U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

     For the fiscal year ended December 31, 2001

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _____ to _______

                         Commission file number 0-32323

                                        TEN STIX INC.
        (Exact name of small business issuer as specified in its charter)

            COLORADO                                             84-1351184
 ------------------------------                               -----------------
(State or other jurisdiction of                              (I.R.S. Employer
 incorporation of organization)                              Identification No.)

                              3101 Riverside Drive
                          Idaho Springs, Colorado 80452
                     --------------------------------------
                    (Address of Principal Executive Offices)

                                 (303) 567-0163
                            -------------------------
                           (Issuer's telephone number)

                                       N/A
               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

     Yes  X     No
        -----     -----

     Check here if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B 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 the issuer's revenues for its more recent fiscal year (ending
December 31, 2001): $ 46,470.

     State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked prices of such common equity, as
of December 31, 2001: $ -0-.

     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the most practicable date:

Class                                      Outstanding as of March 5, 2001

Common Stock, $.001 par value                17,659,488

<PAGE>


                               Table of Contents


                                                                           Page
                                                                           ----
PART I

ITEM 1. DESCRIPTION OF BUSINESS                                               2

ITEM 2. PROPERTIES                                                           17

ITEM 3. LEGAL PROCEEDINGS                                                    17

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  19

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
           STOCKHOLDER MATTERS                                               19

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS                               22

ITEM 7. FINANCIAL STATEMENTS                                                 29

        BALANCE SHEET                                                       F-2

        STATEMENTS OF LOSS AND ACCUMULATED DEFICIT                          F-3

        STATEMENT OF STOCKHOLDERS' EQUITY                                   F-4

        STATEMENTS OF CASH FLOWS                                            F-9

        NOTES TO FINANCIAL STATEMENTS                                       F-10

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS OF
           ACCOUNTING AND FINANCIAL DISCLOSURE                               30

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND
           CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a)
           OF THE EXCHANGE ACT                                               31

ITEM 10.EXECUTIVE COMPENSATION                                               32

ITEM 11.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT                                                    33

ITEM 12.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                       34

ITEM 13.EXHIBITS AND REPORTS ON FORM 8-K                                     36

SIGNATURES                                                                   37


                                       i

<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT AND ORGANIZATION

     Ten Stix Inc. was incorporated on January 10, 1996 under the laws of the
State of Colorado to engage in the design, development and marketing of unique
card games, of which some are derived from Native American heritage, and other
gaming products for the gaming industry. The Company named itself "Ten Stix"
based on its most popular and creative product known as "Ten Stix 21" (currently
being marketed and referenced herein as "Ten to Win"). The Company has designed
and developed certain card games, which are currently being marketed to casinos
located in the States of California, Colorado, Kansas, New Mexico, Nevada, South
Dakota and Wisconsin.

     The Company's principal executive offices are located at 3101 Riverside
Drive, Idaho Springs, Colorado 80542. Its telephone number is (303) 567.0163 and
its facsimile number is (303) 567.0163.

     As of the date of this Annual Report, the Company has generated little
revenues. Since inception, the Company has incurred approximately $67,500 in
salaries-product development expenses, which includes research and development
expenses relating to the design and development of the Company's gaming
products. The Company's auditors, Comiskey & Company, have expressed doubt about
the Company's ability to continue as a going concern, as evidenced in the
auditor's report to the Financial Statements. See "Item 7. Financial
Statements".

PRODUCTS AND CURRENT STATUS

     The Company has designed and developed a line of card games and other
gaming products for the gaming industry. There are two types of gaming products
that the Company has designed and will distribute and market. One type of gaming
product is the "table game with electronics", which includes Ten to Win and
Shotgun 21. Both the Ten to Win and Shotgun 21 card games utilize an electronics
system that was designed and developed by the Company and which provides, among
other things, the managers of casinos with an accounting system allowing for
real-time win/loss statistics. The basic unit hardware is the same for the two
card games, although the Shotgun 21 electronics system has certain modifications
and will perform more sophisticated functions. The other type of gaming product
is a "layout game", which includes all of the other gaming products. The other
gaming products of the Company utilize a tablecover or layout with no electronic
system. The Company offers no warranty pursuant to the sale or lease of any of
its gaming products.

     As of the date of this Annual Report, the Company has generated
insignificant revenues from the sale of its gaming products. Management believes
that there are certain material factors applicable to all of the Company's
products, which are relevant to commencement of generation of revenues, as
follows: (i) adequate capital required to fund operational expenses, which
directly and adversely affects travel associated with the market and
distribution of products; (ii) state approval of the specific game being
marketed; (iii) slow delivery of and/or back-ordered parts associated with

                                       2

<PAGE>


particular games. Together with the specific material factors listed under the
description of each gaming product, management believes that all such material
factors have been disclosed pertaining to the timing of bringing each product to
market and commencement of generation of revenues.

     Ten to Win

     The Company, through its founders and officers/directors, Messrs. Thomas
Sawyer and Tony Cranford, has completed the design and development of its first
and most creative gaming product called "Ten to Win". Based on market testing
conducted by the Company and the popularity of and acknowledgment by casinos,
particularly Native American casinos, of Ten to Win at gaming shows, management
believes that Ten to Win will be the Company's most marketable product. Although
the Company has not generated any revenues from the distribution and sale of its
gaming products including Ten to Win, management believes that it will be able
to successfully market and sell Ten to Win.

     Ten to Win is a Class II (i.e., a game where the players bank all funds and
the casino takes a fee for the use of the game) and a Class III game (i.e., a
game where the casino banks all funds and takes all the risk in the outcome of
the game). The difference between a Class II and a Class III game is generally
that in a Class II game the casino does not act as the bank and merely takes a
percentage override or an hourly fee, i.e., the casino does not lease or win any
money from the card hands because the players take turns putting up the bank and
thus assuming the risk of loss. Management believes that no marketing advantages
exist relating to classification of a game as either a Class II or a Class II
game. Ten to Win can be classified as both a Class II and a Class III game
because it is based and played as a blackjack bonus system. If a casino plays
Class II games, Ten to Win will be classified as a Class II game. If a casino
plays Class III games, Ten to Win will then be classified as a Class III game.
Management believes that Ten to Win will primarily be marketed and used in
casinos playing Class III games. Management further believes, however, that
utilization of both classifications for Ten to Win provides an advantage because
of the potential increase in the number of casinos to which Ten to Win may be
marketed.

     Ten to Win is played on a Blackjack table with a special layout. Seven
positions are used around the table together with a six-deck shoe. The game is
played like Blackjack, however, the object is not only to win wagers but also to
collect ten Stix cards for a bonus prize. When a player is dealt a Stix card,
the player can either count it as 10 points and keep playing or trade it in to
the dealer and get the next card out of the shoe. There is an electronic
tracking system for each player position for the number of ten Stix they have
collected, and Stix may not be transferred between these positions or tables.
When a player leaves the table, the player looses the Stix that they had
accumulated.

     Management believes that a player's excitement and interest in playing Tex
to Win increases depending upon the different prizes being offered by the
casinos and the player's respective wagers. When a player has accumulated only
one or two Stix compared to a player who has accumulated eight or nine Stix, the
player strategies vary creating an exciting and challenging game for all
involved.

     The electronic system used in conjunction with Ten to Win is comprised of a
"Ten to Win" sign, a dealer control box and seven player boxes. It is an
accounting system that awards prizes. When a player receives a "stix" card, he

                                       3

<PAGE>


has the opportunity to play the card or trade it to the dealer for a "ten stix
light". The object of the game is for the player to win his blackjack wagers and
build up ten stix lights to receive a bonus prize. Each time a player receives a
stix light, the dealer uses the control box and turns on one of lights. When the
player receives the tenth stix light, the player gets to electronically spin for
their prize. When activated from the dealer's control box, the player pushes the
button on their box, which randomly spins and stops on the winning prize.

     A Ten to Win sign is set up with adjustable prize amounts. The electronic
system is then operated by placing a small box in front of the player's seat.
The box has ten stix lights together with a spin button. The dealer turns on the
respective player's stix lights to add or subtract lights as necessary. When a
player leaves the table, all stix lights are taken away and the next player
starts at zero.

     Management of the Company believes that the basic odds of Blackjack change
very little for the casino that is offering Ten to Win. The casino that offers
Ten to Win at their tables benefits because the players tend to spend more money
at the tables to collect Stix, even if the cards are not running in their favor.
Management believes that casinos have determined that it is difficult for a
player to walk away from a table when that player has already invested in
collecting a group of Stix.

     The casinos can change the prizes daily to stimulate more play on slower
days, such as offering larger prizes on weekdays than on weekends. The
variations for the casinos are innumerable, including linking tables together in
a pit for an even bigger prize. Management believes that the variations in
offering Tex to Win are numerous when used by the casinos.

     As of the date of this Annual Report, the Company continues to market Ten
to Win at gaming shows and to casinos, but has not generated any revenues.
Management anticipates that the Company will commence generating revenues from
the distribution and sale of Ten to Win by approximately fourth quarter 2002
based on certain material factors: (i) timing of installation of the electronic
system, which is now complete; (ii) acquisition of a testing site for the
working model which is currently in place to be used for demonstration purposes,
(ii) determination by management of those states in which to market Ten to Win,
of which the Company has received approval for play from California and New
Mexico, (iii) commencement of such marketing, and (iv) introduction of Ten to
Win at trade shows. See "Item 1. Description of Business - Customers and
Marketing".

     Bet the House

     Prior to the Company's incorporation, Mr. Tony Cranford created and
designed a card game called "Bet the House". Bet the House is a Class III game
in which the player can play regular blackjack or place side bets on the outcome
of the dealer's hand, i.e. how many cards the dealer ends up with, if the
dealer's hand is an even or odd number, or if the dealer's hand is all red or
all black. It is played together with a table that is similar to a roulette game
table, which is placed next to the blackjack betting spot. This is where the
player places the side bets. As of the date of this Annual Report, Bet the House
has been approved by the Gaming Control Board in the State of Nevada for
distribution and operation.

     On approximately October 16, 2000, Mr. Cranford filed a provisional patent
application with the United States Patent and Trademark Office, application
number 60/240.091, for protection of Bet the House. As of the date of this
Annual Report, the U.S. Patent and Trademark Office has not issued a patent on
Bet the House. See "Item 1. Description of Business - Patents, Copyrights and
Trademarks".

                                       4

<PAGE>


     Pursuant to an assignment agreement between the Company and Mr. Cranford
dated January 19, 2001 (the "Cranford Assignment Agreement"), Mr. Cranford
assigned all of his right, title and interest in Bet the House, including his
rights to the provisional patent application no. 60/240.091, to the Company. In
accordance with the terms and provisions of the Cranford Assignment Agreement,
the Company agreed to pay Mr. Cranford (i) for a period of six months a monthly
royalty fee of $175.00 for each Bet the House game that the Company leases to a
third party during the six month period, and (ii) an aggregate purchase price of
either (a) an amount to be calculated by multiplying the average monthly gross
revenues generated by the Company for each Bet the House game leased during the
six month period by three (3), or (b) $30,000, whichever is greater. The terms
of Cranford Assignment Agreement further provide that such aggregate purchase
price may be paid by the Company to Mr. Cranford on a monthly basis or in one
aggregate payment, with such aggregate purchase price to be paid in full no
later than March 31, 2002.

     As of the date of this Annual Report, Mr. Cranford has not received any
payments from the Company and has agreed to extend such payment date to
September 30, 2002. Management has not determined the manner of payment to be
made to Mr. Cranford and may not make such determination until the Company is
adequately funded and several Bet the House games have been successfully
marketed generating revenues. See "Item 6. Management's Discussion and Analysis
of Financial Condition and Results of Operation - Material Commitments" and
"Item 12. Certain Relationships and Related Transactions."

     As of the date of this Annual Report, the Company has not generated any
revenues from the sale or distribution of Bet the House. Management anticipates
that the Company will commence generating revenues from the distribution and
sale of Bet the House by approximately June 2002 based on certain factors
including, but not limited to, the (i) determination by management of those
states in which to market Bet the House, (ii) commencement of such marketing,
and (iii) introduction of Bet the House at trade shows. See "Item 1. Description
of Business - Customers and Marketing".

     Shotgun 21

     The Company is currently in the process of completing the design and
development of a card game called "Shotgun 21". Shotgun 21 is a Class III game
and is also similar to Blackjack with two separate hand betting fields per
player and bonus prizes, which encourage extended play. Management of the
Company believes that Shotgun 21 presents the most sophisticated electronics
available to the table game industry and provides, among other things, an
accounting system allowing for real-time win/loss statistics.

     The electronic system used in conjunction with Shotgun 21 is comprised of a
dealer control box, a special layout or table top and six sensors. Players play
blackjack in the betting spaces that are set up like the barrels of a shotgun
with sensors on the top of the sight. The player places his wager(s) in one or
two of these circles. In addition, the player may wager an extra dollar by
placing it his sensor. At the beginning of each game, the dealer pushes a start
button on the dealer control box. This activates the sensors and shows on the

                                       5

<PAGE>


dealer control box whether or not a player made the extra dollar wager. At the
same time, the electronic system picks a dollar prize amount (within
predetermined parameters) and a card. Players who wagered the extra dollar have
an opportunity to win a portion of the selected dollar prize if their first two
cards match the card that has been chosen by the electronic system.

     As currently being designed and developed, Shotgun 21 will contain eight
languages, twelve different money conversions, calculate its own royalty
obligations, have remote shut down for non-payment of royalties, and can compute
prizes by linking tables within a casino and among tables at other local
casinos. Management believes that the characteristics of Shotgun 21 ultimately
will expand game interest.

     The table layout may be purchased by the Company from a number of companies
that manufacture such layouts. As of the date of this Annual Report, the Company
has not engaged in any contractual relations regarding the purchase of the table
layout.

     Management of the Company had previously made a strategic business decision
to hold introduction of Shotgun 21 into the marketplace until the patent
infringement case brought against the Company and others, alleging the Company's
product Shotgun 21 infringed upon certain existing patents, was resolved. The
Company reached a settlement agreement pursuant to which it was dismissed from
the suit. As of the date of this Annual Report, the Company has no further
liability in the suit in accordance with the settlement agreement and any
associated license agreements are null and void. Management of the Company
believes that the terms of any license agreement, if applicable, would not be
restrictive or unduly burdensome, and would be immaterial to the total business
operations of the Company.

     Management is currently contemplating the introduction of Shotgun 21 into
the marketplace after completion of certain final modifications to the system,
which may occur by approximately fourth quarter 2002. There has been no previous
or current interest expressed by any casino for leasing of the product Shotgun
21. In the event Shotgun 21 is successfully marketed, management of the Company
believes that any such revenues generated would represent a small portion of the
aggregate revenues anticipated to be realized from the marketing and
distribution of all of the Company's products. See "Item 3. Legal Proceedings."

         Ten Stix Video

         The Company has designed and developed a video version game of Ten Six
21 called the "Ten Stix Video" for use in slot machines. In the Ten Stix Video,
the player accumulates bonus points as the slot machine is played until a total
of ten points are reached. The slot machine then pays an additional "bonus
jackpot". Management believes that the attraction for the player is the bonus
for staying at the slot machine and a sense of competition in attempting to race
to get the ten points. Management further believes that the attraction for the
casino is having constant play on a slot machine utilizing the Ten Stix video
game. As of the date of this Annual Report, the Company has completed testing
the Ten Stix Video in several slot machines located in casinos in the State of
California and management intends to make necessary product modifications.
Therefore, management does not anticipate generation of revenues during fiscal
year 2002 from the marketing and sale of Ten Stix Video.

         The Company is also designing and developing Ten Stix pull tabs, which
will generally follow the same format as the Ten Stix card game.

                                        6

<PAGE>


     Other Products

     The principals of the Company have recently assigned certain rights in
gaming products to the Company. As of the date of this Annual Report, the
Company has the rights to distribute and market certain gaming products, all of
which are listed and discussed below. See "Item 1. Description of Business -
Customers and Marketing" and "Item 12. Certain Relationships and Related
Transactions".

     Bonus 6. The Company has the distributorship rights to market a card game
called "Bonus 6". Bonus 6 is a Class III game and is a five-card stud game.
Bonus 6 requires that the players pay a fee, which gives the player a second
chance to win. If the player does not have a winning hand that starts at a pair
of 6s or better, the player may then buy a sixth card to possibly turn a loosing
hand into a winning hand.

     Prior to the Company's incorporation, Mr. Thomas Sawyer together with other
individuals created and designed a card game called "Bonus 6". On approximately
October 13, 1997, the board of directors of the Company held a special meeting
in which it was decided that the Company was not interested in acquiring or
marketing Bonus 6. Therefore, Mr. Sawyer in his individual capacity entered into
a distribution agreement with Tom Perkins, the owner of Bonus 6, for the
distribution rights of Bonus 6 (the "Distribution Agreement"). Pursuant to the
terms of the Distribution Agreement, Mr. Sawyer was responsible for all
marketing costs and received 35% of gross revenues generated from the sale of
Bonus 6 to casinos. Mr. Sawyer individually proceeded to market and distribute
Bonus 6 to casinos located within Colorado. During fiscal years 1999 and 2000,
the income generated by Mr. Sawyer from the marketing and sale of the Bonus 6
game to casinos in Colorado were approximately $21,900, respectively.

     Therefore, the Company and Mr. Sawyer entered into an assignment agreement
dated December 28, 2000 (the "Sawyer Assignment Agreement") in which (i) Mr.
Sawyer agreed to gift and grant to the Company his distribution rights under the
Distribution Agreement to market and distribute Bonus 6 within the United
States, excluding the State of Colorado, and (ii) the Company agreed to assume
Mr. Sawyer's obligations under the Distribution Agreement as such obligations
pertain to the marketing and distribution of Bonus 6 within the United States,
excluding the State of Colorado. See "Item 12. Certain Relationships and Related
Transactions."

     As of the date of this Annual Report, the Company has generated revenues
from its distribution rights in connection with the marketing of Bonus 6 to
casinos located in South Dakota. Management anticipates that the Company will
generate further revenues by approximately fourth quarter 2002 from the
distribution and marketing of Bonus 6 in additional states based on certain
material factors: (i) determination by management of those states in which to
market Bonus 6, of which the Company has received approval for play from
Colorado, California, Nevada, New Mexico and Mississippi, (ii) complete
installation of Bonus 6 in casinos, (iii) introduction of Bonus 6 at trade
shows, which included the Indian Gaming Exposition in Palm Springs during
January 2001, and (iv) successful results from testing and private showings,
which currently includes a test at the Stardust Casino in Las Vegas, Nevada, and
a previous private showing at Station Casinos during June 2001. As of the date
of this Annual Report, lease agreements with casinos located in South Dakota
have been executed. Approval from South Dakota has taken approximately two years
and was received in June 2001. See "Item 1. Description of Business - Customers
and Marketing".

                                       7

<PAGE>


     Push Your Luck. The Company has the distributorship rights to market a card
game called "Push Your Luck". Push Your Luck is a Class III game in which the
player is provided with optional betting on pushes.

     On approximately November 13, 2000, the Company and Long Games, Inc. ("Long
Games") entered into an agreement in which Long Games agreed to grant to the
Company non-exclusive distributorship and representation rights to its patented
card game known as "Push Your Luck". The provisions further provide that Long
Games will pay to the Company at least 40% of all leased revenues derived from
the "Push Your Luck" game distributed and sold by the Company.

     As of the date of this Annual Report, the Company has not derived any
revenues from the distribution and sale of the Push Your Luck card games. Since
Push Your Luck has received approval for play from several states, management
anticipates that by approximately fourth quarter 2002, the Company will commence
generation of revenues from such sales if there is sufficient capital available
to fund marketing and operational expenses. See "Item 1. Description of Business
- Customers and Marketing".

     Catalina Dice. The Company also has the distributorship rights to market a
patented table game called "Catalina Dice". Catalina Dice is a Class III game
which is a version of craps.

     On approximately November 13, 2000, the Company entered into an agreement
with John P. Bonito, the owner of Catalina Dice (the "Catalina Dice Agreement")
in which the Company was granted non-exclusive distributorship and
representation rights to Catalina Dice. The provisions of the Catalina Dice
Agreement further provide that Catalina Dice will pay to the Company (i) an
amount equal to 40% of all revenues generated from the lease of Catalina Dice in
which the Company sold, trained and installed Catalina Dice; and (ii) an amount
equal to 25% of all revenues generated from the lease of Catalina Dice which
were derived from contracts made by the Company.

     As of the date of this Annual Report, the Company has not derived any
revenues from the distribution and lease of Catalina Dice. Since Catalina Dice
has received approval for play from Nevada, Iowa and New Mexico, management
anticipates that by approximately fourth quarter 2002, the Company will commence
generation of such revenues if there is sufficient capital to fund marketing and
operational expenses. See "Item 1. Description of Business - Customers and
Marketing".

     Pro Shuffle. On approximately May 1, 2001, the Company and Summit
International Group, Inc., a Colorado corporation ("Summit") entered into an
asset purchase agreement (the "Asset Purchase Agreement"). Under the terms of
the Asset Purchase Agreement, the Company acquired from Summit (i) all of
Summit's right, title and interest to U.S. Patent No. 5,718,427 regarding a card
shuffling device marketed by Summit under the name "Pro Shuffle"; (ii) all Pro
Shuffle devices, parts, inventory and equipment related to the manufacturing and
assembly of the Pro Shuffle; (iii) all contracts related to the Pro Shuffle;
(iv) all accounts receivable arising out of the sale or lease of the Pro
Shuffle; (v) two promissory notes made by Mr. Tony Cranford, one payable to
Summit in the approximate amount of $2,500.00 and one payable to Phil Lacerte in
the approximate amount of $6,000.00; (vi) two Blackjack tables located in Las
Vegas, Nevada; and (vii) all other business assets located in Colorado (of which
no material assets were actually acquired).

                                       8

<PAGE>


     Under the terms of the Asset Purchase Agreement, the Company assumed (i) on
the part of Summit a liability to Xpectra of up to an aggregate amount of
$110,000.00 related to fifty updated Pro Shuffle devices and parts; and (ii) two
liabilities owed by Summit to Jerry Delferro and Dick Stewart in the approximate
amount of $3,000.00, respectively. Pursuant to further terms of the Asset
Purchase Agreement, the Company agreed to (i) pay the amount of $300,000.00 to
Summit as evidenced by the execution of two promissory notes, one payable to
Summit in the amount of $220,000.00 and the other payable to Michael Humecki in
the amount of $80,000.00; and (ii) surrender to Summit all of the shares of
common stock of Summit held of record by Mr. Sawyer and Mr. Cranford,
respectively (an approximate 10% equity interest each).

     In order to facilitate consummation of the Asset Purchase Agreement, an
agreement was entered into dated May 1, 2001 among the Company, Thomas Sawyer,
Tony Cranford, Michael Humecki, P. Chad Lacerte, Roger Adams, and Summit (the
"Agreement"). The purpose of the Agreement was to resolve any and all claims,
counterclaims and defenses that Messrs. Humecki, Lacerte and Adams may have
against Summit pursuant to ongoing litigation. According to the terms of the
Agreement, the parties agreed that (i) the Company would acquire from Mr.
Humecki his 10.04% equity interest in Summit (which was returned to Summit);
(ii) the Company would pay Mr. Humecki $100,000, with $20,000 paid by Summit
upon execution of the Agreement and $80,000 evidenced by a promissory note;
(iii) the Company would sign a security agreement for the benefit of Mr. Humecki
as security for the payments under the promissory note; and (iv) Messrs.
Humecki, Lacerte, Adams and Summit would waive and release all claims,
counterclaims, causes of action and demands, known or unknown, that they have or
may claim to have against each other. See "Item 6. Management's Discussion and
Analysis of Financial Condition and Results of Operation - Material Commitments"
and "Item 12. Certain Relationships and Related Transactions".

     As of May 2001, the marketing and sale of the Pro Shuffle generates
approximately $5,600 in monthly revenue; however, the Company pays debt service
of $2,800 monthly in accordance with the terms of the above-described notes.

CONTRACTUAL RELATIONS

     During 1997, Progressive Games, Inc. ("Progressive") believed that the
Company was infringing upon certain of its products by virtue of the design,
manufacture and marketing of the Company's Ten Stix 21 and Shotgun 21 gaming
products. Therefore, on approximately November 20, 1997, Civil Action
97-WI-2689-CB, Progressive Games, Inc. v. Amusements Extra, Ten Stix, et. al.,
was filed in the Federal District Court in Denver, Colorado. This was a patent
infringement against the Company and others alleging certain of the Company's
products/games infringed upon Progressive's patents (the "Lawsuit"). Mikohn
Corporation ("Mikohn") purchased Progressive and became a party to the lawsuit.

     Subsequently, the Company was dismissed as a party defendant to the
Lawsuit. Thus, the Company and Mikohn, BCD Mecanique Ltd. ("BCD"), DEQ Casinos,
Ltd. ("DEQ") and Amusements "Extra" Inc. ("AEI") entered into an amended
memorandum of agreement dated September 23, 1998 (the "Memorandum Agreement").
The Memorandum Agreementprovided that (i) during litigation of the Lawsuit,
Mikohn would grant to the Company a license allowing the Company to continue to
manufacture, use, operate, sell and/or lease the Company's products, which
allegedly infringed upon Progressive's patents, in exchange for payment by the
Company of a royalty fee; and (ii) in the event the remaining defendants to the
Lawsuit were successful, the Company would be released from such contractual
obligations and any further liability.

                                       9

<PAGE>


     Subsequently, the remaining parties to the Lawsuit settled and made the
Company a party to the settlement. Therefore, the Company was released from all
of its duties and obligations under the license agreement and the underlying
license contained in the Memorandum Agreement was null and void.

     Based upon settlement of the lawsuit, on September 23, 1998, the Company
and BCD entered into a letter of understanding which modified the Memorandum
Agreement whereby (i) the Company assigned to BCD ownership of its rights in the
"continuation-in-part" under the Patent Application relating to its lighting
invention in all countries except for the United States of America, (ii) the
Company would remain the owner of all other patent rights with respect to all
aspects of the invention as claimed in the continuation-in-part to the Patent
Application; (iii) BCD granted to the Company the right to use in Ten Stix 21
any such features contained in the Patent Application, (iv) in the event Ten
Stix 21 is not in the format described in the Memorandum Agreement, the Company
agreed to pay BCD a royalty fee of $175.00 per table for use of such features,
and (v) the Company agreed that BCD, DEQ and AEI shall have the right to use the
Company's inventions as described in the Memorandum Agreement along with any
improvements and/or additions to those reserved patent rights.

     As of the date of this Annual Report, the Company is not a party to any
other material contracts with third-parties involving the design, manufacture or
marketing of its gaming products other than those contractual relations
previously disclosed. See "Item 3. Legal Proceedings".

CUSTOMERS AND MARKETING

     Customers

     The Company anticipates marketing its gaming products to casinos located
within the States of California, Colorado, Kansas, New Mexico, Nevada, South
Dakota and Wisconsin. As of the date of this Registration Statement, contract
proposals with approximately six casinos are pending. Customers for the
Company's gaming products are primarily casinos. The Company's current market
concentration has been in the State of Colorado due to existing relationships
with certain clients. Management's primary objective is to continue to
successfully penetrate the Colorado market, and by approximately June 2002
further its penetration in the marketplaces of the States of New Mexico, Nevada,
South Dakota and Wisconsin and strengthen its marketing campaign in the States
of California.

     During fiscal year ended December 31, 2001, the Company generated $46,470
in total revenues. During fiscal year ended December 31, 2000, the Company did
not generate any revenues.

     During fiscal year 1999, the Company received revenues from the lease of
one of its products, Hold'em 88, to casinos located in Colorado. However,
changes in Colorado's rules and regulations during 1999 pertaining to the gaming
industry resulted in the legalization of many other different types of games.
Thus, since Hold'em 88 had originally been designed in accordance with
Colorado's prior rules and regulations, it had a distinct market disadvantage
when other gaming products were legalized. Hold'em 88 was replaced with other
gaming products by casinos in Colorado. Therefore, the Company did not generate
any revenues from the lease or sale of its products during fiscal year 2000, but
focused on the design and development of its other gaming products. During
fiscal year 2001, the Company received revenues from the lease of one products
and from the Pro Shuffle.

                                       10

<PAGE>


     Marketing of Gaming Products

     There are two types of gaming products that the Company has designed and
will distribute and market. One type of gaming product is the "table game with
electronics", which includes Ten to Win and Shotgun 21. Management believes that
the table game using an electronic system, such as Ten to Win and Shotgun 21,
will generally be leased by casinos on a monthly basis at the rate of
approximately $600.00 and $800.00, respectively. However, in the alternative,
Ten to Win and Shotgun 21 can be purchased by a casino at the approximate price
of $5,000.00, plus royalty fee, and $10,000.00, plus royalty fee, respectively.

     The other type of gaming product is a "layout game", which includes all of
the other gaming products. The layout game is a table game utilizing a
tablecover or layout with no electronic system. Management believes that the
layout games will typically be leased on a monthly basis at approximately
$400.00 per month.

     In general, the marketing of Ten to Win and the Company's other gaming
products will involve implementation of either a sales agreement or a leasing
arrangement with a third party.

     The Company's gaming products may be subject to approval by state
regulatory agencies prior to distribution and marketing the games. State
regulations vary regarding which gaming products may be played in that
respective state. In general, the Company is required to apply to the respective
state regulatory agency for verification that the game is legal under the
state's laws and for approval to distribute and market such game. Management
believes that in general such approvals are rarely denied by the respective
state regulatory agencies, unless the particular game is not legal in that
state. See "Item 1. Description of Business - State Gaming Regulation/Federal
Legislation" The table below identifies and lists each of the Company's gaming
products, the applicability of state regulatory requirements in each state where
the Company is or will be distributing and marketing the respective game, and
the current status of the regulatory process.


--------------------------------------------------------------------------------
                                                 States and Status of
Gaming Product                                    Regulatory Approval
--------------------------------------------------------------------------------

                        CA       CO       KN       NM      NV       SD      WI

Ten to Win             (1)                (3)      (1)     (2)      PA*    PA(4)
-------------------------------------------------------------------------------

ShotGun 21             (1)      PA(5)     (3)      (1)     (2)      (3)     Not
                                                                           Legal
--------------------------------------------------------------------------------

Bet the House          (1)      PA       PA       (1)      (2)      PA      Not
                                                                           Legal
--------------------------------------------------------------------------------

Bonus 6                (1)      A**      A        (1)      (2)      A       Not
                                                                           Legal
--------------------------------------------------------------------------------

Push Your Luck         (1)      PA       (3)      (1)      (2)     (3)      Not
                                                                           Legal
--------------------------------------------------------------------------------

Hold'em 88             (1)      A        (3)      (1)     (3)      A        Not
                                                                           Legal
--------------------------------------------------------------------------------

Catalina Dice          Not      Not      (3)      (1)      (2)     Not      Not
                      Legal    Legal                              Legal    Legal
--------------------------------------------------------------------------------

Pro Shuffle            (6)     (6)       (6)      (6)      (6)     (6)      (6)
--------------------------------------------------------------------------------
*Pending Approval
**Approved

                                       11

<PAGE>


(1) As of the date of this Annual Report, neither the State of California nor
New Mexico has any rules or regulations regarding licensing of the Company's
gaming products. Therefore, all of the Company's gaming products, with the
exception of Catalina Dice, can be played in the State of California and New
Mexico without state regulatory approval. Dice and roulette games, such as
Catalina Dice, are not legal in California.

(2) As of the date of this Annual Report, the State of Nevada has rules and
regulations which provide that the gaming products of the Company may be
distributed and marketed without prior licensing but with state approval. Bet
the House, Bonus 6, Push Your Luck and Catalina Dice have all been approved by
the State of Nevada.

(3) As of the date of this Annual Report, management of the Company has not
pursued applications for approval and/or licensing.

(4) In the State of Wisconsin, management believes that state regulatory
approval may not be obtainable until the laws governing blackjack gaming in
Wisconsin are changed.

(5) In the State of Colorado, management believes that state regulatory approval
will be obtained by approximately fourth quarter 2002.

(6) Approved and generating revenues.

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

     Marketing Strategy

     The Company intends to seek to capture market niches in the gaming industry
within the States of California, Colorado, Mississippi, Nevada, New Mexico,
South Dakota and Wisconsin. Although the Company's principal office is located
within the State of Colorado, management believes that the market in Colorado is
limited for the Company's gaming products. Therefore, management intends to move
into the marketplaces of primary states such as New Mexico, Nevada, California,

                                       12

<PAGE>

Kansas and Wisconsin. By fiscal year ended 2002, management intends to commence
marketing its gaming products in foreign countries, such as Africa, Canada,
South America, Caribbean Islands and Southeast Asia, which have legalized
gaming.

     As of the date of this Annual Report, the Company is currently focusing on
marketing its gaming products within the States of Colorado, New Mexico, Nevada,
California, Kansas and Wisconsin by (i) implementation of sales trips and
contacts by independent commissioned representatives, (ii) use of direct mail,
trade publications and press releases for advertising of the gaming products,
and (iii) attendance and display of the gaming products at well-known gaming
trade shows and/or conferences. The Company intends to market its gaming
products through the use of direct sales and independent commissioned
representatives. To aid in the marketing of its gaming products, the Company
intends to utilize several marketing approaches including advertising in trade
publications, submitting press releases, and continuing its participation in
trade shows. The Company's services and gaming products are also electronically
advertised on the Company's web page at www. Ten Stix.com.

     The Company will continue to emphasize use of press releases and
independent commissioned representatives in its marketing efforts. Management
currently anticipates that participation in trade shows, particularly the World
Gaming Show, will be a significant source for marketing the Company's products.
There are approximately six annual major trade shows that the Company
participates in. This includes the largest show, the World Gaming Show, that is
held annually in Las Vegas, Nevada during September/October. During the 2000
World Gaming Show, management anticipates that over 20,000 key gaming
executives, casino managers and supervisors attended. The Company obtained
approximately 80 leads and introductions for its various products from U.S. and
international casinos. Management is currently negotiating with several of these
contacts. The Company also maintained a booth at the Southern California Gaming
Show held January 14/15, 2001 in Palm Springs, California. Management believes
that the Southern California Gaming Show is very important to the Company due to
the legalization of gaming on Native American reservations located in the State
of California. Management intends to direct a significant portion of its
marketing efforts toward market penetration in the States of Nevada, New Mexico
and California, with continued emphasis on the State of Colorado.

EMPLOYEES AND CONSULTANTS

     As of the date of this Annual Report, the Company does not employ any
persons on either a full-time or a part-time basis. The Company's President and
Vice President are primarily responsible for all day-to-day operations of the
Company. Other services, including sales representatives, will be generally
provided by outsourcing and contractual arrangements. As the need arises and
funds become available, management may seek to hire employees as necessary in
the best interests of the Company.

STATE GAMING REGULATION/FEDERAL LEGISLATION

     State Gaming Regulation

     The Colorado Gaming Commission and similar commissions in other states have
adopted general rules and regulations governing the operation of gaming
establishments and/or governing stock ownership of and reporting by public
companies engaged in gaming activities. The Colorado Gaming Commission's rules
and regulations are extensive and any violations thereof could subject the

                                       13

<PAGE>


Company's proposed operations to materially adverse consequences. The Company
and its key personnel are required to hold various gaming licenses; their
failure to obtain or retain a license could have a material adverse effect on
the Company. Generally, the Colorado Gaming Commission has broad discretion in
granting, renewing and revoking licenses. Gaming licenses and related approvals
are deemed to be privileges under Colorado law, and no assurance can be given
that any new license, permits or approvals that may be required in the future
will be given or that existing ones will be renewed or will not be revoked.
Regulatory changes or increases in applicable taxes or fees in Colorado could
have a material adverse effect on the Company.

     The Company's gaming products may also be subject to approval by other
state governmental authorities prior to distributing and marketing the games.
State regulations vary regarding which gaming products may be played in that
respective state and the betting limitations. As of the date of this Annual
Report, neither the State of New Mexico nor California have any rules or
regulations applicable to the licensing of the Company's gaming products prior
to distribution and marketing. Casinos in New Mexico or California are located
on Native American reservations and therefore operate under state compacts. In
the states which have adopted such rules or regulations, in general, the Company
is required to apply to the respective state regulatory agency for verification
that the game is legal under the state's laws and for approval to distribute and
market such game. In connection with obtaining such a license, management
believes that most state regulatory agencies require a background check on and
approval of any shareholder owning over a five percent (5%) equity ownership
interest before a license will be granted. See "Item 1. Description of Business
- Customers and Marketing".

     Federal Legislation

     As of the date of this Annual Report, the Company is not subject to
existing federal governmental regulation, such as the Gambling Devices Act of
1962 and the Gambling Devices Transportation Act, which regulates the
transportation of gaming devices within the United States. Any such legislation,
if applicable, could have a material adverse effect on the Company's business or
results of operation. Moreover, during 1996, President Clinton signed a bill
creating the National Gambling Impact and Policy Commission, which conducted a
comprehensive study of all matters relating to the economic and social impact of
gaming in the United States. The legislation provided that the commission issue
a report to the President and Congress containing its findings and conclusions.
Any such commissions created under future federal legislation which recommend
legislation and administrative actions regarding the gaming industry, if enacted
into law, could adversely impact the gaming industry and have a material adverse
effect on the Company's business or results of operation. Moreover, from time to
time, certain federal legislators have proposed a federal tax on gaming
revenues. Any such tax, if imposed, could also have a material adverse effect on
the Company's business or results of operations.

PATENTS, COPYRIGHTS AND TRADEMARKS

     The Company's gaming products have or may have varying degrees of
protection from issuance of patents, copyrights and trademarks. Management
believes that certain of the Company's gaming products either have electronic
systems that may be patented or a layout that may be copyrighted.

                                       14

<PAGE>


     Patent Application

     The Company filed a patent application with the United States Patent and
Trademark Office for patent protection of its "lighting" invention (the "Patent
Application"). Pursuant to the letter of understanding dated September 23, 1998
between the Company and BCD, the Company assigned to BCD its rights in the
"continuation-in-part" under the Patent Application regarding the lighting
invention in all countries except for the United States. The parties agreed that
if the Company does not first receive the U.S. lighting patent and BCD does
receive such patent protection from the U.S. Patent and Trademark Office, BCD
will allow the Company to have exclusive rights to such lighting patent in the
United States. As of the date of this Annual Report, neither the Company nor BCD
have received any notice regarding its application for "lighting" protection.
Therefore, on approximately February 11, 2002, a notice of appeal was filed with
the U. S. Patent and Trademark Office on behalf of the Company. Management of
the Company believes that such patent will be granted by approximately fourth
quarter 2002. In the event the Company does not first receive the U.S. lighting
patent nor the exclusive rights from BCD to such lighting patent, management
does not believe that this would have a material or adverse effect on the
business operations of the Company or the manufacture or marketability of its
gaming products. See "Item 3. Legal Proceedings".

     Other Applications

     The Company has sought protection of its various products through
application for trademark and copyright registration. In general, a "trademark"
is a distinctive word, phrase, logo, graphic symbol or other device that is used
to identify the source of a product and to distinguish a product from anyone
else's. As a general rule, trademark law confers legal protection to names,
logos and other marketing devices that are distinctive. The Company sought
trademark protection of "Ten Stix 21" in order to identify its product in the
marketplace to prevent consumer confusion and to protect the means it chose to
identify its product against use by competitors.

     In general, a copyright gives the owner of a creative work the right to
keep others from using the work without the owner's permission. In general, a
creative work must meet three criteria to be protected by copyright: (i) it must
be original; (ii) it must be fixed in a tangible medium of expression; and (iii)
it must have at least some creativity, i.e. produced by an exercise of human
intellect. The Company sought copyright protection of the table game design of
"Ten Stix 21".

     Ten Stix 21. The U. S. Patent and Trademark Office has issued to the
Company a Certificate of Registration, No. 2,092,620, dated September 2, 1997
for the trademark "Ten Stix 21", which registration will remain in full force
and effect for a period of ten years. Management of the Company must comply with
certain rules and regulations pertaining to the issuance of such registration of
the trademark. Such registration will be canceled after six years by the
Commissioner of Patents and Trademarks unless, before the end of the sixth year
following the date of September 2, 1997, management files an affidavit of
continued use. Moreover, such registration will expire ten years following the
date of September 2, 1997 unless management files an application for renewal of
the registration. There is no assurance that the U.S. Patent and Trademark
Office will grant such renewal of registration.

     The United States Copyright Office issued to the Company a Certificate of
Registration dated January 29, 1996, which registration will remain in full
force and effect for a period of twenty-one years. Such registration applies to
the table game design of "Ten Stix 21".

                                       15

<PAGE>


     Management of the Company believes that the copyright and trademark
protection for "Ten Stix 21" provides adequate protection for the game "Ten Stix
21". Even though such copyright and trademark for "Ten Stix 21" has been issued
to the Company, there is no assurance that such copyright and trademark will not
be attacked by third parties or that, if any such attack were made, it would not
be successful. The costs in defending such copyright or trademark or prosecuting
a copyright or trademark infringement action could be substantial. See "Item 3.
Legal Proceedings".

     Pro Shuffle. Pursuant to the Asset Purchase Agreement, the Company acquired
from Summit all of its right, title and interest to U.S. Patent No. 5,718,427,
which is a patent issued on February 17, 1998 by the U. S. Patent and Trademark
Office covering a card shuffling device marketed by Summit under the name "Pro
Shuffle". The Pro Shuffle patent has been issued for a term of twenty (20) years
from the date of filing and expires on September 20, 2016 and may not be
renewed. Maintenance fees must be paid by the Company to maintain the patent in
force throughout its life and are payable three times as follows: (i) February
2001 through February 2002; (ii) February 2005 through February 2006; and (iii)
February 2009 through February 2010. There is no assurance that the Company will
have sufficient funds to pay the maintenance fees. In the event the Company
fails to timely pay such maintenance fees, the patent may be canceled.

     Even though such patent for the Pro Shuffle has been issued, there is no
assurance that such patent will not be attacked by third parties or that, if any
such attack were made, it would not be successful. The costs in defending such
patent or prosecuting a patent infringement action could be substantial. As of
the date of this Annual Report, the Company does not have the resources to
pursue such an action if necessary.

     Bet the House. Mr. Tony Cranford applied to the U.S. Patent and Trademark
Office for patent protection of Bet the House. As of the date of this Annual
Report, the Company has not received an order granting a patent. The Company,
however, received a provisional patent from the U.S. Patent and Trademark Office
which is valid for a period of one year. As of the date of this Annual Report,
the Company has filed a patent application with the U.S. Patent and Trademark
Office for protection of its "method of play" for Bet the House. Management of
the Company believes that such patent will be granted by approximately first
quarter 2003. In the event the Company does not receive a patent relating to the
"method of play" for Bet the House, management does not believe that this would
have a material or adverse effect on the business operations of the Company or
the manufacture or marketability of its gaming products.

     As of the date of this Annual Report, the Company has not obtained patent,
copyright or trademark registrations for its other games. The Company applied to
the U.S. Patent and Trademark Office for registration of "Hold'em 88"; however,
on March 13, 1997, the Company was refused registration for such trademark on
the basis that it was confusingly similar to the existing registered trademark
of "88" for playing cards. At this time, management of the Company does not
intend to appeal this finding.

     Although management believes that its other products may be patentable and
intends to aggressively pursue obtaining such registrations, there can be no
assurance that any such registrations will be issued. In the event such
registrations were not issued, management believes that this would not adversely
affect the operations of the Company due to the current market identification

                                       16

<PAGE>


and portfolio of the Company's other products. As of the date of this Annual
Report, management has not taken any steps to apply for such protection of its
other products and does not intend to take such steps until approximately June
2002. Therefore, until such time as a patent, copyright or trademark is issued
for the Company's other products, the Company will not have the right to bring a
patent, copyright or trademark infringement action against a third party which
makes a product similar to the Company's.

COMPETITION

     The gaming industry is highly fragmented and characterized by a high degree
of competition among a large number of participants. Ten to Win and other games
of the Company will be competing with well-known, established and popular games
in the gaming industry. Management believes that the five most successful
specialty games in the united States are (i) "Let it Ride" owned by
Shufflemaster, (ii) "Three Card Poker" owned by Shufflemaster, (iii) "Carribean
Stud" owned by Mikohn, (iv) "Spanish 21" owned by Masgue Publishing, and (v)
"War" owned by Bet Technology.

     Although management believes that sufficient demands exist in the gaming
markets to support its operations, no assurance can be made to that effect nor
can the Company ensure the current growth of the gaming industry in Colorado and
other states.

     The Company will compete with other well-known games as well as other forms
of gaming operations nationwide. Many jurisdictions may legalize various forms
of gaming and wagering that may compete with the Company in the future, such as
on-line computer gambling, bingo, pull tab games, card clubs, sports books,
telephonic betting on horse racing and dog racing, state sponsored lotteries,
video lottery terminals and video poker terminals. Ten to Win and other games of
the Company may be integrated into these new forms of gaming and wagering,
however, there is no assurance that the Company will be successful.

ITEM 2. DESCRIPTION OF PROPERTIES

     The Company does not own any real estate or other properties. The Company's
principal office is maintained at 3101 Riverside Drive, Idaho Springs, Colorado
80542, which consists of an office area, a show room and work area, and storage
space. The Company leases its office space at no expense from Mr. Tom Sawyer,
the president of the Company. Mr. Sawyer holds title to the real property, which
is encumbered by a mortgage. The property consists of approximately 1,100 square
footage. Management believes that the Company's offices are adequate for its
reasonable foreseeable needs. The Company does not intend to acquire any
properties at the current date. In the event the Company generates sufficient
revenues to adequately fund operational expenses in the future, management
intends to enter into a lease arrangement with Mr. Sawyer, which provides for
payment of the rental of such premises on terms favorable to the Company as may
be obtained from an unrelated third party.

ITEM 3. LEGAL PROCEEDINGS

     During 1997, Progressive Games, Inc. ("Progressive") believed that the
Company was infringing upon certain of its products by virtue of the design,
manufacture and marketing of the Company's Ten Stix 21 and Shotgun 21 gaming
products. Therefore, on approximately November 20, 1997, Civil Action
97-WI-2689-CB, Progressive Games, Inc. v. Amusements Extra, Ten Stix, et. al.,
was filed in the Federal District Court in Denver, Colorado. This was a patent

                                       17

<PAGE>


infringement against the Company and others alleging certain of the Company's
products/games infringed upon Progressive's patents (the "Lawsuit").Mikohn
Corporation ("Mikohn") purchased Progressive and became a party to the lawsuit.

     Subsequently, the Company was dismissed as a party defendant to the
Lawsuit. Thus, the Company and Mikohn, BCD Mecanique Ltd. ("BCD"), DEQ Casinos,
Ltd. ("DEQ") and Amusements "Extra" Inc. ("AEI") entered into an amended
memorandum of agreement dated September 23, 1998 (the "Memorandum Agreement").
The Memorandum Agreement provided that (i) during litigation of the Lawsuit,
Mikohn would grant to the Company a license allowing the Company to continue to
manufacture, use, operate, sell and/or lease the Company's products, which
allegedly infringed upon Progressive's patents, in exchange for payment by the
Company of a royalty fee; and (ii) in the event the remaining defendants to the
Lawsuit were successful, the Company would be released from such contractual
obligations and any further liability.

     Subsequently, the remaining parties to the Lawsuit settled and made the
Company a party to the settlement. Therefore, the Company was released from all
of its duties and obligations under the license agreement and the underlying
license contained in the Memorandum Agreement was null and void.

     Based upon settlement of the lawsuit, on September 23, 1998, the Company
and BCD entered into a letter of understanding which modified the Memorandum
Agreement whereby (i) the Company assigned to BCD ownership of its rights in the
"continuation-in-part" under the Patent Application relating to its lighting
invention in all countries except for the United States of America, (ii) the
Company would remain the owner of all other patent rights with respect to all
aspects of the invention as claimed in the continuation-in-part to the Patent
Application; (iii) BCD granted to the Company the right to use in Ten Stix 21
any such features contained in the Patent Application, (iv) in the event Ten
Stix 21 is not in the format described in the Memorandum Agreement, the Company
agreed to pay BCD a royalty fee of $175.00 per table for use of such features,
and (v) the Company agreed that BCD, DEQ and AEI shall have the right to use the
Company's inventions as described in the Memorandum Agreement along with any
improvements and/or additions to those reserved patent rights.

     The Company had filed a patent application with the United States
Department of Commerce, Patent and Trademark Office for patent protection of its
"lighting" invention (the "Patent Application"). If granted, the Company
thereafter would need to file numerous international patent applications in
countries around the world in which the Company wanted protection of its
inventions. Therefore, because of the associated expenses, the Company agreed to
assign its ownership rights in the "continuation-in-part" under the Patent
Application relating to the "lighting invention" to allow BCD to allow BCD to
file for such international patents, excluding the United States, that relate to
the "lighting" protection. The parties agreed that if the Company does not first
receive the U.S. lighting patent and BCD does receive such patent protection
from the U.S., BCD would allow the Company to have exclusive rights to such
lighting patent in the United States.

     Management is not aware of any other legal proceedings contemplated by any
governmental authority or other party involving the Company or its properties.
No director, officer or affiliate of the Company is (i) a party adverse to the
Company in any legal proceedings, or (ii) has an adverse interest to the Company
in any legal proceedings. Management is not aware of any other legal proceedings
pending or that have been threatened against the Company or its properties.

                                       18

<PAGE>


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

     No matters were submitted to a vote of the Company's shareholders through
the solicitation of proxies or otherwise during fiscal year ended December 31,
2001.


                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

     As of the date of this Annual Report, the Company's Common Stock does not
trade on any market. Management has filed an application pursuant to Rule
15c2-11 of the Securities Exchange Act of 1934, as amended (the "1934 Exchange
Act") with the National Association of Securities Dealers, Inc. (the "NASD") for
approval to commence trading the Company's shares of Common Stock on the OTC
Bulletin Board. As of the date of this Annual Report, management believes that
it will receive such approval by June 1, 2002.

     The markets for equity securities have been volatile and the price of the
Company's Common Stock, when it commences trading, could be subject to wide
fluctuations in response to quarter to quarter variations in operating results,
news announcements, trading volume, sales of Common Stock by officers, directors
and principal shareholders of the Company, general market trends, changes in the
supply and demand for the Company's shares, and other factors. These factors can
be expected to affect the market price of the Company's shares of Common Stock
when the Company receives the approval by the NASD to trade the Company's shares
of Common Stock on the OTC Bulletin.

     As of the date of this Annual Report, there are (i) no shares of Common
Stock subject to outstanding options or warrants to purchase or convertible into
shares of Common Stock of the Company; (ii)approximately 17,432,288 shares of
Common Stock that have been beneficially owned for at least one year and could
be sold pursuant to the volume limitations in Rule 144 under the Securities Act
of 1933, as amended (the "1933 Securities Act"); and (iii) no shares of Common
Stock which are or have been proposed to be publicly offered by the Company.

HOLDERS

     As of the date of this Annual Report, the 17,659,488 shares of Common Stock
outstanding were held by approximately 107 holders of record worldwide,
including approximately 93 holders of record in the United States.

DIVIDENDS

     The Board of Directors has never authorized or declared the payment of any
dividends on the Company's Common Stock nor on the Preferred Stock, and does not
anticipate the declaration or payment of cash dividends in the foreseeable
future. The Company intends to retain future earnings, if any, to finance
operational expenses. Future dividend policies will be subject to the discretion
of the Board of Directors and will be contingent upon, among other things,
future earnings, the Company's financial condition, capital requirements,
general business conditions, level of debt, and other relevant factors. The
Company's losses do not currently indicate the ability to pay any cash
dividends, and the Company does not indicate the intention of paying cash
dividends in the foreseeable future.

                                       19

<PAGE>


SHARE ISSUANCES

     To provide capital, the Company has sold stock in private placement
offerings, issued stock in exchange for debts of the Company or pursuant to
contractual agreements including, but not limited to, the following:

     (i)  On September 30, 2000, the Company completed an offering in which it
          raised $60,762 under Rule 504 of Regulation D pursuant to which it
          sold 243,048 shares of Common Stock at $0.25 per share. Of the 243,048
          shares of Common Stock sold, 166,448 shares were issued during fiscal
          year 1999 and 76,600 shares were issued during fiscal year 2000. The
          per share price of the offering was arbitrarily determined by the
          Board of Directors based upon potential future earnings, assets and
          net worth of the Company. The Company issued shares of Common Stock to
          82 investors. Of the 82 investors, none were accredited investors as
          that term is defined under Regulation D. The investors executed
          subscription agreements and acknowledged that the securities to be
          issued have not been registered under the 1933 Securities Act, that
          the investors understood the economic risk of an investment in the
          securities, and that the investors had the opportunity to ask
          questions of and receive answers from the Company's management
          concerning any and all matters related to the acquisition of
          securities. No underwriter was involved in the transaction, and no
          commissions or other remuneration were paid in connection with the
          offer and sale of the securities.

     (ii) During December 2000, the Company completed an offering in which it
          raised $7,000 under Rule 504 of Regulation D pursuant to which it sold
          14,000 shares of Common Stock at $0.50 per share. The per share price
          of the offering was arbitrarily determined by the Board of Directors
          based upon potential future earnings, assets and net worth of the
          Company. The Company issued shares of Common Stock to seven investors,
          none of which were accredited investors as that term is defined under
          Regulation D. The investors executed subscription agreements and
          acknowledged that the securities to be issued have not been registered
          under the 1933 Securities Act, that the investors understood the
          economic risk of an investment in the securities, and that the
          investors had the opportunity to ask questions of and receive answers
          from the Company's management concerning any and all matters related
          to acquisition of the securities. No underwriter was involved in the
          transaction, and no commissions or other remuneration were paid in
          connection with the offer and sale of the securities.

   (iii)  During December 2000, the Company issued 40,000 shares of its Common
          Stock at $0.25 per share for an aggregate consideration of $10,000.
          The Company issued shares of Common Stock to one investor who was not
          an accredited investor as that term is defined under Regulation D. The
          Company issued the shares in reliance upon the exemption from
          registration provided by Section 4(2) and Regulation D, Rule 504, of
          the 1933 Securities Act. The investor executed a subscription
          agreement and acknowledged that the securities to be issued have not
          been registered under the 1933 Securities Act, that he understood the
          economic risk of an investment in the securities, and that he had the
          opportunity to ask questions of and receive answers from the Company's

                                       20

<PAGE>


          management concerning any and all matters related to the acquisition
          of securities. No underwriter was involved in the transaction, and no
          commissions or other remuneration were paid in connection with the
          offer and sale of the securities.

     (iv) On January 23, 2001, Messrs. Sawyer and Cranford elected to convert
          their respective shares of Preferred Stock into shares of Common
          Stock. The Company issued 7,600,000 shares of Common Stock to Mr.
          Sawyer and Mr. Cranford, respectively. The securities were issued in
          reliance upon an exemption from registration provided by Section 4(2)
          of the 1933 Securities Act. No underwriter was involved in the
          transaction, and no commissions or other remuneration were paid in
          connection with the conversion of the securities.

     (v)  During the first quarter of fiscal year 2001 (prior to April 6, 2001),
          the Company issued 16,800 shares of its Common Stock at $0.50 per
          share for an aggregate consideration of $8,400. The Company issued
          shares of Common Stock to seven investors, none of which were
          accredited investors as that term is defined under Regulation D. The
          Company issued the shares in reliance upon the exemption from
          registration provided by Section 4(2) and Regulation D, Rule 504, of
          the 1933 Securities Act. The investors each executed a subscription
          agreement and acknowledged that the securities to be issued have not
          been registered under the 1933 Securities Act, that they understood
          the economic risk of an investment in the securities, and that they
          had the opportunity to ask questions of and receive answers from the
          Company's management concerning any and all matters related to the
          acquisition of securities. No underwriter was involved in the
          transactions, and no commissions or other remuneration were paid in
          connection with the offers and sales of the securities.

     (vi) As of the date of this Annual Report, the Company is engaged in a
          offering pursuant to which it intends to raise an aggregate of
          $1,000,000. In accordance with the terms and provisions of the Private
          Placement Memorandum, the Company is offering and selling 10,000
          shares of Series A Convertible Preferred Stock at $100.00 per share.
          Each share of Series A Convertible Preferred Stock is convertible into
          two hundred shares of restricted Common Stock at any time after
          December 31, 2001. As of the date of this Annual Report, the Company
          has issued two shares of Series A Convertible Preferred Stock to one
          investor who was not an accredited investor as that term is defined
          under Regulation D. The Company issued the shares in reliance upon the
          exemption from registration provided by Section 4(2) and Regulation D,
          Rule 506, of the 1933 Securities Act. The investor executed a
          subscription agreement and acknowledged that the securities to be
          issued have not been registered under the 1933 Securities Act, that he
          understood the economic risk of an investment in the securities, and
          that he had the opportunity to ask questions of and receive answers
          from the Company's management concerning any and all matters related
          to the acquisition of securities. No underwriter was involved in the
          transaction, and no commissions or other remuneration were paid in
          connection with the offer and sale of the securities.

     As of the date of this Annual Report, the Company has 17,659,488 shares of
its Common Stock issued and outstanding and two shares of its Series A
Convertible Preferred Stock issued and outstanding. Of the 17,659,488 of the
Company's current outstanding shares of Common Stock, 2,000,000 shares are free
trading. At such time, the holders may offer and sell these shares of Common
Stock at such times and in such amounts as they may respectively determine in
their sole discretion.

                                       21

<PAGE>


     When the Company's shares are registered for trading on the OTC Bulletin
Board, the holders of free trading Common Stock in the capital of the Company
may offer these shares of Common Stock through market transactions at prices
prevailing in the OTC market or at negotiated prices which may be fixed or
variable and which may differ substantially from OTC prices. The holders have
not advised the Company that they anticipate paying any consideration, other
than the usual and customary broker's commission, in connection with the sales
of these free trading shares of Common Stock. The holders are acting
independently of the Company making such decisions with respect to the timing,
manner and size of each sale.

     Of the 17,659,488 of the Company's current outstanding shares of Common
Stock, 15,659,488 shares are "restricted shares" as that term is defined in the
Securities Act and the rules and regulations thereunder. To be eligible for sale
in the public market, the holders must comply with Rule 144. In general, Rule
144 allows a person holding restricted shares for a period of at least one year
to sell within any three month period that number of shares which does not
exceed the greater of 1% of the Company's then outstanding shares or the average
weekly trading volume of the shares during the four calendar weeks preceding
such sale. Rule 144 also permits, under certain circumstances, sale of shares by
a person who is not an affiliate of the Company and who has satisfied a two year
holding period without any volume limitations, manner of sale provisions or
current information requirements. As defined in Rule 144, an affiliate of an
issuer is a person who, directly or indirectly, through one or more
intermediaries, controls or is controlled by, or is under common control with,
such issuer, and generally includes members of the Board of Directors. Sales
pursuant to Rule 144 or otherwise, if in sufficient volume, could have a
depressive effect on the market price of the Company's securities. Moreover, the
possibility of such sales may have a depressive effect on market prices.

     To date, no subsequent sales of restricted shares of Common Stock have been
made.

TRANSER AGENT

     The transfer agent and registrar for the Company is ComputerShare Investor
Services, P.O. Box 1596, Denver, Colorado 80201, telephone number (303)
984-4100.

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

     Statements made in this Form 10-KSB that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934. These statements often can be identified by the
use of terms such as "may," "will," "expect," "believe," "anticipate,"
"estimate," "approximate" or "continue," or the negative thereof. The Company
intends that such forward-looking statements be subject to the safe harbors for
such statements. The Company wishes to caution readers not to place undue
reliance on any such forward-looking statements, which speak only as of the date
made. Any forward-looking statements represent management's best judgment as to
what may occur in the future. However, forward-looking statements are subject to

                                       22

<PAGE>

risks, uncertainties and important factors beyond the control of the Company
that could cause actual results and events to differ materially from historical
results of operations and events and those presently anticipated or projected.
These factors include adverse economic conditions, entry of new and stronger
competitors, inadequate capital and unexpected costs. The Company disclaims any
obligation subsequently to revise any forward-looking statements to reflect
events or circumstances after the date of such statement or to reflect the
occurrence of anticipated or unanticipated events.

     This section should be read in conjunction with the Company's Financial
Statements included herein. See "Item 7. Financial Statements".

GENERAL

     Since inception, the Company has focused primarily on the research,
development and design of the its products, and generated minimal revenues.
Since inception, the Company has incurred approximately $67,500 relating to
salaries - product development expenses. During prior fiscal years, the
principals of the Company invested personal funds and arranged for loans and/or
lines of credit from private lenders to support the business operations of the
Company.

     Management of the Company believes that future sales of Ten to Win and
related products to the casinos in the State of Colorado will be an important
line of business for the Company for the next several years, however, management
intends to pursue the marketplaces of several other primary states. It is
anticipated that the Company will derive its revenues principally from the
marketing and sale of Ten to Win and other related products to casinos generally
located in the States of California, Colorado, Kansas, New Mexico, Nevada, South
Dakota and Wisconsin. Management anticipates that Ten to Win will be leased for
approximately $600.00 per month or sold for approximately $5,000.00 plus a
royalty fee to casinos. Management anticipates that Shotgun 21 will be leased
for approximately $800.00 per month or sold for approximately $10,000 plus a
royalty fee to casinos. Management further anticipates that the marketing and
sale of the products pursuant to the distributorship agreements will result in
revenues during fiscal year 2002.

     During fiscal year ended December 31, 2001, the Company generated $46,470
in revenues from the lease or sale of its products. During fiscal year ended
December 31, 2000, the Company did not generate any revenues from the lease or
sale of its products, but focused on the design and development of its other
gaming products.

RESULTS OF OPERATION

     Fiscal Year Period Ended December 31, 2001 Compared to Fiscal Year Ended
     December 31, 2000

     The Company's net losses for fiscal year ended December 31, 2001 were
approximately $67,796 compared to a net loss of approximately $57,887 for fiscal
year ended December 31, 2000 (an increase of $9,909 or 17%).

     Total revenue for fiscal years ended December 31, 2001 and 2000 were
$46,470 and $-0-, respectively. The generation of revenue during fiscal year
ended December 31, 2001 was comprised primarily of $45,900 received pursuant to
lease payments from third-parties to the Company for gaming products and $570
received as other income. The lack of generated revenue during fiscal year ended

                                       23

<PAGE>


December 31, 2000 resulted primarily from an operational emphasis on the
continued design and development of products and from a lack of sufficient
capital necessary to fund operational expenses, thus adversely affecting the
marketing and distribution of the Company's gaming products.

     During fiscal year ended December 31, 2001, the Company recorded operating
expenses of $114,266 compared to $57,887 of operating expenses recorded during
fiscal year ended December 31, 2000 (an increase of $56,379 or 97%). Operating
expenses for fiscal year ended December 31, 2001 primarily include (i) $23,225
as depreciation expense; (ii) $30,459 in legal and accounting expenses; (iii)
$14,030 in interest expenses; (iv) $9,423 in amortization expense; (v) $11,250
in salaries - product development; and (vi) $11,017 in travel expense. The
increase in operational expenses during fiscal year ended December 31, 2001
compared to fiscal year ended December 31, 2000 was primarily due to (i) an
increase in depreciation expenses to $23,225 from $741; (ii) an increase in
travel expenses to $11,017 from $1,662 relating to the increased marketing of
the Company's gaming products; (iii) an increase in amortization expense to
$9,423 from $2,105; and (iv) an increase in interest expense to $14,030 from
$-0-.

     As discussed above, although the Company generated revenues in the amount
of $46,470 during fiscal year ended December 31, 2001, the increase in net loss
during such period compared to fiscal year ended December 31, 2000 is
attributable primarily to a substantial increase in operating expenses. The
Company's net losses during fiscal year ended December 31, 2001 were
approximately ($67,796) or ($nil) per common share compared to a net loss of
approximately ($57,887) or ($nil) per common share (an increase of $9,909 or
17%) during fiscal year ended December 31, 2001. The weighted average of common
shares outstanding were 17,655,920 for fiscal year ended December 31, 2001
compared to 17,478,726 for fiscal year ended December 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

     Fiscal Year Ended December 31, 2001

     The Company has only recently generated sufficient cash flow to partially
fund its operations and activities. The Company may experience a liquidity
crisis and be required to raise additional capital. Historically, the Company
has relied upon internally generated funds and funds from the sale of shares of
stock and loans from its shareholders and private investors to finance its
operations and growth. Management may raise additional capital through future
public or private offerings of its stock or through loans from private
investors, although there can be no assurance that the Company will be able to
obtain such financing. The Company's future success and viability are entirely
dependent upon the ability of the Company's current management to (i) strengthen
and increase its customer base by enhancing the marketability of its products,
and (ii) increase the number of customers and expand into additional markets.
Management is optimistic that the Company will be successful in its capital
raising efforts. There can be no assurance, however, that the Company will be
able to continue to successfully distribute and market its gaming products and
to raise additional capital. The Company's failure to do so would have a
material and adverse affect upon the Company and its shareholders.

     The Company's financial statements have been prepared assuming that it will
continue as a going concern and, accordingly, do not include adjustments
relating to the recoverability and realization of assets and classifications of
liabilities that might be necessary should the Company be unable to continue in
operations.

                                       24

<PAGE>


     The Company generated $46,470 in total revenue during fiscal year ended
December 31, 2001 and $-0- in total revenue during fiscal year ended December
31, 2000. Management anticipates that overall generation of revenues will
continue to increase on an annual basis based on existing contracts and
marketability of its gaming products.

     As of December 31, 2001, the Company's current assets were $82,021 and its
current liabilities were $224,044, which resulted in a working capital deficit
of $142,023. As of December 31, 2001, the Company's total assets were $390,525
and its total liabilities were $409,366. As of December 31, 2001, the Company's
total liabilities exceeded its total assets by $18,841.

     As of December 31, 2001, the Company's total assets consisted primarily of
(i) $81,394 in inventory, (ii) $221,985 in property and equipment, and (iii) a
$97,380 cost of patent/copyright rights. As of December 31, 2000, the Company's
total liabilities consisted primarily of (i) $137,819 in accounts payable, (ii)
$184,722 in notes payable, and (iii) $56,825 in current portion due and owing of
notes payable.

     The Company's stockholders' equity increased from $39,153 for fiscal year
ended December 31, 2000 to $390,525 for fiscal year ended December 31, 2001.

     For fiscal year ended December 31, 2001, the net cash flow from operating
activities was $13,416 compared to net cash flow from operating activities of
$31,065 for fiscal year ended December 31, 2000 (a decrease of $17,6490). As
discussed above, the decrease was primarily comprised of (i) $23,225 incurred as
depreciation expense during fiscal year ended December 31, 2001 compared to $741
incurred as depreciation expense during fiscal year ended December 31, 2000,
(ii) $15,232 in accounts payable during fiscal year ended December 31, 2001
compared to $1,169 in accounts payable during fiscal year ended December 31,
2000 (an increase of $14,063), and (iii) a net loss of $67,796 for fiscal year
ended December 31, 2001 compared to a net loss of $57,887 for fiscal year ended
December 31, 2000 (an increase of $9,909).

     During fiscal year ended December 31, 2001, the Company decreased its cash
outlay for capital expenditures to $-0- from $4,762 for fiscal year ended
December 31, 2000, which related primarily to the purchase of equipment and
accumulated patent costs.

     The Company decreased its net cash from financing activities for fiscal
year ended December 31, 2001 to $8,400 compared to $41,150 for fiscal year ended
December 31, 2000. The decrease was attributable to the sale of stock.

SOURCES OF FUNDING FOR MATERIAL COMMITMENTS AND WORKING CAPITAL

     Material Commitments

     Cranford Assignment Agreement. A significant and estimated material
commitment for the Company for fiscal year 2002 is the amounts due and owing
under an assignment agreement with Mr. Tony Cranford dated January 19, 2001 (the
"Cranford Assignment Agreement"). Pursuant to the Cranford Assignment Agreement,
Mr. Cranford assigned all of his right, title and interest in Bet the House,
including his rights to the provisional patent application no. 60/240.091, to
the Company. In accordance with the terms and provisions of the Cranford

                                       25

<PAGE>


Assignment Agreement, the Company agreed to pay Mr. Cranford (i) for a period of
six months a monthly royalty fee of $175.00 for each Bet the House game that the
Company leases to a third party during the six month period; and (ii) an
aggregate purchase price of either (a) an amount to be calculated by multiplying
the average monthly gross revenues generated by the Company for each Bet the
House game leased during the six month period by three, or (b) $30,000,
whichever is greater. The terms of Cranford Assignment Agreement further provide
that such aggregate purchase price may be paid by the Company to Mr. Cranford on
a monthly basis or in one aggregate payment, with such aggregate purchase price
to be paid in full no later than March 31, 2002.

     As of the date of this Annual Report, Mr. Cranford has not received any
payments from the Company and has agreed to extend such payment date to
September 30, 2002. Management has not determined the manner of payment to be
made to Mr. Cranford and may not make such determination until the Company is
adequately funded and several Bet the House games have been successfully
marketed generating revenues.

     Asset Purchase Agreement. A significant and estimated material commitment
for the Company for fiscal year 2002 is the amount of $300,000.00 due and owing
under the terms of an asset purchase agreement entered into with Summit
International Group, Inc. dated May 1, 2001 (the "Asset Purchase Agreement").
Pursuant to the terms of the Asset Purchase Agreement, the Company agreed to pay
the amount of $300,000.00, as evidenced by the execution of two promissory
notes.

     The first promissory note dated May 1, 2001 is in the amount of $80,000.00
and is payable to Michael Humecki (the "Humecki Promissory Note"). The terms of
the Humecki Promissory Note require the Company to make payments as follows: (i)
on the 15th of each month commencing June 15, 2001, the greater of either (a)
50% of gross revenues collected during the prior month from the lease or sale by
the Company of any of the assets acquired by the Company pursuant to the Asset
Purchase Agreement (including the Pro Shuffle) or (b) $2,000.00; (ii) on the
15th of the month after the receipt of 25% of aggregate gross funds raised by
the Company at any time on or after May 1, 2001 pursuant to any private or
public offering of its securities (but such 25% shall not be paid on the first
$100,000 of funds so raised by the Company); and (iii) interest at the rate of
8% per annum commencing May 1, 2002 on any portion of the $80,000 outstanding on
the first of each month payable monthly.

     As of the date of this Annual Report, the Company has paid Humecki
approximately $21,200 pursuant to the terms of the Huekci Promissory Note.

     The Company and Michael Humecki entered into a security agreement dated May
1, 2001 (the "Security Agreement") pursuant to which the Company agreed to grant
to Mr. Humecki a security interest in certain property which includes, but not
limited to, the following: (i) all items of personal property which were
acquired by the Company from Summit; (ii) all deposit accounts; (iii) all
receivables; (iv) all inventory; and (v) all equipment.

     The second promissory note dated May 1, 2001 is in the amount of
$220,000.00 and is payable to Summit International Group, Inc. (the "Summit
Promissory Note"). The terms of the Summit Promissory Note require the Company
to make payments to Summit after payment in full is made by the Company of the
Humecki Promissory Note as follows: (i) on the 15th of each month commencing
after the Humecki Promissory Note, the greater of either (a) 50% of gross
revenues collected during the prior month from the lease or sale by the Company

                                       26

<PAGE>


of any of the assets acquired by the Company pursuant to the Asset Purchase
Agreement (including the Pro Shuffle) or (b) $2,000.00; (ii) on the 15th of the
month after the receipt of 25% of aggregate gross funds raised by the Company at
any time on or after May 1, 2001 pursuant to any private or public offering of
its securities (but such 25% shall not be paid on the first $100,000 of funds so
raised by the Company and not until after payment in full of the Humecki
Promissory Note); and (iii) interest at the rate of 8% per annum commencing May
1, 2004 on any portion of the $220,000.00 outstanding on the first of each month
payable monthly.

     As of the date of this Annual Report, the Company has not paid Summit any
monies pursuant to the terms or the Summit Promissory Note.

     A significant and estimated material commitment for the Company for the
year 2002 is a liability to Xpectra of up to an aggregate amount of
approximately $110,000.00 (the "Xpectra Liability"). According to the terms of a
letter dated May 9, 2001 from the Company to Xpectra, the Company acknowledged
the valuation of $110,174.98 relating to Pro Shuffle units, parts, tools and
drawings held by Xpectra (the "Xpectra Inventory"). The Xpectra Liability
represents an opportunity for the Company to purchase from Xpectra some or all
of the Xpectra Inventory, up to an aggregate $110,174.98. The Xpectra Liability
represents an agreement of the parties to determine quantity to be acquired and
price. The Company may purchase the entire Xpectra Inventory for a substantial
discount from full price, or the Company may select only certain items to be
purchased from the Xpectra Inventory at a lesser or no discount. The Xpectra
Inventory is currently being stored in Xpectra's warehouse on pallets.

     As of the date of this Annual Report, Xpectra has informed the Company that
it will sell the entire Xpectra Inventory for a purchase price of approximately
$35,000.00.

     Funding

     As of the date of this Annual Report, the Company is engaged in an offering
pursuant to which it intends to raise an aggregate of $1,000,000. In accordance
with the terms and provisions of the Private Placement Memorandum, the Company
will offer and sell 10,000 shares of Series A Convertible Preferred Stock at
$100.00 per share. Each share of Series A Convertible Preferred Stock will be
convertible into two hundred shares of restricted Common Stock at any time after
December 31, 2001. The Series A Convertible Preferred Stock will be senior to
the Common Stock with respect to dividends and upon liquidation, dissolution or
winding up. The securities will not be registered under the 1933 Securities Act
and will therefore be offered pursuant to an exemption from registration
provided by Section 4(2) and Regulation D, Rule 506, of the 1933 Securities Act.
Management intents to use net proceeds received from the offering for the
Company's capital requirements, which consist primarily of marketing,
advertising and travel expenses and professional fees.

     As of the date of this Annual Report, the Company has sold and issued two
shares of Series A Convertible Preferred Stock to one investor for an aggregate
amount of $500.00.

     Based upon a twelve-month plan proposed by management, it is anticipated
that the Company's operational work plan will require approximately $500,000 of
financing designed to fund the general business operations. As of the date of
this Annual Report, the Company does not have any material commitments other
than those described above nor does management anticipate any further material

                                       27

<PAGE>


commitments within the next twelve months. It is anticipated that any
expenditures to be incurred by the Company will be operational. Management
anticipates that a substantial portion of the initial budget of $500,000 for the
twelve-month work plan, which includes such expenditures, will be funded
pursuant to public or private offerings, including the private placement
offering described above under Regulation D, Rule 506, of its debt or equity
securities and future advancements. The Company may not be able to raise such
funds and, therefore, the successful marketing of its products may not be
accomplished.

     From the date of this Annual Report, management believes that the Company
can satisfy its cash requirements for approximately the next six months based on
its ability to obtain advances from certain investors and related parties. In
the event the Company is unable to obtain advances from certain investors and
related parties, management believes that the Company can satisfy its cash
requirements for approximately the next three months from its liquid assets.

     As of the date of this Annual Report, the Company has generated little
revenue from operations, has a working capital deficit and a retained earnings
deficit. Therefore, the Company has been deemed a "going concern" by its
independent auditors, Comiskey & Company, P.C., as noted in the financial
statements attached hereto. There is substantial doubt that the Company will be
able to retain its status as a "going concern", that is assumption of the
continuity of operations of the Company in the absence of evidence to the
contrary. Management believes that it can maintain its status as a "going
concern" based on its ability to raise funds pursuant to future public and
private offerings and to obtain advances and minimize operating expenses by not
duplicating expenses or incurring needless expenses.

     The Company does not own any plant and/or equipment. Management does not
anticipate any purchases of plant and/or significant equipment.

AUDIT COMMITTEE

     As of the date of this Annual Report, the Company has not appointed members
to an audit committee and, therefore, the respective role of an audit committee
has been conducted by the board of directors of the Company. When established,
the audit committee's primary function will be to provide advice with respect to
the Company's financial matters and to assist the board of directors in
fulfilling its oversight responsibilities regarding finance, accounting, tax and
legal compliance. The audit committee's primary duties and responsibilities will
be to: (i) serve as an independent and objective party to monitor the Company's
financial reporting process and internal control system; (ii) review and
appraise the audit efforts of the Company's independent accountants; (iii)
evaluate the Company's quarterly financial performance as well as its compliance
with laws and regulations; (iv) oversee management's establishment and
enforcement of financial policies and business practices; and (v) provide an
open avenue of communication among the independent accountants, management and
the board of directors.

     The board of directors has considered whether the regulatory provision of
non-audit services is compatible with maintaining the principal independent
accountant's independence.

                                       28

<PAGE>


     Audit Fees

     As of the date of this Annual Report, the Company has incurred $6,200 as
fees billed by its principal independent accountant for professional services
rendered in connection with preparation of the Company's audited financial
statements for fiscal year ended December 31, 2001 and in connection with review
of the Company's financial statements for quarterly periods during 2001 and
other non-audit services.

ITEM 7. FINANCIAL STATEMENTS

     The information required under Item 310(a) of Regulation S-B is included in
this report as set forth in the "Index to Financial Statement".

Index to Financial Statements

         Report of Independent Public Accountants dated April 19, 2002.
         Balance Sheet for fiscal year ended December 31, 2001.
         Statements of Loss and Accumulated Deficit for fiscal years
        ended December 31, 2001 and December 31, 2000, and from inception
        (January 10, 1996) to December 31, 2001.
         Statements of Cash Flows for fiscal years ended December 31, 2001 and
           December 31, 2000, and from inception (January 10, 1996) to December
           31, 2001.
         Statements of Stockholders' Equity for years ended December 31, 1996
        through fiscal year ended December 31, 2001.
         Notes to Financial Statements for December 31, 2001 and 2000.

                                       29

<PAGE>



                                  TEN STIX INC.
                         (A Developmental Stage Company)

                              FINANCIAL STATEMENTS

                                December 31, 2001

                                       i

<PAGE>




                                    CONTENTS


                                                                      Page


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS                               F-1

BALANCE SHEET                                                          F-2

STATEMENTS OF LOSS AND ACCUMULATED DEFICIT                             F-3

STATEMENT OF STOCKHOLDERS' EQUITY                                   F-4 to F-8

STATEMENTS OF CASH FLOWS                                               F-9

NOTES TO FINANCIAL STATEMENTS                                      F-10 to F-15


                                       ii

<PAGE>


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



The Board of Directors and Stockholders of
Ten Stix, Inc.


We have audited the accompanying balance sheet of Ten Stix, Inc. (a development
stage company) as of December 31, 2001, and the related statements of loss and
accumulated deficit, stockholders' equity, and cash flows for each of the years
ended December 31, 2001 and 2000 and for the period from inception (January 10,
1996) to December 31, 2001. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Ten Stix, Inc. as of December
31, 2001, and the results of its operations and its cash flows for each of the
years ended December 31, 2001 and 2000 and the period from inception (January
10, 1996) to December 31, 2001, in conformity with accounting principles
generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in note 7, the Company has
incurred operating losses since inception and has a deficit in working capital
and equity. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. Management's plans are also discussed in note 7.
These financial statements do not include any adjustments which might be
necessary if the Company is unable to continue.


Denver, Colorado
April 19, 2002



                                            PROFESSIONAL CORPORATION


                                      F-1

<PAGE>


                                 Ten Stix, Inc.
                         (A Development Stage Company)
                                 BALANCE SHEET


     ASSETS                                                         December 31,
                                                                       2001
                                                                     ---------
CURRENT ASSETS
     Cash and cash equivalents                                       $     307
     Inventory                                                          81,394
     Accounts receivable                                                   320
                                                                     ---------

        Total current assets                                            82,021
                                                                     ---------

PROPERTY & EQUIPMENT
     Shufflers                                                         221,985
     Other                                                               6,353
        Less accumulated depreciation/amortization                     (25,714)
                                                                     ---------
                                                                       202,624

OTHER ASSETS
     Note receivable - shareholder                                       8,500
     Patent/Copyright (net)                                             97,380
                                                                     ---------
                                                                       105,880

        TOTAL ASSETS                                                   390,525
                                                                     =========

     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable                                                  137,819
     Accounts payable - related party                                   30,000
     Current portion of long term debt                                  56,825
                                                                     ---------

        Total current liabilities                                      224,644

LONG-TERM LIABILITIES
     Notes payable - net of discount and current portion               184,722
                                                                     ---------

        TOTAL LIABILITIES                                              409,366

STOCKHOLDERS' EQUITY
     Preferred A stock, convertible to 200 common stock,
     each fully voting as if converted, $.001 par value;
     100,000 shares authorized; no shares issued
        and outstanding                                                   --

     Common stock, $0.001 par value; 500,000,000
        shares authorized; 17,659,488 shares
        issued and outstanding                                          17,659
     Additional paid-in capital                                        699,878
     Deficit accumulated during the development
        stage                                                         (736,378)
                                                                     ---------

                                                                       (18,841)

        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                   $ 390,525
                                                                     =========


    The accompanying notes are an integral part of the financial statements

                                      F-2

<PAGE>
<TABLE>
<CAPTION>


                                      Ten Stix, Inc.

                              (A Development Stage Company)
                        STATEMENTS OF LOSS AND ACCUMULATED DEFICIT



                                                     For the year
                                                  ended December 31          Inception
                                            ---------------------------- (January 10, 1996)
                                                2001            2000       to Dec 31, 2001
                                            ------------    ------------    ------------
REVENUES
    <S>                                     <C>             <C>             <C>
     Fees from games                        $       --      $       --      $     37,367
     Leases                                       45,900            --            45,900
     Other income                                    570            --               570
                                            ------------    ------------    ------------

         Total revenue                            46,470            --            83,837
                                            ------------    ------------    ------------

EXPENSES
     Advertising                                     905             188           1,093
     Amortization                                  9,423           2,105          14,970
     Consulting fees                                --             8,780         530,007
     Contract labor                                 --              --             3,187
     Depreciation                                 23,225             741          25,714
     Insurance                                      --              --               959
     Interest expense                             14,030            --            18,741
     Legal and accounting                         30,459          21,598          69,641
     Office expense                                  982           1,340           4,616
     Rent                                           --               250           1,660
     Repairs & maintenance                            99            --                99
     Samples                                         705            --             5,038
     Salaries - product development               11,250          11,250          67,500
     Salaries - marketing                          3,750           3,750          22,500
     Show fees                                     5,800           6,198          11,998
     Supplies                                      2,346            --             2,346
     1996 and prior startup costs                   --              --            19,287
     Taxes and licenses                              275              25             860
     Travel                                       11,017           1,662          18,724
     Utilities                                      --              --               275
                                            ------------    ------------    ------------

         Total expenses                          114,266          57,887         819,215
                                            ------------    ------------    ------------

NET LOSS                                         (67,796)        (57,887)       (735,378)

Accumulated deficit
     Balance, beginning of period               (668,582)       (610,695)           --
     Treasury stock acquired at a premium           --              --            (1,000)
                                            ------------    ------------    ------------

     Balance, end of period                 $   (736,378)   $   (668,582)   $   (736,378)
                                            ============    ============    ============

NET LOSS PER SHARE - BASIC                  $       --      $       --      $      (0.04)
                                            ============    ============    ============

WEIGHTED AVERAGE NUMBER OF
       SHARES OUTSTANDING                     17,655,920      17,478,726      16,377,801
                                            ============    ============    ============


         The accompanying notes are an integral part of the financial statements

                                            F-3
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                   Ten Stix, Inc.
                                           (A Development Stage Company)
                                         STATEMENT OF STOCKHOLDERS' EQUITY
                       For the period from inception (January 10, 1996) to December 31, 2001



                                                                                           Deficit
                                   Common stock         Preferred stock                  accumulated
                               --------------------    ------------------   Additional    during the     Total
                               Number of               Number of             paid-in     development  stockholders'
                                shares      Amount      shares     Amount    capital        stage        equity
                               --------    --------    --------   --------   --------     --------      --------
<S>                            <C>         <C>         <C>        <C>       <C>           <C>           <C>
Common stock issued for
     cash, January 1996
     at $0.242 per share         20,500    $  4,965        --     $   --     $   --       $   --        $  4,965

Common stock issued for
     cash, January 1996
     at $0.92 per share          10,250       9,400        --         --         --           --           9,400

Officers' wages at no
     charge for 1996               --          --          --         --       15,000         --          15,000

Net loss for the year ended
     December 31, 1996             --          --          --         --         --        (15,000)      (15,000)

Officers' wages at no
     charge for 1997               --          --          --         --       15,000         --          15,000

Net loss for the year ended
     December 31, 1997             --          --          --         --         --        (24,313)      (24,313)

Treasury stock acquired
     for cash and retired
     September 1998, $10,400
     or $1.01 per share         (10,250)     (9,400)       --         --         --         (1,000)      (10,400)


                      The accompanying notes are an integral part of the financial statements

                                                         F-4
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                   Ten Stix, Inc.
                                           (A Development Stage Company)
                                         STATEMENT OF STOCKHOLDERS' EQUITY
                       For the period from inception (January 10, 1996) to December 31, 2001



                                                                                                       Deficit
                                        Common stock               Preferred stock                   accumulated
                                   ------------------------    -----------------------   Additional  during the       Total
                                    Number of                   Number of                  paid-in   development   stockholders'
                                     shares        Amount        shares       Amount       capital      stage         equity
                                   ----------    ----------    ----------   ----------   ----------   ----------    ----------
<S>                                <C>           <C>           <C>          <C>          <C>          <C>           <C>
Common stock issued for
     relief of debt and services
     during 1998 at $0.25
     per share                      2,000,000    $    2,000          --     $     --     $  498,000   $     --      $  500,000

Common stock exchanged for
     Preferred A, September 1998
     at no additional cost            (20,500)       (4,965)       76,000           76        4,889         --            --

Officers' wages at no
     charge for 1998                     --            --            --           --         15,000         --          15,000

Net loss for the year ended
     December 31, 1998                   --            --            --           --           --       (515,593)     (515,593)
                                   ----------    ----------    ----------   ----------   ----------   ----------    ----------

Balances, December 31, 1998         2,000,000         2,000        76,000           76      547,889     (555,906)       (5,941)


                      The accompanying notes are an integral part of the financial statements

                                                         F-5
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                      Ten Stix, Inc.
                                               (A Development Stage Company)
                                             STATEMENT OF STOCKHOLDERS' EQUITY
                           For the period from inception (January 10, 1996) to December 31, 2001



                                                                                             Deficit
                                   Common stock          Preferred stock                    accumulated
                              ---------------------   ---------------------   Additional    during the         Total
                               Number of               Number of               paid-in      development     stockholders'
                                shares      Amount      shares      Amount     capital         stage          equity
                              ---------   ---------   ---------   ---------   ---------      ---------       ---------
<S>                           <C>         <C>         <C>         <C>         <C>            <C>             <C>
Common stock issued for
     cash during 1999
     at $0.25 per share         166,448   $     166        --     $    --     $  41,446      $    --         $  41,612

Common stock issued for
     relief of debt and
     services during 1999
     at $0.25 per share          65,840          66        --          --        16,394           --            16,460

Officers' wages at no
     charge for 1999               --          --          --          --        15,000           --            15,000

Net loss for the year ended
     December 31, 1999             --          --          --          --          --          (54,789)        (54,789)
                              ---------   ---------   ---------   ---------   ---------      ---------       ---------

Balances, December 31, 1999   2,232,288       2,232      76,000          76     620,729       (610,695)         12,342

Common stock issued for
     cash during 2000
     at $0.25 per share          96,600          97        --          --        24,053           --            24,150

Common stock issued for
     relief of debt and
     services during 2000
     at $0.25 per share          39,800          40        --          --         9,910           --             9,950


                          The accompanying notes are an integral part of the financial statements

                                                             F-6
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                       Ten Stix, Inc.
                                                (A Development Stage Company)
                                              STATEMENT OF STOCKHOLDERS' EQUITY
                            For the period from inception (January 10, 1996) to December 31, 2001




                                                                                                Deficit
                                      Common stock          Preferred stock                    accumulated
                                 ---------------------   ---------------------  Additional     during the         Total
                                 Number of               Number of                paid-in      development    stockholders'
                                   shares      Amount      shares      Amount     capital         stage          equity
                                 ---------   ---------   ---------   ---------   ---------      ---------       ---------
<S>                              <C>         <C>         <C>         <C>         <C>            <C>             <C>
Common stock issued for
     cash and debt forgiveness
     during 2000 at $0.25 per
     share                          60,000   $      60        --     $    --     $  14,940      $    --         $  15,000

Common stock issued for
     cash during 2000
     at $0.50 per share             14,000          14        --          --         6,986           --             7,000

Officers' wages at no
     charge for 2000                  --          --          --          --        15,000           --            15,000

Net loss for the year ended
     December 31, 2000                --          --          --          --          --          (57,887)        (57,887)
                                 ---------   ---------   ---------   ---------   ---------      ---------       ---------

Balances, December 31, 2000      2,442,688       2,443      76,000          76     691,618       (668,582)         25,555


                          The accompanying notes are an integral part of the financial statements

                                                             F-7
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                       Ten Stix, Inc.
                                                (A Development Stage Company)
                                              STATEMENT OF STOCKHOLDERS' EQUITY
                            For the period from inception (January 10, 1996) to December 31, 2001



                                                                                                  Deficit
                                    Common stock             Preferred stock                     accumulated
                              -----------------------   ------------------------    Additional   during the       Total
                               Number of                 Number of                   paid-in     development   stockholders'
                                shares       Amount       shares         Amount      capital        stage         equity
                              ----------   ----------   ----------    ----------    ----------    ----------    ----------
<S>                           <C>          <C>          <C>           <C>           <C>           <C>           <C>
Common stock issued for
     conversion of 76,000
     preferred shares         15,200,000       15,200      (76,000)          (76)      (15,124)         --            --

Common stock issued for
     cash during 2001
     at $0.50 per share           16,800           16         --            --           8,384          --           8,400

Officers' wages at no
     charge for 2001                --           --           --            --          15,000          --          15,000

Net loss for the year ended
     December 31, 2001              --           --           --            --            --         (67,796)      (67,796)
                              ----------   ----------   ----------    ----------    ----------    ----------    ----------

Balances, December 31, 2001   17,659,488   $   17,659         --      $     --      $  699,878    $ (736,378)   $  (18,841)
                              ==========   ==========   ==========    ==========    ==========    ==========    ==========


                          The accompanying notes are an integral part of the financial statements

                                                             F-8
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                           Ten Stix, Inc.
                                   (A Development Stage Company)
                                      STATEMENTS OF CASH FLOWS


                                                            For the year
                                                         ended December 31,         Inception
                                                       ----------------------   (January 10, 1996)
                                                          2001         2000       to Dec 31, 2001
                                                       ---------    ---------        ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                    <C>          <C>              <C>
Net loss                                               $ (67,796)   $ (57,887)       $(736,628)
Adjustments to reconcile net loss to net cash flows
     from operating activities:
         Amortization                                      9,423        2,105           14,970
         Depreciation                                     23,225          741           25,714
         Services provided at no charge                   15,000       15,000           90,000
         Increase in accounts payable                     15,232        1,169           28,830
         (Increase) in note receivable - shareholder      (8,500)        --             (8,500)
         (decrease) in overdraft                            --         (2,143)            --
         Issuance of common stock for services              --          9,950          527,660
                                                       ---------    ---------        ---------

            Net cash flows from operating activities     (13,416)     (31,065)         (57,954)

CASH FLOWS FROM INVESTING ACTIVITIES
     Equipment purchases                                    --           (415)          (3,912)
     Patent costs accumulated                               --         (4,347)         (37,954)
                                                       ---------    ---------        ---------

            Net cash flows from investing activities        --         (4,762)         (41,866)

CASH FLOWS FROM FINANCING ACTIVITIES
     Issuance of common stock                              8,400       41,150          100,562
     Issuance of preferred stock                            --           --              4,965
     Repurchase of common shares                            --           --            (10,400)
     Loans from shareholders                                --           --              5,000
                                                       ---------    ---------        ---------

            Net cash flows from financing activities       8,400       41,150          100,127
                                                       ---------    ---------        ---------

NET INCREASE (DECREASE) IN CASH
     AND CASH EQUIVALENTS                                 (5,016)       5,323              307

CASH AND CASH EQUIVALENTS,
     BEGINNING OF PERIOD                                   5,323         --               --
                                                       ---------    ---------        ---------

CASH AND CASH EQUIVALENTS,
     END OF PERIOD                                     $     307    $   5,323        $     307
                                                       =========    =========        =========


               The accompanying notes are an integral part of the financial statements

                                                 F-9
</TABLE>
<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



1.   Summary of Significant Accounting Policies
     ------------------------------------------
     Development Stage Company
     Ten Stix, Inc. (the "Company") was incorporated under the laws of the State
     of Colorado on January 10, 1996. Its office is located at the office of its
     President at 3101 Riverside Drive, Idaho Springs, Colorado 80452.

     The Company was founded for the purpose of developing and marketing unique
     card games, derived from Native American heritage, for the gaming industry.
     The Company calls itself "Ten Stix" based on its most popular and creative
     product known as "Ten Stix 21." Initially, the founders of the Company
     recognized the proliferation of gaming casinos in the United States,
     especially the southwestern states, and realized that there were no actual
     Native American Indian games in casinos despite the fact that Native
     Americans had been playing games and gambling throughout recorded history.
     Based upon months of research, the founders of the Company reached the
     conclusion that versions of stick games were the most commonly played among
     the different nations of the Native Americans and that there were some
     games that could be adapted to modern day gambling.

     The Company has transacted only limited activities, all of which have
     related to the development of Ten Stix 21 and other games, its organization
     and licensing, and the raising of capital. The Company does not offer any
     warranties other than those implicit by law in connection with the sale and
     lease of its games. At the present time, there are no full-time employees;
     however, the Company's officers are currently engaged in product
     development and the establishment of proposed marketing and distribution
     plan for its products. As of December 31, 2001, the Company is classified
     as a development stage company since it has received only minimal revenues
     from its planned business activities.

     Accounting Method
     The Company records income and expense on the accrual method. To date, the
     Company's minimal revenues have consisted primarily of fees generated from
     the lease of games. Revenues from long term agreements from the lease of
     games will be recognized ratably over the period of the lease. Royalty
     revenue will be recognized as the royalties become measurable.

     Fiscal Year
     The Company has selected a December 31 fiscal year end.

     Organization Costs
     Organization costs have been charged to operations in the period incurred.

     Depreciation
     Depreciation on assets is recorded using the straight-line method over the
     estimated life of the asset. Current estimated lives of assets are as
     follows:

                           Equipment                 5 years

     Amortization of patent costs is recorded using a useful life's of 5 to 17
     years on the straight-line method.

     Loss per Share
     Loss per share was computed using the weighted average number of shares
     outstanding during the period. All preferred stock was converted to common
     shares in January 2001, and said stock has been treated as outstanding
     since inception.

                                      F-10

<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



1.   Summary of Significant Accounting Policies (continued)
     ------------------------------------------------------
     Statements of Cash Flows
     For purposes of the statements of cash flows, the Company considers all
     highly liquid debt instruments purchased with an original maturity date of
     three months or less to be cash equivalents.

     Use of Estimates
     The preparation of the Company's financial statements in conformity with
     generally accepted accounting principles requires the Company's management
     to make estimates and assumptions that effect the amounts reported in these
     financial statements and accompanying notes. Actual results could differ
     from those estimates.

     Advertising and Marketing
     Advertising and marketing costs are expensed as incurred.

     Inventory
     Inventory consists of ProShuffle devices and parts which are valued at
     cost. This inventory was acquired in the Xpectra transaction on May 9,
     2001.

     Fair Values of Financial Instruments
     Unless otherwise indicated, the fair value of all reported assets and
     liabilities which represent financial instruments (none of which are held
     for trading purposes) approximate the carrying values of such amounts.

     Consideration of Other Comprehensive Income Items
     SFAF 130 - Reporting Comprehensive Income, requires companies to present
     comprehensive income (consisting primarily of net income plus other direct
     equity changes and credits) and its components as part of the basic
     financial statements. For the years ended December 31, 2001 and 2000, and
     for the period from inception (January 10, 1996) to December 31, 2001, the
     Company's financial statements do not contain any changes in equity that
     are required to be reported separately in comprehensive income.

     Stock Basis
     Shares of common stock issued for other than cash have been assigned
     amounts equivalent to the fair value of the service or assets received in
     exchange. Valuation of non-cash compensation for shares is determined in
     reference to contemporaneous cash sales of shares to third parties.

     Services Provided at No Charge to the Company
     Management has performed services in the development and marketing of the
     Company's products but has elected to forego cash compensation due to the
     liquidity position of the Company. The Company records the fair value of
     such services as a capital contribution. Management has classified these
     costs into marketing and product development, based upon an estimate of the
     amount of time devoted to such activities.

2.   Stockholders' Equity
     --------------------
     Preferred Stock
     As of December 31, 2001, a total of 76,000 shares of the Company's $0.001
     par value Series A preferred stock had been converted into 15,200,000
     shares of common stock. No shares of preferred stock were issued or
     outstanding as of December 31, 2001.

                                      F-11

<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



2.   Stockholders' Equity (continued)
     --------------------------------
     Common Stock
     As of December 31, 2001, a total of 2,110,640 shares of the Company's
     $0.001 par value common stock had been issued for consulting services
     provided and for conversion of debt owed by the Company. An additional
     333,848 shares were issued for cash at prices ranging from $0.25 to $0.50
     per share. In addition to the above issued stock, 15,200,000 shares of
     common stock were issued for the conversion from 76,000 shares of preferred
     stock, which occurred in January 2001.

     Adoption of stock option plan
     On January 10, 2001, the Board of Directors of the Company adopted a
     non-qualified stock option plan. An aggregate of 1,000,000 shares of common
     stock are available for issuance under the plan. The number of options, the
     identity of persons to receive options, as well as all option terms and
     conditions, will be determined by the Board of Directors. Option grants may
     be for prices less than market value on the date of grant.

     Preferred Stock
     As of December 31, 2001, no shares of the Company's $0.001 par value
     preferred stock were issued or outstanding. 100,000 shares are authorized.
     Each preferred share may be converted into 200 shares of common stock. No
     dividend has been designated to preferred shares.

3.   Related Party Transactions
     --------------------------
     Officers and directors of the Company own a total of 15,200,000 shares of
     the Company's common stock, which was converted from 76,000 shares of
     preferred stock.

     Officers are compensated for all out-of-pocket expenses. Management has
     advanced funds to the Company from time to time in the form of non-interest
     bearing loans. As of December 31, 2001, the balance due was $0.

     Prior to the Company's incorporation, Mr. Thomas Sawyer together with other
     individuals created and designed a card game called "Bonus 6." On
     approximately October 13, 1997, the board of directors of the Company was
     not interested in acquiring or marketing Bonus 6. Therefore, Mr. Sawyer in
     his individual capacity entered into a distribution agreement with Tom
     Perkins, the owner of Bonus 6, for the distribution rights of Bonus 6 (the
     "Distribution Agreement.") Pursuant to the terms of the Distribution
     Agreement, Mr. Sawyer was responsible for all marketing costs and received
     35% of gross revenues generated from the sale of Bonus 6 to casinos.

     On December 28, 2000, Mr. Sawyer agreed to gift and grant to the Company
     his distribution rights under the Distribution Agreement to market and
     distribute Bonus 6 within the United States, excluding the State of
     Colorado, and the Company agreed to assume Mr. Sawyer's obligations under
     the Distribution Agreement as such obligations pertain to the marketing and
     distribution of Bonus 6 within the United States, excluding the State of
     Colorado. As of the date of this audit, the Company has not generated any
     revenues from its distribution rights in connection with the marketing of
     Bonus 6.

                                      F-12

<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



3.   Related Party Transactions (continued)
     --------------------------------------
     Assignment of assets
     On January 19, 2001, Mr. Cranford assigned all of his right, title and
     interest in Bet the House to the Company. In accordance with the terms and
     provisions of the assignment agreement, the Company agreed to pay Mr.
     Cranford, for a period of six months, a monthly royalty fee of $175 for
     each Bet the House game that the Company leases to a third party and an
     aggregate purchase price of either an amount to be calculated by
     multiplying the number of games leased during the six month period by 3 or
     $30,000, whichever is greater. The terms of the Cranford Assignment
     Agreement further provide that such aggregate purchase price may be paid by
     the Company to Mr. Cranford on a monthly basis or in one aggregate payment,
     with such aggregate purchase price to be paid in full no later than March
     31, 2002. As of December 31, 2001, $30,000 remains in accounts payable
     related party. As of the date hereof, the Company has not generated any
     revenues from the sale or distribution of Bet the House. The accompanying
     balance sheet contains $30,000 under the caption patents & copyrights, net
     of amortization of $4,500 at December 31, 2001.

4.   Income Taxes
     ------------
     The Company has deductible temporary differences and Federal net operating
     loss carryforwards of approximately $646,000. The net operating losses will
     expire between the years 2011 and 2021. The tax benefit of these net
     operating losses and deductible temporary differences is approximately
     $123,000 and has been offset by a full allowance for realization. For the
     period ended December 31, 2001, the valuation allowance decreased by
     approximately $4,500.

5.   Settlement of Litigation
     ------------------------
     The Company was a party to a lawsuit from Progressive Games, Inc. ("PGI").
     An agreement was reached in 1998 between the two companies concerning the
     licensing of certain PGI game tables. This agreement requires the Company
     to pay licensing fees to PGI on a per-table basis. No license fee has
     accrued as of December 31, 2001 under this agreement.

6.   Cash Flows Statement
     --------------------
     Interest and income taxes
     Cash paid for interest and income taxes is as follows:

                 Interest Payments                              $     14,030
                 Income Taxes                                           --
                                                                ------------

                 Total at December 31, 2001                     $     14,030
                                                                ============

     Non-cash transactions
     During the year ended December 31, 2001 equipment and inventory were
     purchased with the issuance of two notes payable as follows:

                 Equipment                                      $    224,426
                 Inventory                                            81,394
                 Note Receivable - Shareholder                         8,500
                 Discount on Notes Payable                            51,283
                 Patent                                               44,397
                 Accounts Payable - Xpectra                         (110,000)
                 Humecki Note Payable (net of discount)              (80,000)
                 Summit Note Payable (net of discount)              (220,000)
                                                                ------------

                 Net effect of transactions                     $       --
                                                                ============

                                      F-13

<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



7.   Presentation as a Going Concern
     -------------------------------
     The Company has minimal capital with which to implement its business plan.
     It has $82,021 in current assets as of December 31, 2001, and current
     liabilities of $224,644. The Company's current ratio is .37 to 1. Liquid
     assets in the form of cash and accounts receivable total $627. The Company
     plans to seek additional financing through sales of its common and
     preferred stock, and may seek deferments by management of expense
     reimbursements, as well as cash investments by existing officers and
     shareholders. No contractual agreements are in place to provide additional
     financing through either the sale of common stock or deferral of expenses.
     The Company receives monthly revenue from the lease of shuffle devices
     which will provide limited liquidity in the coming year.

8.   Inventory
     ---------
     Inventory of $81,394 consists of ProShuffle devices and parts. This
     inventory was acquired as part of the Xpectra transaction on May 9,
     2001.(See note 11) The inventory is valued at cost.

9.   Notes Receivable
     ----------------
     Note receivable - shareholder of $8,500 is not a receivable for stock. The
     note is non-interest bearing. The amount of interest is not material.

10.  Notes Payable
     -------------
     As of December 31, 2001 the Company had the following notes payable.


                                                        Current    Long-term
                                                      ----------   ----------


        8% note secured by equipment,
        to be paid from lease revenues
        principal and interest of $2,800
        due monthly.  Maturing April 2002.            $   56,825   $     --

        8% note secured by equipment,
        to be paid from lease revenues
        principal and interest of $2,800
        to be paid after the above note is paid off
        Maturing April 2004.                                --        184,722
                                                      ----------   ----------

                                                      $   56,825   $  184,722
                                                      ==========   ==========


     There are no scheduled installments on either note, payment is made
     contingently when amounts are collected from the sale or lease of shuffle
     devices.

                                      F-14

<PAGE>


                                 Ten Stix, Inc.
                          (A Development Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                                December 31, 2001



11.  Xpectra Transaction
     -------------------
     A significant and estimated material commitment for the Company for the
     year 2001 is a liability to Xpectra of up to an aggregate amount of
     approximately $110,000 (the "Xpectra Liability"). According to the terms of
     a letter dated May 9, 2001 from the Company to Xpectra, the Company
     acknowledged the valuation of $110,174.98 relating to Pro Shuffle units,
     parts, tools and drawings held by Xpectra (the "Xpectra Inventory"). The
     Xpectra Liability represents an opportunity for the Company to purchase
     from Xpectra some or all of the Xpectra Inventory, up to an aggregate
     $110,174.98. The Xpectra Liability represents an agreement of the parties
     to determine quantity to be acquired and price. The Company may purchase
     the entire Xpectra Inventory for a substantial discount from full price, or
     the Company may select only certain items to be purchased from the Xpectra
     Inventory at a lesser or no discount. The Xpectra Inventory is currently
     being stored in Xpectra's warehouse on pallets. This liability has been
     included on the financial statements as accounts payable on the balance
     sheet.

     As of April 19, 2002, Xpectra has informed the Company that it will sell
     the entire Xpectra Inventory for a purchase price of approximately
     $35,000.00.

12.  Subsequent Event
     ----------------
     Sales of Stock
     The Company continues to raise capital through the sale of common shares
     and preferred shares. Subsequent to December 31, 2001, and through April
     19, 2002, the Company has issued 2 shares of preferred stock for cash
     totaling $500. The preferred stock issued may be converted into 200 common
     shares each.

                                      F-15

<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     The Company's principal independent accountant from January 10, 1996
(inception) to August 2000 was Richard O. Deem, 4800 West 80th Avenue, Suite
202, Westminster, Colorado 80030. The Company's principal independent accountant
from September 1, 2000 to the current date is Comiskey & Company, 789 Sherman
Street, Suite 440, Denver, Colorado 80203. The Company's former principal
independent accountant, Richard O. Deem, P.C., declined to stand for re-election
in August of 2000, and subsequently, management of the Company engaged the
accounting firm of Comiskey & Company, as the Company's independent auditors.
The decision to change accountants was approved by the Board of Directors.

     During the Company's two most recent fiscal years and any subsequent
interim period preceding the resignation of Mr. Deem, there were no
disagreements with Mr. Deem which were not resolved on any matter concerning
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure, which disagreements, if not resolved to the satisfaction of
Mr.Deem, would have caused Mr. Deem to make reference to the subject matter of
the disagreements in connection with his reports.

     The Company's former principal independent accountant did not provide an
adverse opinion or disclaimer of opinion to the Company's financial statements,
nor modify its opinion as to uncertainty, audit scope or accounting principles.

     The Company's financial statements have been audited from inception by
Comiskey & Company, P.C., 789 Sherman Street, Suite 440, Denver, Colorado 80203.
Comiskey & Company, P.C. has been the Company's principal independent
accountants since August 2000 to current. There have been no disagreements with
the Company's independent accountants that have not resolved on any matter
concerning accounting principles or practices, financial statement disclosure,
or auditing scope or procedures.

     The Company's principal independent accountants have not provided an
adverse opinion nor disclaimer of opinion to the Company's financial statements,
nor have they modified their opinion as to uncertainty, audit scope or
accounting principles.

                                       30

<PAGE>


                                    PART III

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

IDENTIFICATION OF DIRECTORS AND EXECUTIVE OFFICERS

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

Name                           Age          Position with the Company
----                           ---          -------------------------

Thomas E. Sawyer               53           Director and President/Treasurer

Tony A. Cranford               49           Director and Vice
                                            President/Secretary

     THOMAS E. SAWYER has been a Director and the President/Treasurer of the
Company since January 10, 1996 (inception). Mr. Sawyer received accreditation
from the University of Nevada at Reno for Table Game Management. Mr. Sawyer was
also the owner and president of Colorado West Metal Studs & Drywall, Inc., which
was a successful contracting business. This business was instrumental in the
development of large projects located in major ski resorts within the State of
Colorado. Over the past ten years, Mr. Sawyer has established a career within
the gaming industry ranging from a dealer at game tables to serving as an
assistant general manager and a table game manager at casinos located in
Blackhawk, Colorado. Mr. Sawyer has developed products, conducted analysis and
created marketing strategies relating to internal controls for table game
accounting, cheating and detection controls, and other protection controls, all
of which have resulted in the operation of successful casinos. Mr. Sawyer also
possesses key gaming licenses that require passing extensive background checks
relating to personal and financial information. He attends on an annual basis
many conferences, such as the World Gaming Conference held in Las Vegas, Nevada,
and the National Indian Gaming Conference.

     TONY A. CRANFORD has been the Vice President/Secretary and a Director of
the Company since January 10, 1996 (inception). Prior to working in the gaming
industry, Mr. Cranford was involved in the entertainment business for a period

                                       31

<PAGE>


of twenty-four years. Over the past fourteen years, Mr. Cranford has established
a career within the gaming industry and recently resigned as a table game
manager from the Lodge Casino in Blackhawk, Colorado. The Lodge Casino is
well-known in Colorado for its table games. Mr. Cranford was responsible for
setting up all internal controls, hiring personnel, including dealers and floor
supervisors. He also established and arranged all table game areas and games.
Mr. Cranford owned and operated a successful bingo hall in Texas from 1986 to
1990. Mr. Cranford was one of the inventors of the Pro-Shuffle, which is a
patented multi-deck card shuffler. Mr. Cranford also possesses key gaming
licenses that require passing extensive background checks relating to personal
and financial information. He attends on an annual basis many conferences such
as the World Gaming Conference and the National Gaming Conference.

     The directors of the Company serve until their respective successor takes
office or until death, resignation or removal. The executive officers serve at
the pleasure of the Board of Directors of the Company.

     Personal Bankruptcy

     On approximately May 10, 2000, Mr. Cranford filed a petition or motion for
a Chapter 13 bankruptcy in the United States Bankruptcy Court for the District
of Colorado. On approximately June 30,2000, Mr. Cranford filed an amended plan
pursuant to Local Bankruptcy Rule 202 entitled Motion to Confirm First Amended
Chapter 30 Plan. No objections to or requests for hearing on the
motion/application were received, therefore, the United States Bankruptcy Court
granted an order confirming the Chapter 13 Plan.

     Other than as described above and as of the date of this Annual Report, no
director or executive officer of the Company is or has been involved in any
legal proceeding concerning (i) any bankruptcy petition filed by or against any
business of which such person was a general partner or executive officer either
at the time of the bankruptcy or within two years prior to that time; (ii) any
conviction in a criminal proceeding or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses) within the
past five years; (iii) being subject to any order, judgment or decree
permanently or temporarily enjoining, barring, suspending or otherwise limiting
involvement in any type of business, securities or banking activity; or (iv)
being found by a court, the Securities and Exchange Commission or the Commodity
Futures Trading Commission to have violated a federal or state securities or
commodities law (and the judgment has not been reversed, suspended or vacated).

Item 10. EXECUTIVE COMPENSATION

     As of the date of this Annual Report, neither Messrs. Sawyer nor Cranford
have received any compensation, either directly or indirectly, for their
services as directors and executive officers of the Company. Officers and
directors of the Company are reimbursed for any out-of-pocket expenses incurred
by them on behalf of the Company. Executive compensation is subject to change
concurrent with Company requirements.

                                       32

<PAGE>


                           Summary Compensation Table

                                                     (1)
                              Annual Compensation        Awards    Payouts
                             ---------------------     ----------  -------
                                $      $       $       $       #       $     $
Name and Position            Salary  Bonus   Other    RSA   Options  LTIP  Other
-----------------            ------  -----   -----    ---   -------  ----  -----

Thomas E. Sawyer       1997      0    0        0       0         0     0      0
Pres./Director         1998      0    0        0       0         0     0      0
                       1999      0    0        0       0         0     0      0
                       2000      0    0        0       0         0     0      0
                       2001      0    0        0       0         0     0      0

Tony A. Cranford       1997      0    0        0       0         0     0      0
Secy./Treasurer and    1998      0    0        0       0         0     0      0
Director               1999      0    0        0       0         0     0      0
                       2000      0    0        0       0         0     0      0
                       2001      0    0        0       0         0     0      0

(1)  Although neither Messrs. Sawyer nor Cranford have received any
     compensation, directly or indirectly, for their respective roles, the
     financial statements reflect the fair value of such services as a capital
     contribution, respectively. See "Financial Statements".

NON-QUALIFIED STOCK OPTION PLAN

     On January 10, 2001, the Board of Directors of the Company adopted the
Non-Qualified Stock Option Plan (the "SOP") which initially provided for the
grant of options to purchase an aggregate of 1,000,000 shares of Common Stock.
The purpose of the SOP is to make options available to directors, officers,
management and significant contractors of the Company in order to encourage them
to secure an increase on reasonable terms of their stock ownership in the
Company and to remain in the employ of the Company, and to provide them
compensation for past services provided.

     The SOP is administered by the Board of Directors which determines the
persons to be granted options under the SOP, the number of shares subject to
each option, the exercise price of each option and the option period, and the
expiration date, if any, of such options. The exercise of an option may be less
than fair market value of the underlying shares of Common Stock. No options
granted under the SOP will be transferable by the optionee other than by that
provided by the Option Grant Agreements or will or the laws of descent and
distribution and each option will be exercisable, during the lifetime of the
optionee, only by such optionee.

     The exercise price of an option granted pursuant to the SOP may be paid in
cash, by the surrender of options, in Common Stock, in other property, including
the optionee's promissory note, or by a combination of the above.

     As of the date of this Annual Report, no options have been granted.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table sets forth the name and address, as of the date of this
Annual Report, and the approximate number of shares of Common Stock owned of
record or beneficially by each person who owned of record, or was known by the
Company to own beneficially, more than five percent (5%) of the Company's Common
Stock, and the name and shareholdings of each officer and director, and all
officers and directors as a group.

                                       33

<PAGE>


--------------------------------------------------------------------------------
Title of Class     Name and Address                Amount and Nature    Percent
                   of Beneficial Owner                  of Class        of Class
--------------------------------------------------------------------------------

                                                                       (1)(2)(3)
Common Stock      Thomas E. Sawyer                     7,600,000        43.25%
                  3101 Riverside Drive
                  Idaho Springs, CO 80452
                                                                       (1)(2)(3)
Common Stock      Tony A. Cranford                     7,600,000        43.25%
                  12252 W. Chenango Drive
                  Morrison, CO 80465

Common Stock      Officers and directors as a         15,200,000        86.51%
                  Group (2)

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

     (1)  On September 16, 1998, Tony A. Cranford and Thomas E. Sawyer each
          exchanged their previously owned 10,200 shares of common stock,
          respectively, for 38,000 shares of Preferred Stock, respectively, for
          a total of 76,000 shares of Preferred Stock issued and outstanding.
          The provisions of the Articles of Incorporation provided that each
          share of Preferred Stock had the voting rights equivalent to 500
          shares of Common Stock as if converted and, that after September 16,
          1998, each share of Preferred Stock may be converted into such 500
          shares of Common Stock. The Articles of Incorporation were amended on
          January 22, 2001 to change the conversion and voting rights of the
          Preferred Stock and to provide that each share of Preferred Stock was
          convertible into 200 shares of Common Stock. On January 23, 2001, both
          Thomas E. Sawyer and Tony A Cranford elected to convert their 38,000
          shares of Preferred Stock into 7,600,000 shares of Common Stock,
          respectively, at the rate of 200 shares for one share of Common Stock,
          for a total of 15,200,000 shares of Common Stock. As of the date of
          this Annual Report, there are no shares of Preferred Stock issued or
          outstanding.

     (2)  These are restricted shares of Common Stock.

     (3)  Does not include the assumption of the exercise of options, warrant,
          rights, conversion privileges or similar obligations to acquire shares
          of common stock within sixty days. Although the board of directors
          adopted a Non-Qualified Stock Option Plan to purchase an aggregate of
          1,000,000, no options have been granted to date. There are no other
          similar obligations outstanding.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

CRANFORD ASSIGNMENT AGREEMENT

     Pursuant to the Cranford Assignment Agreement, Mr. Cranford assigned all of
his right, title and interest in Bet the House, including his rights to the
provisional patent application no. 60/240.091, to the Company. In accordance
with the terms and provisions of the Cranford Assignment Agreement, the Company
agreed to pay Mr. Cranford (i) for a period of six months a monthly royalty fee
of $175.00 for each Bet the House game that the Company leases to a third party
during the six month period; and (ii) an aggregate purchase price of either (a)
an amount to be calculated by multiplying the average monthly gross revenues

                                       34

<PAGE>


generated by the Company for each Bet the House game leased during the six month
period by three, or (b) $30,000, whichever is greater. The terms of Cranford
Assignment Agreement further provide that such aggregate purchase price may be
paid by the Company to Mr. Cranford on a monthly basis or in one aggregate
payment, with such aggregate purchase price to be paid in full no later than
March 31, 2002.

     As of the date of this Annual Report, Mr. Cranford has not received any
payments from the Company and has agreed to extend such payment date to
September 30, 2002. Management has not determined the manner of payment to be
made to Mr. Cranford and may not make such determination until the Company is
adequately funded and several Bet the House games have been successfully
marketed generating revenues.

SAWYER ASSIGNMENT AGREEMENT

     Prior to the Company's incorporation, Mr. Thomas Sawyer together with other
individuals created and designed a card game called "Bonus 6". On approximately
October 13, 1997, the board of directors of the Company held a special meeting
in which it was decided that the Company was not interested in acquiring or
marketing Bonus 6. Among the factors considered by the board of directors in
evaluating the acquisition of Bonus 6 were: (i) the status of the research and
development of Ten Stix 21; (ii) a cost-effective analysis which included the
potential for generation of revenues compared to capital expenditures required
to market Bonus 6; and (iii) the best interests of the Company. Therefore, Mr.
Sawyer in his individual capacity entered into a distribution agreement with Tom
Perkins, the owner of Bonus 6, for the distribution rights of Bonus 6 (the
"Distribution Agreement"). Mr. Sawyer individually proceeded to market and
distribute Bonus 6 to casinos within the State of Colorado. On December 28,
2000, however, the Company and Mr. Sawyer entered into the Sawyer Assignment
Agreement in which (i) Mr. Sawyer agreed to gift and grant his distribution
rights under the Distribution Agreement to the Company to market and distribute
Bonus 6 within the United States, excluding the State of Colorado, and (ii) the
Company agreed to assume Mr. Sawyer's obligations under the Distribution
Agreement as such obligations pertain to the marketing and distribution of Bonus
6 within the United States, excluding the State of Colorado.

ASSET PURCHASE AGREEMENT

     Pursuant to the Asset Purchase Agreement, the Company acquired from Summit
all of Summit's right, title and interest to (i) U.S. Patent No. 5,718,427
regarding a card shuffling device marketed by Summit under the name "Pro
Shuffle"; (ii) all Pro Shuffle devices, parts, inventory and equipment related
to the manufacturing and assembly of the Pro Shuffle; (iii) all contracts
related to the Pro Shuffle; (iv) all accounts receivable arising out of the sale
or lease of the Pro Shuffle; (v) two promissory notes made by Mr. Tony Cranford,
one payable to Summit in the approximate amount of $2,500.00 and one payable to
Phil Lacerte in the approximate amount of $6,000.00; (vi) two Blackjack tables
located in Las Vegas, Nevada; and (vii) all other business assets located in
Colorado.

     Under the terms of the Asset Purchase Agreement, the Company assumed (i) on
the part of Summit an inventory purchase commitment to Xpectra in the
approximate amount of $110,000.00 related to fifty updated Pro Shuffle devices
and parts; and (ii) two liabilities owed by Summit to Jerry Delferro and Dick
Stewart in the approximate amount of $3,000.00, respectively. Pursuant to

                                       35

<PAGE>


further terms of the Asset Purchase Agreement, the Company agreed to (i) pay the
amount of $300,000.00, as evidenced by the execution of two promissory notes,
one payable to Summit in the amount of $220,000.00 and the other payable to
Michael Humecki in the amount of $80,000.00; and (ii) surrender to Summit all of
the shares of common stock of Summit held of record by Mr. Sawyer and Mr.
Cranford, respectively (an approximate 10% equity interest each).

     In order to facilitate consummation of the Asset Purchase Agreement, an
agreement was entered into dated May 1, 2001 among the Company, Thomas Sawyer,
Tony Cranford, Michael Humecki, P. Chad Lacerte, Roger Adams, and Summit (the
"Agreement"). The purpose of the Agreement was to resolve any and all claims,
counterclaims and defenses that Messrs. Humecki, Lacerte and Adams may have
against Summit pursuant to ongoing litigation. According to the terms of the
Agreement, the parties agreed that (i) the Company would acquire from Mr.
Humecki his 10.04% equity interest in Summit (which was returned to Summit);
(ii) the Company would pay Mr. Humecki $100,000, with $20,000 paid by Summit
upon execution of the Agreement and $80,000 evidenced by a promissory note;
(iii) the Company would sign a security agreement for the benefit of Mr. Humecki
as security for the payments under the promissory note; and (iv) Messrs.
Humecki, Lacerte, Adams and Summit would waive and release all claims,
counterclaims, causes of action and demands, known or unknown, that they have or
may claim to have against each other.

     As of the date of this Annual Report, the Company has not entered into any
other contractual arrangements with related parties, with the exception of the
above-described agreements. The board of directors believes that the terms of
each of the above-described agreements is as favorable to the Company as it
would expect to negotiate with unaffiliated third parties, and that consummation
of such agreements is in the best interests of the Company and its shareholders.
The board of directors of the Company has not, however, adopted or approved any
policy regarding possible future transactions with related third parties.

     Messrs. Sawyer and Cranford are not engaged in other businesses, either
individually or through partnerships and corporations in which they may have an
interest, hold an office or serve on the boards of directors. The directors of
the Company, Messrs. Sawyer and Cranford, may in the future have other business
interests to which they may devote a minor portion of their time. Certain
conflicts of interest, therefore, may arise in the future between the Company
and its directors. Such conflicts can be resolved through the exercise by
Messrs. Sawyer and Cranford of judgment consistent with their fiduciary duties
to the Company. Messrs. Sawyer and Cranford intend to resolve any such conflicts
in the best interests of the Company.

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits.

     None.

     (b)  Reports.

     None.

                                       36

<PAGE>


                                   SIGNATURES

     In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                            TEN STIX INC.


Dated: April 256, 2002                      By:  /s/  Tom Saywer
                                              --------------------------------
                                                      Tom Sawyer, President


                                       37