<PAGE>   1
                        SFG CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             APRIL 30, 2000 AND 1999

<TABLE>
<CAPTION>
                                                                                 2000              1999
                                                                          -----------       -----------
<S>                                                                       <C>               <C>
ASSETS:
Cash ...............................................................      $    13,582       $    13,560
Due from officers ..................................................                0               560
Equipment on operating leases, net of accumulated depreciation .....                0                 0
Furniture and equipment, net of accumulated depreciation ...........                0                 0
                                                                          -----------       -----------
        Total ......................................................      $    13,582       $    14,120
                                                                          ===========       ===========


LIABILITIES AND SHAREHOLDERS' DEFICIENCY:
Liabilities:
    Notes payable ..................................................      $        --       $   270,653
    Accounts payable and accrued expenses ..........................          120,029           103,675
    Advance rentals ................................................                0             9,174
    Due to officers ................................................            2,049             2,987
    Sales tax payable ..............................................          221,942           222,006
                                                                          -----------       -----------
        Total liabilities ..........................................          344,020           608,495


Shareholders' Deficiency:
   Common stock -$.001 par value, 100,000,000 shares authorized;
     3,226,856 and 2,955,856 shares issued and outstanding at
       April 30, 2000 and 1999, respectively .......................            3,227             2,956
    Capital in excess of par .......................................        2,062,167         1,793,350
    Accumulated deficit ............................................       (2,395,833)       (2,390,681)
                                                                          -----------       -----------
         Total shareholders' deficiency ............................         (330,439)         (594,375)
                                                                          -----------       -----------

             Total .................................................      $    13,581       $    14,120
                                                                          ===========       ===========
</TABLE>

The accompanying notes are an integral part of the financial statements




                                       3

<PAGE>   2
                        SFG CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE THREE MONTHS ENDED APRIL 30, 2000 AND 1999




<TABLE>
<CAPTION>
                                                             2000              1999
                                                      -----------       -----------
<S>                                                   <C>               <C>
Revenues:
    Rental income ..............................      $     2,766       $    39,797
    Residual income ............................               --                --
    Sale of equipment and other income .........               --            10,689
                                                      -----------       -----------
       Total revenues ..........................            2,766            50,486

Expenses:
    Professional fees ..........................           26,660           110,975
    Administrative expenses ....................            5,273            14,718
    Salaries ...................................            6,000            13,343
    Interest ...................................                0             6,470
    Leasing expense ............................                0             6,584
                                                      -----------       -----------
        Total expenses .........................           37,933           152,090
                                                      -----------       -----------

Loss Before Income Taxes .......................          (35,167)         (101,604)

Provision For Income Taxes .....................                0                 0
                                                      -----------       -----------

Net Loss .......................................      $   (35,167)      $  (101,604)
                                                      ===========       ===========




Net Loss Per Common Share ......................      $         0       $         0
                                                      ===========       ===========

Weighted Number of Common Shares Outstanding ...        3,226,856         2,889,189
                                                      ===========       ===========
</TABLE>


The accompanying notes are an integral part of the financial statements




                                       4

<PAGE>   3
                        SFG CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                       Quarter Ended
                                                                                         April 30,
                                                                                   2000            1999
                                                                                ---------       ---------
<S>                                                                             <C>             <C>
Cash Flows From Operating Activities:
   Net loss ..............................................................      $ (35,167)      $(101,604)
   Adjustments to reconcile net loss to net cash provided by (used in)
      operating activities:
         Gain on sale of assets ..........................................                        (10,689)
         Common stock issued for services ................................                        100,000
         Changes in assets and liabilities:
         (Increase) decrease in assets:
           Accounts receivable
           Due from officers
         Increase (decrease) in liabilities:
            Accounts payable and accrued expenses ........................          8,238           6,429
            Advance rentals
            Due to officers ..............................................           (662)
            Sales tax payable
   Total adjustments .....................................................          7,576          95,740
                                                                                ---------       ---------
         Net cash provided by (used in) operating activities .............      $ (27,591)      $  (5,864)

Cash Flows Provided By Investing Activities:
   Proceeds from sale of operating lease equipment .......................                         10,689

Cash Flows Used In Financing Activities:
   Payments on long term debt ............................................                           (498)
                                                                                ---------       ---------

Net Increase (Decrease) in Cash ..........................................      $ (27,591)      $   4,327

Cash - February 1 ........................................................         41,173           9,233
                                                                                ---------       ---------

Cash - April 30 ..........................................................      $  13,582       $  13,560
                                                                                =========       =========


Supplemental Disclosure of Cash Flows Information:
   Cash paid during the period for:
      Interest ...........................................................             --       $   6,584
                                                                                =========       =========
      Income taxes .......................................................             --              --
                                                                                =========       =========

Supplemental Schedule of Noncash Financing Activities:
   Common Stock issued services ..........................................             --       $ 100,000
                                                                                =========       =========
   Common stock issued to retire debt ....................................             --              --
                                                                                =========       =========
</TABLE>


The accompanying notes are an integral part of the financial statements.


                                       5



<PAGE>   4
                        SFG CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             APRIL 30, 2000 AND 1999


Note #1 - Organization and Significant Accounting Policies.

   Summary of Accounting Policies.

         This summary of accounting policies of SFG Corporation and Subsidiaries
(the Company) is presented to assist in understanding the Company's financial
statements. The financial statements and notes are representations of the
Company's management who is responsible for the integrity and objectivity of the
financial statements. These accounting policies conform to generally accepted
accounting principles and have been consistently applied in the presentation of
the financial statements.

   Basis of Consolidation.

         The consolidated financial statements include the accounts of SFG
Corporation and its wholly owned subsidiaries. All significant inter company
accounts and transactions have been eliminated in consolidation.

   Leasing Arrangements.

         The Company's leasing operations consist of operating leases of
computers and peripheral equipment. The company recognizes rental income, as
earned, over the lives of the leases.

   Equipment Under Operating Leases and Furniture and Equipment.

         Equipment under operating leases and furniture and equipment are stated
at cost. Expenditures for major renewals and betterments that extend the useful
lives of property and equipment are capitalized. Expenditures for maintenance
and repairs are charged to expense as incurred.


<TABLE>
<CAPTION>
                                                             April 30,
                                                      2000               1999
                                                   ---------          ---------
<S>                                                <C>                <C>
Equipment under operating leases                   $ 335,907          $ 445,057
Furniture and equipment                                1,655              1,655
                                                   ---------          ---------
                                                     337,562            446,712
Accumulated depreciation                            (337,562)          (446,712)
                                                   ---------          ---------
         Net                                       $       0          $       0
                                                   ---------          ---------
</TABLE>


                                       6

<PAGE>   5
Note #1 - Organization and Significant Accounting Policies. (continued)

   Net Income (Loss) Per Common Share.

         Net income (loss) per common share is computed using the weighted
average number of common shares outstanding during each period.

   Cash and Cash Equivalents.

         For purposes of reporting the statements of cash flows, cash and cash
equivalents include money market accounts and all highly liquid debt instruments
purchased with a maturity of three months or less.

   Income Taxes.

         Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist primarily of taxes currently due.

   Use of Estimates.

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.


                                       7