##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D. C. 20549
 
 FORM 10-KSB
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED: DECEMBER 31, 2004
 COMMISSION FILE NO. 0-27160
 CALL NOW, INC.
  NEVADA
(State of Incorporation)
    
    65-0337175
(IRS Employer Identification No.)
 
 Issuers Telephone No. (210) 651-7145
 Securities registered pursuant to Section 12(b) of the Act:   Securities registered pursuant to Section 12(g) of the Act:
  o þ
 þ
 o o




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TABLE OF CONTENTS  PART IITEM 1. DESCRIPTION OF BUSINESSITEM 2. DESCRIPTION OF PROPERTYITEM 3. LEGAL PROCEEDINGSITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERSPART IIITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERSITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSITEM 7. FINANCIAL STATEMENTSITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSUREITEM 8A. CONTROLS AND PROCEDURESITEM 8B. OTHER INFORMATIONPART IIIITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACTITEM 10. EXECUTIVE COMPENSATIONITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSPART IVITEM 13. EXHIBITS AND REPORTS ON FORM 8-KITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICESSIGNATURESFirst Amendment to Management Agreement for Retama ParkSecond Amendment to Management Agreement for Retama ParkThird Amendment to Management Agreement for Retama ParkEmployment Agreement - Thomas R. JohnsonEmployment Agreement - Bryan P. BrownCertification Pursuant to Section 302Certification Pursuant to Section 906    Table of Contents  
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS.
 HISTORY AND DEVELOPMENTS DURING THE LAST THREE YEARS
         2




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EMPLOYEES
  AVAILABLE INFORMATION
  
 ITEM 2. DESCRIPTION OF PROPERTY
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS.
  3




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PART II
 
 ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
  FISCAL YEAR 2003
    
    HIGH BID
    
    LOW BID1st Quarter
    
    $
    3.03
    
    
    $
    .902nd Quarter
    
    
    5.40
    
    
    
    1.683rd Quarter
    
    
    4.90
    
    
    
    2.254th Quarter
    
    
    5.00
    
    
    
    2.00
 FISCAL YEAR 2004
    
    HIGH BID
    
    LOW BID1st Quarter
    
    $
    5.50
    
    
    $
    2.252nd Quarter
    
    
    8.15
    
    
    
    3.503rd Quarter
    
    
    7.95
    
    
    
    4.004th Quarter
    
    
    7.45
    
    
    
    4.50
   
 ITEM 6.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
 Retama Park Racetrack
 Management
  Bonds
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Bonds
   Senior
    
    SubordinateRetama Development Corporation Special
    
    Series A Bonds
    
    Series B BondsFacilities Revenue Bonds, Dated 1997
    
    7% due 9/1/33
    
    8% due 9/1/33Total Bonds Outstanding at December 31, 2004
    
    $
    6,585,000
    
    
    $
    86,925,000Bonds owned by Call Now, Inc. at December 31, 2004
    
    $
    155,000
    
    
    $
    43,962,500Carrying Value of Call Now, Inc. position at December 31,
2004 as reported on the balance sheet
    
    $
    155,000
    
    
    $
    1,077,463
    Appraisal valuation of Retama race track land and facilities
    
    $
    21,570,000Deduct Series A bondholders 1st lien position
    
    
    (6,585,000
    )Deduct RDC notes and accrued interest, 2nd lien position
    
    
    (1,982,969
    )Deduct costs of sale and other discounts
    
    
    (1,500,000
    )Net available to Series B bondholders after consideration of
Series A bondholders, funding agreement, and sales commissions
    
    
    11,502,031Face amount of Series B bondholders
    
    
    86,925,000% of face amount available to Series B bondholders
    
    
    13.232
    %Face amount of Series B bonds owned by the Company
    
    
    43,962,500Net collateral value available for the Series B bonds
    
    $
    5,817,176
 Penson Worldwide, Inc.
   5




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Investment Company
     6




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Critical Accounting Policies
 General
  Valuation of Marketable Securities
  Valuation of Penson Note Receivable
  Income Taxes
  YEAR ENDED DECEMBER 31, 2004 COMPARED TO 2003
 RESULTS OF OPERATIONS
 a. Revenues and Other Income
 Revenue
  Interest Income
  7




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b. Expenses
 Cost and Other Expenses of Revenues
  Income Tax
  LIQUIDITY AND CAPITAL RESOURCES
    OFF-BALANCE SHEET ARRANGEMENTS
  EFFECT OF NEW ACCOUNTING PRONOUNCEMENTS
  8




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RISK FACTORS
  RISKS RELATED TO OUR BUSINESS
 Concentration of Operations of Subsidiary
  Concentration of Assets
  9




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Limited Liquidity Available in the Secondary Market
  Investment Company Act
  
 ITEM 7. FINANCIAL STATEMENTS
 Reports of Independent Registered Public Accounting Firms
    
    
    F-1Consolidated Balance Sheet, December 31, 2004
    
    
    F-3Consolidated Statements of Operations, years ended December 31, 2004 and 2003
    
    
    F-4Consolidated Statements of Changes in Stockholders Equity, years ended December 31, 2004 and 2003
    
    
    F-5Consolidated Statements of Cash Flows, years ended December 31, 2004 and 2003
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
 10




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-1




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-2




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##### Table of Contents



CALL NOW, INC. AND SUBSIDIARY  Consolidated Balance Sheet
 December 31,2004ASSETSCurrent Assets:Cash and equivalents
    
    
    
    
    
    $
    18,716Accounts receivable
    
    
    
    
    
    
    131,069Marketable securities
    
    
    
    
    
    
    529,002Other current assets
    
    
    
    
    
    
    49,848Total current assets
    
    
    
    
    
    
    728,635Long-Term Assets:Marketable securities  Retama Development Corp.
    
    
    
    
    
    
    1,232,463Notes receivable:Affiliate
    
    $
    6,600,000Others
    
    
    1,656,669
    
    
    
    8,256,669Interest receivable, long-term:Affiliate
    
    
    25,226Others
    
    
    326,300
    
    
    
    351,526Deferred tax asset
    
    
    
    
    
    
    281,074Total long-term assets
    
    
    
    
    
    
    10,121,732Total Assets
    
    
    
    
    
    $
    10,850,367LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable and accrued expenses
    
    
    
    
    
    $
    172,313Margin loan payable  affiliate
    
    
    
    
    
    
    4,587,191Total current liabilities
    
    
    
    
    
    
    4,759,504Minority Interest in Consolidated Subsidiary
    
    
    
    
    
    
    1,314Stockholders Equity:Preferred stock, .001 par value; authorized 266,667 shares, none outstanding
    
    
    
    
    
    
    Common stock, .001 par value; authorized 16,666,667 shares,
3,160,407 issued and 2,997,552 outstanding
    
    
    
    
    
    
    3,160Additional paid-in-capital
    
    
    
    
    
    
    6,888,286Treasury stock, at cost
    
    
    
    
    
    
    (449,750
    )Accumulated other comprehensive income
    
    
    
    
    
    
    161,200Retained earnings (deficit)
    
    
    
    
    
    
    (513,347
    )Total stockholders equity
    
    
    
    
    
    
    6,089,549Total Liabilities and Stockholders Equity
    
    
    
    
    
    $
    10,850,367
 See notes to consolidated financial statements.
 F-3




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CALL NOW, INC. AND SUBSIDIARY  Consolidated Statements of Operations
 Years Ended December 312004
    
    
    2003RevenuesReimbursement of payroll and payroll related expenses
    
    $
    4,502,582
    
    
    $
    5,264,985Management fees
    
    
    240,000
    
    
    
    240,000Total revenues
    
    
    4,742,582
    
    
    
    5,504,985ExpensesPayroll and payroll related expenses
    
    
    4,616,582
    
    
    
    5,379,985Other management expenses
    
    
    105,056
    
    
    
    121,768Corporate general and administrative operations
    
    
    597,979
    
    
    
    336,068Total expenses
    
    
    5,319,617
    
    
    
    5,837,821Net Operating (Loss)
    
    
    (577,035
    )
    
    
    (332,836
    )Other Income (Expenses)Interest income  affiliate
    
    
    588,353
    
    
    
    287,781Interest income, others
    
    
    208,988
    
    
    
    157,249Gain on sales of marketable securities
    
    
    223,125
    
    
    
    405,103Write-off of note receivable
    
    
    
    
    
    
    (127,634
    )Other income
    
    
    7,832
    
    
    
    35,947Interest expense  affiliate
    
    
    (223,427
    )
    
    
    (274,044
    )Total other income
    
    
    804,871
    
    
    
    484,402Income before minority interest and income taxes
    
    
    227,836
    
    
    
    151,566Minority interest in income of subsidiary
    
    
    (5,241
    )
    
    
    (408
    )Income before income taxes
    
    
    222,595
    
    
    
    151,158Income tax expense
    
    
    79,459
    
    
    
    24,028Net Income
    
    $
    143,136
    
    
    $
    127,130Earnings Per ShareBasic and diluted income per share
    
    $
    .05
    
    
    $
    .04Weighted average common shares outstanding:Basic
    
    
    2,820,200
    
    
    
    2,730,627Dilutive
    
    
    2,962,760
    
    
    
    2,908,316
 See notes to consolidated financial statements.
 F-4




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CALL NOW, INC. AND SUBSIDIARY  Consolidated Statements of Changes in Stockholders Equity
 AccumulatedAdditional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    Retained
    
    
    TotalCommon Stock
    
    
    Paid-In
    
    
    Treasury Stock
    
    
    Comprehensive
    
    
    Earnings
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    (Deficit)
    
    
    EquityBalance, December 31, 2002,
as previously reported
    
    
    8,680,701
    
    
    $
    8,680
    
    
    $
    5,974,261
    
    
    
    488,566
    
    
    $
    (449,750
    )
    
    $
    1,458,175
    
    
    $
    (85,151
    )
    
    $
    6,906,215Correction of error
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,447,117
    )
    
    
    (698,462
    )
    
    
    (2,145,579
    )Balance, December 31, 2002,
as restated
    
    
    8,680,701
    
    
    
    8,680
    
    
    
    5,974,261
    
    
    
    488,566
    
    
    
    (449,750
    )
    
    
    11,058
    
    
    
    (783,613
    )
    
    
    4,760,636Reverse stock split 3:1
    
    
    (5,787,219
    )
    
    
    (5,787
    )
    
    
    5,787
    
    
    
    (325,711
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,130
    
    
    
    127,130Unrealized gain on securities:As previously reported, net of
$431,000 in income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    836,132
    
    
    
    Correction of error, net of
$(381,000) in income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (643,097
    )
    
    
    
    
    
    
    193,035Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    320,165Balance, December 31, 2003
    
    
    2,893,482
    
    
    
    2,893
    
    
    
    5,980,048
    
    
    
    162,855
    
    
    
    (449,750
    )
    
    
    204,093
    
    
    
    (656,483
    )
    
    
    5,080,801Issuance of common stock
    
    
    266,925
    
    
    
    267
    
    
    
    908,238
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    908,505Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    143,136
    
    
    
    143,136Unrealized loss on securities,
net of $(25,000) in income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (42,893
    )
    
    
    
    
    
    
    (42,893
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,243Balance, December 31, 2004
    
    
    3,160,407
    
    
    $
    3,160
    
    
    $
    6,888,286
    
    
    
    162,855
    
    
    $
    (449,750
    )
    
    $
    161,200
    
    
    $
    (513,347
    )
    
    $
    6,089,549
 See notes to consolidated financial statements.
 F-5




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CALL NOW, INC. AND SUBSIDIARY  Consolidated Statements of Cash Flows
 Years Ended December 312004
    
    
    2003Operating ActivitiesNet income
    
    $
    143,136
    
    
    $
    127,130Adjustments to reconcile net income
to net cash provided by operating activities:Net realized (gains) on sales of marketable securities
    
    
    (223,125
    )
    
    
    (405,103
    )Minority interest
    
    
    5,241
    
    
    
    408Deferred taxes
    
    
    79,459
    
    
    
    24,028Changes in operating assets and liabilities:Accounts receivable
    
    
    (86,000
    )
    
    
    85,064Other assets
    
    
    (164,994
    )
    
    
    (87,397
    )Accounts payable and accrued expenses
    
    
    90,690
    
    
    
    48,652Net Cash (Used) by Operating Activities
    
    
    (155,593
    )
    
    
    (207,218
    )Investing ActivitiesAdvances on notes receivable
    
    
    (1,969,134
    )
    
    
    (6,934,535
    )Collections on notes receivable
    
    
    1,500,000
    
    
    
    Proceeds from sales of available-for-sale marketable securities
    
    
    4,152,225
    
    
    
    22,706,396Purchase of available-for-sale marketable securities
    
    
    (3,676,471
    )
    
    
    (22,209,362
    )Proceeds from bond redemption
    
    
    
    
    
    
    5,000Net Cash Provided (Used) by Investing Activities
    
    
    6,620
    
    
    
    (6,432,501
    )Financing ActivitiesMargin loan proceeds (repayments)
    
    
    (816,394
    )
    
    
    5,403,585Issuance of common stock
    
    
    908,505
    
    
    
    Net Cash Provided by Financing Activities
    
    
    92,111
    
    
    
    5,403,585Net Change in Cash
    
    
    (56,862
    )
    
    
    (1,236,134
    )Cash at beginning of year
    
    
    75,578
    
    
    
    1,311,712Cash at End of Year
    
    $
    18,716
    
    
    $
    75,578Supplemental Disclosure of Cash Flow InformationInterest paid in cash
    
    $
    223,427
    
    
    $
    245,814Federal income taxes paid in cash
    
    
    
    
    
    
    
 See notes to consolidated financial statements.
 F-6




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 1  SUMMARY OF ACCOUNTING POLICIES
 Nature of Business:
  Principles of Consolidation:
 Cash and Equivalents:
 Accounts Receivable:
 Marketable Securities
  Furniture and Equipment:
 Impairment of Long-Lived Assets:
 F-7




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 1  SUMMARY OF ACCOUNTING POLICIES  continued
 Federal Income Taxes:
 Revenue Recognition:
  Earnings Per Common Stock:
 Concentration of Credit Risk:
  Use of Estimates:
  F-8




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 1  SUMMARY OF ACCOUNTING POLICIES  continued
 Stock Based Compensation:
  2004
    
    
    2003Net income as reported
    
    $
    143,136
    
    
    $
    127,130Deduct: Total stock-based compensation
expense determined under the fair value based
method for all awards, net of related tax effects 
no options awarded in 2004 or 2003
    
    
    
    
    
    
    Pro forma earnings
    
    $
    143,136
    
    
    $
    127,130Earnings per common share:Basic, as reported
    
    $
    0.05
    
    
    $
    0.04Basic, pro forma
    
    
    0.05
    
    
    
    0.04Diluted, as reported
    
    
    0.05
    
    
    
    0.04Diluted, pro forma
    
    
    0.05
    
    
    
    0.04
 Comprehensive Income:
 Recent Accounting Pronouncements:
  F-9




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 1  SUMMARY OF ACCOUNTING POLICIES  continued
  Reclassification:
 NOTE 2  CORRECTION OF ERRORS
  1.
    
    Management determined the deferred tax liability for the years 1998 through 2001 was
incorrect. The net operating loss available for carryover to future years was overstated,
resulting in the net deferred tax liability being understated. Accordingly, the Company
has recognized an increase in the deferred tax liability as of December 31, 2002 of
$698,462, and a resulting decrease to retained earnings (deficit) in the same amount. This
correction has been made to the Statement of Changes in Stockholders Equity as of December
31, 2002.2.
    
    Management also determined it had misapplied the provisions of SFAS No. 115 for the
classification and valuation of the RDC Series B bonds. The Series B bonds were previously
classified as available-for-sale and stated at their fair market value. Due to the lack of
an actively traded market for the bonds, the subordinated lien on the collateral and the
uncertainty of the payment of interest and principal, the Series B bonds should have been
reported as held to maturity from the date of their acquisition and stated at their
original cost to the Company. Accordingly, the Company has restated the RDC Series B bonds
to their original cost, requiring a decrease to accumulated other comprehensive income of
$1,447,117 as of December 31, 2002, and a further decrease of $643,097 previously reported
during the year ended December 31, 2003. Both of the amounts are net of income taxes as
described on the Consolidated Statements of Changes in Stockholders Equity. This
correction did not impact net income as reported on the Statement of Operations; however,
the previously reported unrealized gain on securities included in other comprehensive
income reported on the Consolidated Balance Sheet and Consolidated Statements of Changes in
Stockholders Equity has been restated as of December 31, 2002 and 2003, and for the year
ended December 31, 2003.
 F-10




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 3  MARKETABLE SECURITIES
  Gross
    
    
    Gross
    
    
    Carrying/Unrealized
    
    
    Unrealized
    
    
    MarketCost
    
    
    Gains
    
    
    (Losses)
    
    
    ValueAvailable-for-sale:RDC Series A bonds
    
    $
    155,000
    
    
    $
    
    
    
    $
    
    
    
    $
    155,000Other securities
    
    
    284,759
    
    
    
    260,972
    
    
    
    (16,729
    )
    
    
    529,002439,759
    
    
    
    260,972
    
    
    
    (16,729
    )
    
    
    684,002Held to maturity:RDC Series B bonds
    
    
    1,077,463
    
    
    
    
    
    
    
    
    
    
    
    1,077,463$
    1,517,222
    
    
    $
    260,972
    
    
    $
    (16,729
    )
    
    $
    1,761,465Included on the balance sheets as:Marketable securities, current
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    529,002Marketable securities, long-term (Retama Development Corp.)  Note 4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,232,463$
    1,761,465
  NOTE 4  RETAMA DEVELOPMENT  MARKETABLE SECURITIES AND NOTES RECEIVABLE
   F-11




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 4  RETAMA DEVELOPMENT  MARKETABLE SECURITIES AND NOTES RECEIVABLE  continued
  Total
    
    
    Owned By
    
    
    CarryingOutstanding
    
    
    Call Now
    
    
    ValueRDC Bonds (Marketable Securities):RDC Series A bonds
    
    $
    6,585,000
    
    
    $
    155,000
    
    
    $
    155,000RDC Series B bonds
    
    
    86,925,000
    
    
    
    43,962,500
    
    
    
    1,077,463Total bonds, long-term
    
    
    
    
    
    
    
    
    
    $
    1,232,463RDC Notes and Interest Receivable:Notes receivable, principal balance
    
    $
    1,656,669
    
    
    $
    1,656,669
    
    
    $
    1,656,669Accrued interest receivable
    
    
    326,300
    
    
    
    326,300
    
    
    
    326,300Total notes and interest
    
    
    
    
    
    
    
    
    
    $
    1,982,969
 NOTE 5  PENSON WORLDWIDE, INC.  NOTE RECEIVABLE
    NOTE 6  PENSON FINANCIAL SERVICES, INC.  MARGIN LOAN PAYABLE
  F-12




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 7  STOCKHOLDERS EQUITY
 Preferred Stock:
    Stock Options:
  2004
    
    2003Risk-free interest rate
    
    
    *
    
    
    
    *Expected dividend yield
    
    
    *
    
    
    
    *Expected volatility of common stock
    
    
    *
    
    
    
    *Expected weighted-average life of option
    
    
    *
    
    
    
    *
 
 *
    
    No grants were awarded during 2003 or 2004   F-13




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##### Table of Contents



CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 7  STOCKHOLDERS EQUITY  continued
  2004
    
    
    2003Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at the
beginning of year
    
    
    446,670
    
    
    $
    2.55
    
    
    
    450,004
    
    
    $
    2.60Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    (266,925
    )
    
    
    3.40
    
    
    
    
    
    
    
    Forfeited
    
    
    (6,410
    )
    
    
    3.12
    
    
    
    (3,334
    )
    
    
    9.00Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at
the end of year
    
    
    173,335
    
    
    $
    1.21
    
    
    
    446,670
    
    
    $
    2.55Options exercisable
at year end
    
    
    173,335
    
    
    $
    1.21
    
    
    
    446,670
    
    
    $
    2.55Weighted average
contractual life
remaining at year-end
    
    
    
    
    
    1.1 yrs.
    
    
    1.9 yrs.
 NOTE 8  INCOME TAXES
  2004
    
    
    2003Current:Federal
    
    $
    79,459
    
    
    $
    24,028State
    
    
    
    
    
    
    $
    79,459
    
    
    $
    24,028
  Deferred tax assets (liabilities):Net operating loss carryforward
    
    $
    364,117Unrealized gain on marketable securities
    
    
    (83,043
    )Net deferred tax asset
    
    $
    281,074
  F-14




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 9  RELATED PARTY TRANSACTIONS
   NOTE 10  MANAGEMENT AGREEMENT
   NOTE 11  EARNINGS PER SHARE
  Income
    
    
    Shares
    
    
    Per Share(Numerator)
    
    
    (Denominator)
    
    
    AmountYear Ended December 31, 2004Basic EPS:Net income
    
    $
    143,136
    
    
    
    2,820,200
    
    
    $
    0.05Effect of dilutive options
    
    
    
    
    
    
    142,560
    
    
    
    Dilutive EPS
    
    $
    143,136
    
    
    
    2,962,760
    
    
    $
    0.05Year Ended December 31, 2003Basic EPS:Net income
    
    $
    127,130
    
    
    
    2,730,627
    
    
    $
    0.04Effect of dilutive options
    
    
    
    
    
    
    177,689
    
    
    
    Dilutive EPS
    
    $
    127,130
    
    
    
    2,908,316
    
    
    $
    0.04
 F-15




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CALL NOW, INC. AND SUBSIDIARY  Notes to Consolidated Financial Statements  December 31, 2004 and 2003
 NOTE 12  CONTINGENCY
 Federal Income Taxes:
  Investment Company Act:
 F-16




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ITEM 8.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE.
    
 ITEM 8A. CONTROLS AND PROCEDURES
  
 ITEM 8B. OTHER INFORMATION
  11




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PART III
 
 ITEM 9.
    
    DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CORPORATE PERSONS; COMPLIANCE WITH SECTION
16(a) OF THE EXCHANGE ACT.
  NAME
    
    AGE
    
    POSITIONThomas R. Johnson, President and Chief Executive Officer
    
    
    38
    
    
    DirectorChristopher J. Hall
    
    
    46
    
    
    DirectorWilliam M. Allen
    
    
    79
    
    
    DirectorBryan P Brown
    
    
    44
    
    
    Director
     COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
  12




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##### Table of Contents



ITEM 10. EXECUTIVE COMPENSATION.
 SUMMARY COMPENSATION TABLE
 Other AnnualName and Principal Position
    
    Year
    
    Salary
    
    Bonus
    
    CompensationThomas R. Johnson
    
    
    2004
    
    
    $
    125,000
    
    
    
    -0-
    
    
    
    -0-Chief Executive Officer
    
    
    2003
    
    
    $
    100,000
    
    
    
    -0-
    
    
    
    -0-2002
    
    
    $
    100,000
    
    
    
    -0-
    
    
    
    -0-William M. Allen
    
    
    2004
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    123,200(Former Chairman, CEO)
    
    
    2003
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    134,4002002
    
    
    
    -0-
    
    
    
    -0-
    
    
    $
    134,400Bryan P. Brown
    
    
    2004
    
    
    $
    200,000
    
    
    
    -0-
    
    
    
    -0-CEO of Retama Entertainment
    
    
    2003
    
    
    $
    175,000
    
    
    
    -0-
    
    
    
    -0-
 DIRECTOR COMPENSATION
   EXECUTIVE EMPLOYMENT CONTRACTS
  Thomas R. Johnson
    
    $
    125,000Bryan P. Brown
    
    $
    200,000
  STOCK OPTIONS
   13




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Number of
    
    Value of UnexercisedUnexercised Options
    
    in-the-money OptionsName
    
    At Fiscal Year End
    
    At Fiscal Year EndThomas R. Johnson
    
    
    33,334
    
    
    $
    158,669
 EQUITY COMPENSATION PLAN INFORMATION AS OF DECEMBER 31, 2004
  Number of
    
    
    
    
    
    Number of securitiessecurities to be
    
    Weighted-
    
    remaining available forissued upon
    
    average exercise
    
    future issuance under equityexercise of
    
    price of
    
    compensation plansoutstanding
    
    outstanding
    
    (excluding securitiesoptions/warrants
    
    options/warrants
    
    reflected in column (a))Plan Category
    
    (a)
    
    (b)
    
    (c)Equity
compensation plans
approved by
security holders
(1)
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-Equity compensation
plans not approved
by
security holders
    
    
    33,334
    
    
    
    1.59
    
    
    
    -0-Total
    
    
    33,334
    
    
    
    1.59
    
    
    
    -0-
 
 ITEM 11.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS.
  Percent ofNumber of
    
    OutstandingName
    
    Shares
    
    Common StockChristopher J. Hall
    
    
    2,541,222
    (1)
    
    
    77.15
    %Thomas R. Johnson
    
    
    60,641
    (1)
    
    
    *Bryan P. Brown
    
    
    -0-William M. Allen
    
    
    -0-Officers and Directors as a group
(4 Persons)
    
    
    2,601,863
    (1)
    
    
    78.20
    %
 
 (1)
    
    Includes stock options held as follows: Christopher J. Hall  133,334 shares, Thomas R Johnson
 33,334 shares.*
    
    Less than 2%. 14




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ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
  REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
 15




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PART IV
 
 ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
  EXHIBIT
    
    INC. BYNO.
    
    REF. NOTE
    
    DESCRIPTION3(a) 
    
    A
    
    Articles of Incorporation of Registrant
as filed with the Secretary of State of
Nevada on September 3, 1999.3(b) 
    
    B
    
    Plan of Merger of Call Now, Inc.(Florida)
into Call Now, Inc (Nevada).3(c) 
    
    F
    
    By-Laws of the Registrant8.7 
    
    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. bonds8.9 
    
    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.8.12 
    
    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.8.15 
    
    
    
    First Amendment to Management Agreement for
Retama Park8.16 
    
    
    
    Second Amendment to Management Agreement for
Retama Park8.17 
    
    
    
    Third Amendment to Management Agreement for
Retama Park10.1 
    
    T
    
    Purchase and Sale Agreement dated November 19,
2001 with Robert Buffkin covering sale of
Andice Development Corporation.10.2 
    
    U
    
    Consulting Agreement with William M. Allen
dated November 19, 2001.10.3 
    
    
    
    Employment Agreement between Call Now, Inc. and
Thomas R. Johnson, date November 3, 200310.4 
    
    
    
    Employment Agreement between Retama
Entertainment Group and Bryan P. Brown, dated
March 31, 200431.1 
    
    V
    
    Certification pursuant to Rule 13a-14(a) or
Rule 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
(filed herewith)32.1 
    
    X
    
    Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of
The Sarbanes-Oxley Act of 2003 (filed
herewith)
 16




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Incorporation by Reference Notes:
 NOTE INCORPORATION BY REFERENCE
 A
    
    
    
    Incorporated by reference to Exhibit 3(a) of Form 10-KSB for
the year ended December 31, 1999B
    
    
    
    Incorporated by reference to Exhibit 3(b) of Form 10-KSB for
the year ended December 31, 1999L
    
    
    
    Incorporated by reference to Exhibit 8.9 of Form 10-KSB
for year ended December 31, 1996M
    
    
    
    Incorporated by reference to Exhibit A of Form 8-K filed
November 21, 1996N
    
    
    
    Incorporated by reference to Exhibit B of Form 8-K filed
November 21, 1996R
    
    
    
    Incorporated by reference to Exhibit 8.13 of Form 10-KSB for
year ended December 31, 1998.S
    
    
    
    Incorporated by reference to Exhibit 8.14 of Form 10-KSB for
year ended December 31, 1998.T
    
    
    
    Incorporated by reference to Exhibit 10.1 of Form 8-K filed
February 8, 2002.U
    
    
    
    Incorporated by reference to Exhibit 10.2 of Form 8-K filed
February 8, 2002.
 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
   2004
    
    2003Audit Fees (1)
    
    $
    12,375
    
    
    $
    13,770Audit-Related Fees
    
    
    0
    
    
    
    0Tax Fees (2)
    
    
    0
    
    
    
    225All Other Fees
    
    
    0
    
    
    
    0Total
    
    $
    12,375
    
    
    $
    13,995
 
 (1)
    
    Audit fees represent fees for professional services provided in connection with
the audit of our financial statements and review of our quarterly financial
statements.(2)
    
    Tax fees principally included tax advice, tax planning and tax return preparation.  17




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Pre-Approval Policies
   
 SIGNATURES
  
  /s/ Thomas R Johnson

 (Principal Executive Officer and Principal Accounting Officer)
    
    President and Director
    
    September 27, 2005/s/ Christopher J Hall
    
    Director
    
    September 27, 2005/s/ William M. Allen
    
    Director
    
    September 27, 2005/s/ Bryan Brown
    
    Director
    
    September 27, 2005
 18