<PAGE> 1
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended: December 31, 1995
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act
Commission File Number: 33-19980-D
Gemstar Enterprises, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 87-0450450
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
73-251 Amber Street
Palm Desert, California 92260
(Address of principal executive offices)
619 - 346 - 4812
(Issuer's telephone number)
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
(1) Yes [ ] No [X] (2) Yes [X] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the Issuer's classes of
common equity; as of the latest practical date: 10,758,614 shares of its
$0.001 par value common stock as of November 5, 1996.
Transitional Small Business Disclosure Format (check one) Yes [ ] No [ X ]
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following unaudited financial statements included as a part of this Form
10-QSB Report for the first quarter ended December 31, 1995, have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
However, in the opinion of management, all adjustments (which include only
normal recurring accruals) necessary to present fairly the financial position,
results of operations, cash flows and stockholders' equity for the periods
presented have been made. These financial statements should be read in
conjunction with the accompanying notes, and with the historical financial
statements and footnotes thereto and other information contained in the
Company's most recent Form 10-KSB Report.
<PAGE>
<PAGE> 3
Gemstar Enterprises, Inc.
(A Development Stage Company)
Balance Sheet
December 31, 1995
[Unaudited]
ASSETS
Current Assets:
Cash in bank $ 7,657
-----------
Total Current Assets $ 7,657
-----------
TOTAL ASSETS $ 7,657
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ -0-
Loans from officers 603
-----------
Total Current Liabilities $ 603
-----------
Stockholders' Equity:
Preferred Stock, none outstanding $ -0-
Common Stock, 6,758,614 shares outstanding 6,759
Additional paid-in capital 908,285
Deficit accumulated prior to the development stage <905,548>
Deficit accumulated during the development stage <2,442>
-----------
Total Stockholders' Equity $ 7,054
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 7,657
===========
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
Gemstar Enterprises, Inc.
(A Development Stage Company)
Statements of Operations
[Unaudited]
<TABLE>
<CAPTION>
From the Date
of Inception
as a Development
Stage Company
(April 10, 1993)
For the Three Month Period Through
Ended December 31, December 31,
1995 1994 1995
---- ---- ----
<S> <C> <C> <C>
Revenue $ -0- $ -0- $ -0-
-------- -------- ---------
Expenses:
Office Supplies 43 -0- 43
Filing Fees 300 300 1,267
Cost of public entity -0- -0- 580
Travel -0- -0- 13
Taxes, non-income -0- -0- 127
Amortization -0- -0- 412
-------- -------- ---------
Total Expenses $ 343 $ 300 $ 2,442
-------- -------- ---------
NET LOSS $ 343 $ 300 $ 2,442
======== ======== =========
NET LOSS PER SHARE $ 0.00 $ 0.00 $ 0.00
======== ======== =========
Common Shares used in
Net Loss Computation 6,758,614 6,758,614 6,758,614
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 5
Gemstar Enterprises, Inc.
(A Development Stage Company)
Statement of Stockholders' Equity
[Unaudited]
<TABLE>
<CAPTION> Deficit Deficit
Accum. Accum. Total
Prior to the During the Due Stockholders'
Common Stock Paid-in Development Development From Equity
Shares Amount Capital Stage Stage Officer <Deficit>
------ ------ ------- ------------ ------------ ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at inception
of Development Stage
April 10, 1993 1,698,864 $ 1,699 $812,150 $<905,548> $ -0- $ -0- $<91,699>
Common stock valued
at $.02 per share
for assumption of
liabilities, amounts
due shareholder and
receivable from
officer
August 16, 1993 5,000,000 5,000 95,000 -0- -0- <7,783> 92,217
Net Loss from the
start of the
Development Stage
to September 30, 1993 -0- -0- -0- -0- <1,300> -0- <1,300>
--------- ------- -------- -------- ------- ------ --------
Balance,
September 30, 1993 6,698,864 $ 6,699 $907,150 $<905,540> $<1,300> $<7,783> $ <612>
Expenses paid by
officer -0- -0- -0- -0- -0- 966 966
Net Loss for the
year ended,
September 30, 1994 -0- -0- -0- -0- <354> -0- <354>
--------- ------- -------- -------- ------- ------ --------
Balance,
September 30, 1994 6,698,864 $ 6,699 $907,150 $<905,540> $<1,484> $<6,817> $ -0-
Common stock issued
for cash at $.02 per
share
October 15, 1994 59,750 60 1,135 -0- -0- -0- -0-
Loan to officer -0- -0- -0- -0- -0- <1,195> <1,195>
Expenses paid by
officer -0- -0- -0- -0- -0- 615 615
Collection of loan
from officer
September 30, 1995 -0- -0- -0- -0- -0- 7,397 7,397
Net Loss for the
year ended,
September 30, 1995 -0- -0- -0- -0- <615> -0- <615>
--------- ------- -------- -------- ------- ------ --------
Balance,
September 30, 1995 6,758,614 $ 6,759 $908,285 $<905,540> $<2,099> $ -0- $ 7,397
Net Loss for the
three month period,
December 31, 1995 -0- -0- -0- -0- <343> -0- <343>
--------- ------- -------- -------- ------- ------ --------
Balance,
December 31, 1995 6,758,614 $ 6,759 $908,285 $<905,540> $<2,442> $ -0- $ 7,054
========= ======= ======== ========= ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 6
Gemstar Enterprises, Inc.
(A Development Stage Company)
Statements of Cash Flows
[Unaudited]
<TABLE>
<CAPTION>
From the Date
of Inception
as a Development
Stage Company
(April 10, 1993)
For the Three Month Period Through
Ended December 31, December 31,
1995 1994 1995
---- ---- ----
<C> <C> <C> <C>
Cash Flows from
Operating Activities:
Net Loss from Operations $ <343> $ <300> $ <2,442>
Amortization -0- -0- 412
Expenses paid by officer -0- -0- 1,581
Decrease in accounts payable -0- -0- <612>
-------- -------- ---------
Net Cash Used In
Operating Activities $ <343> $ <300> $ <1,061>
-------- -------- ---------
Cash Flows from
Financing Activities:
Proceeds from sale of
common stock $ -0- $ 1,195 $ 1,195
Advances from officer -0- 300 603
Collection of receivable
from officer -0- -0- 7,397
Advances to officer -0- <1,195> <1,195>
-------- -------- ---------
Net Cash Provided by
Financing Activities $ -0- $ 300 $ 8,000
-------- -------- ---------
Net Increase <Decrease> In Cash $ <343> $ -0- $ 6,939
Cash at beginning of period 8,000 -0- 718
-------- -------- ---------
Cash at end of period $ 7,657 $ -0- $ 7,657
======== ======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 7
Gemstar Enterprises, Inc.
(A Development Stage Company)
Notes to Financial Statements
[Unaudited]
NOTE 1 - ACCOUNTING POLICIES AND OTHER DISCLOSURES
The condensed financial statements included in this Form 10-QSB Report have
been prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. These financial
statements have been prepared in the ordinary course of business for the
purpose of providing information with respect to the interim three month
periods and are not necessarily indicative of the results to be expected for
the entire year. The accounting policies followed by the Company and other
pertinent footnote disclosures are set forth in the Company's audited
financial statements contained in its Form 10-KSB Report.
The loss per common share has been computed using the number of common shares
outstanding as of the end of the latest period presented. Inasmuch as the
Company is a development stage enterprise, using the number of common shares
outstanding as of December 31, 1995, rather than the weighted average number
of common shares outstanding during each of the periods presented, provides a
more conservative approach to the loss per share computation.
NOTE 2 - SUBSEQUENT EVENTS
The Company amended its articles of incorporation on March 25, 1996. The
nature of the amendment was to change the par value of its common stock from
$0.02 per share to $.001 per share.
In August of 1996, the Company sold to four individuals in a private
transaction, 4,000,000 shares of its common stock at a price of $0.0025 per
share and received therefrom $10,000.00 cash. Thus, after this transaction,
the Company has a total of 10,758,614 shares of $.001 par value common stock
outstanding. Of the shares sold, the Company's sole officer and director
purchased 1,500,000 shares for a total of $3,750.00.
<PAGE> 8
PART I - FINANCIAL INFORMATION
ITEM 2. PLAN OF OPERATIONS
Statements regarding the Company's expectations as to future operations
and certain other statements presented in this Form 10-QSB Report constitute
forward looking information within the meaning of the Private Securities
Litigation Reform Act of 1995. Although the Company believes that its
expectations are based on reasonable assumptions within the bounds of its
knowledge of its business operations, there can be no assurance that actual
results will not differ materially from the expectations expressed herein. In
addition to matters affecting the Company in general, factors which could
cause expectations to differ are, but not limited to, the following: 1)
changes in federal and/or state securities laws; 2) changes in federal and/or
state income tax laws, in particular as they relate to tax free
reorganizations; 3) economic conditions, particularly as they relate to
securities markets; and 4) the Company's ability to continue to have
sufficient capital available to maintain its operations.
The Company was incorporated under the laws of the state of Nevada in
October of 1987, under the name of North Star Petroleum, Inc. and completed a
public offering of its common stock and warrants in August of 1988. Subsequent
to the public offering, the Company engaged in the exploration, development
and production of oil and gas on a joint venture basis with other industry
partners.
In May of 1990, the Company amended its Articles of Incorporation,
thereby changing its name to Gemstar Enterprises, Inc., increasing its par
value from $0.001 per share to $0.02 per share, and authorizing for issuance
5,000,000 shares of preferred stock. Additionally, the Company reverse split
its common stock on the basis of one $0.02 par value common share for twenty
[20], $0.001 par value common shares [1 for 20 reverse split]. All references
contained herein to the Company's common stock have taken this reverse split
into account. During 1990, the Company also acquired approximately 200 acres
of real property located in Alexander County, North Carolina. The Company's
performance in both its oil and gas business and its investment in real estate
did not generate sufficient revenue to result in profitable operations.
During the fiscal year ending in September, 1993, the Company sold all of
its assets and associated liabilities, thus avoiding any bankruptcy,
receivership or similar proceeding. By April, 1993, this reorganization was
completed and the Company retained only a receivable from its sole officer and
director, which amounted to less than $10,000. As a consequence, since April
of 1993, the Company has been considered a new entity for accounting
purposes. During the Company's latest fiscal year, ending in September, 1996,
and for its preceding two fiscal years ending September, 1995 and 1994, the
Company did not engage in any business activity.
The Company recently sold shares of its common stock in a private
transaction for the purpose of paying its operating costs. The Company is now
actively seeking a business to acquire or to merge with, in order to establish
business operations. As previously stated, the Company can not assure success
in this endeavor. Furthermore, the acquisition of any asset or business
enterprise (profitable or not profitable) will in all likelihood result in a
dilution in the percentage ownership that a current shareholder has in the
Company. The dilution will be a result of the Company issuing additional
equity securities in exchange for the assets or operations acquired.
<PAGE> 9
Management anticipates that if and when such a business reorganization
occurs, it would most likely result in a dilution in a current shareholder's
ownership percentage in the Company after the completion thereof. The dilution
will be a result of the Company's need to give consideration to the previous
owners of the operations or business being acquired. Additionally, an
incentive to such entity to be acquired by the Company is that the Company may
sell additional shares of its equity securities in order to fulfill certain
capital requirements of the plan of reorganization.
The Company continues to hold expenses at a minimum by having no
employees during each of its last two fiscal years. Furthermore, it is not
anticipated any employees will be hired unless the Company's business
operations were to change and therefore require that individuals be hired in
anticipation that future revenue would be generated. Management is providing
the Company with a location for its principal executive offices on a "rent
free basis" and no salaries or other form of compensation are currently being
paid by the Company for the time and efforts required by management to seek an
entity for the purpose of entering into a reorganization. To the extent that
the Company requires the exclusive, full-time use of management, it is
intended that management be reimbursed for its out-of-pocket costs and to the
extent that management's time requirements in fulfilling its responsibilities
become greater than currently expected, the Company may accrue a financial
liability to management.
The investigation of specific business opportunities and the negotiation,
drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and will
require the Company to incur substantial costs for payment of accountants,
attorneys and others, which may include management. If a decision is made not
to participate in or complete the acquisition of a specific business
opportunity, the costs thus incurred may not be recoverable in a subsequent
related investigation. Further, even if agreement is reached for the
participation in a specific business opportunity by way of investment or
otherwise, the failure to consummate the particular transaction may result in
the loss to the Company of all related costs incurred. In the past, the board
of directors have approved resolutions authorizing the issuance of the
Company's common stock as consideration for amounts advanced to the Company.
Currently, management is not able to determine the time or resources that
will be necessary to complete the participation in or acquisition of any
future business prospect. There is no assurance that the Company will be able
to acquire an interest in any such prospects, products or opportunities that
may exist or that any activity of the Company, regardless of the completion of
any participation in or the acquisition of any business prospect will be
profitable.
<PAGE> 10
Liquidity and Capital Resources
As of December 31, 1995, the Company had cash assets of $7,657 and $603
in liabilities. Additionally, the Company will incur substantial legal,
accounting and other associated costs to bring its financial and corporate
reporting obligations current [total costs incurred in this regard through the
fiscal year ended September 31, 1996, amounted to $10,069, which does not
represent all of the costs yet to be incurred in this regard]. Management has
not received any compensation for its efforts in this regard. It is
anticipated that the Company will incur more cost including legal and
accounting fees, in the location, evaluation and completion of a
reorganization, should such occur. As additional time commitments are being
given to the Company by management or costs which are incurred are paid by
management, the Company may issue its equity securities or enter into
promissory notes, for such services and costs incurred.
Results of Operations
The Company has not engaged in any business operations, other than
previously disclosed, during the quarters ended December 31, 1995 and 1994.
Consequently, no revenue was generated by the Company during the quarters
ended December 31, 1995 and 1994. Furthermore, the Company did not generate
any revenue during its fiscal year ended September 31, 1996 and it is not
anticipated that any revenue will be generated until a business reorganization
with an operating entity has occurred.
PART II - OTHER INFORMATION
Items 1 - 5
The Company's response with respect to Items 1 - 5 of this Form 10-QSB
Report for the quarter ended December 31, 1995 is "NONE."
Item 6 - Exhibits and Reports on Form 8-K.
The Company has not filed any Reports on Form 8-K during the quarter
being covered by this Form 10-QSB.
Index of Exhibits:
Number 3: Initial Articles of Incorporation and By-laws
Incorporated by reference to the Company's registration statement on Form
S-18, File No. 33-19980-D
Number 3: Amended Articles of Incorporation
Incorporated by reference to the Company's Form 10-KSB, for the year
ended September 30, 1989
Number 3: Amended Articles of Incorporation
Included in this Report as Exhibit 3
<PAGE> 11
Number 3: Amended Articles of Incorporation
Incorporated by reference to the Company's Form 10-KSB, for the year
ended September 30, 1995
Number 4: Warrant Agent Agreement
Incorporated by reference to the Company's registration statement on Form
S-18, File No. 33-19980-D
Number 4: First Amendment to Warrant Agent Agreement
Included in this Report as Exhibit 4
Number 4: Second Amendment to Warrant Agent Agreement
Incorporated by reference to the Company's Form 10-KSB, for the year
ended September 30, 1995
Number 27: Financial Data Schedule
Included in this Report as Exhibit 27
SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GEMSTAR ENTERPRISES, INC.
By: /S/Denny W. Nestripke
Denny W. Nestripke
Chief Executive Officer and
Chief Financial Officer
Date: November 15, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000829323
<NAME> GEMSTAR ENTERPRISES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 7,657
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,657
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,657
<CURRENT-LIABILITIES> 603
<BONDS> 0
0
0
<COMMON> 915,044
<OTHER-SE> (907,990)
<TOTAL-LIABILITY-AND-EQUITY> 7,657
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 343
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (343)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (343)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
EXHIBIT 3 - AMENDED ARTICLES OF INCORPORATION
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
GEMSTAR ENTERPRISES, INC.
Pursuant to the applicable provisions of the Nevada Revised Statutes, Gemstar
Enterprises, Inc. (The "Corporation") hereby adopts the following Articles of
Amendment to its Articles of Incorporation:
First: The present name of the Corporation is Gemstar Enterprises, Inc.
Second: The following amendment to its Articles of Incorporation was
adopted by majority vote of shareholders of the of the Corporation on May 10,
1990, in the manner prescribed by Nevada law:
1. Article IV is amended by adding to "B. Preferred Stock" a paragraph 7
as follows:
7. Conversion: The Series One Preferred Shares shall be convertible
into two shares of common stock at any time subsequent to September 30, 1992.
Third: The number of shares of the Corporation outstanding and entitled
to vote at the time of the adoption of said amendment was 10,977,250 shares.
Fourth: The number of shares voted for such amendment was 5,517,200 and
the number voted against such amendments was 5,000.
Dated this 13th day of July, 1990.
GEMSTAR ENTERPRISES, INC.
/S/ Ricky G. Cogburn /s/ Denny W. Nestripke
- ------------------------------- -----------------------------
Ricky G. Cogburn, Secretary Denny W. Nestripke, President
VERIFICATION
STATE OF UTAH }
} SS
COUNTY OF SALT LAKE }
The Undersigned being first duly sworn, deposes and states: that the
undersigned is the Secretary of Gemstar Enterprises, Inc., that the
undersigned has read the Articles of Amendment and knows the contents thereof
and that the same contains a truthful statement of the amendment duly adopted
by the stockholders of the Corporation.
/s/ Ricky G. Cogburn
-----------------------------
Ricky G. Cogburn, Secretary
STATE OF UTAH }
} SS
COUNTY OF SALT LAKE }
Before me the undersigned Notary Public in and for the said County and State,
personally appeared the President and Secretary of Gemstar Enterprises, Inc. a
Nevada corporation, and signed the foregoing Articles of Amendment as their
own free and voluntary act and deed pursuant to a corporate resolution for the
uses and purposes set forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 13th day of
July, 1990.
/s/ Shanna Atkinson
--------------------------
Shanna Atkinson
NOTARY PUBLIC
My Commission Expires:
Residing At:
January 4, 1991
Salt Lake County, Utah
<PAGE>
EXHIBIT 4 - FIRST AMENDMENT TO WARRANT AGENT AGREEMENT
FIRST AMENDMENT TO WARRANT AGREEMENT
This First Amendment to that certain Warrant Agreement between Gemstar
Enterprises, Inc., formerly North Star Petroleum, Inc., a Nevada corporation
(the "Company") and Cottonwood Stock Transfer, successor to Western States
Transfer & Registrar, Inc., (the "Warrant Agent") dated December 2, 1987 and
attached hereto as Exhibit "A" (the "Agreement") is entered into between the
Company and Warrant Agent this 13th day of July, 1990.
WHEREAS, the Company terminated the services of Western States Transfer &
Registrar, Inc. and replaced it with the Warrant Agent; and
WHEREAS, the Company has designated the original warrant issued by the Company
in 1988 as Class A Warrants and has subsequently distributed warrants to
shareholders of the Company designated as Class B Warrants; and
WHEREAS, the parties desire to modify the Agreement to reflect such changes
and other amendments as set forth herein; and
WHEREAS, the parties desire the Agreement except as modified herein as to
remain in full force and effect;
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. The Company's address is changed to 525 East 100 South, Suite 100, Salt
Lake City, Utah 84102.
2. The term "Warrant Agent" shall refer to Cottonwood Stock Transfer, 525
East 100 South, Suite 105, Salt Lake City, Utah 84102.
3. The first "Whereas" paragraph of the Agreement is deleted in its entirety
and the following paragraphs are substituted:
"WHEREAS, the Company has authorized and issued a Class A Warrant entitling
the registered holder thereof to purchase one share of common stock at a price
of $1.60 per share during the exercise period commencing on the effective date
of that certain registration statement filed with the Securities and Exchange
Commission on Form S-1 by the Company in July of 1990 registering 1,100,009
shares of common stock for sale to warrant holders upon exercise of the
Warrants (the "Registration Statement") and ending 45 days from the effective
date thereof. A copy of the certificate evidencing the Class A Warrant is
attached hereto as Exhibit "B" and by this reference made a part hereof; and
WHEREAS, the Company has authorized and issued a Class B Warrant entitling the
registered holder thereof to purchase one share of common stock at a price of
$4.00 per share during the exercise period commencing on the effective date of
the Registration Statement and ending six months from the effective date
thereof. A copy of the certificate evidencing the Class B Warrant is attached
hereto as Exhibit "C" and by this reference made a part hereof."
4. Section 1.02 of the Agreement is amended by amending the second sentence
as such section to read:
"The test of the Warrant Certificate including the form of assignment and
subscription to be printed on the reverse side thereof shall be substantially
in the form of Exhibit "B" and "C" attached hereto."
5. Section 2.01 of the Agreement is amended by amending the first sentence of
such section to read:
"This Agreement shall cover 551,145 Class A Warrants and 548,864 Class B
Warrants, each exercisable for a period as set forth in the Warrant
Certificate."
6. Section 6.05 of the Agreement is amended by deleting North Star Petroleum
and the address and deleting reference to Thomas G. Kimble, Esq. And the
address and replacing the same with:
Gemstar Enterprises, Inc.
525 East 100 South, Suite 100
Salt Lake City, Utah 84109
Also, the reference and address of Western States Transfer & Registration,
Inc. are deleted and replaced with:
Cottonwood Stock Transfer
525 East 100 South, Suite 105
Salt Lake City, Utah 94109
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the day and year first above written.
GEMSTAR ENTERPRISES, INC.
By /s/ Denny W. Nestripke
---------------------------------
Denny W. Nestripke, President
COTTONWOOD STOCK TRANSFER
By /s/ Shanna Atkinson
---------------------------------
Shanna Atkinson, President
