FIRST ENTERTAINMENT, INC.
1380 Lawrence Street, Suite 1400
Denver, Colorado 80204
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 25, 1997
INTRODUCTORY STATEMENT
This Proxy Statement and accompanying Proxy are furnished in connection with a
solicitation of Proxies by the Board of First Entertainment, Inc. (the
Company) for use at the Special Meeting of Shareholders of the Company, to be
held at the Comedy Works, 1226 15th Street, Denver, Colorado, on August 25,
1997, at 10:00 a.m., local time, for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders.
Shareholders of record at the close of business on July 18, 1997 will be
entitled to receive notice of and to vote at the meeting. Each share of
common stock is entitled to one vote for each matter submitted to a vote at
the meeting. Shares represented by executed and unrevoked Proxies will be
voted in accordance with the specifications made thereon. If the enclosed
form of Proxy is executed and returned, it nevertheless may be revoked by
giving another Proxy or by letter or telegram directed to the Company. Any
such revocation must show the shareholder's name and must be received prior to
the commencement of the meeting in order to be effective. Additionally, any
shareholder attending the meeting in person, who wishes to do so, may vote by
ballot at the meeting, thereby canceling any Proxy previously given. Where no
instructions are indicated, Proxies will be voted FOR the nominees for
directors indicated below and FOR the proposals to be considered at the
Special Meeting or any adjournment thereof. Proxy materials will be mailed to
shareholders of record on or about July 22, 1997.
VOTING SECURITIES, PRINCIPAL HOLDERS AND SECURITY
OWNERSHIP OF MANAGEMENT
The approval of each of the proposals set forth in this Proxy Statement
requires the affirmative vote of a majority of the shares actually voted on
such proposal, except that the amendment to the Company's Articles of
Incorporation requires the affirmative vote of a majority of shares entitled
to be voted at the Meeting.
All voting rights are vested exclusively in the holders of the Company's $.008
par value common stock, with each share entitled to one vote. Only
shareholders of record at the close of business on July 18, 1997 are entitled
to notice of and to vote at the meeting and any adjournment thereof. As of
March 30, 1997, the Company had 5,879,213 shares of common stock outstanding.
The following sets forth the number of shares of the Registrant's $0.008 par
value common stock beneficially owned by (I) each person who, as of March 30,
1997, was known by the Company to own beneficially more than five percent (5%)
of its common stock, (ii) the individual Directors of the Registrant, and
(iii) the Officers and Directors of the Registrant as a group.
Name and Address Amount and Nature Percent of
of Beneficial Owner of Beneficial Ownership(1)(2) Class
Balzac, Inc. 1,100,000 18.7%
200 Fifth Ave. Suite 617
New York, N.Y. 10010
A. B. Goldberg (3) 29,213 .5%
1380 Lawrence Street, Suite 1400
Denver, CO 80204
Cindy Jones 2,500 .1%
1380 Lawrence Street, Suite 1400
Denver, CO 80204
Nick Catalano 5,000 .1%
189-32 44th Avenue
Flushing, NY 11358
Dr. Theodore Jacobs 69,739 1.2%
1380 Lawrence Street, Suite 1400
Denver, CO 80204
Burt Katz (4)195,089 3.4%
1380 Lawrence Street, Suite 1400
Denver, CO 80204
Officers and Directors 301,541 5.2%
as a Group (6 persons)
(1) All ownership is beneficial and of record except as
specifically indicated otherwise.
(2) Beneficial owners listed above have sole voting and investment
power with respect to the shares shown unless otherwise
indicated.
(3) Include shares owned by Nannette Goldberg, wife of A.B. Goldberg, a
Director of the Company, and shares owned by his mother and two children.
There are no stock options issued or outstanding to A. B. Goldberg.
(4) Includes shares owned by the wife and children of Burt Katz.
INFORMATION REGARDING THE COMPANY AND INCORPORATION BY REFERENCE
This proxy statement is accompanied by a copy of its latest Annual Report and
Form 10-QSB as of March 31, 1997. The Company hereby incorporates by
reference its latest annual report on Form 10-KSB and all other reports since
the end of the Company's fiscal year filed pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934, as amended.
ACTION TO BE TAKEN UNDER THE PROXY
Proxies in the accompanying form that are properly executed and returned will
be voted at the Special Meeting in accordance with the instructions thereon.
Any proxy upon which no instructions have been indicated with respect to a
specific matter will be voted as follows with respect to such matter: (a)
FOR the election of the three (3) persons named in this Proxy Statement as
Management's nominees for election to the Board of Directors; (b) "FOR" the
ratification and approval of the Company's prior acquisition of Global
Internet Corporation, a Delaware corporation; FOR amendment to the
Company's Articles of Incorporation to increase the number of authorized
common shares from 6,250,000 shares at $.008 par value to 50,000,000 shares at
$.008 par value; (d) "FOR" the ratification of BDO Seidman, LLP as the
Company's independent public accountants; and (e) FOR the transaction of any
other business to come before the Meeting, in the discretion of the holders of
such Proxies.
Management knows of no other matters, other than those stated above, to be
presented for consideration at the Meeting. If, however, any other matters
properly come before the Meeting, the persons named in the enclosed proxy
intend to vote such proxy in accordance with their judgement on such matters.
The persons named in the enclosed proxy may also, if they deem it advisable,
vote such proxy to adjourn the Meeting from time to time.
ELECTION OF DIRECTORS
It is proposed that three (3) Directors be elected to the Board of Directors
of the Company, each such Director to hold office until the next annual
meeting of shareholders or until their successors are elected and qualified.
All three of the nominees are current directors. The nominees for the Board of
Directors are as follows:
Abraham "A.B." Goldberg has been employed by First Films as Executive Producer
and Financial Consultant since January 1987. Mr. Goldberg served as Executive
Producer for "Almost Blue" and "The Amityville Curse." In addition, he served
as Executive Producer for "Mind Killer," "Night Vision" and "Lone Wolf." Mr.
Goldberg has been an independent consultant and has advised several film
companies, beginning in 1977 with Innovations/ECA, which produced "The Buddy
Holly Story" starring Gary Busey and "Under The Rainbow" starring Chevy Chase
and Carrie Fisher. He also advised Robert Halmi Productions, a New York-based
production company which was merged with Hal Roach Studios and later acquired
by Quintex Entertainment. Mr. Goldberg served as President of Harvard
Financial Group, an independent investment consulting firm, from November 1976
through April 1982. Since April 1982, Mr. Goldberg has consulted with a
variety of businesses, including First Films. Mr. Goldberg earned a
Bachelor's Degree in Finance from the University of Colorado, Boulder,
Colorado in 1969 and attended the University of Denver College of Law. Mr.
Goldberg was elected President and Chief Executive Officer in February 1995.
Dr. Nick Catalano is presently serving in his twenty-fourth year as professor
of English Literature, Communications and music at Pace University, New York
City. He is also the University's director for the Performing Arts. Over the
past several years, he has been a writer/producer for several television
network shows, including The Bill Cosby Show, PBS documentaries, Doug
Hennings' The World of Illusion, and TV specials for Richard Belzer on HBO.
Dr. Catalano has produced travelogue videos for Video Trips on Greece, the
Greek Islands, Utah, St. Martin and is currently completing the Hamptons. In
addition, he is the founder of "The Big Apple Comedy Showcase" at Pace
University, now in its 18th year. It is the oldest college comedy series in
the country.
Dr. Theodore Jacobs, M.D. graduated from New York Medical College in 1955
where he was honored by achieving the highest award to a graduating medical
student. Dr. Jacobs was Board Certified in Internal Medicine in 1962 and Re-
Certified in 1977. Since 1963, Dr. Jacobs has worked in private practice in
Internal Medicine in an office in Las Vegas, Nevada. Dr. Jacobs has served as
a member of the Nevada State Board of Medical Examiners, serving for fifteen
years as president from 1980 to 1995. Dr. Jacobs is currently a Clinical
Professor of Medicine, University of Nevada School of Medicine and Member,
Advisory Board to the Dean of the School of Medical Sciences, University of
Nevada/Reno. Dr. Jacobs is a member of the Board of Directors of Nevada Dance
Theater, Las Vegas Symphonic and Chamber Music Society and the Nevada Opera
Theater. Dr. Jacobs has received numerous awards for outstanding achievement
and contributions to his profession and community. Dr. Jacobs was a member of
the Board of Directors of Power Media Communications International, Inc.
It is the intention of the persons named in the accompanying form of Proxy to
vote such Proxy FOR the election of the persons listed below, unless
shareholders specifically indicate in their Proxies that they desire to
abstain from voting for the electing of certain Directors to office. The
Board of Directors does not contemplate that any nominee will be unable to
serve as a Director for any reason, but if that should occur prior to the
meeting, the Board of Directors reserves the right to substitute another
person(s) of their choice as nominee(s). Each nominee must be approved by an
affirmative vote of a majority of the quorum of the shares present and
entitled to vote at the Special Meeting of Shareholders. The Board of
Directors recommends that shareholders vote FOR the election of each nominee.
VOTING
Pursuant to the terms of the Company's Articles of Incorporation every
shareholder voting for the election of directors is entitled to one vote for
each share. A shareholder may vote each share once for one nominee to each of
the director positions being filled. A shareholder may not accumulate votes.
The Board of Directors intends to vote the Proxies solicited by it (other than
Proxies in which the vote is withheld as to one or more nominees) for the
three candidates standing for election as directors nominated by the Board of
Directors. If any nominee is unable to serve, the shares represented by all
valid Proxies will be voted for the election of such substitute as the Board
of Directors may recommend. At this time the Board of Directors knows of no
reason why any nominee might be unavailable to serve.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
With the exception of the Compensation Committees established solely to
administer its compensation plan to third parties (which does not include
Company executives) under its Forms S-8 registration, the Company has no
committees of the Board of Directors. All members of the Board of Directors of
the Company acted as the Executive Compensation Committee, participated in
deliberations and made decisions concerning executive officer compensation
during the course regular Board Meetings. This Compensation Committee, which
is composed of all of the members of the Board of Directors, had fourteen
meetings or consents in lieu of meetings during the fiscal year ended December
31, 1996. No incumbent director of the Company attended fewer then seventy-
five percent (75%) of total meetings of the Board of Directors. The Board of
Directors conducted fourteen meetings during the fiscal year ended December
31, 1996.
The Directors and Executive Officers of the Company, their ages and present
positions held in the Company are as follows:
Name Age Position Held
A. B. Goldberg 50 Director April 1993 to present
President and Commencing February 1995
Chief Executive
Officer
Dr. Theodore Jacobs 66 Director November 1996 to present
Dr. Nick Catalano 56 Director March 1992 to present
Burt Katz 72 Director December 1994 to June 30
Cindy Jones 42 Secretary and April 1994 to present
Treasurer
The Company's Directors will serve in such capacity until the next annual
meeting of the Company's shareholders and until their successors have been
elected and qualified. The officers serve at the discretion of the Company's
Directors. There are no familial relationships among the Company's officers
and directors, nor are there any arrangements or understanding between any of
the directors or officers of the Company or any other person pursuant to which
any officer or director was or is to be selected as an officer or director.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Section 16(a) of the Securities Exchange Act of 1934 (the "34 Act") requires
the Company's officers and directors and persons owning more than ten percent
of the Company's Common Stock, to file initial reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC").
Additionally, Item 405 of Regulation S-K under the 34 Act requires the Company
to identify in its Form 10-KSB and proxy statement those individuals for whom
one of the above referenced reports was not filed on a timely basis during the
most recent fiscal year or prior fiscal years. Given these requirements, the
Company has the following report to make under this section: None of the
current officers and directors who were required to file Forms 3,4, or 5
during the last fiscal year filed such forms on a timely basis. All such
persons have now filed the appropriate forms and have been counseled as to
their responsibilities for such filings. The Company has implemented a program
to ensure timely future filing of such forms.
EXECUTIVE ENUMERATION
Summary Compensation Table
Only one executive officer received cash compensation in excess of $100,000
during the fiscal year ended December 31, 1996 and 1995. Compensation does
not include minor business-related and other expenses paid by the Company for
its officers during fiscal year 1996 and 1995, nor the personal usage of a
Company automobile. Such amounts in the aggregate do not exceed $10,000. The
Company's Chief Executive Officer, A.B. Goldberg received compensation of
$96,000, $53,800 and $16,100 for 1996, 1995 and 1994, respectively.
From time to time, the Company has granted shares of its common stock as
additional compensation to its offices and key employees for their services,
as determined by the Company's Board of Directors. During 1996 and 1995, no
shares were granted to officers or key employees.
As of December 31, 1996, the Company had no group life, health,
hospitalization, medical reimbursement or relocation plans in effect which
discriminates, in scope, terms, or operation, in favor of officers or
directors of the Company and that are not generally available to all salaried
employees. Further, the Company has no pension plans or plans or agreements
which provide compensation on the event of termination of employment or change
in control of the Company.
The Company does not pay members of its board of Directors any fees for
attendance or similar remuneration, but reimburses them for any out-of-pocket
expenses incurred by them in connection with Company business.
SHAREHOLDER RATIFICATION AND APPROVAL OF ACQUISITION
Summary of the Acquisition
The following is a brief summary of certain information concerning the
Acquisition. The summary is not intended to be complete, and shareholders who
may have further questions are urged to ask the management of the Company.
The Parties.
First Entertainment, Inc., a Colorado corporation (the Company), and
Global Internet Corporation., a Delaware corporation (Internet), and its
principal shareholder, Global Casinos, Inc., a public Utah corporation, are
the parties to the transaction. Internet principal offices are located at 295
Clayton Street, Suite 208, Denver, Colorado 80206. The phone number is (303)-
377-2278.
The Terms.
This transaction was planned as a purchase such that Internet became a
subsidiary of the Company and the former shareholders of Internet would
thereby own approximately 4.7%of the Company. This transaction has been
accounted for as a purchase. At the present time, approximately 50% of the
shares of Internet has been exchanged for approximately 30,000 shares of Class
B Convertible Preferred stock of the Company that is convertible into 375,000
common shares.
The present exchange has given the Company effective control of Internet, and
the current control shareholders of Internet are now affiliates of the
Company.
The Company has decided to engage in the transaction with Internet to broaden
the asset base and increase the value of the Company's shares as a result of
acquiring a potentially profitable business. None of the rights of any
securities holders will be affected by this transaction. The securities of the
Company which have been issued in this transaction are Class B preferred
shares. It is probable that the Class B shareholders will elect to convert
their shares into common shares of the Company, which will have the same
rights and privileges as all other common shares but will be restricted
securities under the Securities Act of 1933, as amended. To obtain conversion
of the Class B preferred shares into common shares, the Company must obtain
the approval of the shareholders to increase its authorized common shares and
must file Articles of Amendment with the Secretary of State of Colorado. While
the Class B preferred shares have been issued, the filing for additional
common shares must await the approval of the shareholders to the increase in
authorized common shares. Representatives of the Company's accounting firm for
the most recent fiscal year are expected to be present at the shareholders'
meeting, will have the opportunity to make a statement if they so desire, and
are expected to be available to respond to appropriate questions.
As far as the Company's common share are concerned, both the high and low bid
prices as of the date preceding public announcement of the transaction were
$1.06.
Global Internet Corporation
Global Internet Corporation (Internet) was incorporated in June 1996, for the
purpose of developing a virtual casino to provide gambling on the Internet.
Internet's operations will eventually be based offshore and Internet will
focus its attention on creating a worldwide market.
Narrative Description of the Business
In June 1996, Internet entered into a Web Site Development and Maintenance
Agreement with DDB Needham Interactive Communications ("DDB"), whereby DDB,
with the assistance of Electronic Data Systems Corporation ("EDS") as a
subcontractor, agreed to develop a Virtual Internet Casino. During November
1996, the June Agreement was superseded with a new agreement.
The agreement outlines a two-phase Web Site development program. Under Phase
1, the agreement calls for the development of five non-commercial gaming
sites: black jack, poker, roulette, slot machines and keno. At these sites,
players would be able to use fictitious money to play against the house or to
enter tournaments in which top place finishers would win prizes. The purpose
of Phase 1 is to have a fully operational test site where the application can
be debugged while a customer base is being developed. This Phase will be less
complex because actual commerce on the Internet will not be involved. In
Phase 2, the site will act as a Virtual Casino and Internet will generate
revenue as a percentage of the money gambled.
Under Phase 1, there will be development of a virtual Internet casino with
five non-commercial gaming sites. During this Phase, the user will be playing
directly against the dealer. The web Site will be very visual and will
simulate as many aspects associated with a live casino experience as possible.
Once the user is connected to the Game Server, the Game Server will tell the
user which card, number and suit, or symbol to display. Based on this
interplay, the user will win, lose or draw.
Phase 1 will require DDB to develop a proprietary connection on the Internet.
This will enable players to have a continuous interactive connection with the
Server. The rapid response time and percentage decrease in inadvertent
disconnection's between the User and the Server will be a deciding factor in
the success of this Phase.
Phase 1 will be hosted in the Piano WebRANCH ( an existing high viability web
site) for four (4) months to de BETA testing of the games. During this time
Internet will allow players to "gamble" with "fun money". Internet plans to
promote the Web Site to advertisers based on the number of hits at the Web
Site. During this period, Internet plans to conduct tournaments that will
offer prizes from advertisers based on criteria such as highest number of
points, top fifty players, or most wins. Because an advertiser is interested
in capturing demographic information about the user and certain users are
unwilling to enter this information, it is anticipated that the games will be
run under two difference levels in Phase 1. Level one will allow anybody to
play for free and will not require the user to enter any demographic
information. Level 2 will allow players to compete in "tournaments" and
against the house. This Phase will require the user to enter all the
appropriate demographic information. Internet believes that by offering this
multi-level virtual casino experience it will be able to gain a better
penetration into the marketplace.
Phase 2 will include the development of multi-player games, commercial gaming
sites and remote hosting. Under Phase 2 it will be possible for players to
reserve a table and play against the dealer with their own friends. During
Phase 2, Internet's primary source of revenue will be a percentage of the
actual money gambled. In addition, Internet will seek advertising revenue by
selling the demographic information obtained from its players or by offering
advertising space on the Web Site. Internet envisions designing advertising
space that would be similar to the shops at the forum at Caesar's Palace Hotel
and Casino.
The agreement with DDB provides that Internet will own all proprietary rights
to the software and the underlying technology.
Internet has not been subject to any bankruptcy, receivership or similar
proceeding.
Backlog
At March 31, 1997, Internet had no backlogs.
Employees
At as of the date hereof, Internet had approximately two full-time employees
all of whom were in management. Internet's employees are not represented by
any union or collective bargaining group, and there is no history of any labor
problems, or disputes. Internet has the human resources at present to fulfill
its current business plan but expects to hire additional employees in the
future for expansion of its operations in the ordinary course of business..
Financial Statements
Enclosed are the audited financial statements of Internet for the fiscal year
ended December 31, 1996 and unaudited financial statements for the three
months ended March 31, 1997.
To the Board of Directors
Golbal Internet Corporation
Denver, Colorado
Independent Auditor's Report
I have audited the accompanying balance sheet of Global Internet Corporation
(A Development Stage Company) as of December 31, 1996, and the related
statements of operations, changes in stockholders' deficiency, and cash flows
for the period June 4, 1997 (Inception) through 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 I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my 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 Global Internet Corporation
(A Development Stage Company) as of December 31, 1996, and the results of its
operations and its cash flow for the year then ended in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered losses from operations and has
a net capital deficiency, which raise substantial doubt about its ability to
continue as a going concern. Additionally, the Company has entered into a Web
Site and Development and Maintenance Agreement with an unaffiliated third
party which requires the Company to place into escrow approximately $1,040,000
to fund the development of the software necessary for th4e Company to commence
its business plan. Should the Company be unsuccessful in obtaining the funds
necessary to meet the escrow requirements by September 15, 1997, the Web Site
Development and Maintenance Agreement shall terminate and the contractual
relationship between the parties will end. Accordingly, the Company would
have to explore other avenues of developing its business plan. As further
discussed in Note 1 to the financial Statements, the majority stockholder of
the Company has entered into an Agreement and Plan of Reorganization with
First Entertainment Incorporated whereby through an exchange of securities,
the Company will become a majority owned subsidiary of First Entertainment
Incorporated. First Entertainment Incorporated is a publicly traded entity
whose auditors modified their latest report citing uncertainty if First
Entertainment Incorporated to continue in existence as a going concern. As
further discussed in Note 1, the financial statement, the Company's business
plan encompasses creating software aimed at developing a virtual casino to
provide gambling on the Internet. There are no assurances that the Company
will receive the necessary permits and or licenses form the various federal,
state, local or international authorities that will allow the Company to
commence and implement its business plan. Management's plans regarding these
matters also are described in Note 1. The finaciail statements do not include
any adjustments that might result from the outcome of these uncertainties.
Gerald R. Hendricks & Company. P.C.
May 21, 1997
<TABLE>
<CAPTION>
GOBAL INTERNET COPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
ASSETS
December 31, April 30,
1996 1997
<S> <C> <C>
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 68,918 $ 4
Total current assets 68,918 4
- --------------------------------------------------------------------------
PROPERTY AND EQUIPMENT, net 607 2,670
$ 69,525 $ 2,674
============================================================================
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES:
Convertible note-related party $ 325,000 $357,000
Accounts payable-
Third part 83,648 5,383
Related party 48,849 40,056
Accrued expenses-related parties
Salaries 68,000 136,000
Interest 6,000 17,000
- ---------------------------------------------------------------------------
Total current liabilities 531,497 555,439
COMMITMENT AND CONTINGENCY
STOCKHOLDERS' DEFICIENCY:
Preferred stock, $.01 par value,
5,000,000 shares authorized, none is
Common stock, $.001 par value,
10,000,000 shares authorized, 2,985,000
issued and outstanding 2,985 2,985
Additional paid-in capital 11,940 11,940
Deficit accumulated during the
development stage (476,897) (567,690)
- ----------------------------------------------------------------------------
(461,972) (552,765)
- ----------------------------------------------------------------------------
$ 69,525 $ 2,674
============================================================================
<CAPTION>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
GOBAL INTERNET COPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
Cumulative
Inception
For the Seven For the Four (June 4, 1996)
Months Ended Months Ended To
December 31, April 30, April 30,
1996 1997 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C>
INTEREST INCOME $ 1,132 $ 90 $ 1,222
- --------------------------------------------------------------------------
OPERATING EXPENSES:
Research and development 292,507 - 292,507
Professional fees-
Third party 860 - 860
Related parties 96,103 688 96,791
Salaries - related
parties 68,000 68,000 136,000
Interest - related
parties 6,000 11,000 17,000
Marketing 4,030 75 4,105
Travel and entertainment 3,983 2,437 6,420
Telephone and
communications 2,935 2,755 5,690
Deprecation - 2 250
Other 3,611 5,678 9,289
- --------------------------------------------------------------------------
478,029 90,883 568,912
- --------------------------------------------------------------------------
NET LOSS $ (476,897) $ (90,793) $ (567,690)
===========================================================================
NET LOSS PER COMMON
SHARE $ (.16) $ (.03) $ (.19)
==========================================================================
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 2,985,000 2,985,000 2,985,000
==========================================================================
</TABLE>
[CAPTION]
The accompanying notes are an integral part of these financial statements.
<TABLE>
<CAPTION>
GOBAL INTERNET COPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICIENCY
Deficit
Accumulated
Additional During the
Class A Common Stock Paid-in Development
Shares Amount Capital Stage Total
<S> <C> <C> <C> <C> <C>
BALANCE, June 4,
1996, (Inception) - $ - $ - $ - $ -
Shares issued for
cash at $.005 per
share 2,985,000 2,985 11,940 - 14,925
Net loss for
the period - - - (476,897) (476,897)
- ------------------------------------------------------------------------------
BALANCE, December
31, 1996 2,985,000 2,985 11,940 (476,897) (461,972)
Net loss for
the period - - - (90,793) (90,793)
BALANCE, April
30, 1997
(Unaudited) 2,985,000 $ 2,985 $ 11,940 $ (567,690) $(552,765)
<CAPTION>
The accompanying notes are an integral part of these financial statements.
</TABLE>
<TABLE>
<CAPTION>
GOBAL INTERNET COPORATION
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
Cumulative
For the Four Inception
For the Seven Months (June 4, 1997)
Months Ended Ended To
December 31, April 30, April 30,
1996 1997 1997
(Unaudited) (Unaudited)
<S> <C> <C> <C>
CASH FLOW FROM OPERATING
ACTIVITIES:
Net loss $ (476,897) $ (90,793) $ (567,690)
- ------------------------------------------------------------------------------
Adjustments to reconcile
net loss to net cash
used in
operating activities:
Deprecation - 250 250
Change in liabilities:
Increase (decrease)
in accounts payable 132,497 (87,058) 45,439
Increase in accrued
expenses 74,000 79,000 153,000
- ------------------------------------------------------------------------------
206,497 (7,808) 198,689
- ------------------------------------------------------------------------------
NET CASH USED IN OPERATING
ACTIVITIES (270,400) (98,601) (369,001)
- ------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of property
and equipment (607) (2,313) (2,920)
- ------------------------------------------------------------------------------
NET CASH USED IN
INVESTING ACTIVITIES (607) (2,313) (2,920)
- ------------------------------------------------------------------------------
CASH FLOW FROM FINANCING
ACTIVITIES:
Proceeds from
convertible note 325,000 32,000 357,000
Issuance of common
stock for cash 14,925 - 14,925
NET CASH PROVIDED BY
FINANCING ACTIVITIES 339,925 32,000 371,925
- -----------------------------------------------------------------------------
NET INCREASE (DECREASE)
IN CASH 68,918 (68,914) 4
CASH AND CASH EQUIVALENTS,
Beginning - 68,918 -
- ------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS,
Ending $ 68,918 $ 4 $ 4
==============================================================================
<CAPTION>
The accompanying notes are an integral part of these financial statements.
</TABLE>
[CAPTION]
GLOBAL INTERNET CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
(Financial data at April 30, 1997 and for the four month
period ended April 30, 1997 is unaudited)
1. Organization and Business Activity
The Company
Global Internet Corporation (the Company) was incorporated in the State of
Delaware on June 4, 1996. The Company is in the development stage and
development stage activities have consisted of raising equity and debt capital
and research and development activities aimed at developing a virtual casino
to provide gambling on the Internet. Global Casinos, Inc. (Global) owns
58.6% of the Company's outstanding common stock.
During the period ended December 31, 1996, the Company received $14,925 of
equity financing in cash and $325,000 in debt financing from Global through
the issuance of a 10% note, due October, 1997. In February 1997, the Company
received an additional $32,000 in debt financing from Global. The Company is
attempting to raise additional equity capital. As further discussed in Note
6, the Company has entered into a Web Site Development and Maintenance
Agreement with an unaffiliated third party which requires the Company to place
into escrow approximately $1,040,000 to fund the development of the software
necessary for the Company to commence its business plan. Should the Company
be unsuccessful in obtaining the funds necessary to meet the escrow
requirements by September 15, 1997, the Web Site Development and Maintenance
Agreement shall terminate and the contractural relationship between the
parties will end. Accordingly, the Company would have to explore other
avenues of developing its business plan.
Global has entered into an Agreement and Plan of Reorganization with First
Entertainment Incorporated (First Entertainment) whereby, through an
exchange of securities, the Company will become a majority owned subsidiary of
First Entertainment (See Note 9). First Entertainment is a publicly traded
entity whose auditors modified their latest report citing an uncertainty of
First Entertainment to continue in existence as a going concern.
The Company's business plan encompasses creating software aimed at developing
a virtual casino to provide gambling on the Internet. There are no assurances
that the Company will receive the necessary permits and or licenses from the
various federal, state, local or international authorities that will allow the
Company to commence and implement its business plan. (See Note 9)
There can be no assurance that the Company's business will develop as
anticipated by management or that additional financing will be available. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might result if the Company is unable to
continue as a going concern.
2. Summary of Significant Accounting Policies
Cash and Cash Equivalents
For purposes of the statement of cash flows, the Company considers all highly
liquid investments purchased with a maturity of three months or less to be
cash equivalents.
Property and Equipment
Property and equipment are stated at cost and are depreciated using the
straight line method over the estimated useful lives of five years.
Expenditures for maintenance and repairs are charged directly to the
appropriate operating account at the time the expense is incurred.
Expenditures determined to represent additions and betterments are
capitalized.
Capitalized Software Costs
Pursuant to Statement of Financial Accounting Standards No. 86, Accounting
for the Costs of Computer Software to be Sold, Leased, or Otherwise Marketed,
issued by the Financial Accounting Standards Board, the Company is required to
capitalized certain software development and production costs once
technological feasibility has been achieved. The cost of purchased software
is capitalized when related to a product which has achieved technological
feasibility or that has an alternative future use. The Company records all
costs incurred to establish the technological feasibility of computer software
to be sold, leased or otherwise marketed as research and development costs.
For the periods ended December 31, 1996 and April 30, 1997, the Company did
not capitalized any software development costs.
Impairment of Long-Lived Assets
Management of the Company periodically reviews the carrying value of long-
lived assets for potential impairment by comparing the carrying value of those
assets with their related, expected future net cash flows. Should the sum of
the related, expected future net cash flows be less than the carrying value,
management would determine whether an impairment loss should be recognized. An
impairment loss would be measured by the amount by which the carrying value of
the asset exceeds the future discounted cash flows.
Income Taxes
Deferred income taxes are reported using the liability method. Deferred tax
assets are recognized for deductible temporary differences and deferred tax
liabilities are recognized for taxable temporary differences. Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Net Loss Per Common Share
The net loss per common share is based on the weighed average number of
common shares outstanding during the periods, including the common stock
equivalents resulting from dilutive stock options. No common stock
equivalents are included in the computation of net loss per share as these
equivalents are antidilutive.
Stock Options
In October 1995 the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based
Compensation. This new standard defines a fair value based method for
accounting for an employee stock option or similar equity instrument. This
statement gives entities a choice of recognizing related compensation expense
by adopting the new fair value method or to continue to measure compensation
using the intrinsic value approach under Accounting Principles Board (APB)
Opinion No. 25, the former standard. If the former standard for measurement
is elected, SFAS No. 123 requires supplemental disclosure to show the effects
of using the new measurement criteria. The Company intends to use the
measurement prescribed by APB Opinion No. 25, and accordingly, this
pronouncement will not affect the Company's financial position or results of
operations.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Fair Value of Financial Statements
The carrying amounts of financial instruments, consisting of cash and cash
equivalents, approximates fair value as of December 31, 1996 and April 30,
1997, because of the relatively short maturity of these instruments. The
carrying value of the convertible note payable approximates fair value as of
December 31, 1996 and April 30, 1997, based upon market prices for the same or
similar debt issues.
3. Property and Equipment
Property and equipment, consisting solely of office equipment, had a net book
value of $0 and $2,670 at December 31, 1996 and April 30, 1997, respectively.
Depreciation expense for the periods ended December 31, 1996 and April 30,
1997 was $0 and $250, respectively.
4. Convertible Note
During the period ended December 31, 1996, the Company received, from time to
time, advances from Global amounting to $325,000. Subsequently in February
1997, the Company executed a Convertible Promissory Note (the Convertible
Note) with Global. The Convertible Note bears interest at 10%, is due
October 31, 1997 and is without collateral. Global can elect to convert the
principal and any accrued and unpaid interest into common stock of the Company
at the greater of the current market price of the Company's stock or $.25.
In February 1997, the Company received an additional $32,000 from Global and
added this amount to the outstanding balance of the convertible note with the
same terms and conditions.
Interest expense charged to operations for the periods ended December 31,
1996 and April 30, 1997, was $6,000 and $11,000, respectively.
5. Related Parties
During the period ended December 31, 1996, the Company paid $6,125 in
consulting fees to an entity in which an officer, director and stockholder is
a principal.
During the periods ended December 31, 1996 and April 30, 1997, the Company
incurred legal fees to two individuals, one who is a stockholder and or who is
an officer and stockholder totaling $89,978 and $688, respectively.
The Company has entered into employment agreements with two individuals one
who is an officer, director and stockholder and one who is an officer and
stockholder. The employment agreement with the President and Chief Executive
Officer is for a period of ten years from September 1, 1996, and calls for
monthly payments in the amount of $10,000 until the Company achieves
profitability, at which point his compensation shall be increased to $15,000.
In the event that his salary is deferred, he is entitled to receive additional
compensation equal to 5% interest on the deferred amount. In connection with
the execution of this agreement, this individual received 50,000 stock options
to acquire shares of the Company's common stock at an exercise price of $.25
per share.
The other employment agreement with the Vice President and Secretary is for a
period of three years from September 1, 1996, and calls for monthly payments
in the amount of $7,000. In the event that his salary is deferred, he is
entitled to receive additional compensation equal to 5% interest on the
deferred amount. In connection with the execution of this agreement, this
individual received 50,000 stock options to acquire shares of the Company's
common stock at an exercise price of $.25 per share.
The Company has not paid any amounts to these individuals pursuant to their
employment contracts. At December 31, 1996 and April 30, 1997, the Company
recorded salary expense, and a corresponding liability totaling, $68,000 and
$136,000, respectively.
6. Commitment and Contingency
Commitment
The Company has entered into a Web Site Development and Maintenance Agreement
with an unaffiliated third party to develop a virtual Internet casino. The
Web Site Development and Maintenance Agreement was amended in November 1996
and subsequently in March 1997.
The March 1997 amendment requires escrow payments to be made in the amount of
$1,039,840 payable as follows: $346,613 at the execution of the March 1997
amendment, $346,613 upon the commencement of work as evidenced by written
notice from the unaffiliated third party that work has commenced; and,
$346,613 at the completion of the initial phase. If the escrow is funded
after March 25, 1997 but before June 16, 1997, the cost of the initial phase
will be increased 5%. If the escrow is funded after June 16, 1997 but before
September 15, 1997, the cost of the initial phase will be increased 10%. If
the escrow is not funded on or before September 15, 1997, the Web Site
Development and Maintenance Agreement shall terminate and the contractual
relationship between the parties will end.
Contingency
During 1995 and 1996, Global and certain officers and directors of Global
received requests for information from the U.S. Securities and Exchange
Commission (SEC) related to an investigation begun by the SEC during 1994
into various matters, including certain transactions in securities by Global
and one of its officers and directors. On January 13, 1997, Global was
notified that the SEC staff intends to recommend that the Commission bring an
action against Global and two of its former officers and directors for alleged
violations of securities laws. Global has begun informal negotiations with
the SEC staff but there can be no assurance as to the final outcome of the
investigation or the impact, if any, on the operations of the Company.
7. Stockholders' Deficiency
Preferred stock
The Company is authorized to issue 5,000,000 shares of its $.01 par value
preferred stock. The shares may be issued in such series and with such
preferences as may be determined by the Board of Directors. No preferred
shares have been issued by the Company.
Common stock
During the period ended December 31, 1996, the Company received $14,925 in
cash and issued 2,985,000 shares ($.005 per share) of its common stock.
Stock Option Plan
The Company established the 1996 Stock Option Plan (the Plan) and reserved
up to 750,000 shares to be issued pursuant to the Plan. Under the Plan, stock
option can be granted at prices not less than 100% of the fair market value of
the Company's stock at the date of grant. Options are exercisable for a
period of five years.
7. Stockholders' Deficiency, continued
Stock Option Plan, continued
Option information is as follows:
<TABLE>
<S> <C>
Options outstanding, June 4, 1996 (inception)
Granted 450,000
Options outstanding, December 31, 1996
and April 30, 1997 450,000
===========================================================
Option exercise prices $ .25
===========================================================
Exercisable options 450,000
===========================================================
Weighted average exercise price $ .25
===========================================================
Options available for future grant 300,000
============================================================
</TABLE>
8. Income Taxes
At April 30, 1997, the Company has net operating loss carryforwards, for
federal income tax purposes of approximately $432,000 expiring in 2012.
When more than a 50% change in ownership occurs, over a three year period, as
defined, the Tax Reform Act of 1986 limits the utilization of net operating
loss (NOL) carryforwards in the year following the change in ownership.
Therefore, it is possible that the Company's utilization of its NOL
carryforwards may be partially reduced as a result of future changes in stock
ownership due to the proposed Agreement and Plan of Reorganization discussed
in Note 9. No determination has been made as of April 30, 1997 as to what
implications, if any, there will be in net operating loss carryforwards of the
Company.
9. Subsequent Event
In May 1997, Global entered into an Agreement and Plan of Reorganization with
First Entertainment whereby Global would exchange 1,500,000 (86%) shares of
the Company's commons stock that it owns and the $357,000 convertible note
that Global holds for 30,000 shares of First Entertainment Class B Convertible
Preferred Stock and 1,500,000 warrants. The warrants shall be for a period of
five years from the date of issuance and will be exercisable at $1.25 per
share.
The Agreement and Plan of Reorganization allows other stockholders of the
Company to exchange their shares at a different exchange rate. Each share
tendered by stockholders other than Global, shall be exchanged for one warrant
that is exerciable for a five year period at $1.25 per share.
The Agreement and Plan of Reorganization is subject to the approval of the
stockholders of the Company and First Entertainment.
Closing of the Transaction.
The transaction was closed on May 3, 1997, with the approval of the Boards of
Directors of both the Company and Internet. The Board of the Company has
submitted this transaction to the shareholders of the Company for ratification
and approval of the completed transaction.
Votes Required.
The Board of Directors of the Company is proposing that the shareholders of
the Company ratify and approve the transaction which closed on May 3, 1997.
This vote must be approved by the affirmative vote of the record holders of a
majority of the outstanding shares of the Company's quorum present in person
or by proxy at the Meeting. All common shareholders of record as of July 18,
1997, which does not include the new shareholders from the acquisition, will
be authorized to vote. The Acquisition has been approved by the holders of a
majority of the outstanding capital shares of Internet.
Board of Director Recommendations.
The Board of Directors of the Company has unanimously approved the Agreement,
and believes that the Acquisition is in the best interests of the Company's
shareholders and unanimously recommends that the shareholders vote to ratify
and approve the Acquisition.
INCREASE IN AUTHORIZED COMMON SHARES
The Company proposes to amend its Articles of Incorporation to authorize the
issuance of up to 50,000,000 Common Shares, all with $0.008 par value. This
amendment is required to have enough shares available for the shareholders of
Internet to convert their Class B preferred shares, if they so chose, under
the definitive agreement of May 3, 1997.
The present Articles of Incorporation of the Company only provide for the
issuance of up to 6,250,000 Common Shares. No specific classes or preferences
of the Common Shares are authorized nor are any contemplated by this proposed
amendment. All newly authorized Common Shares will be of the same class as the
present Common Shares. This Amendment will have no effect on the number of
authorized Preferred Shares, which will remain the same under the Company's
Articles of Incorporation. The issuance of these Common Shares could be used
as an anti-takeover measure and could have the effect of preventing those who
will not control the Company from mounting an effort to do so. Although the
issuance of Common Shares could be used for this purpose, this is not the
intention of the Company in proposing the authorization of Common Shares.
At the present time, the Company's primary purpose to authorize the increase
in the number of Common Shares is to have additional securities for equity
offerings or acquisitions. As the Company expands, there will be need for
additional capital, and the management of the Company believes that it is in
the best interests of the Company and its shareholders to have the option to
issue additional Common Shares as an added avenue to raise capital. The
Company has an ongoing need for additional capital and wants to have as much
flexibility as possible in creating programs for raising such capital. The
Company's management believes that the additional Common Shares will be an
important step in developing that flexibility. This is an added but only
secondary reason for the proposal to authorize an increase in the number of
Common Shares to 50,000,000 shares. In addition, the Company would have common
shares available for potential acquisitions. This resolution requires the
affirmative vote of a majority of the issued and outstanding shares of the
Company. The Board of Directors recommends that shareholders vote FOR the
resolution.
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Company has appointed the Company's present independent public
accountants, BDO Seidman, LLP for the fiscal year ended December 31, 1997.
This appointment will be submitted to the shareholders for ratification at the
Meeting.
The submission of the appointment of BDO Seidman, LLP is not required by law
or the bylaws of the Company. The Board of Directors is nevertheless
submitting it to the shareholders to ascertain their views. If the
shareholders do not ratify the appointment, the selection of other independent
public accountants will be considered by the Board of Directors. To be
adopted, the resolution requires the affirmative vote of a majority of the
shares voting at the meeting. The Board of Directors recommends a vote FOR the
resolution.
OTHER MATTERS
As of the date of this Proxy Statement, the Company's management has no
knowledge of any business, other than previously described herein, which
should be presented for consideration at the meeting. In the event that any
other business is presented at the meeting, it is intended that the persons
named in the enclosed Proxy will have authority to vote such Proxy in
accordance with their best judgment on such business.
SHAREHOLDER PROPOSALS
According to Rule 14a-8 under the Securities Exchange Act of 1934, a
shareholder may require that certain proposals suggested by shareholders be
voted on at a shareholders meeting. Information concerning such proposals
must be submitted to the Company for inclusion in its proxy statement. Such
proposals for inclusion in the Company's proxy materials relating to the next
Annual Meeting of the Company must be received by the Company not later than
December 31, 1997.
ANNUAL REPORT TO SHAREHOLDERS
The Company's Annual Report to Shareholders, including financial statements,
has been mailed with these materials to all shareholders of record. Any
shareholder who has not received a copy of such Annual Report may obtain a
copy by writing to the Company. Such Annual Report is not to be treated as
part of the proxy solicitation material, nor as having been incorporated by
reference.
SOLICITATION OF PROXIES
The cost of solicitation will be borne by the Company. The Company will
reimburse brokerage firms and other custodians, nominees, and fiduciaries for
reasonable expenses incurred by them in sending proxy material to the
beneficial owners of common stock. In addition to solicitation by mail,
directors, officers, and regular employees of the Company may solicit Proxies
personally or by telegraph or telephone, without additional compensation.
NOTICE TO BANKS, BROKERS/DEALERS, VOTING TRUSTEES, AND THEIR NOMINEES
Please advise the Company, in care of its corporate address, whether any other
persons are the beneficial owners of the shares of common stock for which
Proxies are being solicited from you, and, if so, the number of copies of the
Proxy Statement, and other soliciting materials, you wish to receive in order
to supply copies to the beneficial owners of shares.
FIRST ENTERTAINMENT, INC.
By: A.B. Goldberg
President
Dated: July 22, 1997
FIRST ENTERTAINMENT, INC.
1380 Lawrence Street, Suite 1400
Denver, Colorado 80204
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 25, 1997
TO OUR SHAREHOLDERS:
Notice is hereby given that a Special Meeting of Shareholders (the Meeting)
of FIRST ENTERTAINMENT, INC. (the Company), a Colorado corporation, will be
held at the Comedy Works, 1226 15th Street, Denver, Colorado, on August 25,
1997, at 10:00 a.m., local time, for the purposes set forth herein. A Proxy
Card and a Proxy Statement for the Meeting are enclosed.
The Meeting is for the purpose of considering and acting upon:
1. The election of three (3) directors to the Board of Directors of the
Company, to serve until their resignation or removal from office, or until
their respective successors are elected and qualified;
2. The ratification and approval of the Company's prior acquisition of Global
Internet Corporation, a Delaware corporation;
3. Approval to amend the Company's Articles of Incorporation to increase the
number of authorized common shares from 6,250,000 shares at $.008 par value to
50,000,000 shares at $.008 par value
4. The ratification of BDO Seidman, LLP as the Company's auditors for the
fiscal year ended December 31, 1997; and
5. Consideration of any matters which may properly come before the Meeting, or
any adjournment thereof. At this time, the Board of Directors is not aware of
any other business to come before the Meeting.
Any action may be taken on any one of the foregoing proposals at the Meeting
on the date specified above or on any date or dates to which the Meeting may
be adjourned. Only shareholders of record as of the close of business on July
18, 1997 are entitled to notice of and to vote at the Meeting. The stock
transfer books of the Company will remain open. There is printed on the
following pages a Proxy Statement to which your attention is invited. Please
read it carefully.
You are requested to fill in and sign the enclosed form of Proxy which is
solicited by the Board of Directors and to mail it promptly in the enclosed
envelope. The Proxy will not be used if you attend and vote at the Meeting in
person.
By Order of the Board of Directors
A.B. Goldberg
President
Denver, Colorado
July 22, 1997
YOU ARE CORDIALLY INVITED TO ATTEND THE SPECIAL MEETING. IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER YOU OWN. EVEN IF YOU PLAN
TO BE PRESENT, YOU ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED
PROXY PROMPTLY IN THE ENCLOSED POSTAGE PREPAID, ADDRESSED ENVELOPE. IF YOU
ATTEND THIS MEETING, YOU MAY VOTE EITHER IN PERSON OR BY YOUR PROXY. ANY
PROXY GIVEN MAY BE REVOKED BY YOU IN WRITING OR IN PERSON AT ANY TIME PRIOR TO
THE EXERCISE THEREOF.
PROXY
FIRST ENTERTAINMENT, INC.
1380 Lawrence Street, Suite 1400
Denver, Colorado 80204
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
OF FIRST ENTERTAINMENT, INC.
THE UNDERSIGNED hereby appoints and constitutes A.B. Goldberg as his true and
lawful agents and proxy, with full power of substitution and revocation, to
attend, represent and to vote the shares of common stock of the undersigned at
the Special Meeting of Shareholders, to be held at the Comedy Works, 1226 15th
Street, Denver, Colorado, on August 25, 1997, at 10:00 a.m., local time, for
the purposes set forth in the accompanying Notice of Special Meeting of
Shareholders and at any adjournment thereof, and on all matters coming before
said meeting.
Management recommends a vote FOR items 1, 2, 3, 4, and 5, and SHARES WILL BE
SO VOTED UNLESS YOU INDICATE OTHERWISE:
1. Approval of the following individuals to serve on the Board of Directors:
A.B. Goldberg FOR AGAINST ABSTAIN
Dr. Nick Catalano FOR AGAINST ABSTAIN
Dr. Theodore Jacobs, M.D. FOR AGAINST ABSTAIN
2. The ratification and approval of the Company's prior acquisition of Global
Internet Corporation, a Delaware corporation;
FOR AGAINST ABSTAIN
3. Approval to amend the Company's Articles of Incorporation to increase the
number of authorized common shares from 6,250,000 shares at $.008 par value to
50,000,000 shares at $.008 par value
FOR AGAINST ABSTAIN
4. The ratification of BDO Seidman, LLP as the Company's auditors for the
fiscal year ended December 31, 1997; and
FOR AGAINST ABSTAIN
5. Consideration of any matters which may properly come before the Meeting, or
any adjournment thereof. At this time, the Board of Directors is not aware of
any other business to come before the Meeting.
FOR AGAINST ABSTAIN
Dated: , 1997
(Printed Name of Shareholder)
(Signature of Shareholder)
This Proxy Must Be Signed Exactly As Your Name Appears On Your Stock
Certificate. Executors, Administrators, Trustees, Etc., Should Give Full
Title As Such. If The Signer Is A Corporation, Please Sign Full Corporate
Name By Duly Authorized Officer.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY. THE FAILURE TO CHECK
A BLOCK WILL BE TAKEN AS A VOTE FOR THE PROPOSITION.
