------
<S> <C> <C>
Robert G. Rettig A 2001
Jim T. Boyle B 2002
John E. Mulligan B 2002
Bonnie J. Andrikopoulos C 2003
Joseph M. Imhoff, Sr. C 2003
</TABLE>
Messrs. Boyle, Imhoff and Rettig are the members of the Executive
Committee of the Board of Directors.
Howard E. Tooke has served as the President of the Company since
October of 1989. He also served as a director of the Company from October of
1989 to September of 2000. During the period from November of 1995 to December
of 1998, he was also President and Director of the Delaware telecommunications
company which was the parent of the Company during most of that period. From
December of 1986 until October of 1989, Mr. Tooke was the founder, Chief
Executive Officer and President of an Arizona corporation which was merged into
the Company in October of 1989. From July of 1985 until December of 1986, Mr.
Tooke operated as a sole proprietor, developing the business which became the
Arizona Corporation. During the period from December 1982 through June of 1985,
Mr. Tooke was the President and Chief Executive Officer of Shared Use Network
Services, a company operating in Phoenix, Arizona in the telecommunications
business. During the period from July of 1979 through November of 1982, Mr.
Tooke was the Executive Vice President and Chief Operating Officer of GCI, a
Phoenix, Arizona company engaged in the telecommunications business. From
September of 1970 through June of 1979, Mr. Tooke was employed as Executive Vice
President and Director of the Institute of human Resources in Phoenix, Arizona,
a company doing research in the biofeedback aspects of human behavior. From
March of 1966 through September of 1976, Mr. Tooke was employed as the Vice
President of Sales and marketing for the Apollo Tire and
9
<PAGE> 10
Rubber Company of Houston, Texas. During the period from January 1963 through
February of 1966, Mr. Tooke was employed by the National Aeronautics Space
Administration as a Technical Director of Communication and Flight Operations in
Houston, Texas. Mr. Tooke holds a Bachelors or Divinity degree from the
Tennessee Temple Baptist College of Chattanooga, Tennessee and a Masters of Arts
in Human Behavior, which he acquired from the University of Texas in 1968.
Jim T. Boyle became the Secretary and Treasurer of the Company in April
of 2000. He became a director on September 12, 2000. He has been associated with
J.T.B. Associates, Inc., a wholesale supplier of chemical and construction
products since 1968 and has been its President since 1979. Mr. Boyle is a
graduate of Dakota Wesleyan University from which he received a Bachelors degree
in English in 1956.
Bonnie J. Andrikopoulos became a director of the Company on September
12, 2000. Ms. Andrikopoulos has been the owner and manager of a private company
in Denver, Colorado which owns and/or manages oil and gas properties and other
investments since 1984. From 1960 to 1984, she was self-employed as an oil and
gas lease broker. She has served as the President of Pennborough Condominium
Association in Denver, Colorado since 1996. She was the President of Colorado
Micro Credit, Inc., of Denver, Colorado from 1997 to 1999. Ms. Andrikopoulos
became a Registered Nurse in Wyoming in 1957 and received a Bachelor of Science
degree in Nursing from the University of Wyoming in 1966.
Joseph M. Imhoff, Sr. became a director of the Company on September 12,
2000. Mr. Imhoff has been active in the securities industry for over 42 years.
From July of 1986 to present, he has been the Senior Vice President of Peacock
Hislop, Staley, Givens, Inc., a securities broker-dealer in Phoenix, Arizona.
From June 1978 to June of 1986, he was the Executive Vice President and a
director of Hanifen Imhoff, Inc., a securities broker-dealer in Denver,
Colorado. From May of 1970 to May of 1978, he was the President and a director
of J. Imhoff-Nimmo, Inc., a securities broker-dealer in Denver, Colorado. Mr.
Imhoff is a graduate of Regis University in Denver, Colorado from which he
received a Bachelor of Science degree in Business Administration in 1956.
John E. Mulligan became a director of the Company on September 12,
2000. Mr. Mulligan was an officer with the Denver Police Department from July of
1968 to August of 1990, and held the rank of Lieutenant when he retired. From
July of 1984 to the present, he has been the owner and President of The Bingo
Company of Denver, Colorado. Mr. Mulligan is an active member of the Colorado
Charitable Gaming Association. He attended the University of Northern Colorado
in Greeley, Colorado in 1964 and 1965.
Robert G. Rettig became a director of the Company on September 12,
2000. He has served as a director of Lawson Products, Inc. of Des Plaines,
Illinois since 1989, Bermo, Inc. of Circle Pines, Minnesota since 1993 and The
Tech Group of Scottsdale, Arizona since 1995. From 1953 to 1989 he was the
Executive Vice President of Illinois Toolworks, Inc. of Glenview, Illinois. From
1989 to 1999 Mr. Rettig was a director of Scotsman Industrial of Vernon Hills,
Illinois.
ITEM 6 EXECUTIVE COMPENSATION
The Company did not pay any compensation to any officer or director in
1999. During the period from January 1, 2000 through August 31, 2000, the
Company paid a corporation owned by Howard E. Tooke, President of the Company a
management consulting fee totaling $64,000. It is anticipated that the Company
will continue to pay this consulting fee for the remainder of the year 2000 at
the rate of $8,000 per month.
The Company has also paid a consulting fee in 2000 to Joseph M. Imhoff,
Sr. for services rendered totaling $15,000 through August 31, 2000; and may pay
an additional amount to him during the balance of the year 2000.
Although he has not received any compensation through August 31, 2000, Mr. Boyle
may receive compensation during 2000 if he devotes sufficient time to the
Company affairs, at a rate to be determined by the Board of Directors.
The directors of the Company did not receive any compensation for their
services as such in 2000. They may be compensation for any services rendered
outside their normal duties as directors. All directors will be
10
<PAGE> 11
reimbursed for their cash expenses. The directors may also participate in any
stock incentive or stock option programs developed by the Company.
ITEM 7 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to transactions of the Company during the
period since September 1, 1998 in which any of its officers or shareholders
owning 5% or more of its Common Stock as of September 12, 2000 are set forth in
the following paragraphs.
In March of 2000, Howard E. Tooke and/or entities owned by him
transferred 2,618,806 shares of the Company's Common Stock to the Company to be
held as treasury shares in exchange for 100,000 shares of the Company's 2000
Series A Preferred Stock. At the time of the transfer by him the shares of
Common Stock had a negative net tangible asset value. Mr. Tooke had an
identifiable cash cost in the shares transferred to the Company of $1,094,493.
In April of 2000 the Company sold 1,000,000 shares of its Common Stock
held as treasury shares for $.01 per share or a total of $10,000. These shares
were sold in the amount of 200,000 each to: (i) Howard E. Tooke, President of
the Company; (ii) Jim T. Boyle, Secretary-Treasurer and a director of the
Company; (iii) Messrs. Joseph M. Imhoff, Sr., and Robert G. Rettig, directors of
the Company; and (iv) William Daniels, a consultant to the Company.
John E. Mulligan, a director of the Company is a distributor of the Tab
Force(TM) System in Colorado. His arrangement with the Company is on the same
terms and conditions as its other two Colorado distributors.
Bonnie J. Andrikopoulos, a director of the Company purchased $30,000 of
principal amount of the Company's promissory notes on the same terms and
conditions as other purchasers of notes. She received 30,000 shares of Common
Stock as prepaid interest on these notes. The Company has repaid the principal
on the notes.
In December of 1999, the Company sold four notes for $5,000 each of
which has been repaid. These notes provided that the holders would receive, as
prepaid interest, one share of Common Stock for each $2.00 of note principal.
Messrs. Boyle, Imhoff and Rettig each purchased one of these notes. Accordingly,
they each received 2,500 shares of Common Stock as prepaid interest in these
notes.
If the distribution of the 681,102 shares of Common Stock to certain
shareholders of Trilogy Gaming Corp. is completed, four of the Company's
directors, Ms. Andrikopoulos and Messrs. Boyle, Imhoff, and Rettig will receive
an aggregate of 162,975 of these shares.
ITEM 8 DESCRIPTION OF SECURITIES
The Company's authorized capitalization is 30,000,000 shares consisting
of 20,000,000 shares of $.01 par value common stock ("Common Stock") and
10,000,000 shares of $.01 par value preferred stock ("Preferred Stock"). As of
September 12, 2000, there were: (i) 3,036,232 shares of Common Stock issued and
outstanding with the remaining 614,674 shares held by the Company as treasury
stock; and (ii) 100,000 shares of Preferred Stock issued and outstanding and
designated as 2000 Series A Preferred Stock ("Series A Stock"). As of that date
there were no outstanding options, warrants or other rights to acquire shares of
the Common Stock. Under applicable Colorado law and its Articles of
Incorporation, the Company's Board of Directors may issue additional shares of
its stock up to a total amount of authorized Common and/or Preferred Stock
without approval of its shareholders.
Information is set forth in the following subsections concerning the
Common Stock, and the Preferred Stock.
COMMON STOCK. The shares of Common Stock currently outstanding are
fully paid and non-assessable. The holders of Common Stock do not have any
preemptive rights to acquire shares of any capital stock of the Company. In the
event of liquidation of the Company, assets then legally available for
distribution to the holders of Common Stock (assets remaining after payment or
provision for payment of all debts and of all preferential
11
<PAGE> 12
liquidation payments to holders of any outstanding Preferred Stock) will be
distributed in pro rata shares among the holders of Common Stock and the holders
of any outstanding Preferred Stock with liquidation participation rights in
proportion to their stock holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if,
declared by the Board of Directors out of funds legally available therefore; and
then, only after all preferential dividends have been paid on any outstanding
Preferred Stock. The Company has not had any earnings and it does not presently
contemplate the payment of any cash dividends in the foreseeable future.
The Company's Common Stock does not have any mandatory redemptive
provisions, sinking fund provisions or conversion rights.
PREFERRED STOCK. The Preferred Stock of the Company may be issued from
time to time by the Board of Directors in one or more series. The description of
shares of each series of Preferred Stock will be set forth in resolutions
adopted by the Board of Directors and a certificate of designation to be filed
as required by Colorado law prior to issuance of any shares of the series. The
certificate of designation will set the number of shares to be included in each
series of Preferred Stock and set the designations, preferences, conversion or
other rights, voting powers, restrictions, limitations as to distribution,
qualifications, or terms and conditions of redemption relating to the shares of
each series. However, the Board of Directors is not authorized to change the
right of the Common Stock to vote one vote per share on all matters submitted
for shareholder action. The authority of the Board of Directors with respect to
each series of Preferred Stock includes, but is not limited to, setting or
changing the following:
o The designation of the series and the number of shares constituting the
series, provided that the aggregate number of shares constituting all
series of preferred shares may not exceed 10,000,000;
o The annual distribution rate on shares of the series, whether
distributions will be cumulative and, if so, from which date or dates;
o Whether the shares of the series will be redeemable and, if so, the
terms and conditions of redemption, including the date or dates upon
and after which the shares will be redeemable, and the amount per share
payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
o The obligation, if any, of the Company to redeem or repurchase shares
of the series pursuant to a sinking fund;
o Whether shares of the series will be convertible into, or exchangeable
for, shares of stock of any other class or classes and, if so, the
terms and conditions of conversion or exchange, including the price or
prices or the rate or rates of conversion or exchange and the terms of
adjustment, if any;
o Whether the shares of the series will have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of the
voting rights;
o The rights of the shares of the series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Company; and
o Any other relative rights, powers, preferences, qualifications,
limitations or restrictions thereof relating to the series which may be
authorized or permitted under Colorado law.
12
<PAGE> 13
The shares of Preferred Stock of any one series will be identical with
each other in all other respects except as to the dates from and after which
dividends thereon will cumulate, if cumulative.
GENERAL PROVISIONS
The Shares of Common Stock currently outstanding and offered herein,
when issued, will be fully paid and non-assessable. The holders of Common Stock
do not have any preemptive rights to acquire shares of any capital stock of the
Company. In the event of liquidation of the Company, assets then legally
available for distribution to the holders of Common Stock (assets remaining
after payment or provision for payment of all debts and of all preferential
liquidation payments to holders of any outstanding Preferred Stock) will be
distributed in pro rata shares among the holders of Common Stock and to the
holders of any participating Preferred Stock in proportion to their stock
holdings.
Each stockholder is entitled to one vote for each share of Common Stock
held by such Shareholder. A quorum for a meeting of the stockholders is one-half
of the shares of capital stock entitled to vote at that meeting. There is no
right to cumulate votes for the election of directors. This means that holders
of more than 50% of the shares voting for the election of directors can elect
100% of the directors if they choose to do so; and, in such event, the holders
of the remaining shares voting for the election of directors will not be able to
elect any person or persons to the Board of Directors.
Holders of Common Stock are entitled to dividends when, and if,
declared by the Board of Directors out of funds legally available therefore. The
Company does not presently contemplate the payment of any cash dividends in the
foreseeable future.
There are no preemptive rights on the part of the holders of the Common
Stock to acquire any additional shares which may be issued or sold in the future
by the Company.
OUTSTANDING SERIES A PREFERRED
The Company's Series A Stock (of which there are 100,000 shares outstanding
as of the date of this Memorandum) has the following rights, preferences and
limitations:
o The Series A Stock is not entitled to any dividend preferences;
however, the Company may not pay a cash dividend on Common Stock or any
other Preferred Stock until all of the Series A Stock has been redeemed
by the Company.
o In the event of any liquidation of dissolution or winding up of the
Company, voluntary or involuntary, the holders of the Series A Stock
shall be entitled to receive out of the assets of the Company legally
available for distribution to its stockholders, and before any
distribution is made on any class of stock junior to the Series A
Stock, the sum equal to the $1.00 call price. If, upon any voluntary or
involuntary liquidation, dissolution, or winding up of the Company, the
amounts payable to with respect to the Series A Stock are not paid in
full, the holders of the Series A Stock shall share ratably as only
among the holders of Series A Stock in any such distribution of assets
of the Company in proportion to the full respective preferential
amounts to which they are entitled. After payment to the holders of the
Series A Stock of the full preferential amounts provided for in this
Section 1.4, the holders of the Preferred Stock shall not be entitled
to any further participation in any distribution of assets by the
Company. A consolidation or merger of the Company with one or more
corporations or sale of substantially all of the assets of the Company
shall not be deemed to be a liquidation, dissolution nor winding up of
the Company.
o The Company will redeem all outstanding shares of Series A Stock at the
$1.00 call price as of April 30, 2002.
o The Company will not create any class of stock with rights senior to
the Series A Stock.
13
<PAGE> 14
o There shall be no sinking fund or other similar provision in respect of
redemption or purchase of the Series A Stock.
o Holders of the Preferred Stock shall have no voting rights in the
affairs of the Company, other than such voting rights as a class as may
be required by the Colorado Corporation Code.
o The Board of Directors shall have at all times the right to establish
and designate other series of Preferred Stock. At no time, however,
will any other series of Preferred Stock have dividend or liquidation
rights superior to the class of Series A Stock established herein
unless otherwise approved by a majority vote of the issued and
outstanding Series A Stock voting as a class.
The Company's Articles of Incorporation provide for the members to the
Board to be divided into three classes with one class of directors standing
for election each year for a three-year term. These provisions could delay,
defer or prevent a change in control of the Company.
14
<PAGE> 15
PART II
ITEM 1 MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
RELATED SHAREHOLDER MATTERS
There has not been any public trading market for any stock of the
Company since January 1, 1997. When this Form 10-SB Registration Statement has
become effective the Company will endeavor to take the necessary action to have
its common stock included on OTC Bulletin Board. However, there is no assurance
that any public trading market will develop for the Company's common stock.
As of September 12, 2000, information with respect to the Company's
common stock is as follows:
o There were 3,036,232 shares held by 140 stockholders of record
outstanding;
o There were no outstanding options or warrants to purchase, or
securities convertible into common stock;
o Of the outstanding common stock 1,847,000 shares were sold as
"restricted securities" [as defined under the Securities Act of 1933
("Securities Act')] since January 1, 2000;
o The Company was offering to sell up to an additional 378,000 shares of
common stock in a private placement being made directly by the Company
under Rule 506 of Regulation D adopted under the Securities Act; and
o Following the filing of this Form 10-SB Registration Statement
registering the Company's common stock under Section 12(g) of the
Securities Exchange Act of 1934 ("Exchange Act"), the Company will use
its best efforts to prepare, file and achieve effectiveness of the
Registration Statement under the Securities Act relating to: (i) the
sale by the holders thereof of all 1,847,000 outstanding shares of
common stock issued as restricted securities; and (ii) the distribution
by the Company of 681,102 shares of the Company's common stock to the
stockholders of Trilogy Gaming Corp.
The Company has never paid any dividends on any class of its
outstanding stock and there are no present plans to pay any cash dividends in
the future. It may be anticipated that any future net revenues will be retained
by the Company to finance its operations.
ITEM 2 LEGAL PROCEEDINGS
Neither the Company nor any of its property is a party or subject to
any pending legal proceeding. The Issuer is not aware of any contemplated or
threatened legal proceeding against it by any governmental authority or other
party.
ITEM 3 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
None.
ITEM 4 RECENT SALES OF UNREGISTERED SECURITIES
Information with respect to all securities sold by the Company since
September 1, 1996, the offer and sale of which was not subject to an effective
registration statement filed under the Securities Act is as follows:
A. In December of 1999, the Company sold and issued for $5,000 a
promissory note in the principal amount of $5,000 to each of
four individuals (three of whom are now directors of the
Company). These notes have been paid. Under the terms of the
notes, on may 22, 2000, the Company issued,
15
<PAGE> 16
as interest on the principal of the notes, one share of its
common stock for each $2.00 in note principal or 2,500 shares
to each noteholder for a total of 10,000 shares. No person
acted as underwriter with respect to the sale of these notes
and no underwriting discounts or commissions were paid
therefor. These securities were sold in reliance upon the
exemption form the registration requirements of Section 5 of
the Securities Act as a transaction not involving a public
offering under Section 4(2) of the Securities Act. The
securities were: (i) acquired for investment; (ii) issued to
four persons with access to information about the Company,
three of whom are now directors of the Company; and (iii)
issued as "restricted securities" as defined under the
Securities Act. The certificates or notes issued to represent
these securities contain restrictive legends denoting their
statue as restricted securities;
B. In January of 2000, the Company sold and issued promissory
notes in the aggregate principal amounts of $210,000 to 21
investors. These notes provided for: (i) maturity at June 30,
2000; (ii) initial interest payable in shares of the Company's
common stock at the rate of one share for each $1.00 in note
principal; and (iii) payment of additional interest in cash on
notes not paid at maturity at the rate of 10% per year after
maturity until paid. As of September 12, 2000, 18 of these
notes with an aggregate principal of $30,000 had been paid in
full. On May 22, 2000 the Company issued a total of 210,000
shares of its common stock for payment of the initial interest
on these notes. No person acted as an underwriter with respect
to sale of these notes or shares and no underwriting discounts
or commissions were paid therefor. These securities were sold
in reliance upon the exemption form the registration
requirements of Section 5 of the Securities Act as a
transaction not involving a public offering under Section 4(2)
of the Securities Act. The securities were: (i) acquired for
investment; (ii) issued to four persons with access to
information about the Company, three of whom are now directors
of the Company; and (iii) issued as "restricted securities" as
defined under the Securities Act. The certificates or notes
issued to represent these securities contain restrictive
legends denoting their statue as restricted securities;
C. In 1996 the Company agreed to issue a total of 104,500 shares
of its common stock to two individuals for consulting services
which had been rendered to the Company. These rights to
receive 104,500 shares were transferred several times in a
corporate reorganization transaction which was reversed and
they were eventually owned and held by Howard E. Tooke the
President of the Company. In April of 2000 these shares were
issued to the President of the Company in satisfaction of the
Company's obligations to issue them. No person acted as
underwriter with respect to the sale of these shares and no
underwriting discounts or commissions were paid therefor.
These securities were sold in reliance upon the exemption form
the registration requirements of Section 5 of the Securities
Act as a transaction not involving a public offering under
Section 4(2) of the Securities Act. The securities were: (i)
acquired for investment; (ii) issued to four persons with
access to information about the Company, three of whom are now
directors of the Company; and (iii) issued as "restricted
securities" as defined under the Securities Act. The
certificates or notes issued to represent these securities
contain restrictive legends denoting their statue as
restricted securities. These shares were conveyed back to the
Company by its President along with all other shares of the
Company's common stock owned by him in the transaction
described in "D." immediately following.
D. On April 14, 2000, the Company issued to its President, Howard
E. Tooke, 100,000 shares of its Series A Preferred Stock in
exchange for 2,494,774 shares of the Company's common stock
which were acquired as Treasury stock. No person acted as
underwriter with respect to the sale of these shares and no
underwriting discounts or commissions were paid therefor.
These securities were sold in reliance upon the exemption form
the registration requirements of Section 5 of the Securities
Act as a transaction not involving a public offering under
Section 4(2) of the Securities Act. The securities were: (i)
acquired for investment; (ii) issued to four persons with
access to information about the Company, three of whom are now
directors of the Company; and (iii) issued as "restricted
securities" as defined under the Securities Act;
16
<PAGE> 17
E. On April 14, 2000, the Company sold 200,000 shares of its
common stock each to five individuals constituting its
founders for a total conveyance of 1,000,000 shares. These
shares were sold for cash at $.01 per share. No person acted
as underwriter with respect to the sale of these shares and no
underwriting discounts or commissions were paid therefor.
These securities were sold in reliance upon the exemption form
the registration requirements of Section 5 of the Securities
Act as a transaction not involving a public offering under
Section 4(2) of the Securities Act. The securities were: (i)
acquired for investment; (ii) issued to the President, three
directors and a consultant all familiar with its affairs; and
(iii) issued as "restricted securities" as defined under the
Securities Act;
F. During the period from April 14, 2000 through September 12,
2000 the Company sold an aggregate of 388,000 shares of its
common stock to 11 investors for an aggregate of $ 60,164.00.
No person acted as underwriter with respect to the sale of
these shares and no underwriting discounts or commissions were
paid therefor. These securities were sold in reliance upon the
exemption form the registration requirements of Section 5 of
the Securities Act as a transaction not involving a public
offering under Section 4(2) of the Securities Act. The
securities were: (i) acquired for investment; (ii) issued to
persons familiar with the Company; and (iii) issued as
"restricted securities" as defined under the Securities Act;
and
G. During the period from April 14, 2000 through September 12,
2000 the Company has sold an aggregate of 272,000 shares of
its common stock for cash at $2.00 per share for an aggregate
of $544,000. No person acted as underwriter with respect to
the sale of these shares and no underwriting discounts or
commissions were paid therefor. These securities were sold in
reliance upon the exemption form the registration requirements
of Section 5 of the Securities Act provided in Rule 506 of
Regulation D adopted under the Securities Act. The securities
were: (i) acquired for investment; (ii) issued to "accredited
investors" as such are defined under the Securities Act; and
(iii) issued as "restricted securities" as defined under the
Securities Act. The Company filed a Form D with the Securities
and Exchange Commission relating to these sales.
ITEM 5 INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Title 7 of the Colorado Revised Statutes (hereinafter
"Title 7") and the Company's Articles of Incorporation, the Company may
indemnify a person made a party to a proceeding because the person is or was a
director, officer, employee, fiduciary, or agent of the Company (hereinafter
"defined persons"), against liability incurred in the proceeding if:
(a) The person conducts himself or herself in good faith; and
(b) The person reasonably believed:
(I) In the case of conduct in an official capacity with the
corporation, that his or her conduct was in the
corporation's best interests; and
(II) In all other cases, that his or her conduct was at
least not opposed to the corporation's best interests;
and
(c) In the case of any criminal proceeding, the person had no
reasonable cause to believe his or her conduct was unlawful.
However, under Title 7 the Company may not indemnify a director or defined
person where:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) in connection with any other proceeding charging that the
director derived an improper personal benefit, whether or
not involving action in an official capacity, in which
proceeding the director was adjudged liable in the basis
that he or she derived an improper personal benefit,
17
<PAGE> 18
unless a Court finds that the director or defined person is fairly and
reasonably entitled to indemnification in view of all the relevant
circumstances. A Court may then order indemnification, as the court deems
proper. Indemnification is limited to reasonable expenses incurred in connection
with the relevant proceeding.
Title 7 and the Company's Articles of Incorporation also provides for
the mandatory indemnification of persons who were wholly successful on the
merits or otherwise, in the defense of any proceeding to which the person was a
party because the person is or was a director or defined person, against
reasonable expenses incurred by him or her in connection with the proceeding.
Title 7 and the Company's Articles of Incorporation provide for the advancement
of expenses, with certain restrictions, for directors or defined persons who are
parties to a proceeding as a result of that person's current or prior status as
a director or defined person. The Company is also allowed to purchase and
maintain insurance on behalf of directors and defined persons. At present the
Company has no such insurance. The Company's By-Laws are consistent with Title 7
and the Company's Articles of Incorporation and neither enlarges or restricts
the indemnification provided by Colorado Law or the Articles of Incorporation.
18
<PAGE> 19
PART F/S
Index to Financial Statements
<TABLE>
<S> <C>
FOR YEARS ENDED 1998 AND 1999
Independent Auditors' Report F2
Balance Sheet F3
Statements of Operations F4
Statements of Stockholder's Equity F5
Statements of Cash Flows F6
Notes to Financial Statements F7
FOR THE PERIOD ENDED JUNE 30, 2000
Balance Sheet F10
Statements of Operations F11
Statements of Cash Flows F12
Notes to Interim Financial Statements F13
</TABLE>
<PAGE> 20
The Whitmore Company, P.C.
Certified Public Accountants
Independent Auditors' Report
August 30, 2000
We have audited the accompanying balance sheets of Evergreen
Network.com, Inc. as of December 31, 1998 and 1999, and the related statements
of earnings, retained earnings, earnings per share, cash flows, and
stockholders' equity for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on the financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Evergreen
Network.com, Inc. as of December 31, 1998 and 1999, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.
The Whitmore Company, P.C.
F-2
<PAGE> 21
Evergreen Network.com, Inc.
BALANCE SHEET
DECEMBER 31,
<TABLE>
<CAPTION>
1998 1999
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ -- $ --
Accounts Receivable -- --
------------ ------------
Total Current Assets -- --
Plant & Equipment
Equipment & Fixtures -- --
(Less) Accumulated Depreciation -- --
------------ ------------
Total Plant & Equipment -- --
Other Assets
(Less) Accumulated Amortization -- --
------------ ------------
Total Other Assets -- --
------------ ------------
TOTAL ASSETS $ -- $ --
============ ============
LIABILITIES
Current Liabilities:
Accounts Payable $ 20,000 $ 20,000
Payroll Taxes Payable 40,914 40,914
Excise Taxes Payable 3,782 3,782
Accrued Income Taxes 150 200
Accrued Interest 7,475 11,470
Accrued Penalties 7,000 7,000
------------ ------------
Total Current Liabilities 79,321 83,366
Long Term Liabilities:
-- --
------------ ------------
Total Long Term Liabilities -- --
------------ ------------
TOTAL LIABILITIES 79,321 83,366
STOCKHOLDERS' EQUITY
Common Stock 2,771,232 2,771,232
Preferred Stock -- --
Paid In Capital - Common -- --
Treasury Stock -- --
------------ ------------
Total Paid in Capital 2,771,232 2,771,232
Retained Earnings (2,850,553) (2,854,598)
TOTAL STOCKHOLDERS' EQUITY (79,321) (83,366)
------------ ------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ -- $ --
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE> 22
Evergreen Network.com, Inc.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1999
---------- ----------
<S> <C> <C>
REVENUES:
Operating Revenues $ -- $ --
---------- ----------
Total Revenues -- --
OPERATING EXPENSES:
Professional -- --
Advertising & Promotion -- --
General Admin -- --
Payroll -- --
Transportation -- --
Rent -- --
Travel & Entertainment -- --
Miscellaneous -- --
---------- ----------
Total Operating Expenses -- --
INCOME FROM OPERATIONS -- --
OTHER INCOME & (EXPENSES):
Interest Income -- --
Interest Expense (3,744) (3,995)
Depreciation & Amortization -- --
---------- ----------
Total Other Income & (Expenses) (3,744) (3,995)
NET INCOME BEFORE TAX (3,744) (3,995)
---------- ----------
Income Taxes 50 50
NET INCOME $ (3,794) $ (4,045)
========== ==========
Net Income (Loss) Per Share $ (0.0014) $ (0.0015)
Fully Diluted $ (0.0002) $ (0.0002)
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE> 23
Evergreen Network.com, Inc.
STATEMENT OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
Total
Common Stock Common Stock Retained Treasury Shareholders
Shares Amount Paid-In Capital Earnings Stock Equity
------------ ------------ --------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1997 82,954,530 $ 82,955 $ 2,682,196 $ (2,846,759) $ -- $ (81,608)
Additional Capital Contributions 6,081 6,081 6,081
Conversion (80,189,379) 2,682,196 (2,682,196) --
Net Loss for Year Ended 12/31/98 (3,794) (3,794)
------------ ------------ ------------ ------------ ------------ ------------
Balance December 31, 1998 2,771,232 2,771,232 -- (2,850,553) -- (79,321)
Additional Capital Contributions
Conversion
Net Loss for Year Ended 12/31/99 (4,045) (4,045)
------------ ------------ ------------ ------------ ------------ ------------
Balance December 31, 1999 2,771,232 $ 2,771,232 $ -- $ (2,854,598) $ -- $ (83,366)
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE> 24
Evergreen Network.com, Inc.
STATEMENTS OF CASH FLOW
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1998 1999
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ (3,794) $ (4,045)
Add:
Depreciation & Amortization -- --
Loss on Asset Disposal
Increase in Current Liabilities 3,794 4,045
Decrease in Current Assets
Deduct:
Increase in Current Assets --
Decrease in Current Liabilities -- --
Accrued Interest -- --
---------- ----------
Cash Provided by Operating Activities -- --
========== ==========
INVESTING ACTIVITIES:
Purchase of Fixed Assets -- --
Loans to Affiliates -- --
Purchase of Other Assets --
---------- ----------
Cash Provided by Investing Activities -- --
========== ==========
FINANCING ACTIVITIES:
Purchase of Treasury Stock -- --
Capital Investment --
Stockholder Loans -- --
---------- ----------
Cash Provided by Financing Activities -- --
========== ==========
Net Increase (Decrease) in Cash -- --
Beginning Cash Balance -- --
Increase (Decrease) -- --
---------- ----------
Ending Cash Balance $ -- $ --
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE> 25
Evergreen Network.com, Inc.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1999
NOTE 1: COMPANY ORGANIZATION
The Company was organized as a Colorado corporation on May 27, 1987 under the
name SEFCO, Inc. In September, 1989 it merged with an Arizona corporation and
changed its' name to The Members Financial Service bureau, Inc. The Company
changed its' name to Shared Use Network Services, Inc. in August, 1995.
The Company was engaged in various telecommunications endeavors throughout its'
existence. In the winter of 1997, due to problems associated with
under-capitalization, it ceased operations. In the fall of 1999, management
decided to engage in a new business opportunity in the field of charitable
gaming. Specifically, it provides "pull-tab" validation machines and cards for
charitable and fraternal organizations. In the fall of 1999, the Company also
changed its' name to Evergreen Network.com, Inc.
NOTE 2: LIABILITIES
When the Company wound down its' previous business in the fall of 1997, it had
remaining a payroll tax debt of $40,914 and excise tax debt of $3,782. The tax
and associated interest were paid June 13, 2000. The Company is currently in
negotiations with IRS over proposed penalties in the approximate amount of
$7,000.
In year 2000 the Company has raised $210,000 through the sale of promissory
notes of $10,000 each to 21 investors. These notes matured on June 30, 2000. As
of August 18, 2000 $87,500 is still outstanding; extensions having been granted
by the investors. The Company has prepaid interest on these notes with shares of
its' common stock at the rate of one share for each $1.00 note principal. The
notes bear additional interest at the rate of 10% per year after maturity until
paid.
Additionally, on June 30, 2000, the company borrowed $90,000 from a board of
directors member. This note is due December 31, 2000.
NOTE 3: INCOME TAXES
The company has large net operating loss carry-forward amounts from prior years.
However, as the Company is again in a start up phase and future earnings are not
reasonably assured, no tax benefit from these operating losses has been accrued.
NOTE 4: CAPITALIZATION
As of December 31, 1998 and 1999 the Company was authorized 20,000,000 shares of
$1.00 par common stock and 10,000,000 shares of $1.00 par preferred stock. As of
the above dates, there were no shares of preferred stock issued. 2,771,232
shares of common stock were issued and outstanding, with none held in treasury.
F-7
<PAGE> 26
Evergreen Network.com, Inc.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1999
NOTE 4 CONTINUED
The Company's current authorized capitalization is 30,000,000 shares consisting
of 20,000,000 of $.01 par value common stock and 10,000,000 shares of $.01 par
value preferred stock. As of the date of this report there were 3,003,232 shares
of common stock issued of which 2,228,058 shares were outstanding with the
remaining 775,174 shares held by the Company as treasury stock. ; and 100,000
shares of preferred stock issued and outstanding and designated as 2000 Series A
Preferred Stock. As of this date there are no outstanding options, warrants, or
other rights to acquire shares of the common stock. The Company used 388,000
treasury shares to raise funds to pay a tax liability for previous operations.
The Company also distributed 681,102 shares of common stock to others in
settlement of contingent obligations created by prior equity transactions. If
all of these shares are distributed and sold, along with those of the Company's
current offering, there will be 3,344,391 shares of common stock issued and
outstanding. The 100,000 outstanding shares of preferred stock are to be
redeemed by the company by April 30, 2002 at $1.00 per share. The preferred
stock also carries a liquidation preference of $1.00 per share.
NOTE 5: SUBSEQUENT EVENTS
On February 23, 2000 the Company entered into a Master Distributorship Agreement
with Infinity Group, Inc. On March 1, 2000 the Company finalized a written
agreement under which it is purchasing 240 validation machines form Colorado Tab
Force, LLC. This agreement calls for the payment by the Company of $710,000 for
the machines. As of August 18, 2000 the Company had paid $180,000 on the
purchase price. Certain of the machines in question have not yet been certified
by the state of Colorado for gaming use in that state. The Company is
withholding payment for those machines until the matter is rectified.
NOTE 6: USE OF ESTIMATES
Management uses estimates and assumptions in preparing financial statements in
accordance with generally accepted accounting principles. These estimates and
assumptions affect the reporting amounts of assets and liabilities, the
disclosure of contingent liabilities, and the reported revenues and expenses.
Actual results could vary from the estimates that management uses.
NOTE 7: NON ARMS LENGTH TRANSACTIONS
The transactions in which 1,000,000 of the Company's present issued and
outstanding common stock was issued to its officers, directors and a consultant
and issuance of the 100,000 shares of preferred stock were all conducted or
determined by the officers and directors and were not arms length transactions
between independent parties.
NOTE 8: REGULATION RISK
All of the states in which the Company operates or proposes to operate have
legal prohibitions or restrictions upon gambling and/or gaming operations. The
Company's charitable gaming business is allowed to operate under specific
statutory and regulatory provisions which limit or regulate its operations in
great detail. The Company has been advised by counsel that it may sell the "Tab
Force System" in the four states in which it intends to operate; provided it
complies with the applicable legal restrictions. It should be noted that there
is a risk that future legal regulatory provisions may adversely affect the
Company's operations or potential profitability.
F-8
<PAGE> 27
Evergreen Network.com, Inc.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1999
NOTE 9: OFFICER COMPENSATION
The Company did not pay compensation to any officers or directors in 1999. The
president is receiving a salary during year 2000 at the rate of $8,000 per
month. The secretary/treasurer has agreed to compensation commensurate with the
time he is able to devote to the Company and has received $2,000 so far in 2000.
F-9
<PAGE> 28
Evergreen Network.com, Inc.
INTERIM FINANCIAL INFORMATION
UNAUDITED
BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 2000
-------------
<S> <C>
ASSETS
Current Assets
Cash $ 95,626
Prepaid Expenses $ 2,000
Accounts Receivable 4,250
------------
Total Current Assets 101,876
Plant & Equipment
Equipment & Fixtures 737,247
(Less) Accumulated Depreciation (28,717)
------------
Total Plant & Equipment 708,530
Other Assets
Deposits 2,411
------------
Total Other Assets 2,411
------------
TOTAL ASSETS $ 812,817
============
LIABILITIES
Current Liabilities:
Accounts Payable $ 35,900
Payroll Taxes Payable --
Excise Taxes Payable --
Accrued Income Taxes 200
Shareholder Notes 270,000
Contract - Tab Force 570,000
Accrued Interest 6,493
Accrued Penalties 7,000
------------
Total Current Liabilities 889,593
Long Term Liabilities:
--
------------
Total Long Term Liabilities --
------------
TOTAL LIABILITIES 889,593
STOCKHOLDERS' EQUITY
Common Stock 28,757
Preferred Stock 1,000
Paid In Capital - Common 3,085,072
Treasury Stock (7,752)
------------
Total Paid in Capital 3,107,077
Retained Earnings (3,183,853)
TOTAL STOCKHOLDERS' EQUITY (76,776)
------------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 812,817
============
</TABLE>
The accompanying notes are an integral part of this statement.
F-10
<PAGE> 29
Evergreen Network.com, Inc.
INTERIM FINANCIAL INFORMATION
UNAUDITED
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
1999 2000
---------- ----------
<S> <C> <C>
REVENUES:
Operating Revenues $ -- $ 55,595
Cost of Sales -- 18,226
---------- ----------
Gross Profit -- 37,369
OPERATING EXPENSES:
Professional -- 249,982
General Admin -- 14,081
Postage & Delivery -- 6,371
Supplies -- 13,889
Utilities & Telephone -- 11,438
Rent -- 12,657
Travel & Entertainment -- 25,208
Miscellaneous -- 284
---------- ----------
Total Operating Expenses -- 333,910
INCOME FROM OPERATIONS -- (296,541)
OTHER INCOME & (EXPENSES):
Interest Income -- --
Interest Expense (1,998) (3,997)
Depreciation & Amortization -- (28,717)
---------- ----------
Total Other Income & (Expenses) (1,998) (32,714)
NET INCOME BEFORE TAX (1,998) (329,255)
---------- ----------
Income Taxes 25 --
NET INCOME $ (2,023) $ (329,255)
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-11
<PAGE> 30
Evergreen Network.com, Inc.
INTERIM FINANCIAL INFORMATION
UNAUDITED
STATEMENTS OF CASH FLOW
SIX MONTHS ENDED JUNE 30,
<TABLE>
<CAPTION>
1999 2000
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income (Loss) $ (2,023) $ (329,255)
Add:
Depreciation & Amortization -- 28,717
Loss on Asset Disposal
Increase in Current Liabilities 2,023 806,227
Decrease in Current Assets
Deduct:
Increase in Current Assets -- (6,250)
Decrease in Current Liabilities -- --
Accrued Interest -- --
---------- ----------
Cash Provided by Operating Activities -- 499,439
========== ==========
INVESTING ACTIVITIES:
Purchase of Fixed Assets -- (737,247)
Loans to Affiliates -- --
Purchase of Other Assets (2,411)
---------- ----------
Cash Provided by Investing Activities -- (739,658)
========== ==========
FINANCING ACTIVITIES:
Purchase of Treasury Stock -- --
Capital Investment -- 335,845
Stockholder Loans -- --
---------- ----------
Cash Provided by Financing Activities -- 335,845
========== ==========
Net Increase (Decrease) in Cash -- 95,626
Beginning Cash Balance -- --
Increase (Decrease) -- 95,626
---------- ----------
Ending Cash Balance $ -- $ 95,626
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-12
<PAGE> 31
Evergreen Network.com, Inc.
INTERIM FINANCIAL INFORMATION
UNAUDITED
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 1: COMPANY ORGANIZATION
The Company was organized as a Colorado corporation on May 27, 1987 under the
name SEFCO, Inc. In September, 1989 it merged with an Arizona corporation and
changed its' name to The Members Financial Service Bureau, Inc. The Company
changed its' name to Shared Use Network Services, Inc. in August, 1995.
The Company was engaged in various telecommunications endeavors throughout its'
existence. In the winter of 1997, due to problems associated with
under-capitalization, it ceased operations. In the fall of 1999, management
decided to engage in a new business opportunity in the field of charitable
gaming. Specifically, it provides "pull-tab" validation machines and cards for
charitable and fraternal organizations. In the fall of 1999, the Company also
changed its' name to Evergreen Network.com, Inc.
NOTE 2: ACCOUNTS RECEIVABLE
Management believes that all accounts are good and collectable and thus, no
allowance has been established. The Company is subject to credit risk as 100% of
receivables have been concentrated in a single customer at times during the
financial statement period.
NOTE 3: PLANT & EQUIPMENT
All fixed assets are carried at cost. Depreciation is provided over the useful
life of the assets under the straight-line method.
NOTE 4: LIABILITIES
When the Company wound down its' previous business in the fall of 1997, it had
remaining a payroll tax debt of $40,914 and excise tax debt of $3,782. The tax
and associated interest were paid June 13, 2000. The Company is currently in
negotiations with IRS over proposed penalties in the approximate amount of
$7,000.
In year 2000 the Company has raised $210,000 through the sale of promissory
notes of $10,000 each to 21 investors. These notes matured on June 30, 2000. As
of September 15, 2000 $87,500 is still outstanding; extensions having been
granted by the investors. The Company has prepaid interest on these notes with
shares of its' common stock at the rate of one share for each $1.00 note
principal. The notes bear additional interest at the rate of 10% per year after
maturity until paid.
Additionally, on June 30, 2000, the company borrowed $90,000 from a board of
directors' member. This note is due December 31, 2000.
On February 23, 2000 the Company entered into a Master Distributorship Agreement
with Infinity Group, Inc. On March 1, 2000 the Company finalized a written
agreement under which it is purchasing 240 validation machines form Colorado Tab
Force, LLC. This agreement calls for the payment by the Company of $710,000 for
the machines. As of September 15, 2000 the Company had paid $200,000 on the
purchase price. Certain of the machines in question have not yet been certified
by the state of Colorado for gaming use in that state. The Company is
withholding payment for those machines until the matter is rectified.
F-13
<PAGE> 32
Evergreen Network.com, Inc.
INTERIM FINANCIAL INFORMATION
UNAUDITED
NOTES TO FINANCIAL STATEMENTS
SIX MONTHS ENDED JUNE 30, 2000
NOTE 5: INCOME TAXES
The company has large net operating loss carry-forward amounts from prior years.
However, as the Company is again in a start up phase and future earnings are not
reasonably assured, no tax benefit from these operating losses has been accrued.
NOTE 6: CAPITALIZATION
The Company's current authorized capitalization is 30,000,000 shares consisting
of 20,000,000 of $.01 par value common stock and 10,000,000 shares of $.01 par
value preferred stock.
As of June 30, 2000 there were 2,875,732 shares of common stock issued of which
775,174 were held in treasury; and 100,000 shares of preferred stock issued and
outstanding.
As of the date of this report there were 3,003,232 shares of common stock issued
of which 2,228,058 shares were outstanding with the remaining 775,174 shares
held by the Company as treasury stock; and 100,000 shares of preferred stock
issued and outstanding and designated as 2000 Series A Preferred Stock. As of
this date there are no outstanding options, warrants, or other rights to acquire
shares of the common stock. The Company used 388,000 treasury shares to raise
funds to pay a tax liability for previous operations. The Company also
distributed 681,102 shares of common stock to others in settlement of contingent
obligations created by prior equity transactions. If all of these shares are
distributed and sold, along with those of the Company's current offering, there
will be 3,344,391 shares of common stock issued and outstanding. The 100,000
outstanding shares of preferred stock are to be redeemed by the company by April
30, 2002 at $1.00 per share. The preferred stock also carries a liquidation
preference of $1.00 per share.
NOTE 7: NON-ARMS LENGTH TRANSACTIONS
The transactions in which 1,000,000 of the Company's present issued and
outstanding common stock was issued to its officers, directors and a consultant
and issuance of the 100,000 shares of preferred stock were all conducted or
determined by the officers and directors and were not arms length transactions
between independent parties.
NOTE 8: REGULATION RISK
All of the states in which the Company operates or proposes to operate have
legal prohibitions or restrictions upon gambling and/or gaming operations. The
Company's charitable gaming business is allowed to operate under specific
statutory and regulatory provisions which limit or regulate its operations in
great detail. The Company has been advised by counsel that it may sell the "Tab
Force System" in the four states in which it intends to operate; provided it
complies with the applicable legal restrictions. It should be noted that there
is a risk that future legal regulatory provisions may adversely affect the
Company's operations or potential profitability.
NOTE 9: OFFICER COMPENSATION
The Company did not pay compensation to any officers or directors in 1999. The
president is receiving a salary during year 2000 at the rate of $8,000 per
month. The secretary/treasurer has agreed to compensation commensurate with the
time he is able to devote to the Company and has received $2,000 so far in 2000.
F-14
<PAGE> 33
PART III
ITEM 1 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
3.1 Original Articles of Incorporation of SEFCO, INC.
dated May 26, 1987
3.2 Articles of Amendment to the Articles of
Incorporation to change name to Members Financial
Service Bureau, Inc., dated October 6, 1989
3.3 Articles of Amendment to the Articles of
Incorporation changing the name of the Corporation,
among other changes, to Shared Use Network Services,
Inc., dated September 5, 1995
3.4 Articles of Amendment to the Articles of
Incorporation changing the name of the Corporation,
among other changes, to Evergreen Network.com, Inc.,
dated April 5, 2000
3.5 Corporate By-Laws
10.1 Machine Purchase Agreement Between the Company and
Colorado Tab Force, L.L.C., et. al.
10.2 Master Distribution Agreement Between the Company and
Infinity Group, Inc.
10.3 Distribution Agreement with the Bingo Company
10.4 Distribution Agreement with Fungi, Inc.
10.5 Distribution Agreement with Bingo West of Denver
23.1 Consent of The Whitmore Company, P.C.
27.1 Financial Data Schedule
<PAGE> 34
SIGNATURES
The Registrant, pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form 10SB12(g) and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, duly authorized individual, the 11th day of October, 2000.
Evergreen Network.com, Inc.
/s/ Howard Tooke
----------------------------------------
By: Howard Tooke
Title: President
<PAGE> 35
Item 2 Description of Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
3.1 Original Articles of Incorporation of SEFCO, INC.
dated May 26, 1987
3.2 Articles of Amendment to the Articles of
Incorporation to change name to Members Financial
Service Bureau, Inc., dated October 6, 1989
3.3 Articles of Amendment to the Articles of
Incorporation changing the name of the Corporation,
among other changes, to Shared Use Network Services,
Inc., dated September 5, 1995
3.4 Articles of Amendment to the Articles of
Incorporation changing the name of the Corporation,
among other changes, to Evergreen Network.com, Inc.,
dated April 5, 2000
3.5 Corporate By-Laws
10.1 Machine Purchase Agreement Between the Company and
Colorado Tab Force, L.L.C., et. al.
10.2 Master Distribution Agreement Between the Company and
Infinity Group, Inc.
10.3 Distribution Agreement with the Bingo Company
10.4 Distribution Agreement with Fungi, Inc.
10.5 Distribution Agreement with Bingo West of Denver
23.1 Consent of The Whitmore Company, P.C.
27.1 Financial Data Schedule
</TABLE>
