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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             _______________________

                                   FORM 10-KSB/A-2

                     ANNUAL REPORT UNDER SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


For the fiscal year ended: December 31, 2003     Commission File Number: 0-32323
                             _______________________

                                  TEN STIX INC.
                 (Name of Small Business Issuer in Its charter)

           Colorado                                           84-1351184
(State or Other Jurisdiction of                            (I.R.S. Employer
 Incorporation or Organization)                           Identification No.)

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

                                 (303) 567-0163
                (Issuer's Telephone Number, including Area Code)

         Securities registered under Section 12(b) of the Exchange Act:

                                      None

         Securities registered under Section 12(g) of the Exchange Act:

                         Common Stock, $0.001 Par Value

     Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that a
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes _X_ No ___

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

     The Issuer's revenues for the most recent fiscal year ended December 31,
2003, were approximately $94,891.

     The aggregate market value of the voting and non-voting common equity held
by non-affiliates of the Registrant on May 5, 2004 based upon the average bid
and ask price of the common stock on the Over the Counter Bulletin Board for
such date, was approximately $218,458. The number of shares of the Registrant's
common stock issued and outstanding on December 31, 2003, was 21,018,228.

     Transitional Small Business Disclosure Format. Yes ___ No _X_

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                                TABLE OF CONTENTS

ITEMS                                                                       PAGE
-----                                                                       ----
                                     PART I
                                     ------
Item 1.       Description of Business ...................................      4
Item 2.       Description of Property ...................................     18
Item 3.       Legal Proceedings .........................................     18
Item 4.       Submission of Matters to a Vote of Security Holders .......     20

                                     PART II
                                     -------
Item 5.       Market For Common Equity and Related Stockholder Matters ..     20
Item 6.       Management's Discussion and Analysis or Plan of Operation .     23
Item 7.       Financial Statements ......................................     27
Item 8.       Changes in and Disagreements with Accountants on
              Accounting and Financial Disclosure .......................     27

                                    PART III
                                    --------
Item 9.       Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act .........     27
Item 10.      Executive Compensation ....................................     29
Item 11.      Security Ownership of Certain Beneficial Owners and
              Management and Related Stockholder Matters ................     31
Item 12.      Certain Relationships and Related Transactions ............     33
Item 13.      Exhibits and Reports on Form 8-K ..........................     33
Item 14.      Controls and Procedures ...................................     34
Item 15.      Principal Accountant Fees and Services ....................     34

                                     Page 2

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                              CAUTIONARY STATEMENT

     Some of the statements contained in this Form 10-KSB for Ten Stix, Inc.
(the "Company") discuss future expectations, contain projections of results of
operation or financial condition or state other "forward-looking" information.
These statements are subject to known and unknown risks, uncertainties, and
other factors that could cause the actual results to differ materially from
those contemplated by the statements. The forward-looking information is based
on various factors and is derived using numerous assumptions. Important factors
that may cause actual results to differ from projections include, for example:

o        the success or failure of management's efforts to implement their
         business strategy;
o        the ability of the Company to raise sufficient capital to meet
         operating requirements;
o        the uncertainty of consumer demand for our product;
o        the ability of the Company to protect its intellectual property rights;
o        the ability of the Company to compete with major established companies;
o        the effect of changing economic conditions;
o        the ability of the Company to attract and retain quality employees; and
o        other risks which may be described in future filings with the SEC.

     Words such as "anticipates," "expects," "intends," "plans," "believes,"
"seeks," "estimates," and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and assumptions that are difficult to predict. Therefore, actual results and
outcomes may differ materially from what is expressed or forecasted in any such
forward-looking statements. Such risks and uncertainties include those set forth
herein under "Risk Factors" as well as those noted in the documents incorporated
herein by reference. Unless required by law, the Company undertakes no
obligation to update publicly any forward-looking statements, whether as a
result of new information, future events or otherwise.

                                     Page 3

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                                     PART I
                                     ------
Item 1.  Description of Business.

         Business Development

     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, some of which are derived from Native American heritage, and other
gaming products for the gaming industry. The Company trades its shares of Common
Stock on the OTC Bulletin Board under the symbol "TNTI.OB." The Company named
itself "Ten Stix" based on the name of its first table game product, Ten Stix
21, which is 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 Arizona, California, Colorado, 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.

     The Company has generated limited revenues and incurred substantial
selling, general and administrative expenses, expenses, which includes research
and development expenses relating to the design and development of the Company's
gaming products. The Company's auditors, HJ & Associates LLC, 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 "Part II.
Item 7. Financial Statements."

         Business of Issuer

     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
table cover or layout with no electronic system. The Company offers no warranty
pursuant to the sale or lease of any of its gaming products.

     During fiscal year ended December 31, 2003, the Company generated
approximately $90,726 in revenues from the lease of its gaming products.
Management further believes that there are certain material factors applicable
to all of the Company's products relevant to the generation of revenues which
include, but are not limited to, the following: (i) adequate capital required to
fund operational expenses, which directly and adversely affects travel
associated with the market and distribution of products; and (ii) state approval
of the specific game being marketed. 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

                                     Page 4

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         Products and Services

         Ten to Win

     The Company, through its founders, officers, and directors, Messrs. Thomas
Sawyer and Tony Cranford, completed the design and development of its gaming
product called "Ten to Win." Although the Company has not generated any revenues
from the distribution and sale of 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 III
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 Ten
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
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.

                                     Page 5

<PAGE>

     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 Ten to Win are numerous when used by the casinos.

     The Company continues to market Ten to Win at gaming shows and to casinos,
but has not generated any revenues and the Company is not sure if, or when, Ten
to Win will generate any revenues. See "Part I. Item 1. Description of Business
- Marketing and Distribution."

        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 tabletop 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 on 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 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.

                                     Page 6

<PAGE>

     Management is currently contemplating the introduction of Shotgun 21 into
the marketplace after completion of certain final modifications to the system,
which are currently being finalized. 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.

        Ten Stix Video

     The Company has designed and developed a video version game of Ten Stix 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 as
suggested by the testing program. Therefore, management does not anticipate
generation of any revenues during fiscal year 2004 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.

         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).

     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 related to approximately forty-two 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 each. Management of the Company
negotiated a settlement of the liability due and owing to Xpectra. During fiscal
year 2002, the Company paid $15,000 as settlement of the aggregate liability due
to Xpectra and $6,000 to Messrs. Delferro and Stewart. 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, of which $176,673 remains as of
this filing, and the other payable to Michael Humecki in the amount of
$80,000.00, which was paid in full during the 2002 fiscal year; 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). See "Part II. Item 6. Management's Discussion and Analysis or Plan of
Operation - Material Commitments."

                                     Page 7

<PAGE>

     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 (as
discussed above); (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 leasing of the Pro Shuffle
generates approximately $7,500 in monthly revenue.

         Marketing and Distribution

     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 table
cover 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 "Part I. Item 1. Description of Business - State Gaming
Regulation/Federal Legislation."

         Marketing Strategy

     The Company intends to capture market niches in the gaming industry within
the States of Arizona, 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 Arizona, Mississippi, New
Mexico, Nevada, California, and Wisconsin. By fiscal year ended 2004, management
intends to commence marketing its gaming products internationally, including
countries such as Africa, Canada, South America, Caribbean Islands and Southeast
Asia, which have legalized gaming.

                                     Page 8

<PAGE>

     As of the date of this Annual Report, the Company is currently focusing on
marketing its gaming products within the States of Arizona, Colorado, New
Mexico, Nevada, South Dakota, Mississippi, California, 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.TenStix.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 Global
Gaming Expo, will be a significant source for marketing the Company's products.
There are approximately six annual major trade shows that the Company
participates in, the largest show, the Global Gaming Expo, is held annually in
Las Vegas, Nevada during September/October. During the 2003 Global Gaming Expo,
management believes that over 20,000 key gaming executives, casino managers and
supervisors attended. The Company obtained 35 key leads and introductions for
its various products from U.S. and international casinos. Management has been
involved in negotiations with several of these contacts.

     Management intends to direct a significant portion of its marketing efforts
toward market penetration in the States of Arizona, Nevada, New Mexico and
California, with continued emphasis on the State of Colorado.

          Recent Developments

     The Company has been involved in developing a retail market for its
ProShuffle card shufflers. The Company is working with Excalibur Electronics,
Inc. in Miami, Florida, and they have developed and are marketing the consumer
version shufflers to retail stores throughout the country.

         Strategic Alliances

     None.

         Competitive Business Conditions

     The main competitors of the Company include Shufflemaster, Mikohn, Masque
Publishing, and Galaxy Gaming. Shufflemaster markets the Shufflemaster line of
playing card shufflers and several table games including "Let It Ride," "Three
Card Poker," and "War." The Company considers these games and shufflers to be
their main competition with regard to casino business. Mikohn markets "Caribbean
Stud" table game among other and also competes with Ten Stix for table game
space. Galaxy Gaming has been successful leasing their game, "Lucky Ladies," in
multiple markets making them a strong competitor.

         Raw Materials and Supplies

     Not Applicable

         Dependence on One or a Few Major Customers

     The Company believes that the diversity of the products and services it
offers helps alleviate the dependence on any one customer or limited group of
customers. Through the widespread use of the Company's products and services
in gaming industries, the Company will continue to increase its customer base.
However, the Company had three customers who accounted for greater than 10% of
total revenue each.

                                     Page 9

<PAGE>
         Intellectual Property and Proprietary Rights

     The Company currently holds one registered U.S. trademark. The mark "TEN
STIX 21," Trademark Registration No. 2092620, was registered on September 2,
1997.

     The Company currently holds two U.S. registered patents: 1) Pro Shuffle
Multi deck automatic card shuffler No. 5718427, used in casinos to shuffle up to
8 decks of cards, and 2) Electronic lighting game No. 6609975, used as an
electronic accounting system.

         Need for Government Approval

     With the exception of the requirement that the Company be registered or
qualified to do business in the States in which they will be doing business, the
products developed and sold by the Company are not subject to approval of any
government regulation.

         Effect of Existing or Probable Governmental Regulations

     The Company's common stock is registered pursuant to Section 12(g) of the
Securities Exchange Act of 1934. As a result of such registration, the Company
is subject to Regulation 14A of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), which regulates proxy solicitations. Section 14(a) requires
all companies with securities registered pursuant to Section 12(g) thereof to
comply with the rules and regulations of the Commission regarding proxy
solicitations, as outlined in Regulation 14A. Matters submitted to stockholders
of the Company at a special or annual meeting thereof or pursuant to a written
consent will require the Company to provide its stockholders with the
information outlined in Schedules 14A or 14C of Regulation 14; preliminary
copies of this information must be submitted to the Commission at least 10 days
prior to the date that definitive copies of this information are forwarded to
stockholders.

     The Company is also required to file annual reports on Form 10-KSB and
annual reports on Form 10-QSB with the Commission on a regular basis, and will
be required to disclose certain events in a timely manner, (e.g. changes in
corporate control; acquisitions or dispositions of a significant amount of
assets other than in the ordinary course of business; and bankruptcy) in a
Current Report on Form 8-K.

     The Company is not aware of any other governmental regulations now in
existence or that may arise in the future that would have an effect on the
business of the Company.

         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
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.

                                    Page 10

<PAGE>

     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 "Part I. Item 1. Description of
Business - Marketing and Distribution."

         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 operations. 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 operations. 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.

         Research and Development

     The Company continues to develop new and better shuffling devices. The
Shotgun 21 game and Ten to Win game are both still being tested and the new
games are being developed.

         Environmental Regulations

     The Company does not believe that it is affected by any rules, which have
been enacted or adopted regulating the discharge of material into the
environment. However, environmental laws, rules and regulations may have an
adverse effect on any business venture viewed by the Company as an attractive
acquisition, reorganization or merger candidate, and these factors may further
limit the number of potential candidates available to the Company for
acquisition, reorganization or merger.

         Employees

     As of December 31, 2003, the Company had two employees. No union or any
other form of collective bargaining unit represents any employee. None of the
employees are subject to employment agreements with the Company. The Company
believes its relations with its employees are excellent. The Company's success
will depend in large part upon its ability to retain its current employee and
secure additional employees.

                                    Page 11

<PAGE>

                             CERTAIN BUSINESS RISKS

     The risks and uncertainties described below are not the only ones facing
the Company and there may be additional risks that are not presently known or
are currently deemed immaterial. All of these risks may impair business
operations.

     The Company's present and proposed business operations will be highly
speculative and subject to the same types of risks inherent in any new or
unproven venture, as well as risk factors particular to the industries in which
it will operate, and will include, among other things, those types of risk
factors outlined below.

        Risk that the Company's Common Stock may be deemed a "Penny Stock"

     The Company's common stock may be deemed to be a "penny stock" as that term
is defined in Rule 3a51-1 of the Exchange Act of 1934. Penny stocks are stocks
(i) with a price of less than five dollars per share; (ii) that are not traded
on a "recognized" national exchange; (iii) whose prices are not quoted on the
NASDAQ automated quotation system (NASDAQ-listed stocks must still meet
requirement (i) above); or (iv) of an issuer with net tangible assets of less
than US$2,000,000 (if the issuer has been in continuous operation for at least
three years) or US$5,000,000 (if in continuous operation for less than three
years), or with average annual revenues of less than US$6,000,000 for the last
three years.

     A principal exclusion from the definition of a penny stock is an equity
security that has a price of five dollars ($5.00) of more, excluding any broker
or dealer commissions, markups or markdowns. As of the date of this report the
Company's common stock has a price less than $5.00.

     If the Company's Common Stock is at any time deemed a penny stock, section
15(g) and Rule 3a51-1 of the Exchange Act of 1934 would require broker-dealers
dealing in the Company's Common Stock to provide potential investors with a
document disclosing the risks of penny stocks and to obtain a manually signed
and dated written receipt of the document before effecting any transaction in a
penny stock for the investor's account. Potential investors in the Company's
common stock are urged to obtain and read such disclosure carefully before
purchasing any shares that are deemed to be "penny stock."

     Moreover, Rule 15g-9 of the Exchange Act of 1934 requires broker-dealers in
penny stocks to approve the account of any investor for transactions in such
stocks before selling any penny stock to that investor. This procedure requires
the broker-dealer to (i) obtain from the investor information concerning his or
her financial situation, investment experience and investment objectives; (ii)
reasonably determine, based on that information, that transactions in penny
stocks are suitable for the investor and that the investor has sufficient
knowledge and experience as to be reasonably capable of evaluating the risks of
penny stock transactions; (iii) provide the investor with a written statement
setting forth the basis on which the broker-dealer made the determination in
(ii) above; and (iv) receive a signed and dated copy of such statement from the
investor, confirming that it accurately reflects the investor's financial
situation, investment experience and investment objectives. Compliance with
these requirements may make it more difficult for investors in the Company's
common stock to resell their shares to third parties or to otherwise dispose of
them.

        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)
"Lucky Ladies" owned by Galaxy Gaming.

                                     Page 12

<PAGE>

     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.

        Volatile and Limited Market for Common Stock

     As of December 31, 2003, the Company's common stock was quoted on the
Bulletin Board under the symbol "TNTI.OB." OTC, or "Over The Counter,"
securities are issued by companies that either choose not to, or are unable to,
meet the standards for listing on the NASDAQ or a national stock exchange. OTC
equity securities can be quoted on the Pink Sheets Electronic Quotation Service,
or, if the companies meet the SEC reporting requirements and eligibility
requirements established by the NASD, such equity securities may be quoted on
the NASD OTC Bulletin Board Service.

     The market price of the Company's Common Stock has been and is likely to
continue to be highly volatile and subject to wide fluctuations due to various
factors, many of which may be beyond the Company's control, including: annual
variations in operating results; announcements of technological innovations or
new software, services or products by the Company or its competitors; and
changes in financial estimates and recommendations by securities analysts. In
addition, there have been large price and volume fluctuations in the stock
market, which have affected the market prices of securities of many technology
and services companies, often unrelated to the operating performance of such
companies. These broad market fluctuations, as well as general economic and
political conditions, may adversely affect the market price of the Company's
Common Stock. In the past, volatility in the market price of a company's
securities has often led to securities class action litigation. Such litigation
could result in substantial costs and diversion of the Company's attention and
resources, which could have a material adverse effect on the Company's business,
financial condition and operating results.

        Dependence on Key Employees and Need for Additional Management and
Personnel

     Historically, the Company has been heavily dependent on the ability of Tony
Cranford and Thomas Sawyer who have contributed essential technical and
management experience. The loss of either gentleman's services would have a
material adverse effect on the Company's business. However, both gentlemen's
interests are closely aligned with those of the Company due to their large
ownership interest in the Company. There can be no assurance that it will be
able to employ qualified persons on acceptable terms to replace either one
should either one become unavailable.

     In the event of future growth in administration, marketing, manufacturing
and customer support functions, the Company may have to increase the depth and
experience of its management team by adding new members. The Company's success
will depend to a large degree upon the active participation of its key officers
and employees, as well as, the continued service of its key technology and
management personnel and its ability to identify, hire and retain additional
qualified personnel, particularly those in the field of computer programming.
There can be no assurance that the Company will be able to recruit such
qualified personnel to enable it to conduct its proposed business successfully.

                                    Page 13

<PAGE>

        Unascertainable Risks Associated with Potential Future Acquired
Businesses

     To the extent that the Company may acquire a business in a highly risky
industry, the Company will become subject to those risks. Similarly, if the
Company acquires a financially unstable business or a business that is in the
early stages of development, the Company will become subject to the numerous
risks to which such businesses are subject. Although management intends to
consider the risks inherent in any industry and business in which it may become
involved, there can be no assurance that it will correctly assess such risks.

        Risks Associated with Acquisitions and Strategic Relationships

     The Company may acquire other companies or technologies and regularly
evaluate such opportunities. Acquisitions entail numerous risks, including
difficulties in the assimilation of acquired operations and products, diversion
of management's attention from other business concerns, amortization of acquired
intangible assets; and potential loss of key employees of acquired companies.
The Company has no experience in assimilating acquired organizations into our
operations.

     No assurance can be given as to the Company's ability to integrate
successfully any operations, personnel, services or products that might be
acquired in the future. Failure to successfully assimilate acquired
organizations could have a material adverse effect on the Company's business,
financial condition and operating results. The Company has not yet established
nor developed any strategic relationships with other gaming companies or
manufacturers. Additionally, there can be no assurance that any such
relationships, if and when developed, will be maintained, or that if they are
maintained, they will be successful or profitable. The Company may not develop
any new such relationships in the future. Additionally, to the extent that the
Company may acquire a business in a highly risky industry, the Company will
become subject to those risks.

        Conflicts of Interest; Related Party Transactions

     The possibility exists that the Company may acquire or merge with a
business or company in which the Company's executive officers, directors,
beneficial owners or their affiliates may have an ownership interest. Although
there is no formal bylaw, stockholder resolution or agreement authorizing any
such transaction, corporate policy does not forbid it and such a transaction may
occur if management deems it to be in the best interests of the Company and its
stockholders, after consideration of all factors. A transaction of this nature
would present a conflict of interest to those parties with a managerial position
and/or an ownership interest in both the Company and the acquired entity, and
may compromise management's fiduciary duties to the Company's stockholders. An
independent appraisal of the acquired company may or may not be obtained in the
event a related party transaction is contemplated. Furthermore, because
management and/or beneficial owners of the Company's common stock may be
eligible for finder's fees or other compensation related to potential
acquisitions by the Company, such compensation may become a factor in
negotiations regarding such potential acquisitions. It is the Company's
intention that all future transactions be entered into on such terms as if
negotiated at arms length, unless the Company is able to receive more favorable
terms from a related party.

        Risks Associated with Significant Fluctuations in Annual Operating
Results

     The Company expects to experience large fluctuations in future annual
operating results that may be caused by many factors, including the timing of
introductions or enhancements to its products by the Company or its competitors;
market acceptance of such newly introduced or upgraded products; the pace of
development of the market for the Company's such gaming products; changes in
strategy; the success of or costs associated with acquisitions, joint ventures
or other strategic relationships; changes in key personnel; seasonal trends;
changes in the level of operating expenses to support projected growth; and
general economic conditions.

                                    Page 14

<PAGE>

        Risks Associated with Management of a Changing Business

     The Company expects operating expenses and staffing levels to increase in
the future. In particular, the Company intends to hire additional skilled
personnel, including persons with experience in the development, marketing and
sales of their products. Competition for such personnel is intense, and there
can be no assurance that the Company will be able to find or keep additional
suitable persons in the future. The Company expects that future expansion will
continue to challenge the Company's ability to successfully hire and retain
associates.

     If the Company's revenues do not keep up with operating expenses, the
Company's production and release of new and upgraded products do not meet
increasing demands, the Company fails to attract, assimilate and retain
qualified personnel, or the Company fails to manage the Company's expansion
effectively, there could be a material adverse effect on the Company's business,
financial condition and operating results. The rapid growth in the use and
demand for the Company's gaming products may strain the Company's ability to
adequately expand.

        Risks Associated with Delays in Introduction of New Services and
Products

     The Company's future success depends in part on the Company's ability to
develop and enhance the Company's products. There are significant technical
risks in the development of new products or enhanced versions of existing
products. There can be no assurance that the Company will be successful in
achieving any of the following: effectively using new technologies; adapting the
Company's products to emerging industry standards; developing, introducing and
marketing product enhancements; or developing, introducing and marketing new
products. The Company may also experience difficulties that could delay or
prevent the development, introduction or marketing of these products.
Additionally, these new products may not adequately meet the requirements of the
marketplace or achieve market acceptance. If the Company is unable to develop
and introduce enhanced or new products quickly enough to respond to market or
customer requirements, or if they do not achieve market acceptance, the
Company's business, financial condition and operating results will be materially
adversely affected.

        Risks Associated with Dependence on Intellectual Property Rights

     The Company presently holds two patents and one trademark. The Company
intends to seek additional copyright and trademark protection of its trade names
and products. The Company's success and ability to compete are dependent to a
degree on the Company's name and product recognition. Accordingly, the Company
will primarily rely on copyright, trade secret and trademark law to protect its
product and brand names of products or under which the Company conducts its
business. Effective trademark protection may not be available for the Company's
trademarks. There can be no assurance that the Company will be able to secure
significant protection for the Company's trademarks.

     The Company's competitors or others may adopt product or service names
similar to the Company's, thereby impeding the Company's ability to build brand
identity and possibly leading to customer confusion. The Company's inability to
adequately protect its product, brand, trade names and trademarks would have a
material adverse effect on the Company's business, financial condition and
operating results. Despite any precautions the Company takes, a third party may
be able to copy or otherwise obtain and use the Company's software or other
proprietary information without authorization or to develop similar software
independently.

     Policing unauthorized use of the Company's products are made especially
difficult by the global nature of the Internet and the difficulty in controlling
the ultimate destination or security of products or other data. The laws of
other countries may afford the Company little or no effective protection for the
Company's intellectual property.

                                    Page 15

<PAGE>

     There can be no assurance that the steps the Company takes will prevent
misappropriation of the Company's technology or that agreements entered into for
that purpose will be enforceable. In addition, litigation may be necessary in
the future to enforce the Company's intellectual property rights; protect the
Company's trade secrets; determine the validity and scope of the proprietary
rights of others; or defend against claims of infringement or invalidity. Such
litigation, whether successful or unsuccessful, could result in substantial
costs and diversions of resources, either of which could have a material adverse
effect on the Company's business, financial condition and operating results.

        Risks Associated with Infringement

     The Company may in the future receive notices of claims of infringement on
other parties' proprietary rights. There can be no assurance that claims for
infringement or invalidity (or any indemnification claims based on such claims)
will not be asserted or prosecuted against the Company. Any such claims, with or
without merit, could be time consuming and costly to defend or litigate, divert
the Company's attention and resources or require the Company to enter into
royalty or licensing agreements. There can be no assurance that such licenses
would be available on reasonable terms, if at all, and the assertion or
prosecution of any such claims could have a material adverse effect on the
Company's business, financial condition and operating results.

        Risks Associated with Entering New Markets

     One element of the Company's strategy is to leverage the Company's brand
names of products that the Company provides. No assurance can be given that the
Company will be able to compete successfully in any such new markets. There can
be no assurance that the Company's marketing efforts or the Company's pursuit of
any new opportunities will be successful. If the Company's efforts are not
successful, the Company could realize less than expected earnings, which in turn
could result in a decrease in the market value of the Company's Common Stock.
Furthermore, such efforts may divert management attention or inefficiently
utilize the Company's resources.

        Substantial Doubt that the Company Can Continue as a Going Concern

     The Company expects to continue to incur significant capital expenses in
pursuing its business plan to market its products and expand its product line,
while obtaining additional financing through stock offerings or other feasible
financing alternatives. In order for the Company to continue its operations at
its existing levels, the Company will require significant additional funds over
the next twelve months. Therefore, the Company is dependent on funds raised
through equity or debt offerings. Additional financing may not be available on
terms favorable to the Company, or at all. If these funds are not available the
Company may not be able to execute its business plan or take advantage of
business opportunities. The ability of the Company to obtain such additional
financing and to achieve its operating goals is uncertain. In the event that the
Company does not obtain additional capital or is not able to increase cash flow
through the increase of sales, there is a substantial doubt of its being able to
continue as a going concern.

        New and Uncertain Markets and Technology; Unproven Market Acceptance

     Factors that may adversely affect the Company's operating results include,
but are not limited to, the Company's ability to attract consumers/users at a
steady rate and maintain consumer/user satisfaction, the Company's ability to
maintain or increase sales productivity, the introduction of new or enhanced
sites and services, the amount of expenditures for online advertising by
businesses, the level of use of online services and consumer acceptance of the
Internet for services such as those the Company offers, the Company's ability to
upgrade and develop its systems and the amount and timing of operating costs and
capital expenditures relating to expansion of the Company's business and
infrastructure and general economic conditions. The markets for the Company's
products and services have only recently begun to develop, are rapidly changing
and are characterized by low barriers to entry. There can be no assurance that
the markets for the Company's products and services will develop at the pace

                                    Page 16

<PAGE>

anticipated and even if the market emerges that it will become economically
sustainable. Additionally, it is becoming increasingly important that strategic
relationships with larger, more financially sound, and well-known entities be
entered into to obtain exposure to a large number of users, sponsors and
advertisers. There is no assurance that these strategic relationships can be
developed and agreements entered into.

        Future Capital Needs; Uncertainty of Additional Funding

     No assurance can be given that the Company will be able to conduct its
marketing and product development programs as planned, or that change in the
Company's marketing and product development plans or other changes affecting the
Company's operating expenses will not result in the expenditure of such proceeds
before such time. Contingencies may arise that require the Company to obtain
additional funding before that time. The Company's future capital requirements
will depend on many factors, including continued product development programs,
the magnitude of these programs, the time and expense involved in obtaining new
customers, competing technological and market developments, the establishment of
additional collaborative arrangements, the costs involved in filing and
prosecuting and enforcing copyright and trademark claims, establishing marketing
programs and conducting commercialization activities and arrangements for new
products and services.

        Substantial Future Sales of Stock; Dilution

     There may be substantial sales of the Company stock, common or preferred.
Sales of substantial amounts of stock could have a material dilutive effect on
shareholders. Additionally, it may be necessary to offer warrants or options to
obtain strategic relationships or to raise additional capital. All of these
issuances will dilute the holdings of existing shareholders thereby reducing
such holder's percentage ownership.

        No Dividends

     The Company anticipates that it will use any funds available to finance its
growth and that it will not pay cash dividends to stockholders in the
foreseeable future.

        Risk of Technical Obsolescence

     The Company operates in an ever-evolving field. Developments are expected
to continue at a rapid pace in the industry in general. Competition from other
producers, large companies, joint ventures, research and academic institutions
and others is intense and expected to increase. Many of these companies and
institutions have substantially greater capital resources, research and
development staffs and facilities than the Company, and many have substantially
greater experience in conducting testing, manufacturing and marketing of
products. These entities represent significant long-term competition for the
Company. There can be no assurance that developments by others will not render
the Company's technologies and future products obsolete or noncompetitive. In
addition, the Company's competitors might succeed in developing technologies and
products that are more effective than those that are being developed by the
Company or that would render the Company's technology and products obsolete or
noncompetitive. See above "Competitive Business Conditions."

        Limited Current Sales and Marketing Capability

     The Company has limited experience in sales, marketing and distribution. To
market its products, the Company may both hire and retain the necessary
personnel to distribute and market the product or enter into collaborative
arrangement or distribution agreements with third parties who will market such
products or develop its own marketing and sales force with technical expertise
and supporting distribution capability. There can be no assurance that the
Company will be able to hire or retain the personnel with sufficient experience
and knowledge to distribute and market its products or be able to enter into
collaborative or distribution arrangements or develop its own sales force, or
that such sales and marketing efforts, including the efforts of the companies
with which the Company will enter into agreements will be successful.

                                    Page 17

<PAGE>

        No Guarantee of Continued Listing on OTC Bulletin Board

     There is no guarantee that the Company's common stock will continue to be
listed on the pink sheets or on any other published medium including but not
limited to the OTC Bulletin Board or any publication by the National Quotation
Bureau, Incorporated or any by similar successor organizations, or by any member
firm of the New York Stock Exchange, or other American Exchange, NASDAQ, or NASD
related entity.

        History of Losses; Uncertainty of Future Profitability

     As of December 31, 2003, the Company had accumulated significant net
losses. The development of the Company's products will require the commitment of
substantial resources to increase its advertising, marketing and distribution of
its existing products and to complete the testing manufacturing, marketing and
distribution of said new products. These expenditures are expected to result in
substantial and increasing losses over the next six months. There can be no
assurance that the Company will not incur substantial and continuing net losses
beyond the next six months or that the Company will ever reach profitability.
Furthermore, there can be no assurance the Company's products will meet the
expectations and effectiveness required to be competitive in the market place,
that the Company will enter into arrangements for product development and
commercialization, successfully market its software products, or achieve
customer acceptance.

        Reports to Security Holders

     Copies of the Company's reports, as filed with the Securities and Exchange
Commission, are available and can be accessed and downloaded via the internet at
http://www.sec.gov/cgi-bin/srch-edgar, and simply typing in "Ten Stix, Inc."

Item 2.  Description of Property.

     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
80452, which consists of an office area, a show room and work area, and storage
space. The Company leases its office space at $650.00 per month 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 feet. 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.

        Rapid Funding, LLC v. Ten Stix, Inc.

     The Company is a defendant in the matter of Rapid Funding, LLC v. Ten Stix,
Inc., filed subsequent to the date of this report on February 17, 2004, in the
District Court for the County of Jefferson, State of Colorado, Case No.
04-CV-0461. Included as additional defendants in this case are Tony A. Cranford
and Thomas E. Sawyer, each being an officer and director of the Company.

                                     Page 18

<PAGE>

     The background for this action arises out of a secured loan made on or
about June 28, 2002 by Rapid Funding LLC to Jodi and Robert Stevens in the
amount of $163,500. The Stevens pledged 305,000 shares of common stock of the
Company as collateral for this loan. As additional security for the loan, Tony
Cranford and Thomas Sawyer each pledged 4,500,000 shares of common stock they
owned in the Company for repayment of the loan. The Stock Pledge Agreement
executed by the parties allowed Rapid Funding, as secured party, to sell, assign
or deliver any of the pledged stock at a public or private sale in order to
satisfy and repay the loan, in the event the Stevens default on their loan
obligations. Subsequently, the Stevens defaulted under the terms of the loan
documents. On November 24, 2003, a UCC sale of the pledged stock was held and
Rapid Funding was the prevailing bidder. Thus, Rapid Funding became the owner of
9,582,500 shares of the Company's common stock, being approximately 48.8% of all
issued and outstanding shares in the Company. Thereafter, the Company, Rapid
Funding and Messrs. Cranford and Sawyer entered into a series of "standstill"
agreements in order to work out their dispute. These agreements expired on
February 13, 2004.

     On February 17, 2004, Rapid Funding commenced the subject litigation
asserting breach of the "standstill" agreements and, by subsequent amendment to
its Complaint, various other claims including, without limitation, breach of
agreement and breach of fiduciary duty. Rapid Funding initially alleged that it
was being unlawfully diluted in connection with the Company's undertaking to
issue 470,000,000 shares pursuant to a merger without having first obtained
shareholder consent, which issuance and transaction was later reversed. On
February 17, 2004, Rapid Funding was granted a temporary restraining order
prohibiting the Company and Messrs. Cranford and Sawyer from issuing any
additional shares of the Company's common stock and prohibiting the sale,
assignment, pledge or encumbrance of any of the Company's assets. Thereafter, on
March 3, 2004, the Court entered a Preliminary and Mandatory Injunction which
prohibited the issuance by the Company of any shares of common stock, prohibited
the sale, assignment, pledge or encumbrance of the Company's assets and,
additionally, set forth the requirement that a meeting of the Company's
shareholders be held.

     Thereafter, on April 6, 2004, the parties entered into a final stipulation
which provided, among other things, for the transfer by Mr. Cranford and Mr.
Sawyer to Rapid Funding of all of their respective shares of capital stock of
the Company and the deliver duly signed and acknowledged stock powers to convey
all of foregoing shares of the Company's stock, and the other shares of the
Company stock previously foreclosed upon by Rapid Funding. It was further agreed
that a shareholder's meeting of the Company would be conducted which would,
among other things, elect Messrs. Cranford and Sawyer as directors for the
ensuing year and approve of new Articles of Incorporation which would change the
domicile of the Company to Nevada. After approval of new Articles of
Incorporation, the Company agreed to issue to Rapid Funding 11,000,000 shares of
restricted common stock in consideration of the settlement of the litigation and
the Preliminary and Mandatory Injunction being vacated and terminated. Moreover,
Rapid Funding agreed to sell to the Company all of its shares of the Company's
common stock, whether now owned or hereafter acquired or received, in exchange
for $200,000.00 in cash payable in 12 monthly installments commencing no later
than July 1, 2004. Until this purchase price is paid in full, the Company agrees
to refrain from issuing any new shares of its capital stock or any other rights
to acquire capital stock that would dilute the percentage ownership of Rapid
Funding in the Company below 51% of the outstanding common stock. In this
regard, the Company must provide Rapid Funding with certified monthly reports
that detail the exact amount of capital stock, or any other rights to acquire
capital stock, issued by the Company to confirm that there is no threat of
dilution to Rapid Funding's minimum ownership interest. The Stipulation contains
a series of additional restrictions including, without limitation, limitations
on salaries payable to Messrs. Cranford and Sawyer, restrictions on the sale of
assets of the Company and limitations on indebtedness, which may be incurred by
the Company. In the event of default in the terms of the Stipulation, Rapid
Funding is entitled to petition for re-institution of the preliminary injunction
against the Company and entry of judgment against Messrs. Cranford and Sawyer,
jointly and severally, in the amount of the unpaid balance of the $200,000
payable to Rapid Funding, provided that, in no event, shall such judgment be in
an amount exceeding $90,000.00.

     The foregoing provides a summary of pertinent provisions set forth in the
Stipulation entered into by the parties to settle and resolve the subject
litigation. For further information concerning the Stipulation, please see the
Company's Form 8-K filed on May 4, 2004.

                                    Page 19

<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders.

     No matter was submitted to a vote of our shareholders during the fourth
quarter of 2003.

                                     PART II
                                     -------
Item 5.  Market For Common Equity and Related Stockholder Matters.

     As of the date of this Annual Report, the Company's Common Stock trades on
the Over-the-Counter Bulletin Board under the symbol "TNTI.OB." The market for
the Company's Common Stock is limited, volatile and sporadic and the price of
the Company's Common Stock could be subject to wide fluctuations in response to
quarterly 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. The following table sets forth the high and
low sales prices relating to the Company's Common Stock for the last fiscal year
since commencement of trading. These quotations reflect inter-dealer prices
without retail mark-up, mark-down, or commissions, and may not reflect actual
transactions.

<TABLE>
         Fiscal 2003                                 High                       Low
         <S>                                         <C>                        <C>
         ----------------------------------------------------------------------------
         First Quarter (1)                           $1.01                      $0.60
         Second Quarter (1)                          $0.85                      $0.35
         Third Quarter (1)                           $0.42                      $0.04
         Fourth Quarter (1)                          $0.10                      $0.02

         Fiscal 2002                                 High                       Low
         ----------------------------------------------------------------------------
         First Quarter                               n/a                        n/a
         Second Quarter                              $3.11                      $0.25
         Third Quarter                               $1.80                      $0.51
         Fourth Quarter                              $1.90                      $0.73
</TABLE>

         (1)  This represents the closing bid information for the stock on the
              Non-Nasdaq OTC.  The bid and ask quotations represent prices
              between dealers and do not include retail markup, markdown or
              commission.  They do not represent actual transactions and have
              not been adjusted for stock dividends or splits.

     All of the above information was listed as reported by the National
Association of Securities Dealers Composite feed or other qualified inter-dealer
quotation medium.

        Holders

     There were approximately 255 holders of record of the Company's Common
Stock as of May 5, 2004, and 18 shareholders of record of the Company's
Preferred Stock.

        Dividends

     The Company has not declared any cash dividends with respect to its common
stock, and does not intend to declare dividends in the foreseeable future. There
are no material restrictions limiting, or that are likely to limit, the
Company's ability to pay dividends on its securities.

        Recent Issuance of Registered Securities

     On November 18, 2003, the Company authorized the issuance of 600,000
registered shares of common stock to David Keaveney, pursuant to the Corporate
Image Agreement dated September 11, 2003. No underwriters were used. The
securities were registered under the Securities Act of 1933 on Form S-8, which
became effective on September 15, 2003 and pursuant to an Order of Effective
Registration by Qualification pursuant to Section 44-1891 of the Securities Act
of Arizona which was granted on November 12, 2003.

                                    Page 20

<PAGE>

     On December 4, 2003, the Company issued 600,000 registered shares of common
stock to David Keaveney, pursuant to Corporate Image Agreement dated September
11, 2003. No underwriters were used. The securities were registered under the
Securities Act of 1933 on Form S-8, which became effective on September 15, 2003
and pursuant to an Order of Effective Registration by Qualification pursuant to
Section 44-1891 of the Securities Act of Arizona which was granted on November
12, 2003.

        Recent Issuance of Restricted Securities

     On October 14, 2003, the Company authorized the issuance of 20,000
restricted shares of Common Stock to Empire Relations Group Inc., pursuant to a
Consulting Services Agreement. No underwriters were used. The securities were
issued pursuant to an exemption from registration provided under Section 4(2)
and 4(6) of the Securities Act of 1933.

     On November 7, 2003, the Company issued 500,000 restricted shares of Common
Stock to DK Holdings, LLC pursuant to the terms of a Consulting Services
Agreement. No underwriters were used. The securities were issued pursuant to an
exemption from registration provided under Section 4(2) and 4(6) of the
Securities Act of 1933.

     On November 14, 2003, the Company authorized the issuance of 470,238,120
shares of common stock to fifteen separate individuals and entities in
anticipation of a merger with WayCool3D. No underwriters were used. The
securities were issued pursuant to an exemption from registration provided under
Section 4(2) and 4(6) of the Securities Act of 1933.

     On November 16, 2003, the Company authorized the cancellation of the merger
between Ten Stix, Inc. and WayCool3D, pursuant to the cancellation, 470,238,210
shares of Ten Stix Common Stock issued as part of the merger were returned and
cancelled.

     On December 17, 2003, the Company issued 175,000 restricted shares of
common stock to American Registrar & Transfer, in exchange for services rendered
to the Company in the amount of $1,750. No underwriters were used. The
securities were issued pursuant to an exemption from registration provided under
Section 4(2) and 4(6) of the Securities Act of 1933.

        Subsequent Events

     On January 14, 2004, subsequent to the period covered by this report, the
Company issued 1,200,000 registered shares of common stock to David Keaveney,
pursuant to Corporate Image Agreement dated September 11, 2003. No underwriters
were used. The securities were registered under the Securities Act of 1933 on
Form S-8, which became effective on September 15, 2003 and pursuant to an Order
of Effective Registration by Qualification pursuant to Section 44-1891 of the
Securities Act of Arizona which was granted on November 12, 2003.

     On February 26, 2004, subsequent to the period covered by this report, Ten
Stix requested, the return of Preferred Stock shares from Mercatus, Certificate
No. 1021 for 5,725 shares and No. 1020 for 8,588 shares, in consideration of
loan funding that was never delivered to the Company.

     On April 7, 2004, subsequent to the period covered by this report, the
Company issued 1,200,000 registered shares of common stock to David Keaveney,
pursuant to Corporate Image Agreement dated September 11, 2003. No underwriters
were used. The securities were registered under the Securities Act of 1933 on
Form S-8, which became effective on September 15, 2003 and pursuant to an Order
of Effective Registration by Qualification pursuant to Section 44-1891 of the
Securities Act of Arizona which was granted on November 12, 2003.

                                    Page 21

<PAGE>

     On April 7, 2004, subsequent to the period covered by this report, the
Company issued 1,000,000 registered shares of common stock to Frank Dobrucki for
services rendered as a consultant. No underwriters were used. The securities
were registered under the Securities Act of 1933 on Form S-8, which became
effective on September 15, 2003 and pursuant to an Order of Effective
Registration by Qualification pursuant to Section 11-51-304 of the Colorado
Securities Act which was granted on September 17, 2003.

     On April 13, 2004, subsequent to the period covered by this report, the
Company issued 2,000,000 registered shares of common stock to Scott Cartwright
pursuant to the 2003 Stock Plan. No underwriters were used. The securities were
registered under the Securities Act of 1933 on Form S-8, which became effective
on September 15, 2003 and pursuant to an Order of Effective Registration by
Qualification pursuant to Section 11-51-304 of the Colorado Securities Act which
was granted on September 17,2003.

     On April 13, 2004, subsequent to the period covered by this report, the
Company issued 2,000,000 registered shares of common stock to John Delello
pursuant to the 2003 Stock Plan. No underwriters were used. The securities were
registered under the Securities Act of 1933 on Form S-8, which became effective
on September 15, 2003 and pursuant to an Order of Effective Registration by
Qualification pursuant to Section 11-51-304 of the Colorado Securities Act which
was granted on September 17,2003.

     On May 13, 2004, subsequent to the period covered by this report, Ten Stix
issued 11,000,000 shares of its common stock to Rapid Funding, LLC, pursuant to
the terms of the April 6, 2004 stipulation in the matter of Rapid Funding, LLC
v. Ten Stix, Inc., Case No. 04-CV-0461. Following the issuance of these shares
Rapid Funding, LLC is the owner of 25,764,600 shares of Ten Stix, Inc. common
stock, representing 54.68% of the total outstanding shares. See Part II, Item 1
- Legal Proceedings.

     On May 13, 2004, subsequent to the period covered by this report, the
Company issued 1,300,000 registered shares of common stock to David Keaveney,
pursuant to Corporate Image Agreement dated September 11, 2003. No underwriters
were used. The securities were registered under the Securities Act of 1933 on
Form S-8, which became effective on September 15, 2003 and pursuant to an Order
of Effective Registration by Qualification pursuant to Section 44-1891 of the
Securities Act of Arizona which was granted on November 12, 2003.

     On May 13, 2004, subsequent to the period covered by this report, the
Company issued 1,000,000 registered shares of common stock to Frank Dobrucki for
services rendered as a consultant. No underwriters were used. The securities
were registered under the Securities Act of 1933 on Form S-8, which became
effective on September 15, 2003 and pursuant to an Order of Effective
Registration by Qualification pursuant to Section 11-51-304 of the Colorado
Securities Act which was granted on September 17, 2003.

     On May 13, 2004, subsequent to the period covered by this report, the
Company issued 2,700,000 registered shares of common stock to Scott Cartwright
pursuant to the 2003 Stock Plan. No underwriters were used. The securities were
registered under the Securities Act of 1933 on Form S-8, which became effective
on September 15, 2003 and pursuant to an Order of Effective Registration by
Qualification pursuant to Section 11-51-304 of the Colorado Securities Act which
was granted on September 17,2003.

     On May 13, 2004, subsequent to the period covered by this report, the
Company issued 2,700,000 registered shares of common stock to John Delello
pursuant to the 2003 Stock Plan. No underwriters were used. The securities were
registered under the Securities Act of 1933 on Form S-8, which became effective
on September 15, 2003 and pursuant to an Order of Effective Registration by
Qualification pursuant to Section 11-51-304 of the Colorado Securities Act which
was granted on September 17,2003.

                                     Page 22

<PAGE>

Item 6.  Management's Discussion and Analysis or Plan of Operation.

        Cautionary Forward - Looking Statement

     This section and other parts of this Form 10-KSB contain forward-looking
statements that involve risks and uncertainties. The Company's actual results
may differ significantly from the results discussed in the forward-looking
statements. Certain matters discussed herein may contain forward-looking
statements that are subject to risks and uncertainties. Such risks and
uncertainties include, but are not limited to, the following:

      -        the volatile and competitive nature of the software business,
      -        the uncertainties surrounding the rapidly evolving markets in
               which the Company competes,
      -        the uncertainties surrounding technological change and the
               Company's dependence on computer systems,
      -        the Company's dependence on its intellectual property rights,
      -        the success of marketing efforts by third parties,
      -        the changing demands of customers and
      -        the arrangements with present and future customers and third
               parties.

     Should one or more of these risks or uncertainties materialize or should
any of the underlying assumptions prove incorrect, actual results of current and
future operations may vary materially from those anticipated.

     The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto included in Item 7 of this
Form 10-KSB. See "Part II, Item 7. Financial Statements." All information
presented herein is based on the Company's fiscal calendar.

        Fiscal Year Period Ended December 31, 2003 Compared to Fiscal Year Ended
December 31, 2002

     The Company's net loss for fiscal year ended December 31, 2003 was
approximately ($576,982) compared to a net loss of approximately ($145,012) for
fiscal year ended December 31, 2002 (an increase of $431,970). Total revenue for
fiscal years ended December 31, 2003 and 2002 were $94,981 and $123,274,
respectively (a decrease of $28,293). Total revenue generated during fiscal year
ended December 31, 2003 was comprised of (i) $90,726 in lease income; (ii) $200
in equipment sales; and, (iii) 3,965 in royalties income. Total revenue
generated during fiscal year ended December 31, 2002 was comprised of (i)
$99,225 in lease income and (ii) $24,049 in equipment sales. The decrease in
revenue during fiscal year ended December 31, 2003 was primarily due to a
decrease in the number of shufflers sold to casinos. During fiscal year ended
December 31, 2003, the Company incurred operating expenses of $562,912 compared
to $337,682 of operating expenses incurred during fiscal year ended December
31,2002 (an increase of $225,230). Operating expenses for fiscal year ended
December 31, 2003 primarily consisted of: (i) $502,915 as selling, general and
administrative expenses; (ii) $49,153 as depreciation expense; and, (iii)
$10,844 as amortization expense. Operating expenses for fiscal year ended
December 31, 2002 primarily consisted of: (i) $276,770 as selling, general and
administrative expenses; (ii) $45,611 as depreciation expense; (iii) $10,844 as
amortization expense; and, (iv) $4,457 in cost of sales.

     The increase in operating expenses during fiscal year ended December 31,
2003 compared to fiscal year ended December 31, 2002 was primarily due to a
increase in salaries, contract labor, and general and administrative expenses
resulting from an increase in emphasis on scale and scope of overall corporate
activity pertaining to the marketing and distribution of the Company's gaming
products. General and administrative expenses generally include corporate
overhead, administrative management, consulting costs and professional fees.

                                    Page 23

<PAGE>

     The Company also incurred $20,309 as interest expense during fiscal year
ended December 31, 2003 as compared to $25,604 as interest expense during fiscal
year ended December 31, 2002.

        Liquidity and Capital Resources

     Since inception, the Company has focused primarily on the research,
development and design of its products, and generated minimal revenues. 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. As of the date of this Annual Report,
management of the Company believes that an estimated $500,000 is required over
the next fiscal year for payment of expenses associated with the ongoing
business operations of the Company. The Company generated $94,891 in total
revenue during fiscal year ended December 31, 2003 and $123,274 in total revenue
during fiscal year ended December 31, 2002. Management anticipates that overall
generation of revenues will increase on an annual basis based on existing
contracts and marketability of its gaming products. Management believes that the
Company can satisfy its cash requirements for approximately the next six months
based on its ability to successfully generate revenues from the marketing of its
gaming products and to obtain advances from certain investors and related
parties, as necessary. 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.

        Fiscal Year Ended December 31, 2003

     As of December 31, 2003, the Company's current assets were $11,001 and its
current liabilities were $499,547, which resulted in a working capital deficit
of $488,546. As of December 31, 2003, current assets were comprised of: (i)
$3,487 in inventory; (ii) $3,614 in cash and (iii) $3,900 in receivables. As of
December 31, 2003, current liabilities were comprised of: (i) $191,633 in notes
payable; (ii) $76,500 in notes payable to shareholders; (iii) $140,804 in
accounts payable to related parties; and, (iv) $90,610 in accounts payable and
accrued expenses. As of December 31, 2003, the Company's total assets were
$273,224 and its total liabilities were $499,547. As of December 31, 2003, the
Company's total assets exceeded its total liabilities by $226,323. As of
December 31, 2003, the Company's total assets consisted primarily of (i) $11,001
as current assets; (ii) $134,545 in net cost equipment; (iii) $75,692 in net
intangible assets (consisting of costs associated with the acquisition of
patents, copyrights and licenses which are amortized over lives ranging from 5
to 11 years); and, (iv) $51,986 in non-current inventory. As of December 31,
2003, the Company's total liabilities consisted of $499,547 as current
liabilities. The Company's stockholders' equity decreased from $111,647 for
fiscal year ended December 31, 2002 to a deficit of ($226,323) for fiscal year
ended December 31, 2003. For fiscal year ended December 31, 2003, net cash flow
used by operating activities was ($123,467) compared to net cash flow used by
operating activities of ($112,756) for fiscal year ended December 31, 2002. The
increase in net cash used by operating activities during fiscal year ended
December 31, 2003 compared to December 31, 2002 resulted primarily from a
net loss of ($576,982) incurred during fiscal year ended December 31, 2003
compared to a net loss of ($145,012) incurred during fiscal year ended December
31, 2002.

                                    Page 24

<PAGE>

     During fiscal year ended December 31, 2003, net cash flows provided by
investing activities was $1,875 compared to $2,957 during fiscal year ended
December 31, 2002, which relates primarily to the proceeds from the sale of
equipment.

     Net cash flows provided by financing activities was $117,135 during fiscal
year ended December 31, 2003 compared to net cash flows provided by financing
activities of $117,563 during fiscal year ended December 31, 2002. Cash flows
provided by financing activities for the fiscal year ended December 31, 2003
were primarily attributable to: (i) $147,162 in proceeds from sale of shares of
Common Stock; and, (ii) $25,500 in loans from shareholders.

        Sources Of Funding For Material Commitments And Working Capital.

     Asset Purchase Agreement. A significant and estimated material commitment
for the Company for fiscal year 2004 is the amount of $176,673 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 was in the amount of $80,000
and was payable to Michael Humecki (the "Humecki Promissory Note"). As of the
date of this Annual Report, the Company has paid the Humecki Promissory Note in
full. 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
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 paid
Summit an amount of $43,327 under the terms of the Summit Promissory Note.

     Loans from Shareholders. A significant and estimated material commitment
for the Company for fiscal year 2003 is the amount of $66,000.00 due and owning
certain shareholders of the Company. During fiscal year 2002, certain
shareholders of the Company advanced an aggregate of $66,000.00 to the Company
pursuant to notes payable. The terms of the notes payable provide that the notes
are payable upon demand, are non-interest bearing, and may be converted into an
undetermined number of shares of the Company's restricted Common Stock.

        Plan Of Operation

     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 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

                                    Page 25

<PAGE>

expenditures, will be funded pursuant to public or private offerings, including
the private placement offerings described above under Regulation D, Rule 506,
and Regulation S, 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, HJ & Associates, LLC, 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 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.

        Off-Balance Sheet Arrangements

     As of the date of this Annual Report, the Company does not have any
off-balance sheet arrangements that have or are reasonably likely to have a
current or future effect on the Company's financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that are material to investors. The
term "off-balance sheet arrangement" generally means any transaction, agreement
or other contractual arrangement to which an entity unconsolidated with the
Company is a party, under which the Company has (i) any obligation arising under
a guarantee contract, derivative instrument or variable interest; or (ii) a
retained or contingent interest in assets transferred to such entity or similar
arrangement that serves as credit, liquidity or market risk support for such
assets.

        Audit Committee

     As of the date of this Annual Report, the Company has not appointed members
to an audit committee. As of the date of this Annual Report, no audit committee
exists. Therefore, the role of an audit committee has been conducted by the
Board of Directors of the Company. The Company intends to establish an audit
committee. When established, the audit committee will be comprised of at least
two disinterested members. 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: (i) to serve as
an independent and objective party to monitor the Company's financial reporting
process and internal control system; (ii) to review and appraise the audit
efforts of the Company's independent accountants; (iii) to evaluate the
Company's quarterly financial performance as well as its compliance with laws
and regulations; (iv) to oversee management's establishment and enforcement of
financial policies and business practices; and (v) to provide an open avenue of
communication among the independent accountants, management and the Board of
Directors. The Board of Directors has considered whether the provision of such
non-audit services would be compatible with maintaining the principal
independent accountant's independence. During the fiscal years ended December
31, 2003 and 2002, the aggregate fees billed by the Company's auditors, for
services rendered for the audit of the annual financial statements and the
review of the financial statements included in the quarterly reports on Form
10-QSB for services provided in connection with the statutory and regulatory
filings or engagements for those fiscal years, was $24,000 and $28,860,
respectively. Financial Information Systems Design and Implementation Fees
during fiscal year ended December 31, 2003, the Company did not incur any fees
for professional services rendered by its principal and former independent
accountant for certain information technology services which may include, but is
not limited to, operating or supervising or managing the Company's information
or local area network or designing or implementing a hardware or software system
that aggregate source data underlying the financial statements. All Other Fees
During fiscal year ended December 31, 2003, the Company did not incur any other
fees for professional services rendered by its principal independent accountant
for all other non-audit services which may include, but is not limited to,
tax-related services, actuarial services or valuation services.

                                    Page 26

<PAGE>

     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
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.

Item 7.  Financial Statements.

     The Financial Statements of Ten Stix, Inc. are listed on
the Index to Financial Statements set forth on page F-2.

Item 8.  Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure.

     None.

                                    PART III
                                    --------
Item 9.  Directors, Executive Officers, Promoters and Control Persons Compliance
with Section 16(a) of the Exchange Act.

     See Item 11 for information on the beneficial ownership of the Company's
securities.

     (a) .....Identity of Directors and Executive Officers.

<TABLE>
<CAPTION>
         Name.....                  Age              Position
         <S>                        <C>              <C>

         Thomas E. Sawyer           55               Director and President/Treasurer and
                                                     Chief Executive Officer

         Tony A. Cranford           52               Director and Vice President/Secretary
</TABLE>

     THOMAS E. SAWYER has been a Director, the President/Treasurer and Chief
Executive Officer 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.

                                    Page 27

<PAGE>

     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
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 Indian Gaming Conference.

     There are no arrangements or understandings between any of the directors or
executive officers, or any other person or person pursuant to which they were
selected as directors and/or officers.

        Directorships

     No Director of the Company or person nominated or chosen to become a
Director holds any other directorship in any company with a class of securities
registered pursuant to section 12 of the Exchange Act or subject to the
requirements of section 15(d) of such Act or any other company registered as an
investment company under the Investment Company Act of 1940.

        Family Relationships

     There are no family relationships between any of the directors, officers or
employees of the Company.

        Involvement in Certain Legal Proceedings.

     During the past five years, no present or former director, executive
officer or person nominated to become a director or an executive officer of the
Company:

     (1) was a general partner or executive officer of any business against
which any bankruptcy petition was filed, either at the time of the bankruptcy or
two years prior to that time;

     (2) was convicted in a criminal proceeding or named subject to a pending
criminal proceeding (excluding traffic violations and other minor offenses);

     (3) was subject to any order, judgment or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities; or

     (4) was found by a court of competent jurisdiction (in a civil action), 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.

                                    Page 28

<PAGE>

        Section 16 (a) Beneficial Ownership Compliance

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than ten percent of the
Company's Common Stock, to file initial reports of beneficial ownership on Form
3, changes in beneficial ownership on Form 4 and an annual statement of
beneficial ownership on Form 5, with the SEC. Such executive officers, directors
and greater than ten percent shareholders are required by SEC rules to furnish
the Company with copies of all such forms that they have filed.

     Based on its review of the copies of such forms filed with the SEC
electronically, received by the Company and representations from certain
reporting persons, the Company believes that for the fiscal year ended December
31, 2003, all the officers, directors and more than 10% beneficial owners have
filed all reports required under the above described filing requirements.
However, both Messrs. Sawyer and Cranford were delinquent in the filing of their
an Annual Statement of Beneficial Ownership on Form 5 for the fiscal year ended
December 31, 2003 and additionally their Statement of Change of Beneficial
Ownership on Form 4 with regard to the transfer of shares that occurred on
November 24, 2003 as set forth in Item 3 of this report. Subsequent to the
period covered by this report, on May 4, 2004, Messrs. Sawyer and Cranford filed
the required Forms 4 and 5.


Item 10.  Executive Compensation.

     The following table sets forth the aggregate compensation paid by the
Company for services rendered during the periods indicated:

<TABLE>
<CAPTION>

                           SUMMARY COMPENSATION TABLE

                                                                                Long Term Compensation
                                    Annual Compensation                         Awards                      Payouts
                         ------------------------------------------------------------------------------------------
                                                                                    Securities              All
                                                          Other                     Underlying              Other
                                                          Annual       Restricted   Options/     LTIP      Compen-
Name and                 Year or                          Compen-      Stock        SAR's        Payouts    sation
Principal                Period  Salary     Bonus         sation)      Awards       (#)          ($)        ($)
Position                 Ended   ($)        ($)           ($)
(a)                      (b)     (c)        (d)           (e)          (f)          (g)          (h)        (i)
<S>                      <C>     <C>        <C>           <C>          <C>          <C>          <C>        <C>
-------------------------------------------------------------------------------------------------------------------
Thomas E. Sawyer         2003    $43,500     0            $9,384*      0            0            0          0
President and CEO        2002    $39,000     0            $4,480*      0            0            0          0
                         2001    $0          0            $0           0            0            0          0

Tony A. Cranford         2003    $43,500     0            $0           0            0            0          0
Vice President           2002    $39,000     0            $0           0            0            0          0
                         2001    $0          0            $0           0            0            0          0

</TABLE>
____________________

* On December 28, 2000, Mr. Sawyer assigned the distributorship rights to market
a card game called "Bonus 6" within the United States, excluding Colorado, to
the Company and the Company assumed the obligations under Mr. Sawyer's
distribution agreement with the owner of Bonus 6. Pursuant to the terms of the
assignment agreement, Mr. Sawyer maintained the marketing and distribution
rights within the State of Colorado and receives a 40% commission on gross
revenues generated from the sale or lease of "Bonus 6" to the casinos located in
Colorado, on a monthly basis. During 2003 and 2002, Mr. Sawyer received
commissions of $9,384 and $4,480, respectively from the Company. During 2003,
the Company allowed its distribution rights to "Bonus 6" to expire.

        Employment Contracts

     None.

        Other Contracts

     None.

                                    Page 29

<PAGE>

        Stock Options and Warrants

     On September 11, 2003, the Company's 2003 Stock Plan (the "Plan") was
adopted and approved by the Board of Directors. The Plan has authorized
15,000,000 shares of common stock of the Company to that may be granted to
employees, officers, and directors of the Company in the form of both incentive
and non qualified stock options.

     As of the date of this report no options or other grants have been made
pursuant to the Plan.

        Option Grants Table

     The following tables reflect certain information, with respect to stock
options granted under the Company's stock option plans to certain executive
officers and directors during fiscal 2003.
<TABLE>
<CAPTION>
                     Options/SAR Grants In Last Fiscal Year

                                            Number Of         % Of Total
                                            Securities        Options
                                            Underlying        Granted To        Exercise
                                            Options           Employees         Or Base
                                            Granted           In Fiscal         Price            Expiration
Name                                        (#)               Year(%)           ($/Sh)(1)        Date
<S>                                         <C>               <C>               <C>              <C>
-----------------------------------------------------------------------------------------------------------
Thomas Sawyer                                 0                0                 0                0
Tony Cranford                                 0                0                 0                0
</TABLE>

Option Exercise and Year End-Value Table

     The following tables reflect certain information, with respect to the
exercise of stock options by certain executive officers during fiscal 2003:

<TABLE>
<CAPTION>
Aggregated Option/Sar Exercises In The Last Fiscal Year And Year-End Option/Sar Value

                                                                       Number Of
                                                                       Securities                Value Of
                                                                       Underlying                Unexercised
                                                                       Unexercised               In-The-Money
                                                                       Options At                Options At
                                                                       Fy-End(#)                 Fy-End($)
                                                                       --------------------------------------
                               Shares          Value
                             Acquired On     Realized                Exercisable (E)/               Exercisable (E) /
Name                         Exercise(#)       ($)                   Unexercisable (U)              Unexercisable (U)
<S>                          <C>             <C>                     <C>                            <C>

---------------------------------------------------------------------------------------------------------------------------
Thomas E. Sawyer                  0             0                     0 (E)  / 0 (U)                0 (E) /  0 (U)
Tony A. Cranford                  0             0                     0 (E)  / 0 (U)                0 (E) /  0 (U)
</TABLE>
-----------------

                                    Page 30

<PAGE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters.

     (a) Security Ownership of Certain Beneficial Owners

     The following table sets forth security ownership information as of the
close of business on December 31, 2003, for any person or group, known by the
Company to own more than five percent (5%) of the Company's voting securities.

<TABLE>
<CAPTION>
                                                     Number of
                                                     Shares                Percent of
                                                     Beneficially          Outstanding
Name of Beneficial Owner                             Owned                 Shares
<S>                                                  <C>                   <C>
---------------------------------------------------------------------------------------------------------------------------

Thomas E. Sawyer                                     2,795,750             13.30%
3101 Riverside Drive
Idaho Springs, CO 80452

Tony A. Cranford                                     2,386,350             11.35%
12252 W. Chenango Drive
Morrison, CO 80465

Rapid Funding, LLC                                   9,582,500             45.59%
c/o Andrew Miller
1405 Adams Street
Denver, CO 80206
</TABLE>

        (b) Security Ownership of Management

     The following table sets forth security ownership information as of the
close of business on December 31, 2003, of all directors, executive officer
listed in the "Summary Compensation Table" set forth herein, and all directors
and executive officers as a group.

<TABLE>
                                                     Number of
                                                     Shares                Percent of
                                                     Beneficially          Outstanding
Name of Beneficial Owner                             Owned(1)              Shares
<S>                                                  <C>                   <C>
---------------------------------------------------------------------------------------

Thomas E. Sawyer                                     2,795,750             13.30%
3101 Riverside Drive
Idaho Springs, CO 80452

Tony A. Cranford                                     2,386,350             11.35%
12252 W. Chenango Drive
Morrison, CO 80465

Officers and Directors as a Group                    5,182,500             24.65%
</TABLE>

        (c) Changes in Control.

     On April 8, 2004, subsequent to the period of this report, pursuant to a
stipulation in settlement of the matter of Rapid Funding, LLC v. Ten Stix, Inc.,
et al., Case Number 04 CV 0461, in the District Court of Jefferson County,
Colorado, Rapid Funding, LLC acquired additional shares of the Company's common
stock so that it then owned an aggregate of 14,764,750 shares (representing
66.39% of then outstanding shares of common stock of the Company) and received
from the Company the right to an additional 11,000,000 shares of the Company's

                                    Page 31

<PAGE>

common stock. A change in control of the Company has occurred due to the
substantial stock ownership now held by Rapid Funding LLC.

     On November 18, 2003, as a result of a UCC foreclosure sale on an
obligation due from Robert and Jodi Stevens, Rapid Funding LLC increased its
ownership to an aggregate of 9,582,500 shares of the Company's common stock.
Included in these shares were 4,500,000 shares pledged by Tony A. Cranford, an
officer and director of the Company, and 4,500,000 shares pledged by Thomas E.
Sawyer, an officer and director of the Company. Neither Mr. Cranford nor Mr.
Sawyer were personally obligated on the indebtedness due and owing from Robert
and Jodi Stevens to Rapid Funding, LLC. Thereafter, on April 8, 2004, pursuant
to the Stipulation, Rapid Funding LLC received ownership of an additional
2,386,350 shares from Tony A. Cranford and an additional 2,795,750 shares from
Thomas E. Sawyer and his wife.

     The stipulation also provides that the Company shall pay, in installments
payable over 12 months commencing no later than July 1, 2004, a total of
$200,000 to Rapid Funding, LLC in exchange for which the Company shall purchase
and acquire all shares of the Company's common stock owned by Rapid Funding,
LLC.

        (d) Securities Authorized for Issuance Under Equity Compensation Plans.
<TABLE>
<CAPTION>
                                                     --------------------- ------------------- ----------------------
                                                                           Weighted-average    Number of securities
                                                     Number of             exercise price of   remaining available
                                                     Securities to be      outstanding         for future issuance
                                                     issued upon           options, warrants   under equity
                                                     exercise of           and rights          compensation plans
                                                     outstanding                               (excluding
                                                     options, warrants                         securities reflected
                                                     and rights                                in column (a))
                  ---------------------------------- --------------------- ------------------- ----------------------
                  <S>                                <C>                   <C>                 <C>
                  ---------------------------------- --------------------- ------------------- ----------------------
                                                             (a)                  (b)                   (c)
                  ---------------------------------- --------------------- ------------------- ----------------------
                  ---------------------------------- --------------------- ------------------- ----------------------
                  Equity compensation plans
                  approved by security holders
                                                              0                    0                     0
                  ---------------------------------- --------------------- ------------------- ----------------------
                  ---------------------------------- --------------------- ------------------- ----------------------
                  Equity compensation plans
                  Not approved by security holders
                      -2003 Stock Plan                        0                 $0.03               15,000,000
                      -Corporate Imaging Agreement            0 (1)             $0.03                  300,000
                  ---------------------------------- --------------------- ------------------- ----------------------
                  ---------------------------------- --------------------- ------------------- ----------------------

                  ---------------------------------- --------------------- ------------------- ----------------------
                  ---------------------------------- --------------------- ------------------- ----------------------
                  Total                                       0                 $0.03               15,300,000
                  ---------------------------------- --------------------- ------------------- ----------------------
</TABLE>

                    (1) Under the terms of the Corporate Imaging Agreement the
                    Company is to pay equal payments of thirty thousand dollars
                    each or it can make share payments valued at thirty thousand
                    dollars, the number of shares of which shall be calculated
                    based upon the closing bid price of Common Stock as of the
                    last day of the month immediately preceding the date which
                    each share payment is due, thus payment in shares will only
                    be realized if the Company opts not to make a cash payment.

                                    Page 32

<PAGE>

Item 12.  Certain Relationships and Related Transactions.

        New Company Debt

     On November 19, 2003, the Company received a loan from John Zavoral in the
amount of $20,000, with no interest, payable on demand.

        Resolution of Company Debt

     None.

        Other Subsequent Events

     Subsequent to the period covered by this report, on February 25, 2004 the
2003 Stock Option Plan was Amended and Restated to provide for the issuance of
Nonqualified Stock Options and to clarify the respective exercise prices for
both Incentive Stock Options and Nonqualified Stock Options.

Item 13.  Exhibits and Reports on Form 8-K.

     (a) List of Exhibits attached or incorporated by reference pursuant to Item
601 of Regulation S-B.

         Exhibit           Description
         3.1(1)            Amendment to Articles of Incorporation dated January
                           22, 2001 and filed with the Colorado Secretary of
                           State on January 22, 2001.
         3.2 (2)           Statement of Correction to the Articles of
                           Incorporation dated and filed with the Secretary of
                           State of Colorado on August 27, 2003.
         3.3 (1)           By-laws of the Company;
         31**              Certification of Chief Executive Officer Pursuant to
                           18 U.S.C. Section 1350
         31**              Certification of Chief Financial Officer Pursuant to
                           18 U.S.C. Section 1350
         32**              906 Certification
         ________________________
         (1)  Incorporated by reference to Form 10SB filed February 8, 2001
         (2)  Incorporated by reference to Form 8-K filed October 31, 2003.
          **   Filed Herewith

     (b) Reports on Form 8-K.

     On October 31, 2003, the Company filed a report on Form 8-K that stated
upon review of the Company's periodic filings it was discovered that the Company
had inadvertently failed to file a copy of the Amendment to Articles of
Incorporation as filed with the Colorado Secretary of State on January 22, 2001,
with its quarterly report for the quarter ended March 31, 2001 and the Statement
of Correction to the Articles of Incorporation as filed with the Colorado
Secretary of State on August 27, 2003, with its quarterly report for the quarter
ended September 30, 2003. A copy of the Amendment to the Articles of
Incorporation and Statement of Correction, were attached as exhibits to the
current report.

     There were not any other current reports on Form 8-K during the final
quarter ending December 31, 2003.

        Subsequent Reports on Form 8-K

     Subsequent to the period covered by this report, on May 4, 2004, the
Company filed a report on Form 8-K setting forth the circumstances behind the
Change of Control of the Company that occurred on April 8, 2004 and additionally
listing five separate press releases filed during the month of April 2004.

     Subsequent to the period covered by this report, on May 4, 2004, the
Company filed a report on Form 8-K setting forth the circumstances behind the
Change of Control of the Company that occurred on April 8, 2004 and additionally
listing five separate press releases filed during the month of April 2004.

     Subsequent to the period covered by this report, on May 18, 2004, the
Company filed a report on Form 8-K for a Press Release that announced the
delivery of its consumer model of the ProShuffle (TM) through its distributor,
Excalibur Electronics, to the J.C. Penney Corporation, Inc.

     Subsequent to the period covered by this report, on May 20, 2004, the
Company filed a report on Form 8-K for a Press Release that announced the second
order of shufflers by Bed Bath & Beyond.

                                    Page 33

<PAGE>

Item 14.  Controls and Procedures.

     (a) Evaluation of disclosure controls and procedures. Our principal
executive officer and principal financial officer have evaluated the
effectiveness of our disclosure controls and procedures (as defined in Rules
13a-14(c) and 15d-14(c) under the Exchange Act), as of a date within 90 days of
the filing date of this Annual Report on Form 10K-SB. Based on such evaluation,
they have concluded that as of such date, our disclosure controls and procedures
are effective and designed to ensure that information required to be disclosed
by us in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
applicable SEC rules and forms.

     (b) Changes in internal controls. There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of evaluation by our principal executive officer
and principal financial officer.

Item 15.  Principal Accountant Fees and Services.

         Independent Public Accountants

     The Company's independent accountants during the fiscal year ending
December 31, 2003 were HJ & Associates, LLC and AJ. Robbins, P.C. From January
1, 2003 through July 1, 2003, AJ. Robbins, P.C. were the auditors
for the Company and commencing on July 2, 2003 through the end of the fiscal
year on December 31, 2003 the auditors were HJ & Associates, LLC.

     (a) Audit Fees. During the fiscal years ended December 31, 2003 and 2002,
the aggregate fees billed by the Company's auditors, for services rendered for
the audit of our annual financial statements and the review of the financial
statements included in our quarterly reports on Form 10-QSB for services
provided in connection with the statutory and regulatory filings or engagements
for those fiscal years, was $24,000 and $28,860, respectively.

     (b) Audit-Related Fees. During fiscal years ended December 31, 2003 and
2002 our auditors did not receive any fees for any audit-related services other
than as set forth in paragraph (a) above.

     (c) Tax Fees. Our auditors did not provide tax compliance or tax planning
advice during the fiscal years ended December 31, 2003 and 2002.

                                    Page 34

<PAGE>

                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                            Ten Stix, Inc.



Dated: June 21, 2004                        /s/ Thomas E. Sawyer
                                            __________________________________
                                            By: Thomas E. Sawyer
                                            Its: President and
                                            Chief Executive Officer



Dated: June 21, 2004                        /s/ Tony A.Cranford
                                            __________________________________
                                            By: Tony A. Cranford
                                            Its: Vice President and Secretary


                                    Page 35

<PAGE>








                                 TEN STIX, INC.

                              FINANCIAL STATEMENTS

                                December 31, 2003











                                     F - 1

<PAGE>





                                 C O N T E N T S


Independent Auditors' Reports............................................. F - 3

Balance Sheet..............................................................F - 5

Statements of Operations.................................................. F - 7

Statements of Stockholder's Equity (Deficit).............................. F - 8

Statements of Cash Flows.................................................. F - 9

Notes to the Financial Statements........................................ F - 11


                                      F - 2
<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




To the Board of Directors
Ten Stix, Inc.
Idaho Springs, Colorado

We have audited the balance sheet of Ten Stix, Inc. as of December 31, 2003, and
the related statement of operations, stockholders' equity (deficit) and cash
flows for the year then ended. 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 audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (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 audit provided 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, 2003 and the results of its operations and its cash flows for the year then
ended December, in conformity with generally accepted accounting principles in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficit that raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to those
matters are also described in Note 2 to the financial statements. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.


HJ & Associates, LLC
Salt Lake City, Utah
May 4, 2004, except for Note 12 as to
  which the date is June 18, 2004


                                     F - 3

<PAGE>

                                AJ. ROBBINS, P.C.
                          CERTIFIED PUBLIC ACCOUNTANTS
                              216 SIXTEENTH STREET
                                    SUITE 600
                                DENVER, CO 80202


                          INDEPENDENT AUDITORS' REPORT
Ten Stix, Inc.
Denver, Colorado

     We have audited the accompanying statement of operations, changes in
stockholders' equity (deficit) and cash flows of Ten Stix, Inc. for the year
ended December 31, 2002. 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 audit.

     We conducted our audit in accordance with generally accepted auditing
standards in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

     In our opinion, the financial statements referred to above present fairly,
in all material respects, the results of Ten Stix, Inc.'s operations and its
cash flows for the year ended December 31, 2002 in conformity with generally
accepted accounting principles in the United States of America.

     The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered recurring losses from operations
and has a working capital deficiency of $395,001 that raises substantial doubt
about the entity's ability to continue as a going concern. Management's plans in
regard to these matters are also described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

                                AJ. ROBBINS, PC.
                          CERTIFIED PUBLIC ACCOUNTANTS

Denver, Colorado
March 8, 2003

                                     F - 4

<PAGE>

                                 TEN STIX, INC.
                                  Balance Sheet

<TABLE>
<CAPTION>
                                     ASSETS


                                                                                                  December 31,
                                                                                                      2003
                                                                                                  -----------
<S>                                                                                               <C>
CURRENT ASSETS
   Cash                                                                                           $    3,614
   Accounts receivable                                                                                 3,900
   Inventory (Note 1)                                                                                  3,487
                                                                                                  -----------
     Total Current Assets                                                                             11,001
                                                                                                  -----------
FIXED ASSETS, NET (NOTE 4)                                                                           134,545
                                                                                                  -----------
OTHER ASSETS

   Inventory - non current (Note 1)                                                                   51,986
   Loan receivable - stockholder (Note 10)                                                                 -
   Purchase options (Note 3)                                                                               -
   Intangible assets, net (Note 5)                                                                    75,692
   Gaming rights (Note 6)                                                                                  -
                                                                                                  -----------
     Total Other Assets                                                                              127,678
                                                                                                  -----------
       TOTAL ASSETS                                                                               $  273,224
                                                                                                  ===========
</TABLE>

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

                                      F - 5
<PAGE>

                                 TEN STIX, INC.
                            Balance Sheet (Continued)
<TABLE>
<CAPTION>
                  LIABILTIES AND STOCKHOLDERS' EQUITY (DEFICIT)


                                                                                                  December 31,
                                                                                                      2003
<S>                                                                                               <C>
CURRENT LIABILITIES

   Accounts payable and accrued expenses                                                          $   90,610
   Accounts payable - related party, net                                                             140,804
   Notes payable (Note 8)                                                                            191,633
   Notes payable - stockholders (Note 10)                                                             76,500
                                                                                                  -----------
       Total Current Liabilities                                                                     499,547
                                                                                                  -----------
COMMITMENT AND CONTINGENCIES (NOTE 11)

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred A stock, $.001 par value, 100,000 shares
     Authorized; 96 shares issued and outstanding                                                          1
   Common stock; $.001 par value, 500,000,000 shares
     authorized, 21,018,228  issued and outstanding                                                   21,018
   Additional paid-in capital                                                                      1,211,030
   Accumulated deficit                                                                            (1,458,372)
                                                                                                  -----------
       Total Stockholders' Equity (Deficit)                                                         (226,323)
                                                                                                  -----------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                         $  273,224
                                                                                                  ===========
</TABLE>

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

                                      F - 6

<PAGE>

                                 TEN STIX, INC.
                            Statements of Operations

<TABLE>
<CAPTION>
                                                                                  For the Years Ended
                                                                                      December 31,
                                                                                  -------------------
                                                                               2003               2002
                                                                           -----------        -----------
<S>                                                                        <C>                <C>
REVENUES

   Lease income                                                            $    90,726        $    99,225
   Royalty income                                                                3,965                  -
   Equipment sales                                                                 200             24,049
                                                                           -----------        -----------
     Total Revenue                                                              94,891            123,274
                                                                           -----------        -----------
EXPENSES

   Cost of sales                                                                     -              4,457
   Selling, general and administrative                                         502,915            276,770
   Depreciation                                                                 49,153             45,611
   Amortization                                                                 10,844             10,844
                                                                           -----------        -----------
     Total Expenses                                                            562,912            337,682
                                                                           -----------        -----------
OPERATING LOSS                                                                (468,026)          (214,408)
                                                                           -----------        -----------
OTHER INCOME (EXPENSE)

   Interest expense                                                            (20,309)           (25,604)
   Gain on reduction of debt                                                         -             95,000
   Gain on sale of equipment                                                     2,948                  -
   Loss on gaming rights                                                       (19,500)                 -
   Loss on expiration of options                                               (72,100)                 -
                                                                           -----------        -----------
     Net Other Income (Expense)                                               (108,961)            69,396
                                                                           -----------        -----------
NET LOSS                                                                   $  (576,982)       $  (145,012)
                                                                           ===========        ===========
NET LOSS PER SHARE, BASIC AND DILUTED                                            (0.03)             (0.01)
                                                                           ===========        ===========
WEIGHTED AVERAGE NUMBER OF COMMON
  SHARES OUTSTANDING, BASIC AND DILUTED                                     21,892,112         17,800,048
                                                                           ===========        ===========
</TABLE>

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

                                      F - 7

<PAGE>

                                 TEN STIX, INC.
                  Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>


                                                                                           Additional                      Total
                                       Preferred Stock               Common Stock            Paid-In    Accumulated    Stockholders'
                                     Shares       Amount        Shares        Amount      Capital        Deficit    Equity (Deficit)
                                  -----------   -----------   -----------   -----------  -----------   -----------    -----------
<S>                               <C>           <C>           <C>           <C>          <C>           <C>            <C>
Balance at December 31, 2001                -   $         -    17,659,488   $    17,659  $   699,878   $  (736,378)   $   (18,841)

Contributed capital, services               -             -             -             -        7,500             -          7,500

Sale of common stock for cash               -             -       280,000           280      110,820             -        111,100

Sales of preferred stock                   96             1             -             -       23,949             -         23,950

Stock issued for services                   -             -       111,200           112       47,488             -         47,600

Stock issued for interest on
  previously converted note                 -             -        15,000            15        3,735             -          3,750

Stock issued for game rights                -             -        75,000            75       62,025             -         62,100

Stock issued for video rights
  purchase option                           -             -        20,000            20       11,980             -         12,000

Stock issued for card game
  purchase option                           -             -        10,000            10        7,490             -          7,500

Net loss for the year ended
  December 31, 2002                         -             -             -             -            -      (145,012)      (145,012)
                                  -----------   -----------   -----------   -----------  -----------   -----------    -----------
Balance December 31, 2002                  96             1    18,170,688        18,171      974,865      (881,390)       111,647
Sale of common stock for cash               -             -       952,540           952      146,210             -        147,162

Stock issued for services                   -             -     1,895,000         1,895       89,955             -         91,850

Net loss for the year ended
  December 31, 2003                         -             -             -             -            -      (576,982)      (576,982)
                                  -----------   -----------   -----------   -----------  -----------   -----------    -----------
Balance  December 31, 2003                 96   $         1    21,018,228   $    21,018  $ 1,211,030   $(1,458,372)   $  (226,323)
                                  ===========   ===========   ===========   ===========  ===========   ===========    ===========
</TABLE>


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

                                      F - 8

<PAGE>

                                 TEN STIX, INC.
                            Statements of Cash Flows
<TABLE>
<CAPTION>
 For the Years Ended
                                                                                      December 31,
                                                                                  -------------------
                                                                               2003               2002
                                                                           -----------        -----------
<S>                                                                        <C>                <C>

CASH FLOWS FROM OPERATING ACTIVITIES

   Net loss                                                                $  (576,982)       $  (145,012)
   Adjustments to reconcile net loss to net cash
    used by operating activities:
     Depreciation and amortization                                              59,997             56,455
     Amortization of debt discounts                                             15,119             17,094
     Services provided at no charge                                                  -              7,500
     Loss on gaming rights and expiration of options                            91,600                  -
     Gain on sale of equipment                                                  (2,948)                 -
     Issuance of common stock for services                                      91,850             47,600
     Issuance of common stock for interest on previously
       converted note                                                                -              3,750
   Changes in assets and liabilities
     (Increase) decrease in inventory                                             (751)             2,702
     (Increase) decrease in accounts receivable                                 (3,900)               320
     Increase (decrease) in accounts payable and accrued
       expenses                                                                202,548           (103,165)
                                                                           -----------        -----------
       Net Cash Used by Operating Activities                                  (123,467)          (112,756)
                                                                           -----------        -----------
CASH FLOWS FROM INVESTING ACTIVITIES

   Purchase of equipment                                                        (1,625)            (1,500)
   Cost of equipment sold                                                            -              4,457
   Proceeds from sale of equipment                                               3,500                  -
                                                                           -----------        -----------
       Net Cash Flows Provided by Investing Activities                           1,875              2,957
                                                                           -----------        -----------
CASH FLOWS FROM FINANCING ACTIVITIES

   Payments on notes payable                                                   (53,527)           (88,487)
   Proceeds from issuance of common stock                                      147,162            111,100
   Proceeds from issuance of preferred stock                                         -             23,950
   Loans from stockholders                                                      25,500             73,000
   Payment on loans from stockholders                                           (2,000)            (2,000)
                                                                           -----------        -----------
       Net Cash Provided by Financing Activities                               117,135            117,563
                                                                           -----------        -----------
INCREASE (DECREASE) IN CASH                                                     (4,457)             7,764

CASH, BEGINNING OF PERIOD                                                        8,071                307
                                                                           -----------        -----------
CASH, END OF PERIOD                                                         $    3,614        $     8,071
                                                                           ===========        ===========
</TABLE>

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

                                      F - 9
<PAGE>

                                 TEN STIX, INC.
                      Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
                                                                                      December 31,
                                                                                  -------------------
                                                                               2003               2002
                                                                           -----------        -----------
<S>                                                                        <C>                <C>

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES:

   Cash paid for interest                                                  $     3,190        $     4,760
   Cash paid for income taxes                                              $         -        $         -

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

   Common stock issued for services                                        $    91,850        $    47,600
   Services provided at no charge                                          $         -        $     7,500
   Common stock issued for interest on previously converted note           $         -        $     3,750
   Common stock issued for game rights                                     $         -        $    62,100
   Common stock issued for video rights purchase option                    $         -        $    12,000
   Common stock issued for card game purchase options                      $         -        $     7,500
</TABLE>


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

                                     F - 10
<PAGE>

                                 TEN STIX, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002


NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

               a. Business

               Ten Stix, Inc. ("The Company") was incorporated on January 10,
               1996 under the laws of the State of Colorado. The Company
               develops and markets unique card games and other gaming products
               for the gaming industry.

               There are two types of gaming products the Company has designed,
               distributes and markets: 1) The "table game with electronics",
               which includes "Ten to Win" and "ShotGun 21"; and, 2) a "layout
               game", which includes all of the other gaming products. The
               layout game is a table game utilizing a table cover or layout
               with no electronic system, including "Hold'em 88".

               The Company also manufactures, leases and sells playing card
               shufflers under the name Pro Shuffle. Casinos use automatic card
               shufflers to save time and eliminate the possibility of a dealer
               manipulating the cards while hand shuffling. Hand shuffling takes
               approximately one minute and forty seconds, whereas the Pro
               Shuffle shuffles six decks of cards in forty seconds.

               b. Concentrations of Credit Risk

               The Company maintains all cash in deposit accounts, which at
               times may exceed federally insured limits. The Company has not
               experienced a loss in such accounts.

               The Company has three customers who account for greater than 10%
               of total revenue for the year ended December 31, 2003.

               c. Reclassification

               Certain amounts reported in the Company's financial statements
               for the period ended December 31, 2002 have been reclassified to
               conform to the current period presentations.

               d. Cash and Cash Equivalents

               Cash and cash equivalents include cash on hand and investments
               with original maturities of three months or less.

               e. Inventory

               Inventory is valued at the lower of cost or market and consists
               of replacement and repair parts. It is estimated that
               approximately $51,986 of inventory will be used beyond one year
               as shufflers require repairs.

                                     F - 11

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

               f. Equipment

               Equipment is recorded at cost. Depreciation expense is provided
               on a straight-line basis using the following useful lives: gaming
               equipment (including gaming equipment leased to customers under
               short term arrangements), 5 years; and furniture, fixtures and
               equipment, 3-5 years. Maintenance and repairs are charged to
               expense as incurred. Total depreciation expense was $49,153 and
               $45,611 for the years ended December 31, 2003 and 2002,
               respectively. The cost and accumulated depreciation of assets
               retired, sold, or otherwise disposed of are eliminated from the
               accounts and any resulting gain or loss is credited or charged to
               income as appropriate.

               g. Intangible assets

               Intangible assets consist of costs associated with the
               acquisition of patents, copyrights, and license costs which are
               amortized over lives ranging from 5 to 11 years. Total
               amortization expense was $10,844 and $10,844 for the years ended
               December 31, 2003 and 2002, respectively.

               h. Impairment Of Long-Lived Assets

               The Company evaluates its long-lived assets in accordance with
               Statement of Financial Accounting Standard No. 144, "Accounting
               for the Impairment or Disposal of Long Lived Assets" by measuring
               the carrying amounts of assets against the estimated undiscounted
               future cash flows associated with them. At the time the carrying
               value of such assets exceeds the fair value of such assets,
               impairment is recognized. To date, no adjustments to the carrying
               value of the assets have been made.

               i. Advertising Expense

               The Company expenses advertising costs as incurred. Advertising
               expense for the years ended December 31, 2002 and 2001 was $6,310
               and $24,955, respectively.

              j.   Research and Development Expense

               Costs relating to the development of new products are expensed as
               incurred.

               k. Revenue Recognition

               Revenues derived from the sale of shufflers are recognized when
               shipped and title has passed to the customer. Revenues derived
               from leasing shufflers and games are recognized when earned,
               which is generally simultaneous with receipt.

                                     F - 12

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

               l. Use of Estimates

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the reported amounts
               of assets and liabilities and disclosure of contingent assets and
               liabilities at the date of the financial statements and the
               reported amounts of revenues and expenses during the reporting
               period. Actual results could differ from those estimates and
               assumptions.

               m. Income Taxes

               Deferred taxes are provided on a liability method whereby
               deferred tax assets are recognized for deductible temporary
               differences and operating loss and tax credit carryforwards and
               deferred tax liabilities are recognized for taxable temporary
               differences. Temporary differences are the differences between
               the reported amounts of assets and liabilities and their tax
               bases. Deferred tax assets are reduced by a valuation allowance
               when, in the opinion of management, it is more likely than not
               that some portion or all of the deferred tax assets will not be
               realized. Deferred tax assets and liabilities are adjusted for
               the effects of changes in tax laws and rates on the date of
               enactment.

               Net deferred tax assets consist of the following components as of
               December 31, 2003 and 2002:

<TABLE>
<CAPTION>
                                                            2003
                                                        -----------
              <S>                                       <C>
              Deferred tax assets:
                NOL Carryover                           $   270,350
                Contribution Carryover
                Depreciation

              Deferred tax liabilities:
                Depreciation                                (21,150)

              Valuation allowance                          (249,200)
                                                        -----------
              Net deferred tax asset                    $         -
                                                        ===========
</TABLE>

               The income tax provision differs from the amount of income tax
               determined by applying the U.S. federal and state income tax
               rates of 39% to pretax income from continuing operations for the
               years ended December 31, 2003 due to the following:

                                     F - 13

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
         (Continued)

               m. Income Taxes (Continued)
<TABLE>
<CAPTION>
                                                            2003
                                                        -----------
              <S>                                       <C>
              Book Income                               $  (225,020)
              Stock for Services/Options                     43,425
              Other                                             562
              Valuation allowance                           181,033
                                                        -----------
                                                        $         -
                                                        ===========
</TABLE>

               At December 31, 2003, the Company had net operating loss
               carryforwards of approximately $693,000 that may be offset
               against future taxable income from the year 2003 through 2023. No
               tax benefit has been reported in the December 31, 2003 financial
               statements since the potential tax benefit is offset by a
               valuation allowance of the same amount.

               Due to the change in ownership provisions of the Tax Reform Act
               of 1986, net operating loss carryforwards for Federal income tax
               reporting purposes are subject to annual limitations. Should a
               change in ownership occur, net operating loss carryforwards may
               be limited as to use in future years.

               n. Fair Value of Financial Instruments

               The carrying amounts of cash, accounts payable, accrued expenses,
               and notes payable approximate fair value because of the short
               maturity of these items.

               o. Earnings Per Common Share

               The computation of basic loss per share of common stock is based
               on the weighted average number of shares outstanding during the
               period.

<TABLE>
<CAPTION>
                                                                                  For the Years Ended
                                                                                      December 31,
                                                                                  -------------------
                                                                               2003               2002
                                                                           -----------        -----------
                         <S>                                               <C>                <C>
                         Net loss (numerator)                              $  (576,982)       $  (145,012)
                         Weighted average shares outstanding
                           (denominator)                                    21,892,112         17,800,048
                         Net loss per share                                $     (0.03)       $     (0.01)
</TABLE>

                                     F - 14

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

               p. Stock-Based Compensation

               As permitted by FASB Statement 148 "Accounting for Stock Based
               Compensation - Transition and Disclosure" (SFAS No. 148), the
               Company elected to measure and record compensation cost relative
               to employee stock option costs in accordance with Accounting
               Principles Board ("APB") Opinion 25, "Accounting for Stock Issued
               to Employees", and related interpretations and make proforma
               disclosures of net income and earning per share as if the fair
               value method of valuing stock options had been applied. Under APB
               opinion 25, compensation cost is recognized stock options granted
               to employees when the option price is less than the market price
               of the underlying common stock on the date of grant.

               q. Recently Issued Accounting Pronouncements

               During the year ended December 31, 2003, the Company adopted the
               following accounting pronouncements:

               SFAS No. 143 -- In August 2001, the FASB issued SFAS No. 143,
               Accounting for Asset Retirement Obligations, which established a
               uniform methodology for accounting for estimated reclamation and
               abandonment costs. The statement was effective for fiscal years
               beginning after June 15, 2002. The adoption of SFAS No. 143 did
               not have a material effect on the financial statements of the
               Company.

               SFAS No. 145 -- On April 30, 2002, the FASB issued FASB Statement
               No. 145 (SFAS 145), "Rescission of FASB Statements No. 4, 44, and
               64, Amendment of FASB Statement No. 13, and Technical
               Corrections." SFAS 145 rescinds both FASB Statement No. 4 (SFAS
               4), "Reporting Gains and Losses from Extinguishment of Debt," and
               the amendment to SFAS 4, FASB Statement No. 64 (SFAS 64),
               "Extinguishments of Debt Made to Satisfy Sinking-Fund
               Requirements." Through this rescission, SFAS 145 eliminates the
               requirement (in both SFAS 4 and SFAS 64) that gains and losses
               from the extinguishment of debt be aggregated and, if material,
               classified as an extraordinary item, net of the related income
               tax effect. However, an entity is not prohibited from classifying
               such gains and losses as extraordinary items, so long as it meets
               the criteria in paragraph 20 of Accounting Principles Board
               Opinion No. 30, Reporting the Results of Operations Reporting the
               Effects of Disposal of a Segment of a Business, and
               Extraordinary, Unusual and Infrequently Occurring Events and
               Transactions. Further, SFAS 145 amends paragraph 14(a) of FASB
               Statement No. 13, "Accounting for Leases", to eliminate an
               inconsistency between the accounting for sale-leaseback
               transactions and certain lease modifications that have economic
               effects that are similar to sale-leaseback transactions.

                                     F - 15

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

               q. Recently Issued Accounting Pronouncements (Continued)

               The amendment requires that a lease modification (1) results in
               recognition of the gain or loss in the 9 financial statements,
               (2) is subject to FASB Statement No. 66, "Accounting for Sales of
               Real Estate," if the leased asset is real estate (including
               integral equipment), and (3) is subject (in its entirety) to the
               sale-leaseback rules of FASB Statement No. 98, "Accounting for
               Leases: Sale-Leaseback Transactions Involving Real Estate,
               Sales-Type Leases of Real Estate, Definition of the Lease Term,
               and Initial Direct Costs of Direct Financing Leases." Generally,
               FAS 145 is effective for transactions occurring after May 15,
               2002. The adoption of SFAS 145 did not have a material effect on
               the financial statements of the Company.

               SFAS No. 146 -- In June 2002, the FASB issued SFAS No. 146,
               "Accounting for Exit or Disposal Activities" (SFAS 146). SFAS 146
               addresses significant issues regarding the recognition,
               measurement, and reporting of costs that are associated with exit
               and disposal activities, including restructuring activities that
               are currently accounted for under EITF No. 94-3, "Liability
               Recognition for Certain Employee Termination Benefits and Other
               Costs to Exit an Activity (including Certain Costs Incurred in a
               Restructuring)." The scope of SFAS 146 also includes costs
               related to terminating a contract that is not a capital lease and
               termination benefits that employees who are involuntarily
               terminated receive under the terms of a one-time benefit
               arrangement that is not an ongoing benefit arrangement or an
               individual deferred-compensation contract. SFAS 146 will be
               effective for exit or disposal activities that are initiated
               after December 31, 2002 and early application is encouraged. The
               provisions of EITF No. 94-3 shall continue to apply for an exit
               activity initiated under an exit plan that met the criteria of
               EITF No. 94-3 prior to the adoption of SFAS 146. The effect on
               adoption of SFAS 146 will change on a prospective basis the
               timing of when the restructuring charges are recorded from a
               commitment date approach to when the liability is incurred. The
               adoption of SFAS 146 did not have a material effect on the
               financial statements of the Company.

               SFAS No. 147 -- In October 2002, the Financial Accounting
               Standards Board (FASB) issued Statement of Financial Accounting
               Standards (SFAS) No. 147, "Acquisitions of Certain Financial
               Institutions" which is effective for acquisitions on or after
               October 1, 2002. This statement provides interpretive guidance on
               the application of the purchase method to acquisitions of
               financial institutions. Except for transactions between two or
               more mutual enterprises, this Statement removes acquisitions of
               financial institutions from the scope of both SFAS 72 and
               Interpretation 9 and requires that those transactions be
               accounted for in accordance with SFAS No. 141, "Business
               Combinations" and No. 142, "Goodwill and Other Intangible
               Assets". The adoption of SFAS No. 147 did not have a material
               effect on the financial statements of the Company.

                                     F - 16

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

               q. Recently Issued Accounting Pronouncements (Continued)

               SFAS No. 148 -- In December 2002, the FASB issued SFAS No. 148,
               "Accounting for Stock Based Compensation-Transition and
               Disclosure-an amendment of FASB Statement No. 123" which is
               effective for financial statements issued for fiscal years ending
               after December 15, 2002. This Statement amends SFAS 123,
               Accounting for Stock-Based Compensation, to provide alternative
               methods of transition for a voluntary change to the fair value
               based method of accounting for stock-based employee compensation.
               In addition, this Statement amends the disclosure requirements of
               SFAS 123 to require prominent disclosures in both annual and
               interim financial statements about the method of accounting for
               stock-based compensation and the effect of the method used on
               reported results. The adoption of SFAS No. 148 did not have a
               material effect on the financial statements of the Company.

               SFAS No. 149 -- In April 2003, the FASB issued SFAS No. 149,
               "Amendment of Statement 133 on Derivative Instruments and Hedging
               Activities" which is effective for contracts entered into or
               modified after June 30, 2003 and for hedging relationships
               designated after June 30, 2003. This statement amends and
               clarifies financial accounting for derivative instruments
               embedded in other contracts (collectively referred to as
               derivatives) and hedging activities under SFAS 133. The adoption
               of SFAS No. 149 did not have a material effect on the financial
               statements of the Company.

               SFAS No. 150 -- In May 2003, the FASB issued SFAS No. 150,
               "Accounting for Certain Financial Instruments with
               Characteristics of both Liabilities and Equity" which is
               effective for financial instruments entered into or modified
               after May 31, 2003, and is otherwise effective at the beginning
               of the first interim period beginning after June 15, 2003. This
               Statement establishes standards for how an issuer classifies and
               measures in its statement of financial position certain financial
               instruments with characteristics of both liabilities and equity.
               It requires that an issuer classify a financial instrument that
               is within its scope as a liability (or an asset in some
               circumstances) because that financial instrument embodies an
               obligation of the issuer. The adoption of SFAS No. 150 did not
               have a material effect on the financial statements of the
               Company.

               FASB Interpretation No. 45 -- "Guarantor's Accounting and
               Disclosure Requirements for Guarantees, Including Indirect
               Guarantees of Indebtedness of Others - an Interpretation of FASB
               Statements No. 5, 57 and 107". The initial recognition and
               initial measurement provisions of this Interpretation are to be
               applied prospectively to guarantees issued or modified after
               December 31, 2002. The disclosure requirements in the
               Interpretation were effective for financial statements of interim
               or annual periods ending after December 15, 2002. The adoption of
               FASB Interpretation No. 45 did not have a material effect on the
               financial statements of the Company.

                                     F - 17

<PAGE>

NOTE 1 - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

               q. Recently Issued Accounting Pronouncements (Continued)

               FASB Interpretation No. 46 -- In January 2003, the FASB issued
               FASB Interpretation No. 46 "Consolidation of Variable Interest
               Entities." FIN 46 provides guidance on the identification of
               entities for which control is achieved through means other than
               through voting rights, variable interest entities, and how to
               determine when and which business enterprises should consolidate
               variable interest entities. This interpretation applies
               immediately to variable interest entities created after January
               31, 2003. It applies in the first fiscal year or interim period
               beginning after June 15, 2003, to variable interest entities in
               which an enterprise holds a variable interest that it acquired
               before February 1, 2003. The adoption of FIN 46 did not have a
               material impact on the Company's financial statements.

               During the year ended December 31, 2003, the Company adopted the
               following Emerging Issues Task Force Consensuses: EITF Issue No.
               00-21 "Revenue Arrangements with Multiple Deliverables", EITF
               Issue No. 01 -8 " Determining Whether an Arrangement Contains a
               Lease", EITF Issue No. 02-3 "Issues Related to Accounting for
               Contracts Involved in Energy Trading and Risk Management
               Activities", EITF Issue No. 02-9 "Accounting by a Reseller for
               Certain Consideration Received from a Vendor", EITF Issue No.
               02-17, "Recognition of Customer Relationship Intangible Assets
               Acquired in a Business Combination", EITF Issue No. 02-18
               "Accounting for Subsequent Investments in an Investee after
               Suspension of Equity Method Loss Recognition", EITF Issue No.
               03-1, "The Meaning of Other Than Temporary and its Application to
               Certain Instruments", EITF Issue No. 03-5, "Applicability of
               AICPA Statement of Position 9702, 'Software Revenue Recognition'
               to Non-Software Deliverables in an Arrangement Containing More
               Than Incidental Software", EITF Issue No. 03-7, "Accounting for
               the Settlement of the Equity Settled Portion of a Convertible
               Debt Instrument That Permits or Requires the Conversion Spread to
               be Settled in Stock", EITF Issue No. 03-10, "Application of EITF
               Issue No. 02-16 by Resellers to Sales Incentives Offered to
               Consumers by Manufacturers.

NOTE 2 - GOING CONCERN

               The Company's financial statements are prepared using accounting
               principles generally accepted in the United States of America
               applicable to a going concern, which contemplates the realization
               of assets and satisfaction of liabilities in the normal course of
               business. The Company's continuation as a going concern is
               dependent upon its ability to generate sufficient cash flow from
               operations to meet its obligations on a timely basis and/or
               obtain financing as may be required. The Company has incurred net
               losses from operations since inception and has an accumulated
               deficit of $1,458,372 and a working capital deficit of $488,546
               as of December 31, 2003.

               The Company's strategy is to expand the marketing of their
               shufflers and games and continue to form positive relationships
               with casinos throughout the United States.  Management
               anticipates that during the upcoming fiscal year the Company will
               need approximately $500,000 to implement its plan and meet its
               working capital requirements.

                                     F - 18

<PAGE>

NOTE 2 - GOING CONCERN (Continued)

               Although the Company has obtained short-term loans, in the
               absence of long-term financial support, there can be no assurance
               that additional financing can be obtained from conventional
               sources. Management is pursuing alternatives that include plans
               to raise capital through private placements and other offerings.

NOTE 3 - PURCHASE OPTIONS

               In July 2002 the Company entered into an option agreement to
               purchase the video rights for "Bonus 6 Stud Poker". The Company
               issued 20,000 shares of common stock valued at $12,000 when the
               option was accepted. The option period expired unexercised
               January 30, 2003 and the $12,000 cost was written off 2003.

               In July 2002 the Company entered into a letter of intent to
               purchase the rights to the casino card game known as "Bet the Set
               "21"", including copyrights, trademarks, leases and all
               equipment. The Company issued 10,000 shares of common stock
               valued at $7,500 when the option was accepted. The option expired
               in November 2002 at which time the grantor of the option agreed
               to a verbal extension which was also allowed to expire and the
               $7,500 cost was written off in 2003.

NOTE 4 - EQUIPMENT

              Equipment consists of the following:

<TABLE>
<CAPTION>
                                                                    December 31,
                                                                        2003
                                                                    -----------
                               <S>                                  <C>
                               Furniture, fixtures and equipment    $     1,500
                               Gaming equipment                         247,868
                                                                    -----------
                                    Total Equipment                     249,368
                                                                    -----------
                               Less accumulated depreciation           (114,823)
                                                                    -----------
                                    Net Equipment                   $   134,545
                                                                    ===========
</TABLE>

               The Company leases its shufflers to customers under short-term
               operating leases. The cost of shufflers subject to operating
               leases was $56,122 at December 31, 2003. Accumulated depreciation
               related to the leased shufflers was $14,552 and $14,552 at
               December 31, 2003 and 2002, respectively.

                                     F - 19

<PAGE>

NOTE 5 - INTANGIBLE ASSETS

               Intangible assets consists of the following:
 <TABLE>
<CAPTION>
                                                                    December 31,
                                                                        2003
                                                                    -----------
                               <S>                                  <C>

                               Patents                              $    82,351
                               License costs                             30,000
                                                                    -----------
                                                                        112,351
                                                                    -----------
                               Less accumulated depreciation            (36,659)
                                                                    -----------
                                                                    $    75,692
                                                                    ===========
</TABLE>

               In January 2001 the Company's Vice President 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 this
               Assignment Agreement, the Company agreed to pay a monthly royalty
               fee of $175 for each "Bet the House" game that the Company leases
               to a third party during the six month period; and (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 purchase price was to be paid in full
               by March 31, 2002, however, the payment date was extended into
               2003 and allowed to expire.

NOTE 6 - GAME RIGHTS

               In July 2002 the Company entered into an option agreement to
               purchase the rights to the Bonus 6 games within the states of
               Colorado, South Dakota, California, and Arizona for $100,000
               payable in five equal installments through April 2003 and issued
               10,000 shares of restricted common stock valued at $10,100 upon
               acceptance of the option agreement. An additional 65,000 shares
               of restricted common stock valued at $52,000 were issued in
               August 2002 when the option was exercised and the first
               installment was paid. During 2003, the Company allowed all game
               rights to expire, reversed related notes payable of $90,000 and
               recognized a loss of $72,100.

NOTE 7 - PRO SHUFFLE ACQUISITION

               In May 2001 the Company entered into an asset purchase agreement
               and acquired (i) all of the right, title and interest to U.S.
               Patent No. 5,718,427 regarding a card shuffling device 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 receivable
               made by a related party totaling $8,500, (vi) two Blackjack
               tables located in Las Vegas, Nevada; and (vii) all other business
               assets

                                     F - 20

<PAGE>

NOTE 7 - PRO SHUFFLE ACQUISITION (Continued)

               located in Colorado (of which no material assets were actually
               acquired). The Company is renegotiating the terms of the
               promissory notes.

               In exchange for the assets acquired, the Company assumed a
               liability up to an aggregate amount of $110,000 related to fifty
               updated Pro Shuffle devices and parts and two liabilities
               totaling $6,000. The Company also agreed to pay $300,000 as
               evidenced by the execution of two promissory notes payable in the
               amounts of $220,000 and $80,000 (See Note 8). In addition, the
               Company's President and Vice President surrendered their shares
               of the sellers stock they owned personally. During 2002 the
               Company paid the $6,000 of liabilities, renegotiated and paid
               $15,000 as settlement of the $110,000 liability and recorded a
               gain of $95,000.

NOTE 8 - NOTES PAYABLE

               In May 2001 the Company entered into a promissory note to pay
               $80,000 to an individual 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; (ii) on the 15th of the month, after the
               receipt thereof, 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. The Company imputed
               interest at 8.0% on the note through April 2002 in the amount of
               $5,926 and reduced the note by this amount. The Company
               recognized the remaining $1,482 as interest expense during 2002.
               During 2003, the note was paid in full.

               In May 2001 the Company entered into a promissory note to pay
               $220,000 after the above $80,000 note is paid in full as follows:
               (i) on the 15th of each month 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; (ii) on the 15th of the month, after the
               receipt thereof, 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 $80,000 note);
               and (iii) interest at the rate of 8% per annum commencing May 1,
               2004 on any portion of the $220,000 outstanding on the first of
               each month payable monthly. The note is secured by all assets
               acquired, including the ProShuffle assets. The Company imputed
               interest at 8.0% on the note through April 2004 in the amount of
               $45,357 and reduced the note by this amount. The Company
               recognized $15,119 and $15,119 in interest expense during the
               years ended December 31, 2003 and 2002, respectively.

               In November 2003, the Company entered into a non-interest
               bearing, unsecured promissory note to pay $20,000, due upon
               demand. No payments have been made on the note as of December 31,
               2003.

                                     F - 21

<PAGE>

NOTE 9 - STOCKHOLDERS' EQUITY

               Preferred Stock

               Each share of preferred A stock may be converted into 200 shares
               of common stock. No dividend has been designated to preferred
               shares.

               Contributed Capital

               The Company's management performed services in the development
               and marketing of the Company's products but had elected to forego
               cash compensation due to the liquidity position of the Company.
               The Company recorded the fair value of such services as a capital
               contribution of $7,500. In July 2002 management began receiving
               cash compensation.

NOTE 10 - RELATED PARTY TRANSACTIONS

               The Company has the distributorship rights to market a card game
               called "Bonus 6" after entering into an assignment agreement
               dated December 28, 2000 in which (i) its President agreed to
               assign to the Company his distribution rights, previously
               obtained under an agreement with the owner of "Bonus 6", to
               market and distribute "Bonus 6" within the United States,
               excluding the State of Colorado, and (ii) the Company agreed to
               assume the obligations under the previous distribution agreement
               as such obligations pertain to the marketing and distribution of
               "Bonus 6" within the United States, excluding the State of
               Colorado. Prior to the assignment agreement, the Company's
               President had individually marketed and distributed "Bonus 6" to
               casinos within the State of Colorado and he receives a 40%
               commission on gross revenues generated from the sale or lease of
               "Bonus 6" to these casinos on a monthly basis. During 2003 and
               2002, the Company's President received $9,384 and $4,480 in
               commissions, respectively. Additionally, the Company has allowed
               its rights to "Bonus 6" to expire during 2003.

               The Company obtained loans from stockholders in the amounts of
               $5,500 and $66,000 during 2003 and 2002, respectively. The notes
               are non-interest bearing and may be converted into shares of the
               Company's common stock in an amount to be determined based upon
               negotiations between the parties, when and if the loans are
               converted.

               In April 2002 the Company entered into a promissory note for
               $7,000 with a lender. The note bore interest at prime plus 11.25%
               and was due April 2003. In September 2002 a stockholder paid the
               note in full on behalf of the Company, less $2,000 that the
               Company had paid. The Company and the stockholder are currently
               negotiating payment of the remaining $5,000 principal balance now
               owed to the stockholder as of December 31, 2003.

                                     F - 22

<PAGE>

NOTE 10 - RELATED PARTY TRANSACTIONS (Continued)

               During 2003, the Company allowed gaming rights totaling $162,100
               to expire. As a result, the Company reversed its payables to
               related parties, including the Company's Chief Financial Officer,
               totaling $90,000 and recognized a loss of $72,100.

 NOTE 11 - COMMITEMENTS AND CONTINGENCIES

               License Agreement

               During August 2002, the Company entered into a License Agreement
               for the exclusive use of the name "Pro Shuffle" in card shuffling
               devices designed for home and/or recreation use, as well as, an
               exclusive license to produce a card shuffler for home and/or
               recreational use under patents held by the Company. The term of
               the agreement is for five years, starting August 1, 2002 through
               July 31, 2007, plus a 90 day sell-off period upon expiration.

               The License Agreement calls for the payment of royalties as
               follows:

               i. A 5% royalty of the net revenues from the sale of the first
               100,000 units sold during any contract year;
               ii. A 41/2% royalty of the net revenues from the sales of more
               than 100,000 units but less than 250,000 units sold during any
               contract year; and,
               iii. A 4% royalty of the net revenues from
               the sales of more than 250,000 units sold during any contract
               year.

               The Company recognized $3,965 and $0 revenue from royalties
               during the years ended December 31, 2003 and 2002, respectively.

               Consulting Agreement

               During November 2003, the Company entered into a Corporate Image
               Agreement whereby it agreed to pay a retainer fee of $180,000 or
               issue registered shares of the Company"s common stock payable as
               follows:

               i. Six equal payments of $30,000, due the fifth day of each month
               with the first payment due immediately; or,
               ii. Six equal share payments valued at $30,000, the number of
               shares of which to be calculated based upon the closing bid price
               of the common stock as of the last day of the month immediately
               preceding date which each share payment is due.

               As of December 31, 2003, the Company has issued a total of
               1,200,000 shares of common stock valued at $60,000 in payment of
               this agreement.

                                     F - 23

<PAGE>

NOTE 11 - COMMITEMENTS AND CONTINGENCIES (Continued)

               Litigation

               During 2003, Rapid Funding, LLC, brought a Lawsuit against the
               Company's Chief Executive and Chief Financial Officers
               (collectively, the "Defendants") as a result of a guarantee of
               third party debt through the use of substantially all of the
               Defendants personally held common stock of the Company. On April
               5, 2004 Rapid Funding and the Defendants entered into the
               Stipulation in an effort to settle the Lawsuit.  On April 6, 2004
               the Jefferson County, Colorado, District Court entered the Order
               approving the Stipulation.

               The Stipulation provides that the Defendants and their spouses
               shall, within two business days from the date of approval of the
               Stipulation by the court, transfer to Rapid Funding all of their
               respective shares of capital stock of the Issuer, free and clear
               of all liens, claims and encumbrances.  In connection therewith,
               on April 8, 2004 the Defendants and their spouses transferred
               5,182,100 Shares to Rapid Funding.  In addition, the Defendants
               agreed to direct the Issuer"s transfer agent and registrar to
               record such transfer on the stock ledger and books and records of
               the Issuer.

               In addition, in connection with the Stipulation, the Issuer
               agreed to issue to Rapid Funding, immediately after the approval
               of new Articles of Incorporation at a subsequent shareholder's
               meeting to be held in accordance with the Stipulation, 11,000,000
               additional Shares.  The Defendants also agreed that, pursuant to
               the Stipulation, the Issuer shall periodically issue enough
               additional Shares to Rapid Funding to insure that Rapid Funding
               owns at least 51% of the outstanding common stock of the Issuer
               (including any and all shares of capital stock currently held by
               or foreclosed upon by Rapid Funding), such outstanding common
               stock to include any outstanding securities currently exercisable
               for or convertible into (i) common stock of the Issuer, or (ii)
               securities convertible into or exercisable for common stock of
               the Issuer, each to include, without limitation, any options,
               warrants, convertible preferred stock, convertible debt or any
               other similar rights, interests or securities (the "Outstanding
               Common Stock").  As of the date hereof, these additional Shares
               have not been issued to Rapid Funding and are not included in the
               number of Shares held by Rapid Funding as set forth in this
               amended statement.

               Pursuant to the Stipulation, Rapid Funding agreed to subsequently
               sell to the Issuer all of the Shares received by Rapid Funding in
               connection with the Lawsuit and Stipulation, whether now owned or
               hereafter acquired or received (the "Lawsuit Shares"), in
               exchange for $200,000.00 in cash (the "Purchase Price").  The
               Purchase Price is required to be paid in twelve installments, but
               may be prepaid by the Issuer.  The first installment is due on
               the earlier of (a) July 1, 2004, or (b) 30 days after the Issuer
               has held a shareholder's meeting according to the Stipulation,
               with each installment thereafter being due on the first day of
               each and every month thereafter, subject to a grace period of
               five business days. The first eight installments shall be in an
               amount of $15,000 each, and the last four installments shall be
               in an amount of $20,000 each.  Upon payment in full of the
               Purchase Price, Rapid Funding will transfer the Lawsuit Shares to
               the Issuer.

                                     F - 24

<PAGE>

NOTE 11 - COMMITEMENTS AND CONTINGENCIES (Continued)

               Litigation (Continued)

               Rapid Funding further agreed, provided that the Defendants are
               not in default of any term of the Stipulation, that it shall not
               pledge or assign the Lawsuit Shares or any portion thereof to any
               other person or entity prior to the purchase thereof by the
               Defendants pursuant to the terms of the Stipulation.  Until the
               Purchase Price is paid in full, Rapid Funding shall retain 100%
               ownership of all of the Lawsuit Shares and will have full
               authority to vote all of the Lawsuit Shares.

               Until the Purchase Price is paid in full, the Defendants agreed,
               among other things, as follows:

               (a) The Issuer shall not issue any new shares of its capital
               stock or any other rights to acquire capital stock that would
               dilute the percentage ownership of Rapid Funding below 51% of the
               Outstanding Common Stock; provided that the Issuer may issue
               additional shares of its capital stock to Rapid Funding such that
               Rapid Funding will own at least 51% of the Outstanding Common
               Stock.  The consideration for the issuance of such additional
               shares shall relate back to and be part of the original
               consideration for the Stipulation, which includes, but is not
               limited to, the resolution of the Lawsuit in a manner consistent
               with the best interests of the Issuer.

               (b) Not later than the tenth day of each month, commencing on May
               10, 2004, the Issuer shall provide Rapid Funding with a report
               that details the exact amount of capital stock, or any other
               rights to acquire capital stock, issued by the Issuer for the
               month immediately prior thereto, and confirm that any such
               issuances have not diluted Rapid Funding's ownership of capital
               stock of the Issuer below 51% of the Outstanding Common Stock.
               Such reports shall be certified by an officer of the Issuer.

               (c) The Issuer shall not sell any of its assets except for sales
               of inventory in the ordinary course of business consistent with
               past practices, and shall not otherwise pledge, convey,
               hypothecate, encumber or otherwise transfer any of its assets,
               including without limitation any intellectual property
               (including, without limitation, patents, trademarks, and trade
               names) owned or controlled by the Issuer.

               (d) The Issuer shall have the immediate right to borrow up to an
               aggregate of $15,000; provided that thereafter the Issuer shall
               not borrow any additional amount unless Rapid Funding has been
               paid, or will be simultaneously paid, an equal or greater amount
               against the Purchase Price. In no event shall the Issuer borrow
               more than $75,000 in the aggregate pursuant to the foregoing
               terms without the prior written consent of Rapid Funding, which
               consent may be withheld or conditioned in Rapid Funding's sole
               discretion; provided, however, that the Issuer shall have the
               right to borrow funds and pay such funds to Rapid Funding without
               Rapid Funding's prior written consent if and only if the borrowed
               funds are sufficient to pay in full the entire unpaid Purchase
               Price due and payable to Rapid Funding.

                                     F - 25

<PAGE>

NOTE 11 - COMMITEMENTS AND CONTINGENCIES (Continued)

               Litigation (Continued)

               (e) Provided that the Defendants are not in default under the
               Stipulation, the Issuer may: (i) pay salaries not to exceed
               $6,000 per month to each of Messrs. Cranford and Sawyer and
               salaries not to exceed $1,500 per month each for up to four
               additional employees; (ii) issue additional Shares to employees
               or consultants provided that the issuance of any such shares
               shall comply with the terms and provisions of the Stipulation
               with respect to Rapid Funding's minimum ownership requirement;
               and (iii) make standard and customary minimum payments on its two
               existing lines of credit and two credit cards which Mr. Sawyer
               was required to personally guarantee on behalf of the Issuer.
               Any other payments by the Issuer to its employees, officers,
               directors or shareholders or any of its or their respective
               affiliates shall be made only with the prior written consent of
               Rapid Funding, which consent may be withheld or conditioned in
               Rapid Funding's sole discretion.

               (f) With respect to the Form 10-KSB for the fiscal year ended
               December 31, 2003 and the Form 10-QSB for the quarter ended March
               31, 2004, the Issuer shall file each such periodic report with
               the SEC on or before May 7, 2004 and June 4, 2004, respectively.
               Thereafter, the Issuer shall timely file any and all subsequent
               periodic reports and all other filings required by the rules and
               regulations under the Securities Act of 1933, as amended, and the
               Securities Exchange Act of 1934, as amended, and other rules and
               regulations promulgated thereunder by the SEC.  The Issuer shall
               also provide notice to Rapid Funding if its trading symbol shall
               be changed.

               (g) The Issuer shall not enter into, or agree to enter into, any
               agreement, arrangement or the like pursuant to which the Issuer
               would be involved in any merger, consolidation, reorganization,
               reclassification of stock, recapitalization, sale of all or
               substantially all of its assets, stock split, stock dividend or
               similar transaction, without the prior written consent of Rapid
               Funding, which consent may be withheld or conditioned in Rapid
               Funding's sole discretion.

               (h) The Issuer shall promptly notify Rapid Funding in writing of
               any material developments or events involving the Issuer, the
               Lawsuit Shares, or the Stipulation.

               The Stipulation requires the Issuer to schedule and hold an
               annual shareholder meeting in accordance with the articles of
               incorporation and bylaws of the Issuer, Colorado law, and the
               following provisions:

               (a) The Issuer's shareholders of record as of the later of (i)
               April 15, 2004, or (ii) the day after the date on which all
               shares registered in the names of Messrs. Cranford and Sawyer and
               their spouses have been transferred into the name of Rapid
               Funding on the stock ledger and books and records of the Issuer,
               and on which Rapid Funding shall be entitled to receive notice
               of, and vote at, the subject annual shareholder meeting, shall be
               entitled to receive notice of, and vote at, the subject annual
               shareholder meeting.

                                     F - 26

<PAGE>

NOTE 11 - COMMITEMENTS AND CONTINGENCIES (Continued)

               Litigation (Continued)

               (b) The Issuer's shareholders shall be asked to vote for and
               approve the following items: (i) election of two directors
               consisting of the Defendants, (ii) new Articles of Incorporation
               which include a change in domicile from Colorado to Nevada, two
               classes of stock identical to that currently authorized, no
               shareholder preemptive rights, limitation in director liability
               as authorized by statute, and such other provisions as mutually
               agreed upon by the Issuer and Rapid Funding, and (iii)
               ratification and/or approval of a stock option plan granting the
               Issuer the right to issue options for up to 30,000,000 Shares to
               key employees and/or consultants, of which 2,000,000 Shares have
               already been issued, provided that issuance of any such options
               shall comply with the terms and provisions of the Stipulation
               with respect to Rapid Funding's minimum ownership requirement.

               In connection with the foregoing shareholder meeting, and
               provided that the Defendants are not in default under the
               Stipulation, Rapid Funding agreed to vote all of the Lawsuit
               Shares in favor of the items presented as set forth above. In
               addition, so long as no event of default or breach exists under
               the Stipulation, Rapid Funding agreed to vote all of the Lawsuit
               Shares in favor of items proposed and recommended by the Board of
               Directors of the Issuer; provided, however, such vote by Rapid
               Funding shall not (i) amend, change, revise, vary or otherwise
               alter (a) any of the obligations, rights or duties of the
               Defendants under the Stipulation, or (b) any of the rights,
               remedies or other protections afforded to Rapid Funding under the
               Stipulation, or (ii) otherwise adversely affect Rapid Funding or
               its interests in the Issuer, each in Rapid Funding's sole
               discretion.

               In the event of a default under the terms of the Stipulation, and
               in addition to all other remedies, among other things,:

               (a) Rapid Funding shall retain ownership of all of the Lawsuit
               Shares and payments previously made pursuant to the terms of the
               Stipulation.

               (b) Rapid Funding shall have the absolute right, at its sole
               discretion and election, to attempt to sell the Issuer,
               including, without limitation, all of its assets, goodwill and
               every other tangible and intangible thing of value owned by the
               Issuer, or the Lawsuit Shares upon such terms and conditions as
               Rapid Funding deems appropriate.

               (c) The Defendants each shall be obligated to pay, in addition to
               other amounts set forth therein, all of Rapid Funding's
               attorneys' fees, costs and expenses incurred in obtaining and
               collecting a liquidated judgment against them arising from the
               date of the such event of default.

               (d) Default interest at the rate of 18% per annum shall accrue on
               amounts owing by the Defendants under the terms of the
               Stipulation.

               (e) Rapid Funding shall retain the right to vote to remove
               Messrs. Cranford and

                                     F - 27

<PAGE>

NOTE 11 - COMMITEMENTS AND CONTINGENCIES (Continued)

               Litigation (Continued)

               Sawyer as directors of the Issuer and to vote to replace them
               with designees appointed by Rapid Funding.  In order to
               effectuate such removal and replacement, Messrs. Cranford and
               Sawyer delivered to Rapid Funding signed letters of resignation
               that will be held by Rapid Funding and tendered only upon a
               default by the Defendants under the Stipulation.

NOTE 12 - SUBSEQUENT EVENTS

               During April 2004, the Company issued 1,200,000 shares of common
               stock pursuant to a Corporate Imaging Agreement.

               During April, 2004, the Company issued 5,000,000 shares of common
               stock for services.

               During April 2004, the Company entered into a stipulation in
               settlement agreement with Rapid Funding, LLC. (See Note 11)

               During May 2004, the Company issued 11,000,000 shares of common
               stock to Rapid Funding in accordance with this agreement.

               During May 2004, the Company issued 7,700,000 shares of common
               stock to four individuals for services rendered.

                                     F - 28