<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

                             ---------------------

                                  FORM 10-KSB
                             ---------------------

    [X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1999

                          COMMISSION FILE NO. 0-27160

                                 CALL NOW, INC.
              (Exact name of small business issuer in its charter)

<TABLE>
<S>                                              <C>
                  NEVADA                                         65-0337175
         (State of Incorporation)                     (IRS Employer Identification No.)

         10803 GULFDALE, SUITE 222                               78216-3634
              SAN ANTONIO, TX                                    (zip code)
 (Address of principal executive offices)
</TABLE>

                     Issuer's Telephone No. (210) 349-4141

          Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

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

                                  COMMON STOCK

     Check whether the Registrant (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or 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. Yes [X]   No [ ]

     Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-KSB or any amendment to this Form 10-KSB.  [X]

 State issuer's revenues for twelve months ended December 31, 1999: $5,905,224.

     The aggregate market value of the voting stock held by non-affiliates of
the Registrant based upon the average bid and asked prices of such stock, at
May 31, 2000 was $4,908,692.

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 8,495,444 shares of common
stock, as of April 24, 2000.

                      Documents Incorporated by Reference:

                                      NONE

               Transitional Small Business Disclosure Format:  NO

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<PAGE>   2

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS.

HISTORY AND DEVELOPMENTS DURING THE LAST THREE YEARS

     Call Now, Inc. (the "Company") was organized under the laws of the State of
Florida on September 24, 1990 under the name Rad San, Inc. It changed its name
to Phone One International, Inc. in January 1994 and to Call Now, Inc. in
December 1994. We changed our domicile to the state of Nevada in 1999.

     Our primary operations are the management of Retama Park Racetrack in
Selma, Texas, through our 80% owned subsidiary. Under the Management Agreement,
we are reimbursed for the expenses of operating the track from revenues
generated at the track.

     On July 15, 1996, Andice Development Co. (a wholly-owned subsidiary of Call
Now, Inc.) acquired 118 acres of development property in Williamson County,
Texas for a purchase price of $2,363,060. Under the terms of the purchase, we
paid $589,310 and executed a seven year, 9% note in the amount of $1,770,000.
The note requires us to make semi-annual principal and interest payments of
$85,721 commencing on January 15, 1997 and ending July 15, 2003, at which time,
the entire remaining balance of $1,655,056 is due and payable. We are still
formulating our plans for this property.

     In August 1996 we decided to exit the long distance telephone business due
to the competitive environment and its inability to develop its business to the
point of profitability. The business was sold to Alan Niederhoffer, formerly our
Vice President and President of our ARN subsidiary for 100,000 shares of our
common stock owned by Niederhoffer and assumption of substantially all of the
liabilities of ARN.

     On September 29, 1996 we acquired $52,274,000 of $54,040,000, 8.75%, term
bonds of the Retama Development Corporation Special Facilities Revenue Bonds,
Series 1993 for a purchase price of $10,300,000. The bonds are secured by a
first mortgage on the Retama Park Horse Racing facility. In a simultaneous
closing, we sold 50% of the bonds to a broker/dealer for a down payment of
$1,740,000 and future payments of $1,950,000. The broker/dealer also agreed to
pay $7,600 for stock purchase options granting the right to acquire 760,000
shares of Call Now, Inc. common stock at a purchase price of $2.60 per share.

     In November 1996 we purchased from Retama Partners, Ltd. the principal
amount of $39,275,000 of a Retama Development Corporation Series A note and
$500,000 of a Retama Development Corporation Series 1993B note. We issued
385,700 shares of our common stock in exchange for such notes. These notes were
secured by a second lien on the Retama Park Racetrack facilities, including real
and personal property.

     On March 26, 1997, the Company participated in the defeasance of the RDC
bonds and notes held by it, and received cash in the amount of $3,853,086,
$3,640,000 7% Series 1997 A Bonds and $45,200,000, 8% Series 1997 B Bonds as
part of the defeasance. The 1997 bonds were valued by an independent third party
at the same value as the carrying value of the 1993 bonds.

     On April 7, 1997, the Company acquired the balance of the RDC bonds in
exchange for 760,000 shares of the Company's common stock, 15,000 shares of
Compressent Corporation ("Compressent") common stock, and $2,150,000 in cash.
The cost of the remaining bonds purchased by the Company, including
acquisition costs, was $3,187,728. At December 31, 1997 the Company's total
holdings of RDC bonds were: (a) 1997 Series A 7% bonds- $7,000,000 and (b) 1997
Series B 8% bonds- $86,925,000.

     Due to unanticipated difficulty in securing complete financing for the
bond transaction and the possibility of losing a three million dollar
non-refundable deposit, the Company decided to approach the second bidder for
the RDC bonds. As a result, Hall, Soloman and Howe ("HSH") agreed to purchase
50% of the bonds for $3.69 million which resulted in a loss of $1.7 million.
This business decision was made in order to complete the acquisition of the
bonds, which the Company considered to be a valuable asset and to preserve the
three million dollar non-refundable deposit.

     The Company was able to acquire bonds at a cost of $10.34 million which
are secured by Retama Racetrack that has been appraised at over twenty-two
million dollars by an independent appraisal group.

     As part of the transaction, the Company received notes from HSH in the
amount of $1,950,000. Of this amount $1,100,000 was received on a timely
manner. The remaining $850,000 was received in a subsequent transaction in
which the Company acquired the balance of the defeased bonds. Constant
negotiations with HSH during this period assured the Company that the $850,000
would be collected and it was collected in the April 1997 transaction.

     On December 1, 1997 our 80% owned subsidiary, Retama Entertainment Group,
Inc. obtained a management agreement to operate and manage the Retama Park
Racetrack. Our then President, Bryan P. Brown, relocated to Texas to personally
supervise such activities. The management agreement extends to November 1, 2000
subject to certain extension rights, and provides monthly management fee of
$15,000 plus a variable fee equal to 25% of profits in excess of $1,000,000.

     In February 1998, we entered into a loan agreement with Compressent
Corporation in which the Company was obligated to lend, on or before July 31,
1998, upon the request of Compressent's Board of Directors, up to $10,000,000.
Amounts loaned were to be due one year from the date of the loan and would bear
interest at 15% a year. In addition, we were to receive a $400,000 commitment
fee at the time of the first loan advance. In connection with the loan
agreement, we would receive warrants to acquire 500,000 shares of the
Compressent's common stock at $6.25 per share.

     In addition, we agreed to exchange $3,500,000 face amount of its investment
in RDC, Series A Bonds for 56,000 shares of Compressent, 7.5% cumulative
convertible preferred stock, which would be convertible into

                                        2
<PAGE>   3

560,000 shares of Compressent's common stock, and an option to acquire 500,000
shares of Compressent common stock for $6.25 per share.

     On May 20, 1998, the Company and Compressent terminated the loan agreement
before any loan was made thereunder. In addition, the parties rescinded the
preferred stock and warrant purchase by each party returning to the other the
securities originally exchanged. However, Compressent, upon the original receipt
of the RDC bonds borrowed approximately $2,000,000, pledging the bonds as
collateral. In this connection, upon termination of the agreement, the Company
assumed the approximate $2,000,000 loan.

     In July 1998, we agreed to purchase three thoroughbred racetracks,
Louisiana Downs in Louisiana, Remington Park in Oklahoma and Thistledown in
Ohio. The Company deposited $2,000,000 as a down payment. We terminated the
Agreement during the inspection period and obtained the return of our down
payment.

     In July 1998, we sold $3,500,000 face amount of its RDC, Series A Bonds for
$2,150,000, subject to certain repurchase rights.

     In May 1999, we entered into an agreement with two unaffiliated trusts,
Global Trust and Hemisphere Trust, under which we exchanged $43,462,500 of the
Series B RDC Bonds for $2,000,000 of Series A RDC Bonds and the payment of the
Compressent debt assumed by the Company. After the next conversion date of
Series B Bonds into Series A Bonds, the parties will adjust their ownership of
the Bonds so that the Company owns 50% of the total Class A and B Bonds and
Global and Hemisphere own 25% each of such Bonds. Global and Hemisphere also
agreed to contribute up to $300,000 of the cost to repair the infield lake at
the Retama Park Racetrack which we have agreed to repair and one-half of the
annual salary and bonus of the chief executive officer of the track, currently
Bryan Brown, a director of the Company. A copy of the Agreement with Global and
Hemisphere is filed as an exhibit herein.

EMPLOYEES

     The Company has about 210 full-time employees, including 4 executive
employees. This includes the employees of Retama Entertainment Group, Inc.

ITEM 2.  DESCRIPTION OF PROPERTY.

     We lease 864 square feet of office space in Miami, Florida for $1,224.75
per month on a month-to-month basis.

ITEM 3.  LEGAL PROCEEDINGS.

     On December 15, 1998, we were served as Defendants in a civil case brought
by Retama Development Corporation in the 224th Judicial District of Bexar
County, Texas District Court. The suit alleges that the Registrant's Chairman
interfered with Plaintiff's management contract with a third party by
instructing a representative of the management company to engage a contractor to
undertake repairs on a lake owned by Plaintiff, and such conduct constituted a
breach of duty of good faith and fair dealing and fraudulently and negligently
misrepresented the expertise of the contractor. The action seeks the sum of
$600,000 in damages and lost profits resulting from the "failed lake" which is
alleged to have caused the reduction in attendance at the Retama Park Racetrack,
and also seeks exemplary damages.

     In May, 1999, we entered into a settlement agreement under which we agreed
to repair the lake. The lake was repaired and the suit was dismissed.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.

     None.

                                        3
<PAGE>   4

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     The Company's Common Stock trades on the over-the-counter market under the
symbol CNOW. The following sets forth the range of high and low bid quotations
for the periods indicated as reported by National Quotation Bureau, Inc. Such
quotations reflect prices between dealers, without retail mark-up, markdown or
commission and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                              HIGH BID   LOW BID
                                                              --------   -------
<S>                                                           <C>        <C>
March 31, 1998.............................................. $ 1.875    $ 1.3125
June 30, 1998...............................................   4.00       1.625
September 30, 1998..........................................   3.4375     1.375
December 31, 1998...........................................   1.625       .875
March 31, 1999..............................................   2.25        .6875
June 30, 1999...............................................   1.50        .75
September 30, 1999..........................................   1.375       .875
December 31, 1999...........................................   2.625       .875
</TABLE>

     The Company paid a dividend of one share of Compressent Corporation common
stock for each ten shares of Company common stock to its stockholders of record
on March 12, 1996. The Company has not established a policy of payment of
regular dividends on its common stock. There are no restrictions on the payment
of dividends. As of April 3, 2000 there were approximately 384 registered
holders of record of the Company's common stock.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

YEAR ENDED DECEMBER 31, 1999 COMPARED TO 1998

  Results of Operations

     a. Revenues and Other Income

     The Company's income for the year ended December 31, 1999 was $5,905,224
compared to $5,419,238 for the year ended December 31, 1998. The increase in
income for the current year is primarily attributable to the operations of
Retama Park Racetrack. Interest income for the year ended December 31, 1999 was
$303,264 compared to $52,946 for the year ended December 31, 1998. The increase
was due primarily to additional investment of cash received from the income tax
refund and interest earned on the RDC bonds.

     b. Expenses

  Cost and Other Expenses of Revenues

     Expense for the year ended December 31, 1999 was $7,322,881 compared to
$7,472,409 for the year ended December 31, 1998. The net decrease was due
primarily to a reduction in general and administrative expense and loss on
financing transaction less an increase in racetrack operating expenses.

  Income Tax

     The income tax benefit for 1999 was $447,814 compared to $1,247,637 in
1998. The decrease is due to the reduction of the net operating loss to
$1,314,868 from $4,573,979 in 1998.

  Liquidity and Capital Resources:

     During the year ended December 31, 1999, the Company's operating activities
used cash of $110,686 compared to $2,242,902 used for the year ended December
31, 1998.

                                        4
<PAGE>   5

     We have investments in Retama Development Corporation Bonds. The fair
market value of the securities at December 31, 1999 was $4,403,403. The Series
A bonds will generate $140,000 in interest income.

     We applied for and received a $1,871,787 income tax refund. A federal
income tax refund claim of $566,442 is being prepared.

     Barron Chase executed a note payable to the Company in the amount of
$750,000 bearing interest at 12% per annum. The note pays the Company $7,500.00
per month which the Company utilizes as working capital. Such arrangement
terminates on August 15, 2000.

     Based on the above information, management of the Company believes that it
has adequate financial resources to fund its operations for the current fiscal
year.

     The Company has been advised by the Securities and Exchange Commission that
it may be considered an investment company and therefore subject to certain
provisions of the Investment Company Act of 1940. The Company does not believe
it is an investment company and has taken the following actions:

          1. On July 15, 1996 the Company acquired 118.34 acres of land for
     development for $2,363,060. Such land is located in Williamson County,
     Texas. The Company executed a purchase money mortgage in connection with
     the purchase which is payable in semi-annual installments of $85,721
     beginning on January 15, 1997, including interest at 9% with the entire
     unpaid balance of $1,655,056 due on July 15, 2003. The Company paid
     $593,060 at closing from its working capital. The land is currently vacant
     and a survey is in progress to determine the best use of the property.

          2. The Company disposed of most of its shares of Intermedia
     Communications, Inc. in 1996, which it received in December 1994 in
     connection with the disposition of Phone One, Inc. It currently owns less
     than 200 of such shares.

          3. In August 1996 the Company disposed of its remaining long distance
     telephone business for 100,000 shares of the Company's common stock, plus
     assumption by Buyer of certain liabilities of the Company. The business was
     sold to a former employee and officer of the Company.

          4. In September and October 1996 the Company acquired certain secured
     bonds issued by Retama Development Corporation of Selma, Texas. The bonds
     are secured by a lien on real estate which includes the Retama Park
     Racetrack in suburban San Antonio, Texas.

          5. The balance of the Company's holdings in Compressent were
     registered by Compressent in its recent registration statement on Form S-1.
     In November 1997, the Company disposed of 76,000 of such shares.

          6. On December 1, 1997, the Company's 80% owned subsidiary, Retama
     Entertainment Group, Inc., was engaged as the manager of the Retama Park
     Racetrack effective January 1, 1998.

     In the event the Company is deemed to be an investment company, the Company
may become subject to certain restrictions relating to the Company's activities,
including restrictions on the nature of its investments and the issuance of
securities. In addition, the Investment Company Act imposes certain requirements
on companies deemed to be within its regulatory scope, including registration as
an investment company, adoption of a specific form of corporate structure and
compliance with certain burdensome reporting, record keeping, voting, proxy,
disclosure and other rules and regulations. In the event of characterization of
the Company as an investment company, the failure of the Company to satisfy
regulatory requirements, whether on a timely basis or at all, would, under
certain circumstances have a materially adverse effect on the Company.

YEAR 2000 COMPUTER PROBLEM

     The Company has addressed the concerns of potential Year 2000 computing
problems, both internally and with external parties and believes that
significant additional costs will not be incurred because of this circumstance.
The Company has performed an evaluation of its computer hardware and software
and has determined that recent enhancements and upgrades have brought its
systems significantly into compliance with the Year 2000 phenomenon and that
existing support agreements are adequate to cope with any

                                        5
<PAGE>   6

remaining issues. Based upon equipment evaluations and analysis by consulting
parties, management does not believe that significant operational equipment
modifications are necessary. As of the date hereof, the Company has not
experienced any Year 2000 related computer problems.

ITEM 7.  FINANCIAL STATEMENTS.

     Index to Consolidated Financial Statements

     Report of Independent Certified Public Accountants

     Consolidated Financial Statements:

          Consolidated Balance Sheet, December 31, 1999

          Consolidated Statements of Operations, years ended December 31, 1999
     and 1998

          Consolidated Statements of Changes in Stockholders' Equity, years
     ended December 31, 1999 and 1998

          Consolidated Statements of Cash Flows, years ended December 31, 1999
     and 1998

          Notes to Consolidated Financial Statements

ITEM 8. NONE.

                                        6
<PAGE>   7

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE PERSONS;
        COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

     The directors and executive officers of the Company are as follows:

<TABLE>
<CAPTION>
NAME                                                     AGE           POSITION
----                                                     ---   ------------------------
<S>                                                      <C>   <C>
William M. Allen.......................................  73    Chairman and Director
Robert C. Buffkin......................................  68    President and Director
Bryan P. Brown.........................................  38    Director
James D. Grainger, CPA.................................  68    Vice President -- Finance
Susan Lurvey...........................................  35    Secretary
</TABLE>

     William M. Allen was President from June 1992 to 1997 and a director from
June 1992 and Chairman from February 1997. He has been managing partner of Black
Chip Stables from 1982 to date and President of Doric, Inc. from 1985 until its
merger with the Company in 1994. He has served as President of Kamm Corporation
from 1985 to date and President of Kamm Life from 1985 to date. He was Chairman
and CEO of Academy Insurance Group from 1975 to 1984.

     Bryan P. Brown has served as director since 1997. He was President from
1997 to December 1998. He was previously President of Riverwood, a master
planned golf course community in Port Charlotte, Florida. He served as Treasurer
of the Mariner Group, Inc. and Assistant Vice President of First Union National
Bank and First Republic Bank. He also serves as CEO of the Company's 80% owned
subsidiary, Retama Entertainment Group, Inc.

     James D. Grainger was elected Vice President -- Finance in 1998. He has
been a certified public accountant since 1964 and maintains an outside
accounting practice. He served as Chief Financial Officer from 1996 to 1997.

     Susan Lurvey has been the Secretary since June 1992. She has served as
administrative assistant to Mr. Allen since 1987.

     Robert C. Buffkin has been a business consultant specializing in
associations and insurance since 1974. He was elected as a director in 1996 and
President in December 1998.

     Bryan P. Brown is William M. Allen's son-in-law.

COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

     Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who beneficially own more than 10% of a registered class
of the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and are required to
furnish copies to the Company. To the best of the Company's knowledge, all
reports required to be filed were timely filed in fiscal year ended 1997.

ITEM 10.  EXECUTIVE COMPENSATION.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                                       OTHER ANNUAL
NAME AND PRINCIPAL POSITION                                  YEAR    SALARY    BONUS   COMPENSATION
---------------------------                                  ----   --------   -----   ------------
<S>                                                          <C>    <C>        <C>     <C>
William M. Allen...........................................  1999   $ 60,000    -0-        -0-
Chairman, Chief                                              1998   $240,000    -0-        -0-
Executive Officer                                            1997   $240,000    -0-        -0-

Bryan P. Brown.............................................  1999   $150,000    -0-        -0-
President of Retama Entertainment                            1998   $150,000    -0-        -0-
                                                             1997   $150,000    -0-        -0-
</TABLE>

                                        7
<PAGE>   8

     There are no long term compensation or other compensation plans.

DIRECTOR COMPENSATION

     Non-officer directors are entitled to a fee of $2,000 for attendance at
meetings of the Board of Directors, plus reimbursement for reasonable travel
expenses.

STOCK OPTIONS

     In 1997 the Company granted its directors and officers five year stock
options as follows:

<TABLE>
<CAPTION>
NAME                                                         NO. OF OPTIONS   EXERCISE PRICE
----                                                         --------------   --------------
<S>                                                          <C>              <C>
William M. Allen...........................................     300,000           $4.00
Bryan P. Brown.............................................     200,000           $2.34
Robert C. Buffkin..........................................      10,000           $2.34
</TABLE>

     In 1999 the Company granted its directors, officers and employees five year
stock options as follows:

<TABLE>
<CAPTION>
NAME                                                         NO. OF OPTIONS   EXERCISE PRICE
----                                                         --------------   --------------
<S>                                                          <C>              <C>
William M. Allen...........................................     500,000           $1.04
Bryan P. Brown.............................................     300,000            1.04
Robert C. Buffkin..........................................     200,000            1.04
Janet Farmato..............................................      20,000            1.04
William M. Allen...........................................     200,000            1.295
Robert C. Buffkin..........................................     100,000            1.295
Bryan P. Brown.............................................     100,000            1.295
</TABLE>

     The following table summarizes all stock option activities during the year
ended December 31, 1999:

<TABLE>
<CAPTION>
                                                            STOCK        WEIGHTED AVERAGE
                                                           OPTIONS   EXERCISE PRICE PER SHARE
                                                           -------   ------------------------
<S>                                                        <C>       <C>
Outstanding as of December 31, 1998......................    540,000            $3.27
Granted during year......................................  1,420,000             1.20
Expired or canceled......................................        -0-               --
Exercised................................................        -0-               --
Outstanding at December 31, 1999.........................  1,960,000            $3.26
</TABLE>

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth, as of May 3, 2000, the beneficial ownership
of the Company's Common Stock by (i) the only persons who own of record or are
known to own, beneficially, more than 5% of the Company's Common Stock; (ii)
each director and executive officer of the Company; and (iii) all directors and
officers as a group.

<TABLE>
<CAPTION>
                                                                              PERCENT OF
                                                              NUMBER OF      OUTSTANDING
NAME                                                           SHARES        COMMON STOCK
----                                                          ---------      ------------
<S>                                                           <C>            <C>
William M. Allen............................................  4,621,000(1)(2)     48.7%
Robert C. Buffkin...........................................    321,000(2)         3.3
Susan Lurvey................................................     18,000             *
Bryan P. Brown..............................................    645,000(2)        7.1
James D. Grainger, CPA......................................     40,500             *
Officers and Directors as a group (5 Persons)...............  5,645,500(1)(2)    54.3%
</TABLE>

---------------

(1) Includes 1,068,000 shares owned by William M. Allen's wife as to which he
    disclaims any beneficial interest.

(2) Includes stock options held as follows: William M. Allen -- 1,000,000
    shares, Bryan P. Brown -- 600,000 shares, Robert C. Buffkin -- 310,000
    shares.

  * Less than 2%.

                                        8
<PAGE>   9

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Consulting fees aggregating approximately $46,000 were paid to certain
shareholder and director of the Company in 1999 and 1998, respectively.

     In December 1996 the Company loaned Bryan P. Brown $92,838 with interest at
8%. The loan was due January 7, 1999 and was extended to January 2000.

     We leased office space from our Chairman, William M. Allen, for $17,500 in
1998 and $30,000 in 1997. Such arrangement terminated in July 1998.

                                        9
<PAGE>   10

                                    PART IV

ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a) Certain exhibits listed below are incorporated by reference to
previously filed registration statements and reports as indicated in the
"Incorporated by Reference Note" column and notes below.

<TABLE>
<CAPTION>
EXHIBIT        INCORPORATED BY
  NO.          REFERENCE NOTE     DESCRIPTION
-------        ---------------    -----------
<S>       <C>  <C>                <C>
3(c)      --          F           By-Laws of the Registrant
8.7       --          L           Agreement with Barron Chase Securities, Inc.
8.8       --          M           Agreement with Howe, Solomon & Hall Financial, Inc. dated
                                  10/17/96 covering purchase of Retama Development Corp. bonds
8.9       --          N           Agreement with Retama Park Association, Inc., Retama
                                  Partners, Ltd. and Retama Park Management Co. L.C. relating
                                  to purchase of certain Retama Development Corp. notes.
8.10      --          O           Agreement to purchase certain real estate in Texas.
8.11      --          P           Agreement to sell assets of ARN Communication Corp.
8.12      --          Q           Management Agreement for Retama Park Racetrack.
8.13      --          R           Agreement with Global Trust and Hemisphere Trust dated
                                  May 27, 1999.
8.14      --          S           Agreement for construction services between Retama
                                  Development Corporation and William M. Allen.
</TABLE>

Incorporation by Reference Notes:

<TABLE>
<CAPTION>
 NOTE          INCORPORATION BY REFERENCE
 ----          --------------------------
<S>   <C>    <C>
   L   --    Incorporated by reference to Exhibit 8.9 of Form 10-KSB for year ended
             December 31, 1996
   M   --    Incorporated by reference to Exhibit A of Form 8-K filed November 21, 1996
   N   --    Incorporated by reference to Exhibit B of Form 8-K filed November 21, 1996
   O   --    Incorporated by reference to Exhibit C of Form 8-K filed November 21, 1996
   P   --    Incorporated by reference to Exhibit D of Form 8-K filed November 21, 1996
   Q   --    Incorporated by reference to Exhibit 8.12 of Form 10-KSB for year ended
             December 31, 1997.
</TABLE>

The following exhibits are filed herewith:

<TABLE>
<S>       <C>  <C>                <C>
3(a)      --    Articles of Incorporation of Registrant as filed with the Secretary of State
                of Nevada on September 3, 1999.
3(b)      --    Plan of Merger of Call Now, Inc. (Florida) into Call Now, Inc. (Nevada).
27.       --    Financial Data Schedule (for SEC use only).
</TABLE>

                                       10
<PAGE>   11

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                          CALL NOW, INC.

                                          By:       /s/ ROBERT BUFFKIN
                                            ------------------------------------
                                                       Robert Buffkin
                                                         President

May 3, 2000

     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the registrant and in the capacities as of
July 14, 1999.

<TABLE>
<C>                                                    <S>                               <C>
              /s/ WILLIAM M. ALLEN                     Chairman and Director             May 3, 2000
-----------------------------------------------------    (Principal Executive Officer)
                  William M. Allen

              /s/ ROBERT C. BUFFKIN                    President and Director            May 3, 2000
-----------------------------------------------------
                  Robert C. Buffkin

             /s/  BRYAN P. BROWN                       Director                          May 3, 2000
-----------------------------------------------------
                   Bryan P. Brown

           /s/ JAMES D. GRAINGER, CPA                  Vice President -- Finance         May 3, 2000
-----------------------------------------------------    (Principal Accounting Officer)
                  James D. Grainger
</TABLE>

                                       11
<PAGE>   12
CLYDE BAILEY P.C.
------------------------------------------------------------------------------


                                                     CERTIFIED PUBLIC ACCOUNTANT
                                                        10924 VANCE JACKSON #404
                                                        SAN ANTONIO, TEXAS 78230
                                                            (210) 699-1287(OFC.)
                                          (888) 699-1287 -- (210) 691-2911 (fax)
                                                                         Member:
                                                     American Institute of CPA's
                                                          Texas Society of CPA's

To the Board of Directors and Shareholders
Call Now Inc.



                     REPORT OF INDEPENDENT PUBLIC ACCOUNTANT

We have audited the accompanying consolidated balance sheet of Call Now Inc. and
subsidiaries (Company) as of December 31 1999 and the related consolidated
statements of operations, changes in stockholders' equity, and cash flows for
the years ended December 31, 1999 and 1998. 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. On May
25, 1999 an agreement was signed between the Company and two trusts known as the
Global Trust and the Hemisphere Trust to sell 50% of the Company's investment in
the Retama Development Corporation Special Facilities Revenue Bonds. This event
is further explained in Note 18 in the notes to financial statements.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company and
subsidiaries as of December 31 1999, and the consolidated results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.



                                 /s/ Clyde Bailey
                           ----------------------------
                                  Clyde Bailey
                           Certified Public Accountant


March 27, 2000






                                      F-1
<PAGE>   13




                         CALL NOW, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                             As of December 31, 1999





                            ASSETS

Current Assets
Cash And Cash Equivalents                               $   963,895
Accounts Receivable                                          45,000
Accounts Receivable - Other                                 371,425
Marketable Securities, At Market Value                    4,403,403
Income Tax Refund Claim                                     566,442
Note Receivable                                             750,000
Other                                                        98,180
                                                        -----------

        Total Current Assets                            $ 7,198,345

Furniture And Equipment
        (Less Accumulated Depreciation of $26,938)            6,261

Land                                                      2,369,075

Long-Term Notes and Loan Receivables                        841,286

Deferred Tax Assets                                          65,009

Other                                                       223,799
                                                        -----------
        Total Assets                                    $10,703,775
                                                        ===========



           See accompanying summary of accounting policies and notes
                      to consolidated financial statements.

                                      F-2
<PAGE>   14

                         CALL NOW, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                             As of December 31, 1999


              LIABILITIES AND STOCKHOLDERS' EQUITY


Current Liabilities
Accounts Payable                                        $     34,716
Deferred Tax Payable - Bonds                                 493,873
Current Portion of Mortgage Payable                           16,169
Accrued Expenses                                             599,817
Accrued Expenses - Other                                     169,740
                                                        ------------
        Total Current Liabilities                       $  1,314,315

Non-Current Liabilities
Mortgage Payable, less current maturity                    1,713,052
                                                        ------------
        Total Liabilities                                  3,027,367
                                                        ------------

Commitment and Contingencies                                      --

Minority Interest in Consolidated Subsidiary                  16,770
                                                        ------------

Stockholders' Equity
Preferred stock, no par shares                                    --
        authorized 800,000 shares
        none outstanding
Common Stock, no par shares                                6,205,778
        authorized 50,000,000,
        8,585,444 shares issued
        and 8,495,444 shares outstanding
Retained Earnings                                          1,057,592
Less subscription notes receivable                          (230,000)
        for 115,000 shares of common stock
Accumlulated other comprehensive income                      832,318
Treasury stock, at cost                                     (206,050)
                                                        ------------

        Total Stockholders' Equity                         7,659,638
                                                        ------------
        Total Liabilities and Stockholders' Equity      $ 10,703,775
                                                        ============



           See accompanying summary of accounting policies and notes
                      to consolidated financial statements.



                                      F-3
<PAGE>   15


                         Call Now, Inc. And Subsidiaries
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>

                                                         Years Ended December 31
                                                      -----------------------------
                                                         1999               1998
                                                      -----------       -----------
<S>                                                   <C>               <C>
Income
Race Track Operating Income                           $ 5,725,224       $ 5,039,712
Management Fees                                           180,000           180,000
Concert Fees                                                   --           198,340
Miscellaneous                                                  --             1,186
                                                      -----------       -----------

             Total Income                               5,905,224         5,419,238
                                                      -----------       -----------

Costs  and Expenses
Salaries and Wages                                      5,167,529         4,558,177
Payroll Taxes and Benefits                              1,021,267           837,280
Legal & Professional                                      340,448           401,815
Consulting Fees                                           106,456            96,450
Litigation Settlement                                           0            94,563
General and Administrative                                415,710           919,617
Concert Costs                                                  --           151,515
Interest                                                  267,291           409,247
Depreciation and Amortization                               4,180             3,745
                                                      -----------       -----------

             Total Cost and Expenses                    7,322,881         7,472,409
                                                      -----------       -----------

(Loss) from continuing operations before               (1,417,657)       (2,053,171)
    other income and expenses, income taxes, and
    minority interest

             Other Income and Expenses                    102,789        (2,520,808)
                                                      -----------       -----------

(Loss) before income taxes and                         (1,314,868)       (4,573,979)
     minority interest

             Income Tax Benefit                           447,814         1,247,637
                                                      -----------       -----------

(Loss) before minority interest                          (867,054)       (3,326,342)

             Minority Interest                              2,662           (19,432)
                                                      -----------       -----------


             Net (Loss)                               $  (864,392)      $(3,345,774)
                                                      ===========       ===========

Earnings Per Share - Basic and Diluted:
             Net (Loss)                                     (0.10)            (0.39)



</TABLE>

           See accompanying summary of accounting policies and notes
                      to consolidated financial statements.


                                      F-4
<PAGE>   16

                         Call Now, Inc. And Subsidiaries
           Consolidated Statements of Changes in Stockholders' Equity
                     Years Ended December 31, 1999 and 1998

<TABLE>
<CAPTION>

                                                                   Common Stock                         Treasury Stock
                                                         ------------------------------      ------------------------------
                                                             Shares            Amount            Shares           Amount
                                                         ------------      ------------      ------------      ------------

<S>                                                         <C>            <C>                     <C>         <C>
Balance December 31, 1997                                   8,408,944         5,704,965            90,000          (206,050)


Comprehensive (Loss):
        Net (Loss)
        Unrealized (Loss) on securities
           Less: Reclassification adjustment for
                    loss included in net loss

        Total Comprehensive (Loss)


Issue of common stock in connection
   with financing transaction                                 150,000           431,250


Litigation settlement                                          26,500            69,563
                                                         ------------      ------------      ------------      ------------

Balance, December 31, 1998                                  8,585,444      $  6,205,778            90,000      $   (206,050)

Comprehensive (Loss):
        Net (Loss)
        Unrealized Gain on securities


        Total Comprehensive Income



                                                         ------------      ------------      ------------      ------------

Balance, December 31, 1999                                  8,585,444      $  6,205,778            90,000      $   (206,050)
                                                         ============      ============      ============      ============



</TABLE>




<TABLE>
<CAPTION>
                                                                        Subscription                                Accumulated
                                                                      Notes Receivable            Unrealized           Other
                                                            ------------------------------         Holding          Comprehensive
                                                                Shares             Amount         Gain(Loss)         Income (Loss)
                                                            ------------      ------------       ------------       ------------

<S>                                                              <C>          <C>                                        <C>
Balance December 31, 1997                                        115,000          (230,000)                --            268,560


Comprehensive (Loss):
        Net (Loss)
        Unrealized (Loss) on securities                                                                                 (875,701)
           Less: Reclassification adjustment for
                    loss included in net loss                                                                            600,000
                                                                                                                    ------------
        Total Comprehensive (Loss)


Issue of common stock in connection
   with financing transaction


Litigation settlement

                                                            ------------      ------------       ------------
Balance, December 31, 1998                                       115,000      $   (230,000)                --       $     (7,141)

Comprehensive (Loss):
        Net (Loss)
        Unrealized Gain on securities                                                                                    839,459


        Total Comprehensive Income



                                                            ------------      ------------       ------------       ------------

Balance, December 31, 1999                                       115,000      $   (230,000)                --            832,318
                                                            ============      ============       ============       ============



</TABLE>
































<TABLE>
<CAPTION>


                                                               Retained
                                                               Earnings           Total
                                                            ------------      ------------

<S>                                                            <C>               <C>
Balance December 31, 1997                                      5,267,758        10,805,233
                                                                              ------------

Comprehensive (Loss):
        Net (Loss)                                            (3,345,774)       (3,345,774)
        Unrealized (Loss) on securities
           Less: Reclassification adjustment for
                    loss included in net loss                                     (275,701)
                                                                               ------------
        Total Comprehensive (Loss)                                              (3,621,475)
                                                                              ------------

Issue of common stock in connection
   with financing transaction                                                      431,250
                                                                              ------------

Litigation settlement                                                               69,563
                                                            ------------      ------------

Balance, December 31, 1998                                  $  1,921,984      $  7,684,571
                                                                              ------------
Comprehensive (Loss):
        Net (Loss)                                              (864,392)         (864,392)
        Unrealized Gain on securities                                              839,459
                                                                              ------------

        Total Comprehensive Income                                                 (24,933)
                                                                              ------------


                                                            ------------      ------------

Balance, December 31, 1999                                     1,057,592         7,659,638
                                                            ============      ============



</TABLE>


           See accompanying summary of accounting policies and notes
                      to consolidated financial statements.



                                      F-5
<PAGE>   17



                         Call Now, Inc. And Subsidiaries
                      Consolidated Statements of Cash Flows
                 For the Years Ended December 31, 1998 and 1997

<TABLE>
<CAPTION>
                                                                        Years Ended December 31
                                                                     ------------------------------
                                                                         1999             1998
                                                                     ------------      ------------
<S>                                                                  <C>               <C>
Cash Flows from Operating Activities:
Net (Loss)                                                           $  (864,392)      $(3,345,774)
                                                                     -----------       -----------

Adjustments to reconcile net loss to net cash
             used in operating activities:

             Depreciation and Amortization                                 4,180             3,745
             Income Tax Refund Claim                                   1,305,345        (1,871,787)
             Issuance of common stock for litigation settlement               --            69,563
             Gain on Bond Defeasance                                          --        (2,150,000)
             Financing transaction loss                                       --         2,431,250
             Loss on sale of marketable securities                       150,159         2,305,740
             Changes in assets and liabilities:
             (Increase) Decrease in Assets:
                Accounts Receivable                                        3,999           (48,999)
                Accounts Receivable - Other                             (371,425)
                Deferred Tax Asset                                       117,099           624,194
                Other Current Assets                                     (66,386)           19,965
                Other Assets                                             (11,605)          (96,599)
             Increase (Decrease) in Liabilities:
                Accounts Payable                                         (16,632)           (2,228)
                Accrued Expenses                                        (202,843)          474,240
                Accrued Expenses-Other                                  (155,523)          325,000
                Income Tax Payable                                            --        (1,000,844)
                Minority Interest                                         (2,662)           19,632
                                                                     -----------       -----------

             Total Adjustments                                           753,706         1,102,872
                                                                     -----------       -----------

Net Cash (used for) Operating Activities                                (110,686)       (2,242,902)
                                                                     -----------       -----------
</TABLE>




                                      F-6
<PAGE>   18



                         Call Now, Inc. And Subsidiaries
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                      Years Ended December 31
                                                                  -----------------------------
                                                                       1999              1998
                                                                  -----------       -----------
<S>                                                                 <C>               <C>
Cash Flows from Investing Activities:
             Proceeds from the sale of marketable securities        4,429,021         2,168,999
             Proceeds from the sale of treasury bills                      --         1,305,055
             Capital Expenditures                                          --            (2,347)
             Purchase of marketable securities                     (2,000,000)
             Notes and Loans Receivable:
                 Advances                                             (14,856)       (1,450,000)
                 Collections                                          120,000                --
             Proceeds from bond redemption                             10,000           600,000
                                                                  -----------       -----------

Net Cash provided by Investing Activities                           2,544,165         2,621,707
                                                                  -----------       -----------

Cash Flows from Financing Activities

             Payment of Short-term debt                            (2,000,000)        2,000,000
             Issue of Stock for Financing Transaction                      --           431,250
             Financing Transaction Loss                                     0        (2,431,250)
             Payment of Long Term Debt                                (14,806)          (13,557)
                                                                  -----------       -----------

Net Cash (used for) Financing Activities                           (2,014,806)          (13,557)
                                                                  -----------       -----------

Net Increase in Cash                                                  418,673           365,248

Cash Balance, Beginning of Year                                       545,222           179,974
                                                                  -----------       -----------

Cash Balance, End of Year                                         $   963,895       $   545,222
                                                                  ===========       ===========

</TABLE>






                                      F-7
<PAGE>   19

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES

NATURE OF BUSINESS

After exiting the long distance telephone business in 1996, the Company has
redeployed its assets primarily in acquiring $93,925,000 face amount bonds and
notes collateralized by a lien on the Retama Park Horse Racing Facility
("Facility") in Selma, Texas, and into real estate by the acquisition of 118
acres of land in Williamson County, Texas which it may develop. In addition, the
Company entered into a contract to manage the Facility commencing January 1998.

In 1999, the Company and it's shareholders approved articles of merger with a
Nevada corporation by the same name to effectively change the Company's domicile
from Florida to Nevada.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Call
Now, Inc. and it's wholly owned subsidiaries Andice Development Co., ARN
Communications Corp., National Communication Inc., and Retama Entertainment
Group Inc. (collectively "the Company"). Investments in which the Company does
not have a majority voting or financial controlling interest are accounted for
under the equity method of accounting unless its ownership constitutes less than
a 20% interest in such entity for which such investment would then be included
in the consolidated financial statements on the cost method. All significant
inter-company transactions and balances have been eliminated in consolidation.

MARKETABLE SECURITIES

In accordance with Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," (SFAS 115),
the Company classifies its investment portfolio according to the provisions of
SFAS 115 as either held to maturity, trading, or available for sale. At December
31, 1999, the Company classified its investment portfolio as available for sale
and held to maturity. Securities available for sale are carried at fair value
with unrealized gains and losses included in stockholders' equity.

Gain or losses from the sale or redemption of the investments are determined
using the specific identification method.

INCOME TAXES

The Company accounts for income taxes pursuant to the provisions of the
Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes", which requires an asset and liability approach to calculating deferred
income taxes. The asset and liability approach requires the recognition of
deferred tax liabilities and assets for the expected future tax consequences of
temporary differences between the carrying amounts and the tax basis of assets
and liabilities.




                                      F-8
<PAGE>   20

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUATION)

EARNINGS PER COMMON SHARE

Effective December 31, 1997, the Company adopted Financial Accounting Standards
(SFAS) No. 128, "Earnings Per Share," which simplifies the computation of
earnings per share requiring the restatement of all prior periods.

Basic earnings per share are computed on the basis of the weighted average
number of common shares outstanding during each year.

Diluted earnings per share are computed on the basis of the weighted average
number of common shares and dilutive securities outstanding. Dilutive securities
having an anti-dilutive effect on diluted earnings per share are excluded from
the calculation.

UNINSURED CASH BALANCES

The Company maintains its cash balances at several financial institutions.
Accounts at the institutions are secured by the Federal Deposit Insurance
Corporation up to $100,000. Periodically, balances may exceed this amount. At
December 31, 1999, uninsured balances aggregated $753,310.

CONCENTRATION OF CREDIT RISK / ECONOMIC DEPENDENCY

The Company's current business involves two ventures, which are interest rate
sensitive. First is ownership of tax-exempt bonds partially collateralized by a
first mortgage on the Retama Park Horse Racing Facility near San Antonio, Texas.
The second is ownership of development property in Williamson County, Texas
(near Austin, Texas). Both ventures are dependent on continued low interest
rates and economic prosperity in the Austin and San Antonio metropolitan areas.

USE OF ESTIMATES

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 on
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.











                                      F-9
<PAGE>   21

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUATION)

YEAR 2000 CONCERNS

The Company has addressed the concerns of potential year 2000 computing
problems, both internally and with external parties and believes that
significant additional costs will not be incurred because of this circumstance.
The Company has performed an evaluation of its computer hardware and software
and has determined that recent enhancements and upgrades have brought it's
systems significantly into compliance with the year 2000 phenomenon and that
existing support agreements are adequate to cope with any remaining issues.
Based upon equipment evaluations and analysis by consulting parties, management
does not believe that significant operational equipment modifications are
necessary.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying value of financial instruments including marketable securities,
notes and loans receivables, accounts payable and notes payable approximate
their fair values at December 31, 1999.

LONG-LIVED ASSETS

Statement of Financial Accounting Standards No. 121 "Accounting for Impairment
of Long-Lived Assets to be Disposed of " requires, among other things,
impairment loss of assets to be held and gains or losses from assets that are
expected to be disposed of be included as a component of income from continuing
operations before taxes on income.

STOCK BASED COMPENSATION

Statement of Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" SFAS No. 123 established a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company did not adopt the fair value based method but instead discloses the
effects of the calculation required by the statement.

COMPREHENSIVE INCOME

Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income," establishes standards for reporting and display of
comprehensive income, its components and accumulated balances. Comprehensive
income is defined to include all changes in equity except those resulting from
investments by owners and distributions to owners. Among other disclosures, SFAS
No.130 requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in a
financial statement that is displayed with the same prominence as other
financial statements.




                                      F-10
<PAGE>   22
                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUATION)

SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION

Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about
Segments of an Enterprise and Related Information, supersedes SFAS No. 14,
"Financial Reporting for Segments of a Business Enterprise." SFAS 131
establishes standards for the way that public companies report information about
operating segments in annual financial statements and requires reporting of
selected information about operating segments in interim financial statements
issued to the public. It also establishes standards for disclosures regarding
products and services, geographic areas and major customers. SFAS 131 defines
operating segments as components of a company about which separate financial
information is available that is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in assessing
performance.

RECLASSIFICATION

Certain reclassifications have been made to the prior year's financial
statements in order to conform to the current presentation.


NOTE 2- MARKETABLE SECURITIES

The carrying amounts of marketable securities as shown in the accompanying
balance sheet and their approximate market values at December 31, 1999 are as
follows:

<TABLE>
<CAPTION>

                                                    GROSS          GROSS
                                                  UNREALIZED     UNREALIZED    MARKET
                                        COST         GAINS         LOSSES       VALUE
                                        ----      ----------    -----------     -----
<S>                                  <C>          <C>          <C>          <C>
         Available for sale:
         Municipal bonds and notes
          Corporate                  $3,067,464   $1,335,866   $       --   $4,403,330
          Securities                     15,595           --       15,522           73
                                     ----------   ----------   ----------   ----------
                                     $3,083,059   $1,335,866   $   15,522   $4,403,403

</TABLE>


Unrealized gains on securities available for sale at December 31, 1999 are shown
net of income taxes as a component of stockholders' equity.








                                      F-11
<PAGE>   23

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 3 - INCOME TAX REFUND CLAIM

For federal income tax purposes the Company had an operating loss of $ 3,537,625
and a capital loss carry-back in the amount of $ 1,967,504 in 1998. As a result,
the Company filed a Federal income tax refund claim in the amount of $
1,871,787. The claim was received in June 1999. The Company is in the process of
filing a claim for refund to carry back the net operating loss from 1999 and
1998.

NOTE 4 - INVESTMENT IN BONDS
         AND BOND DEFEASANCE TRANSACTION

On September 20, 1996, the Company acquired $52,274,000, 8.75% term bonds of
Retama Development Corporation ("RDC") Special Facilities Revenue Bonds, Series
1993 for a purchase price of $10,300,000. The bonds were secured by a first
mortgage on the Retama Park Horse Racing facility.

In November 1996, the company purchased $39,275,000 principal amount of Retama
Development Corporation Series 1993A notes and $500,000 of Retama Development
Corporation Series 1993B notes for 385,700 shares of the company's common stock
valued at $337,488. The notes were secured by a lien on the Retama Park Horse
Racing facilities, including real and personal property.

Simultaneously, the company sold 50% of the bonds and notes to a broker/dealer
for an initial payment of $1,704,000 and future payments of $1,950.000 to be
paid prior to December 16, 1996.

On March 26, 1997, the Company participated in the defeasance of the RDC bonds
and notes held by it, and received cash in the amount of $3,853,086, $3,640,000
7% Series 1997 A Bonds and $45,200,000, 8% Series 1997 B Bonds as part of the
defeasance. The 1997 bonds were valued by an independent third party at the same
value as the carrying value of the 1993 bonds.

On April 7, 1997, the Company acquired the balance of the RDC bonds in exchange
for 760,000 shares of the Company's common stock, 15,000 shares of Compressent
Corporation ("Compressent") common stock, and $2,150,000 in cash. The cost of
the remaining bonds purchased by the Company, including acquisition costs, was
$3,187,728. At December 31, 1997 the Company's total holdings of RDC bonds were:
(a) 1997 Series A 7% bonds-$7,000,000 and (b) 1997 Series B 8%
bonds-$86,925,000.

Due to unanticipated difficulty in securing complete financing for the bond
transaction and the possibility of losing a three million non-refundable
deposit, the Company decided to approach the second bidder for the RDC bonds. As
a result, Hall, Soloman, and Howe ("HSH") agreed to purchase 50% of the bonds
for $3.69 million which resulted in a loss of $1.7 million. This business
decision was made in order to complete the acquisition of the bonds, which the
Company considered to be a valuable asset and to preserve the three million
non-refundable deposit.

The Company was able to acquire bonds at a cost of $10.34 million which are
secured by Retama Racetrack that has been appraised at over twenty-two
million dollars by an independent appraisal group.


                                      F-12
<PAGE>   24



                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 4 - INVESTMENT IN BONDS
         AND BOND DEFEASANCE TRANSACTION  (CONTINUATION)

As part of the transaction, the Company received notes from HSH in the amount of
$1,950,000. Of this amount $1,100,000 was received on a timely manner. The
remaining $850,000 was received in a subsequent transaction in which the Company
acquired the balance of the defeased bonds. Constant negotiations with HSH
during this period assured the Company that the $850,000 would be collected and
it was collected in the April 1997 transaction.

Under the terms of the bond defeasance, after giving effect to the purchase of
the additional bonds referred to in the preceding paragraph, the Company had a
gain of $3,853,086. However, the company was obligated to lend to RDC, to fund
any operating deficit (as defined) of RDC, up to $2,150,000 for a two-year
period expiring March 1999, of which $853,000 had been advanced and $120,000 was
repaid at December 31, 1999.

As a result of the foregoing obligation, the Company reduced the gain on the
bond defeasance by $2,150,000 in 1997, which was reflected in the balance sheet
as deferred gain from bond defeasance. In this connection, a deferred tax asset
of $801,950 in 1997 has been recorded. At December 31, 1999, the Company has
loaned a total of $ 853,000 to RDC of which $120,000 was repaid in 1999. The
funding agreement expired in March 1999 and no further loans have been made. As
a result, the Company reversed the deferral of $2,150,000 to income and recorded
an accompanying income tax benefit of $ 801,950 in 1998.

NOTE 5 - NOTES AND LOANS RECEIVABLE

Notes and loans receivable at December 31, 1999 comprise the following:

      On August 15, 1998, the Company executed a note with a broker-dealer in
      the amount of $750,000. The note bears an interest rate of 12% per annum,
      payable monthly and matures August 15, 2000. The note is an approved
      transaction through the National Association of Securities Dealers. The
      Company has advised the broker-dealer that it will not renew this
      agreement.

NOTE 6 - LAND

On July 15, 1996, the Company acquired 118 acres of development property in
Williamson County, Texas for a purchase price of $2,363,060. Under the terms of
the purchase, the Company paid $589,310 and executed a seven year, 9% note, in
the approximate amount of $1,770,000 with semi-annual principal and interest
payments of $85,721 commencing January 1997 and ending July 15, 2003, at which
time the remaining $1,655,056 balance is due.

The following is a summary of annual principal payments due under this note:

                           YEAR                                     AMOUNT
                           ----                                     ------
                           2000                               $     16,169
                           2001                                     17,657
                           2002                                     19,282
                           2003                                  1,676,112
                                                              ------------
                                                              $  1,729,220
                                                              ============




                                      F-13
<PAGE>   25

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 7 - STOCKHOLDERS' EQUITY

The Company has authorized 800,000 shares of no par value preferred stock. Of
the 800,000 shares, 300,000 are designated Class A convertible redeemable
preferred stock (Class A), 7,500 are designated Class B convertible redeemable
preferred stock (Class B), and 300,000 are designated as Class C convertible
redeemable preferred stock (Class C).

The Class A preferred stock is non-voting, redeemable at the option of the
Company at a price of $5 per share plus accrued but unpaid dividends, and
convertible into five shares of common stock at the option of the holder. The
Class A preferred stockholders are entitled to receive an annual dividend of
$.30 per share. Of the 300,000 designated shares, none were outstanding at
December 31, 1999.

The Class B preferred is non-voting stock redeemable at the option of the
Company at a price of $100 per share plus accrued but unpaid dividends, and is
convertible into 100 shares of common stock at the option of the holder. The
Class B preferred stockholders are entitled to receive an annual dividend of
$6.00 per share. Of the 7,500 designated shares, none were outstanding at
December 31, 1999.

The Class C preferred stock is non-voting, redeemable at the option of the
Company at a price of $3.00 per share plus one share of common stock and
convertible into one share at the option of the holder. Of the 300,000
designated shares, none were outstanding at December 31,1999.

In a prior year, the Company entered into "Consultant's Stock Purchase and Sale
Agreements" (stock subscription notes receivable) with several individuals. In
exchange for providing certain advisory and/or consulting services, the
individuals were entitled to purchase 710,000 shares of the Company's common
stock at $.80 per share. The purchase price was payable in five years, with
interest at prime plus 1% per annum. All of any compensation due by any of the
individuals was credited to the purchase price of the stock.

During 1997, the Company authorized three of its officers and employees to
exercise options aggregating 115,000 in exchange for notes totaling $230,000. At
December 31,1999, accrued interest receivable on the subscription notes
receivable amounted to $45,584.

NOTE 8 - STOCK BASED COMPENSATION

At December 31, 1999, the Company has non-plan options, which are described
below. The Company applies APB Opinion 25; Accounting for stock issued to
employees, and related interpretations in accounting for the options. Under APB
Opinion 25, because the exercise price of the Company's employee stock options
equals or exceeds the market price of the underlying stock on the date of grant,
no compensation cost is recognized.







                                      F-14
<PAGE>   26

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 8 - STOCK BASED COMPENSATION (CONTINUATION)

In 1995, the Company granted options to purchase 115,000 shares of its common
stock to its corporate counsel, chief financial officer and controller. The
options are exercisable at $2 per share and expire three years from the date of
grant. These options were exercised during 1997.

On April 25, 1997, the Company granted a stock bonus of 14,544 shares of its
common stock to its corporate counsel, chief financial officer and controller.
In addition, on the same date, the Company granted options to purchase 530,000
shares of the Company's common stock to its president, chief executive officer
and two members of the Company's board of directors. The options are exercisable
at prices ranging from $2.34 - $4 per share and expire five years from the date
of grant.

In March of 1999 the Company granted options to its directors to purchase
400,000 shares at the average bid/ask price plus 10%. The options will expire in
five years.

In December of 1999 the Company granted options to its directors and certain
employees to purchase 1,020,000 shares at an option price of $1.04 per share.
The options will expire in five years.

FASB Statement 123, Accounting for Stock-Based Compensation, requires the
Company to provide pro forma information regarding net income per share as if
compensation cost for the Company's options had been determined in accordance
with the fair value based method prescribed in FASB Statement 123. The Company
estimates the fair value of each stock option at the grant date by using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1999 and 1998: no dividend yield percent;
expected volatility of 46.5 and 0.1 percent; risk-free interest rates of 6.8%
and 6.0%, and with expected lives of 3.3 years and 4.3 years for the non-plan
options.

Under the accounting provisions of FASB Statement 123, the Company's net income
and earnings per share would have been reduced to the pro forma amount indicated
below:


                                                 1999               1998
                                                 ----               ----
         Net Income
              As reported               $ ( 864,392)            $(3,345,774)
              Pro forma                 $(1,840,088)            $(3,639,142)

         Earnings per share
              As reported                      (.10)                   (.39)
              Pro forma                        (.21)                   (.42)







                                      F-15
<PAGE>   27



                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 8 - STOCK BASED COMPENSATION (CONTINUATION)

A summary of the status of the Company's non-plan options as of December 31,
1999 and 1998, and changes during the years ended on those dates is presented
below:

<TABLE>
<CAPTION>

                                             DECEMBER 31, 1999                        DECEMBER 31, 1998
                                    -------------------------------------      -----------------------------------
                                                         WEIGHTED AVERAGE                        WEIGHTED AVERAGE
                                       SHARES             EXERCISE PRICE         SHARES           EXERCISE PRICE
                                    -----------        ------------------      ---------        ------------------
<S>                                     <C>                <C>                <C>                <C>
Outstanding at
   Beginning of year                    540,000            $   3.27           530,000            $   3.27
Granted                               1,420,000                1.20            10,000            $   3.00
Exercised                                    --               --                   --               --
Forfeited                                    --               --                   --               --

Outstanding at
   the end of year                    1,960,000            $   2.26           540,000            $   3.26

Options exercisable
   at year end                        1,960,000            $   2.26           540,000            $   3.26

Weighted average
   fair value of options
   granted during the year                   --               --                   --                 .80
</TABLE>




The following table summarizes information about non-plan options outstanding at
December 31, 1999:

<TABLE>
<CAPTION>

                          OPTIONS OUTSTANDING                                            OPTIONS EXERCISABLE
           ------------------------------------------------------        --------------------------------------------------
            RANGE OF             NUMBER OF          WEIGHTED             RANGE OF       NUMBER OF               WEIGHTED
            EXERCISE           OUTSTANDING AT       REMAINING            EXERCISE     OUTSTANDING AT            REMAINING
             PRICES               12/31/99       CONTRACTUAL LIFE         PRICES        12/31/99            CONTACTUAL LIFE
             ------               --------       ----------------         ------        --------            ---------------
             <S>                 <C>                <C>                 <C>            <C>                  <C>
             $ 1,25                400,000            4.3 Years           $ 1.25         400,000              4.3 Years
             $ 1.04              1,020,000            4.9 Years           $ 1.04       1,020,000              4.9 Years
             $ 2.34                230,000            2.3 Years           $ 2.34         230,000              2.3 Years
             $ 4.00                300,000            2.3 Years           $ 4.00         300,000              2.3 Years
             $ 3.00                 10,000            4   Years           $ 3.00          10,000              4   Years
</TABLE>







                                      F-16
<PAGE>   28



                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 9 - INCOME TAXES

The components of the provision for income tax benefits are as follows:

                                                  YEAR ENDED DECEMBER 31,
                                              -------------------------------
                                              1999                       1998
                                              ----                       ----

              Current:
                  Federal                 $ (447,814)             $ (1,247,637)
                  State                          -0-                       -0-
                                    ----------------           ----------------
                                          $(447,814)              $ (1,247,637)
                                    ----------------           ----------------


Such income tax benefits are included in the accompanying consolidated financial
statements as follows:

                                                   YEAR ENDED DECEMBER 31,
                                                   -----------------------
                                                    1999           1998
                                                   ------         --------

         Income from operations               $  (447,814)      $(1,247,637)
         Extraordinary Items                          -0-               -0-
                                            -------------    --------------
                                              $  (447,814)      $(1,247,637)
                                            -------------    --------------


The above provision has been calculated based on Federal statutory rates.


NOTE 10 - RELATED PARTY TRANSACTIONS

Consulting fees aggregating approximately $46,000 were incurred to a certain
shareholder and director of the Company in 1999 and 1998.

The Company leased office space from its chief executive officer and majority
shareholder on a month-to-month basis. The Company incurred rental expenses of
$17,500 until July 15, 1998.

At December 31, 1999, outstanding notes receivables from the Company's
stockholders and officers amounted to $108,286 with accrued interest in the
amount of $ 8,468.

In December of 1999, the Board of Directors approved a resolution to settle the
Company's President's salary of $240,000 per year by agreeing to pay the salary
for 1998 in February 2000, settle the 1999 salary for an investment valued at
$60,000 (as Consultant's Fees), and to pay $1 for his salary in 2000.






                                      F-17
<PAGE>   29

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 11 - MANAGEMENT AGREEMENT

On October 27, 1997 the RDC'S Board Of Directors approved a management contract
granting Retama Entertainment Group, Inc., an 80% owned subsidiary of the
Company, the right to manage the operations of the Facility commencing on
January 1, 1998. The five-year agreement provides Retama Entertainment Group,
Inc., with a monthly management fee of $15,000 plus a variable fee equal to 25%
of profits in excess of $1,000,000 annually. Operations of this subsidiary began
January 1, 1998.


NOTE 12 - SUPPLEMENTAL CASH FLOW INFORMATION

                                                    YEAR ENDED DECEMBER 31,
                                                    -----------------------
                                                    1999              1998
                                                    ----              -----

         Cash paid for interest               $   433,530       $   216,244
         Cash paid for income taxes                   -0-         1,027,663


SUPPLEMENTARY INFORMATION:

During the year ended December 31, 1998, non-cash investing and financing
activities are as follows:

1)   Termination of agreement with a broker-dealer represented by a note
     receivable of $1,155,000 bearing interest at 12% per annum and a
     non-interest note payable of $1,155,000.

2)   Issuance of 150,000 shares of the Company's common stock in the amount of
     $431,250 as part of a financing transaction.

3)   Issuance of 26,500 shares of the Company's common stock in settlement of a
     former director's lawsuit.


NOTE 13 - LITIGATION SETTLEMENT

In 1994, a former director, filed a lawsuit in Florida against the Company
seeking damages of approximately $500,000 for breach of an oral employment
agreement. On May 14, 1998, this litigation was settled. In this connection, the
Company paid $50,000 and issued 26,500 of the Company's common stock to the
former director in 1998.










                                      F-18
<PAGE>   30

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements
NOTE 14 - CONTINGENCIES

During 1996, the Securities and Exchange Commission advised the Company that it
may be an investment company as defined by the Investment Company Act of 1940.
In the event the Company is deemed to be an investment company, the Company may
become subject to certain restrictions relating to the Company's activities,
including restrictions on the nature of it's investments and the issuance of
securities. In addition, the Investment Companies Act imposes certain
requirements on companies deemed to be within it's regulatory scope, including
registration as an investment company, adoption of a specific form of corporate
structure and compliance with certain reporting, record keeping, voting, proxy,
disclosure, and other rules and regulations. In the event of characterization of
the Company as an investment company, the failure of the Company to satisfy
regulatory requirements, whether on a timely basis or at all, could, under
certain circumstances have materially adverse effect on the Company.

In 1999, the Securities and Exchange Commission has been reviewing the 1997 and
1998 filings concerning the transaction of the 1997 bond defeasance and the
recognition of the $3,853,086 gain on the transaction. Although the Company and
its auditors believe that the accounting for the transaction was and is correct,
the Commission maintains that rather than a gain recognized, as reported by the
predecessor auditors, there should have been a reduction in cost basis. If this
adjustment is made then the 1997 and 1998 filings would have to be restated and
a "net" change of retained earnings of ($1,857,432) for 1997 and 1998 would be
recorded after allowing for the sale and exchanges of the bonds in 1998 and
1999. After adjusting the remaining RDC bonds to market value there would be a
negative effect on Stockholder's Equity in the amount of $1,009,592.

NOTE 15 - NOTE PAYABLE AND FINANCING TRANSACTION

In February 1998, the Company entered into a loan agreement with Compressent
Inc. (Compressent) in which the Company agreed to provide certain financing to
Compressent and to receive a commitment fee along with warrants to acquire
shares of Compressent common stock. This loan agreement was terminated on May
20, 1998 before any loan was made and as a result, the Company did not receive
the commitment fee or warrants from Compressent.

In addition, the Company exchanged $3,500,000 face amount of its investments in
RDC Series A bonds for specific shares of Compressent's convertible preferred
stock and an option to acquire additional shares of Compressent's common stock.

Compressent subsequently borrowed, from a third party, $2,000,000, pledging the
3,500,000 RDC Series A bonds as collateral. In connection with a rescission of
the purchase of Compressent convertible preferred stock, the Company received
the $3,500,000 Series A RDC bonds, assumed the $2,000,000 loan, and was to
receive 2,000,000 unregistered shares of Compressent common stock. This was
subsequently reduced to 500,000 Compressent common stock shares and a 10%
interest in the business venture between Compressent and a third party. In
addition, the Company agreed to issue 150,000 shares of its common stock. The
500,000 Compressent shares have not been received and were deemed worthless at
December 31, 1998. The Company recorded a loss of $2,431,250 on the financing
transaction in 1998.






                                      F-19
<PAGE>   31

                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements


NOTE 16 - EARNINGS PER SHARE

The following reconciles the components of the earnings per share (EPS)
computation:
<TABLE>
<CAPTION>

                                            1999                                      1998
                    -------------------------------------------     ------------------------------------------------
EARNINGS PER C       (LOSS)              SHARES       PER SHARE          (LOSS)           SHARES           PER SHARE
COMMON SHARE        (NUMERATOR)       (DENOMINATOR)     AMOUNT        (NUMERATOR)      (DENOMINATOR)         AMOUNT
------------        -----------       -------------     ------       ------------      -------------         ------
<S>                 <C>               <C>              <C>           <C>                <C>                 <C>
Net Income          $(864,392)        8,495,444        $(.10)        $(3,345,774)       8,404,804           $(.39)

Effect of Dilative Securities:
Stock Options
-------------------------------------------------------------------------------------------------------------------

Income from
continuing
operations available
to common
shareholders plus
assumed
conversions         $(864,392)        8,495,444        $(.10)        $(3,345,774)       8,404,804           $(.39)

</TABLE>




Options to purchase 1,960,000 shares and 540,000 were outstanding at December
31, 1999 and 1998 respectively were not included in the computation of diluted
EPS as they would be anti-dilutive.


NOTE 17 - OTHER INCOME AND EXPENSE ITEMS

The following items are shown on the consolidated statement of operations as
other income and expense items and are disclosed elsewhere in these notes:
<TABLE>
<CAPTION>

                                                                  1999                       1998
                                                                  ----                       ----

<S>                                                           <C>                   <C>
         Loss on Sale of Bonds                             $       -0-              $ (1,967,504)
         Gain on Bond Defeasance                                   -0-                 2,150,000
         Gain on Disposal of Marketable Securities                 -0-                       -0-
         Loss on Compressent Transaction                           -0-                (2,431,250)
         Interest Income                                       303,264                    52,946
         Gain (Loss) on Sale of Assets                        (191,202)                      -0-
         Accrued Expense - Other                                (9,273)                 (325,000)
                                                      -----------------            --------------
                  Total                                    $  ,102,789              $   2,520,808
                                                       ================            ==============
</TABLE>





                                      F-20
<PAGE>   32


                                 Call Now, Inc.
                                And Subsidiaries
                          Notes to Financial Statements

NOTE 18 - OTHER EVENTS

On May 25, 1999 an agreement was signed between the Company and two trusts known
as the Global Trust and the Hemisphere Trust (Trusts) to sell 50% of the
Company's investment in the Retama Development Corporation Special Facilities
Revenue Bonds.

The agreement calls for the Company to exercise an option to purchase from ITG
Fund $6,950,000 in aggregate principal amount of Retama Development Corporation
(RDC) Series 1997A bonds for a total exercise price of $4,775,000. The agreement
further provides for the Trusts to purchase these bonds from the Company for a
total price of $ 4,862,500 plus accrued interest on the Series A bonds and to
deliver to the Company $2,000,000 of the Series A bonds plus the payment of the
Compressent debt assumed by the Company, and the Company will deliver to the
Trusts $43,462,500 in the Series B bonds of RDC.

The agreement further provides for the Trusts to assume 50% of the Company's
obligation to the RDC for the repairs to the lake (not to exceed a total of
$600,000) in the aforementioned lawsuit, and to provide 50% of the Chief
Executive Officer`s compensation of the track operations.

NOTE 19 - SUBSEQUENT EVENTS

The Company and its CEO (William M Allen) were sued by RDC, the issuer of the
bonds held by the Company, in connection with the repair of the lake at Retama
Park Race Track. The action seeks $600,000 in damages plus exemplary damages.
The Company had indemnified the contractor regarding matters related to the race
track. The Company has entered into a construction services contract with the
RDC to dismiss the lawsuit against the Company and Mr. Allen, and an assignment
by the RDC of its claims and causes of action against the contractor and related
parties. The Company engaged an engineering firm to perform a study to repair
the lake, and has engaged a qualified contractor to repair the lake. The Company
estimates that the total cost to repair the lake and therefore the liability,
will be somewhere around $650,000 and one-half of that amount was accrued in
1998. Due to the agreement detailed in the following paragraph $325,000 was
accrued at December 31, 1998. In February 2000, a settlement was reached between
the parties to drop all action after the construction was completed and the lake
was repaired.

In 1999, the Securities and Exchange Commission has been reviewing the 1997 and
1998 filings concerning the transaction of the 1997 bond defeasance and the
recognition of the $3,853,086 gain on the transaction. Although the Company and
its auditor believe that the accounting for the transaction was and is correct,
the Commission maintains that rather than a gain recognized, as reported by the
predecessor auditors, there should have been a reduction in cost basis. If this
adjustment is made then the 1997 and 1998 filings would have to be restated and
a "net" change of retained earnings of ($1,857,432) for 1997 and 1998 would be
recorded after allowing for the sale and exchanges of the bonds in 1998 and
1999. After adjusting the remaining RDC bonds to market value there would be a
negative effect on Stockholder's Equity in the amount of $1,009,592.

No other material subsequent events have occurred that warrants disclosure since
the balance sheet date.



                                      F-21