ALOTTAFUN, INC.

                                   FORM 10-KSB

                      FOR THE YEAR ENDED DECEMBER 30, 1999



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


                                   FORM 10-KSB


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

                  For the year ended December 30, 1999

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

                         Commission File Number 0-21279


                                 ALOTTAFUN, INC.
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)

          Delaware                                       39-1765590
          --------                                       ----------
(State or jurisdiction of                   (I.R.S. Employer Identification No.)
incorporation or organization)



            141 N. Main Street, Suite 207, West Bend, Wisconsin          53095
            ---------------------------------------------------          -----
                 (Address of principal executive offices)             (Zip Code)

       Registrant's telephone number, including area code: (262) 334-4500

     Securities registered pursuant to Section 12(b) of the Act: NONE

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

[ X ] Yes  [   ] No

Check  if no  disclosure  of  delinquent  filers  in  response  to  Item  405 of
Regulation S-B is contained in this form,  and no disclosure  will be contained,
to the best of  registrant's  knowledge,  in  definitive  proxy  of  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB [ X ]

State  issuer's   revenues  for  its  most  recent   reporting   period  (Fiscal
year)........$128,844.

Aggregate  market  value  of the  voting  stock  held by  non-affiliates  of the
registrant  at  December  31, 1999 was  $5,528,760.  The bid price of the common
stock at that date was $0.69.

DOCUMENTS INCORPORATED BY REFERENCE
Parts of the Company's  definitive proxy statement for the Annual Meeting of the
Company's  stockholders  to be held on  AUGUST  15,  2000  are  incorporated  by
reference into part III of this Form.


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                                 ALOTTAFUN, INC.

                               FORM 10-KSB - Index
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999


        PART I

                                                                      Page
                                                                      ----
        Item 1.     Business                                             1.

        Item 2.     Properties                                          14.

        Item 3.     Legal Proceedings                                   14.

        Item 4.     Submission of Matters to a Vote of
                     Security Holders                                   15.

        PART II

        Item 5.     Market of the Registrant's Securities and
                     Related Stockholder Matters                        15.

        Item 6.     Management's Discussion and Analysis of
                     Financial Condition and Results of Operations      16.

        Item 7.     Consolidated Financial Statements and
                     Supplementary Data                                 24.

        Item 8.     Changes in and Disagreements with Accountants
                     on Accounting and Financial Disclosures            24.
        PART III

        Item 9.      Directors and Executive Officers of the
                     Registrant                                         24.

        Item 10.     Executive Compensation                             24.

        Item 11.     Security Ownership of Certain Beneficial
                      Owners and Management                             24.

        Item 12.     Certain Relationships and Related Transactions     24.

        PART IV

        Item 13.     Exhibits, Consolidated Financial Statements,
                      Schedules and Reports on Form 8-K                 25.

        Signatures                                                      27.



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This Form 10-KSB  contains  forward  looking  statements,  within the meaning of
Section 27A of the  Securities  Act of 1933 and  Section  21E of the  Securities
Exchange Act of 1934,  regarding future events and the future performance of the
Company  involve risks and  uncertainties  which may cause our actual results in
future periods to be materially different from any future performance  suggested
herein. We believe that its business strategy that includes focus on collectible
toy products and our internet  initiative are unique.  There can be no assurance
that our strategy will be successful.  There can be no assurance that sufficient
capital can be obtained to market our  products  and  internet  services and our
performance  and actual results could differ  materially from those projected in
the forward looking statements contained herein.

                                     PART I

ITEM 1. BUSINESS.

GENERAL

OVERVIEW
We were originally established on August 15 1993 as a distributor,  and marketer
of collectible  toys and candy  products for children  between the ages of three
and twelve years old. We have marketed  products  that include tea sets,  games,
puzzles, books, plush toys, purses, ride-on cars, and unique surprise boxes that
contain gum and candy,  collectible toys, trading cards, milk caps (pogs), comic
strips, tattoos,  stickers, and various promotional inserts.  Alottafun! has not
generated  sufficient  revenues  in the  last  two  years  to fund  its  ongoing
operations  and has sustained  substantial  losses since its inception and we do
not  expect to become  profitable  until  2001.  Accumulated  losses to date are
approximately  $4,715,397  and there is  substantial  doubt about our ability to
continue as a going concern.

In May 1999, Alottafun!  joint ventured with E-Commerce Fulfillment,  LLC. which
contracted with M.W Kasch,  an independent  U.S. toy  distributor,  to launch an
e-commerce Internet portal called TOYPOP.COM.  The Joint venture was owned 33.3%
by E-Commerce  Fulfillment and 67.7% by Alottafun!,  Inc. E-Commerce Fulfillment
(ECF) was a wholly owned by Jeffrey C. Kasch,  President of M.W.  Kasch Company.
ECF's  responsibilities  and  obligations  included  selling toy products to the
joint  venture,  at prices that did not exceed  prices  charged to ECF's typical
customers.  ECF provided its products  based on regular  availability.  ECF also
merchandised  toys on the Web  site  and  made  decisions  as to  which  toys to
highlight as special  buys, to promote,  or present as a `hot' toy.  M.W.  Kasch
Company  warehoused and provided  fulfillment to ECF. The  relationship  between
M.W.  Kasch Company and ECF was exclusive as far as ECF was  concerned,  but not
exclusive  with regard to M.W.  Kasch.  M.W.  Kasch was free to sell any and all
other  retailers,  electronic  or  otherwise.  Our role was to manage  marketing
strategies,  and to  provide  the  electronic  mediums  for the  sale,  customer
support, and fulfillment of products that the joint venture purchases.

In October 1999, we commenced  negotiations with a software  developer,  MHA, to
jointly develop a business-to-business  site, that would allow toy manufacturers
to sell direct to retailers as a further  expansion of its TOYPOP site. We chose
not to partner  with MHA, and instead  decided to pursue a  business-to-business
strategy  ourselves.  At Toy Fair 2000,  we  announced  our  strategy  and began
signing   up   both    manufacturers    and   retailers.    We   announced   our
business-to-business internet strategy on February 22, 2000.

On  February  28,  2000,  the  M.  W.  Kasch  and us  agreed  to  terminate  our
relationship and thereupon,  M.W. Kasch Co. gave notice that effective March 28,
2000 our agreement with them was terminated.

On   February   10,  2000  as  a  result  of  our   independent   pursuit  of  a
business-to-business  strategy without MHA, who hosted the TOYPOP internet site,
MHA shut down our  TOYPOP  site.  We intend to remake the site into a channel in
the new MRABA internet initiative. Sales of toy products through the TOYPOP site
amounted to $ 16,506  during the Holiday  selling  season,  primarily due to the
lack of  marketing  and the  limited  availability  of the  better  selling  toy

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products that was available  through M. W. Kasch.  We are optimistic that TOYPOP
can be made a  viable  internet  retail  portal  through  a  reorganization  and
restructuring within our MRABA internet opportunity.

According to Toy Manufacturers of America, the leading toy industry trade group,
total  annual  retail toy sales were  estimated at $27.2  billion in 1998.  This
represents  traditional  retail toy sales of $21 billion and video games of $6.2
billion.  These  figures  represent  the retail  sales of toys through all major
retail outlets such as national toy stores, discount stores,  department,  drug,
food and variety stores; gift and novelty shops; price clubs;  bookstores;  home
supply stores, mail order catalogs and online toy stores.

Toy sales through the Internet  represented  the fastest  growing segment of toy
retail   sales   during  the  last   quarter  of  1998.   According  to  Jupiter
Communications,  Inc., a New York research firm, retail sales through online toy
stores is expected to generate $52 million in 1999,  $555  million in 2002,  and
$1.5 billion by 2003 excluding software, books and other children's categories.

Without the joint  venture  with  E-Commerce  Fulfillment,  we have  revised the
expectation of our ability to sell toy products over the Internet. As we develop
relationships  with the toy  manufacturers  through  our MRABA  initiative,  and
providing  that we can arrange the necessary  capital,  we now expect to capture
$20 million of this $1.5 billion toy  electronic  segment of the toy industry by
2003.  There  is no  assurance  that we  will be  successful  in  marketing  and
distributing toys through electronic commerce. If we experience any difficulties
regarding the  development of our Internet site, our future  business  prospects
will be adversely affected.

Our e-commerce site was originally  launched on September 21, 1999. The Web-site
e-commerce development program cost about $235,144 through December 31, 1999. In
comparison with other retailers of toys, our expenditures were relatively small.
Marketing  expenditures  included  limited  newspapers,   radio,  magazine,  and
internet  advertisements.  Our expected marketing program was not funded for the
recent  holiday  selling  season.  Our  lack of  marketing  resources  has had a
negative impact on our sales and our ability to meet our sales projections.  Our
Toypop.com  site was  processing  orders  through  February 10, 2000 when it was
closed.

Our operating results may hinder our ability to raise additional capital to fund
our operations  going forward.  To date, we have funded our Web-site  e-commerce
development  with working  capital  provided by the sales of our  securities and
borrowings.  However,  there is no assurance that these working capital reserves
will be  sufficient  to  complete,  launch,  and  market  our  e-commerce  site.
Furthermore,  there is no  assurance  that we will be able to  raise  additional
funds through securities sales and borrowings in the future.

When we again reopen our TOYPOP portal  during the second  quarter 2000, we will
be using industry standard software and systems to process orders and to protect
the security of our customers. We will implement a broad array of scaleable site
management,   search,  customer,   interaction,  and  systems  used  to  process
customers'  orders  and  payments.   These  services  and  systems  will  use  a
combination  of  technologies  developed  by our  software  developers  and  are
commercially available, licensed technologies.

Our systems will again be designed to reduce  downtime in the event of outages.-
they provide 24-hour-a-day,  seven-day-a-week  availability. Our system hardware
will be  hosted  at a third  party  facility  in New  York  city  that  provides
redundant communications lines and emergency power back up.

Mother  Hubbard  Toys (now  Hearthside  Treasures)  was acquired in June 1998 to
provide high quality tea sets,  cook n' serve sets,  continental  cookware sets,
and food sets to  children  between  the ages of three to five years  old.  This
acquisition  presents us with an opportunity to expand our  distribution in this
growing  segment of the toy industry.  Mother  Hubbard Toys was founded in 1997.
The terms of our agreement  with Mother  Hubbard's  Toys calls for us to pay its
previous  owner,  Gerald Waak, the principal of Vagabond  Associates,  a royalty
payment for years 1999 through years 2001. We had no prior  affiliation with the
seller prior to this acquisition.  Prior to our acquisition,  Mother Hubbard had
approximately  $35,000 in sales in 1998 and no sales prior to that date. We have
had Mother Hubbard products sales of $109,459 through December 31, 1999.

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We continue to seek  acquisitions  of companies  that market basic toy products,
however,  we have no pending or contemplated  acquisitions.  If we are presented
with appropriate  opportunities,  we intend to make investments in complementary
companies,  products or  technologies.  We could have difficulty in assimilating
the acquired  technology or products into our operations which could disrupt our
ongoing  business,  distract  our  management  and  employees  and  increase our
expenses.  Furthermore,  we may have to incur  further debt or issue more equity
securities to pay for any future  acquisitions or  investments,  the issuance of
which could be dilutive to existing stockholders.

Most of our products are relatively simple and inexpensive toys. We believe that
these  products  have  proven to have  enduring  appeal and are less  subject to
general  economic  conditions,  toy product  fads and trends,  changes in retail
distribution  channels and other factors.  In addition,  the simplicity of these
products enables us to choose among a wider range of  manufacturers  and affords
us greater flexibility in product design, pricing and marketing.

We sell our products  through our  in-house  sales staff and  independent  sales
representatives.  Our  Vice-President  of  Sales  is  our  only  in-house  sales
employee. Purchasers of our products include grocery, drug, variety, video, mass
merchandisers  and specialty  outlets,  although revenues from toy product sales
have been very limited in amount to date. Our revenue will all be denominated in
U.S. dollars.

Our new e-Commerce initiative will be directed toward established manufacturers,
distributors and retailers in the toy industry.  We hope that development of our
MRABA Internet site will allow us to become a business-to-business portal within
the toy industry to expedite  delivery of toy products  throughout that channel.
However,  there is no assurance that our marketing and distribution efforts will
be successful.  Furthermore,  the MRABA project and the  re-establishment of our
TOYPOP  site to market  and  distribute  our  products  through  e-commerce  may
conflict with our ability to market our products directly to retailers and other
local distributors.

Over  the  past  few  years,  the  toy  industry  has  experienced   substantial
consolidation  among both toy companies and toy  retailers.  We believe that the
ongoing  consolidation  of toy  companies  provides  us  with  increased  growth
opportunities  due to  retailers'  desire not to be entirely  dependent on a few
dominant  toy  companies.   Such   dependence   places   tremendous   sales  and
profitability pressure on distributors because if one major retailer decides not
to order your product, it could have a significant effect on unit sales and unit
profitability.  On the other hand,  if a  distributor  can develop an  exclusive
arrangement  with a retailer for a particular  toy, this can  guarantee  healthy
sales and profits.


THE TOY INDUSTRY
According  to the Toy  Manufacturers  of  America,  Inc.  ("TMA"),  the  leading
industry  trade  group,  total  manufacturers'   wholesale  shipments  of  toys,
excluding video games, in the U.S.,  were  approximately  $15.2 billion in 1998.
According to the TMA, the United States  represents 36% of toy revenue;  Western
Europe,  Asia and Japan follow with 28%, 13% and 10%. (TMA,  1997).  The U.S. is
also the leader in toy development,  sales support,  marketing,  advertising and
special promotions.  Classic toys have consistently remained the backbone of the
toy business which includes games, preschool and infant items and activity toys,
although, high-tech toys have become increasingly popular among children.

ELECTRONIC COMMERCE
We believe that a significant opportunity exists for both the online retail sale
of toys and other products and for  business-to-business  e-Commerce for the toy
industry  on the  Internet.  The  Internet  has grown  rapidly in recent  years,
spurred  by  development  of  easy-to-use  Web  browsers,  a large  and  growing
installed base of advanced personal  computers,  the adoption of faster and more
cost  efficient  networks,  the  emergence of compelling  Web-based  content and
commerce  applications,  and the growing sophistication of the user base. At the
end of 1998, there were 98 million Internet users, and projections indicate this
user base to grow to 320 million by 2002. In addition, the Internet's commercial

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use  presents a  significant  opportunity  for  merchants  to reach an  expanded
customer base. Jupiter Communications, a marketing research firm, estimates that
the value of goods and services  purchased  over the Internet will increase from
$2.6  billion in 1997 to $37.5  billion  in 2002.  The broad  acceptance  of the
Internet as a global communication medium presents significant opportunities for
online  retail  commerce.  Online toy  retailers  currently  account for a small
portion of total Internet commerce sales,  however,  a number of businesses have
developed plans and begun to focus in this area.

The online commerce market is new, rapidly  evolving and intensely  competitive.
Management  expects  competition  to  intensify  in the  future as more and more
businesses develop an Internet presence.  Barriers to entry are low which enable
current and new competitors to enter that market and sell  competitive  products
without much resistance.

We will compete with a variety of other companies, which include:

-    Current online toy retailers.
-    Traditional  store-based  toy  and  children's  product  retailers.
-    Major discount retailers.
-    Entertainment companies  that  sell  and  license children's products.
-    Catalog retailers of children's products.
-    Manufacturers of children's products.
-    Online  retailers  that currently sell other products and could easily add
      children's products.
-    Internet portals and destination Web sites that host shopping for
      children's products.

TOYPOP.COM will readily compete in the online retail toy market based on the
following factors:

-    Unique child oriented site
-    Wholesale pricing
-    Online games
-    pocket ghost collectibles
-    convenience
-    price
-    speed and accessibility
-    customer service
-    quality of site content
-    reliability and speed of fulfillment.

Many of TOYPOP.COM's  current and potential  traditional  store-based and online
competitors  have longer  operating  histories,  larger  customer or user bases,
greater brand recognition and  significantly  greater  financial,  marketing and
other  resources.  Many of these  current and potential  competitors  can devote
substantially more resources to Web site and systems development than we can. In
addition,  larger,  well-established  and  well-financed  entities  may acquire,
invest in or form joint  ventures  with online  competitors  or  children's  toy
suppliers as the use of the Internet and other online services increases.

Competitors may be able to secure products from vendors on more favorable terms,
fulfill  customer orders more  efficiently and adopt more aggressive  pricing or
inventory availability policies.  Traditional  store-based retailers also enable
customers  to see and feel  products in a manner that is not  possible  over the
Internet.

TOYPOP.COM's  online  competitors are particularly able to use the Internet as a
marketing medium to reach significant numbers of potential  customers.  Finally,
new  technologies  and the  expansion  of existing  technologies,  such as price
comparison  programs that select specific titles from a variety of Web sites and
may direct customers to other online toy, video game, software,  video and music
retailers, may increase competition.

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However,  we  feel  that  wholesale  pricing,  child  oriented  marketing,   and
proprietary  products will differentiate the TOYPOP.COM site in the long run and
ensure long-term  profitability,  although we can not provide  assurance that we
will be successful in doing so.

Online  toy  sales  were  estimated  to be $200  million  in 1999,  up from just
$1,000,000 in 1997. The online sales of toys are growing dramatically,  although
it represents a very small portion of total toy annual sales of $25 billion.


BUSINESS STRATEGY
Our business strategy consists of the following elements:

-    Expand core products.  In February 2000, we introduced new products within
     our core product lines,  including  several unique  collectible toys. These
     classic  toys  continue to be popular  among  children  and are not greatly
     affected by new trends in the toy industry.

-    Enter new product categories.  We are currently  developing 80 new "Pocket
     Ghost"  collectible  products in  conjunction  with our Hong Kong agent for
     manufacturing in China.  Molds have been made for 84 characters within this
     product line with the balance of 70 characters  scheduled for completion in
     Summer 2000. Our manufacturer in Israel  supervises the quality control and
     development  aspects of new toy products.  We maintain strong  affiliations
     with  companies  in Europe that will  enable us to identify  new trends and
     products  in the  European  toy market  which can be  marketed  in the U.S.
     market.  In  addition,  these  relationships  present us  opportunities  in
     exporting  products to Europe.  This  exporting  opportunity  would be made
     available through European distributors.  To facilitate sales in Europe, we
     intend before the end of the year 2000,  to make our TOYPOP site  available
     in other languages.

-    Development  of TOYPOP.COM  Interactive  online toy store.  The TOYPOP.COM
     online toy store, originally opened on September 21, 1999 and was suspended
     on February  10,  2000,  will be  reformulated  to become part of the MRABA
     network  of  interactive  online  toy  stores.  Our  Internet  destination,
     targeted to children  between  the ages of three and twelve,  will  contain
     more  interactive  games  and  puzzles  than  are  traditionally  found  on
     electronic  commerce  Web  sites.  A number of  characteristics  of the toy
     industry make the online sale of toys particularly  attractive  relative to
     traditional  distribution channels. The online environment offers many data
     management  and  multimedia  features  that  enable  consumers  to  conduct
     effective  searches by name,  product type, or product category and display
     products better than traditional catalogs. Online retailers can more easily
     obtain  extensive  demographic and behavioral  data about their  customers,
     providing them with greater direct marketing  opportunities and the ability
     to offer a more  personalized  shopping  experience.  In  addition,  online
     retailers can also offer consumers significantly broader product selection,
     the  convenience  of  home  shopping  and  24-hour-a-day,  seven-day-a-week
     operations,  available to any location, foreign or domestic that has access
     to the Internet.

     While physical store-based toy retailers must make significant  investments
     in inventory,  real estate and personnel  for each store  location,  online
     retailers  incur a  fraction  of these  costs,  generally  use  centralized
     distribution, and have virtually unlimited merchandising space. Traditional
     retailers are compelled to limit the amount of inventory they carry at each
     store and focus on a smaller selection of faster-selling hit releases. As a
     result,  we  believe  that a  typical  toy  store is able to carry far less
     merchandise  units  compared to the  unlimited  capability of an online toy
     store.  Online  retailers  can offer  consumers a broader range of products
     that  include  hundreds  of  smaller  toy  companies  that  currently  have
     difficulty competing against major toy retailers.  As is generally true for
     popular toy products,  availability  of these products is highly  dependent
     upon supply  commitments  from  manufacturers  and their  perception  as to
     expected  unit sales.  We will,  however have the same  difficulty as other
     small  retailers  obtaining  access to a new toy  product  and such lack of
     availability could impact our sales and profitability.

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     We cannot  provide any assurance  that our efforts will be  successful.  In
     addition,  if these popular  products are  available  through us, we cannot
     provide any assurance  that our marketing  efforts will be successful as we
     presently  have very  limited  resources  to both  promote  and  market our
     product  offerings.  In  addition,  should such  capital  resources be made
     available,  we  further  cannot  provide  any  assurance  that it  would be
     available on a timely basis or that we would appropriately spend such funds
     on an effective or a successful marketing program.

     Our principal  TOYPOP  objective is to be a leading  retailer of children's
     toy products. Key elements of our strategy include:

     -     FOCUS ON ONLINE RETAILING OF CHILDREN'S PRODUCTS
     TOYPOP.COM  intends  to  become  the  primary   destination  for  consumers
     purchasing  children's products.  Our online store will focus on children's
     products and will offer an extensive selection of games,  software,  videos
     and  music.  While it  intends  to focus on toys,  TOYPOP.COM  will  expand
     offerings into additional  children's  product categories to take advantage
     of our customer base, brand name,  merchandising expertise and distribution
     capabilities.   We  will  further  expand  into  books,  videos  and  music
     categories.  We  intend  to add to the  depth  of  selections  within  each
     category as we add many new  manufacturers  to the site. We intend to bring
     on-line  the  products of small  manufacturers  to enable them to market to
     consumers  through our  TOYPOP.COM  site by which they will drop ship their
     merchandise directly to the consumer. We also intend to add a gift registry
     to the site and add, what we view as quite  important,  a on-line  customer
     service capability so that our customers can get needed service to order in
     a prompt and timely manner.

     -     BUILD BRAND RECOGNITION
     Through  our  advertising  and  promotional  activities,   we  will  target
     purchasers  of  children's  products,  with a primary focus on children and
     mothers.  We believe that while  mothers are the principal for purchases of
     children's  products and strongly  influence  the  purchasing  decisions of
     family  and  friends-  children  are the  ultimate  consumer  and  strongly
     influence  the  buying   decision.   Both  off-line  and  online  marketing
     strategies  will be used to maximize  customer  awareness and enhance brand
     recognition.

             -  OFF-LINE  ADVERTISING.  TOYPOP.COM will use offline advertising
                to  promote   both  brand   name  and   specific   merchandising
                opportunities  with  traditional  advertising  efforts that will
                include print  advertising in FAMILY FUN, FAMILY PC,  PARENTING,
                PARENTS  and  CHILD  publications,   and  radio  and  television
                advertising  in major  markets.  Our plans will use  traditional
                off-line   advertising  in  order  to  continue  building  brand
                recognition.

             -  ONLINE ADVERTISING. TOYPOP.COM will partner with online portals
                and Internet service providers,  parenting-related Web sites and
                Children-oriented companies.

              - DIRECT ONLINE MARKETING.  As our customer base grows, we expect
                to continue to collect  significant data about customers' buying
                preferences and habits in an effort to increase repeat purchases
                by  existing  customers.  We will  maximize  the  value  of this
                information by delivering meaningful and helpful suggestions and
                special  offers to  customers  via  e-mail and other  means.  In
                addition,  a in-house  newsletter,  THE TOYPOP NEWS,  will alert
                customers   to   important    developments   and   merchandising
                initiatives.

     -    BUILD RELATIONSHIPS WITH CHILDREN
     We intend to build a relationship with children through collectible toys to
     be launched in the summer of 2000.  Within each  package  will be placed an
     insert, which will lead the child to a game at the TOYPOP.COM Web site. The
     site  will  feature  an  interconnected  series  of  game  challenges  with
     identified users able to earn points,  and ultimately prizes as a result of
     successful  completion of a number of challenges.  This game element within
     the  site  will  challenge  the  ingenuity,  problem  solving  skills,  and
     persistence of the user to boost the perceived value of the rewards.  Along

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     the way the users will gain not only an enhancement of those qualities, but
     a great deal of useful  information and positive  attitudes.  The site will
     also contain  quite a bit of irreverent  humor and a bit of  silliness,  as
     well as product  descriptions,  and children auctions,  and message boards.
     The site will function as a tool to drive sales of our collectible  toys by
     utilizing secret code numbers included in toy packaging.  The allure of the
     game  element of the site will drive the target user base to  purchase  the
     toys not just for the sale of the toys but also for the facilitation of the
     game. The characters  found in collectible  toys will be incorporated  into
     the Game Space as well.


     PURSUE WAYS TO INCREASE SALES
     We intend to pursue new opportunities to increase sales by:

     -    opening new departments on TOYPOP.COM to expand into new
            product categories;

     -    increasing product selection in existing departments;

     -    adding more services to further personalize the customer experience;

     -    pursuing international market opportunities; and

     -    acquiring complementary businesses, products or technologies.

     -   Pursue  strategic  acquisitions.  Since our inception,  we intended to
         acquire and develop our unique brands through the  acquisition of other
         toy companies or their assets. Our Hearthside Treasures product line is
         the first of many intended  acquisitions  that  complement our intended
         product lines. We intend to continue our efforts to acquire and develop
         the  Alottafun!  Brand through the  acquisition of other toy businesses
         with valuable trademarks or brands and compatible product lines.

We intend to focus the majority of our time and resources on the  development of
our  collectible  toys,  the  ToyPop.com  website and the MRABA.COM  portal.  We
marketed  our  collectible  toys at the  February  2000  Toy  Fair.  There is no
assurance that our business strategy, which is highly dependent upon e-commerce,
will be  successful or that we will be able to generate any  significant  sales.
The on-line marketing efforts of competitors,  who are substantially  larger and
have  far  more  financial  resources  could  have  a  critical  impact  on  our
opportunity for success.

PRODUCTS
Our initial  product  consisted of a surprise box that included  quality gum and
candy, toys, trading cards, milk caps (pogs), comic strips,  tattoos,  stickers,
and various  promotional  inserts.  Our initial emphasis was placed upon gaining
distribution among convenience and neighborhood  stores. More recently,  we have
targeted  larger volume trade channels such as grocery,  drug,  variety,  video,
mass  merchandisers  and  specialty  outlets.  Our success in  distributing  our
Surprise Box was very limited in targeting  neighborhood and convenience stores.
If we are to be  successful  in this  effort in the future,  substantially  more
advertising  and promotion  would have to be devoted to this segment.  We cannot
provide any  assurance  that we will be  successful in this endeavor or that the
capital resources will be readily available to fund such a program. Our Internet
strategy to sell toys direct to the public could  potentially  conflict with the
distribution  of our products though regular retail channels and could adversely
impact our sales and  profitability.  We also cannot provide  assurances that we
will be successful in this regard.

Our packaging and graphic designs target children  between the ages of three and
twelve years old.  Package  designs and graphics are  provocative,  colorful and
irreverent. The main cartoon character located on the package is Reely, which is
representative  of a typical 10 year old.  To develop  brand  loyalty  among the
higher age groups of seven to twelve years old, high quality trading cards, milk
caps and comics are added to maintain their interest.

                                       7
<PAGE>


Since the  introduction  of the Alottafun!  Surprise Box, we have  significantly
expanded our product offerings to include:

-    Cooking and housekeeping sets
-    Collectible toys
-    Puzzles
-    Books with built-in games
-    Plush toys
-    Purses
-    Girl make-up kits
-    Ride-on push cars
-    Building block sets
-    Models

COLLECTIBLE TOYS
Our  collectible  toy products are based on the European  Collectible Toy market
products.  European  candy  companies  have produced  collectible  toys for over
twenty five years which consist of small toys  surrounded  by candy shells.  The
toys inside the candy shell are well engineered collectible models of airplanes,
cars, clowns, frogs, crocodiles,  pandas and a various other objects. These toys
have been  collected and traded in Europe for many years and have  established a
substantial secondary market.

We  introduced  80  original  collectible  toys at the Toy  Fair  2000  industry
convention  in February  2000.  We have designed our own version of the European
Collectible  toy that  conforms to U.S.  product  guidelines.  Prior to this new
design,   collectible  toys  could  not  meet  these   guidelines.   Our  design
incorporates the high quality easily  assembled  objects within a plastic shell.
We will introduce new objects inside the  collectible  frequently and will limit
the number of objects  produced  to  stimulate  the  collectable  aspects of the
product.  The collectible toy product is a natural extension of our Surprise Box
and will prove to be a significant product in the United States.

Our  collectible  toy products  introduction  was delayed  until  February  2000
because  it has taken us  longer  than  anticipated  to  construct  the molds to
manufacture these products and secure distribution relationships.  We originally
expected to launch these products at the end of 1999,  however,  we felt that by
delaying  the launch  until Toy Fair 2000 would  provide  for a more  successful
introduction. All of the major toy distributors are present for this event which
will effectively  introduce our collectible products to key distributors without
having to visit each one  individually.  Our limited capital  resources  to-date
make  this  introduction  our most  viable  alternative,  however,  there are no
assurances  that these  distributors  will be receptive to our  collectible  toy
products  and that  these  products  will be  successfully  introduced.  We have
focused on introducing our products in the European market initially.

Our Hearthside  Treasures  acquisition  provides high quality tea sets,  cook n'
serve sets,  continental  cookware sets,  and food sets to children  between the
ages  of  three  to  five  years  old.  This  acquisition  presents  us  with an
opportunity  to expand  our  distribution  in this  growing  segment  of the toy
industry.  These products are primarily  targeted toward young girls which allow
us to further diversify our customer base.


TOYPOP.COM
Our internet destination consists of three major components that make it unique.
Upon entering  TOYPOP.COM,  individuals  may either choose a section called "Fun
Stuff" which contains jokes,  puzzles,  comics, links to internet sites targeted
toward children. The second section contains a guest book for registering on the
site allowing us to collect valuable demographic  information and extend special
promotion to our members.  Finally, the last section contains interactive online
games that children may play individually or against others.

                                       8
<PAGE>

SALES, MARKETING, AND DISTRIBUTION
 We  sell  all  of our  products  through  our  own  in-house  sales  staff  and
independent  sales  representatives.  Purchasers of our products include toy and
discount  retail chain  stores,  department  stores,  toy  specialty  stores and
wholesalers.  The Alottafun!  Surprise Box product is also  distributed  through
convenience and small specialty retail establishments.  As we continue to expand
our operations,  we will hire additional  independent sales  representatives  to
handle specific classes of trade, such as video,  military,  mass merchandisers,
variety, toy, and other outlets.

Our success  depends on our ability to  establish  and  increase the size of our
distribution network for our products.  To facilitate growth in our distribution
network,  we provide  incentives to  distributors  by offering them discounts on
volume  purchases.  Except for purchase orders relating to products on order, we
do not have written  agreements with our customers.  Instead,  we generally sell
products to our  customers  pursuant to letters of credit or, in some cases,  on
open account with payment terms typically varying from 30 to 90 days.

We will budget  approximately  5% of our net sales for advertising and promotion
of our traditional products. We will use radio and to a lesser extent television
commercials  to market our  products.  We  advertise  our  products in trade and
consumer  magazines  and other  publications,  market our  products at major and
regional toy trade shows,  conventions  and exhibitions and carry on cooperative
advertising with toy retailers and other customers.


TOYPOP.COM
TOYPOP.COM  will promote its brand using a combination of online and traditional
advertising.  We will advertise online on those popular destinations that target
children. As part of these arrangements, we will purchase banner advertisements,
often  in  conjunction   with  specified  search  keywords  or  on  contextually
appropriate  pages that  allow  children  to  immediately  click  through to the
TOYPOP.COM site. The significant flexibility of online advertising will allow us
to quickly  adjust  advertising  plans in response to seasonal  and  promotional
activities.

We believe that  traditional  advertising is a key ingredient in building brand
recognition  and promoting the benefits of online retail  shopping.  Traditional
advertising  can be an effective means of promoting  widespread  brand awareness
and attracting  traditional  retail consumers to TOYPOP.COM's  online retail toy
store.

With our joint venture with E-Commerce Fulfillment, LLC, we expected to maintain
very low inventory  levels,  but with the  withdrawal  of M.W.  Kasch we are now
dependent upon establishing another relationship or providing for the inventory,
and computer  systems and other  elements of the  infrastructure  to process and
fill orders.. The strategic  relationship with Kasch had allowed us to avoid the
high fixed costs and capital requirements associated with owning and warehousing
product  inventory  and  the  significant  operational  effort  associated  with
same-day  shipment.  We are now  obligated  to incur  additional  investment  to
provide  for  what we  originally  believed  was a key  strategic  advantage  in
competing  with other  online toy  retailers.  We believe our MRABA site and the
developing  relationships  we  are  building  with  toy  manufacturers  has  the
potential to supplant the Kasch relationship.

TOYPOP.COM,  once re-opened, will internally process customer orders and will be
responsible  for both  security  and data  integrity.  We will  package and ship
customer  orders and charge for  merchandise,  shipping and handling.  We expect
that products will be shipped within two business days after an order is placed.

We will perform customer billing through a third-party credit card processor. We
will use First National Bank of Omaha as our credit card  processor.  Because we
are  processing  confidential  information  over  the  Internet,  we  must  take
necessary steps to prevent security breaches and fraudulent activities. However,
we cannot assure that we can prevent all security breaches even though our third

                                       9
<PAGE>

party credit card  processor  may approve  payment of the orders.  Under current
credit  card  practices,  which we will be  subjected,  a merchant is liable for
fraudulent  credit card  transactions  whereby that  merchant  does not obtain a
cardholder's  signature.  A failure to adequately control fraudulent credit card
transactions would adversely affect our business.


MRABA.COM

GENERAL
MRABA,COM  will allow  companies  to sell  products on the  internet via a giant
network of  thousands  of  retailers.  This is an  opportunity  to increase  the
distribution base and profits of e-Commerce participants.

We  will  utilize   experienced   professionals  who  are  knowledgeable   about
business-to-business  e-Commerce that are based in New York City. We will create
a eCommerce network  specifically  designed for manufacturers,  distributors and
wholesalers which enables them to display, promote and sell all of their product
offerings  with  no  out-of-pocket  expenses  involved.  We  will  charge  a  1%
transaction fee for sales that move through our MRABA.COM portal.


ESTABLISH CUSTOMER WEBSITES
We will  assist  companies  to set up  products  for sale  with  our  e-Commerce
software and rapidly  establish their presences on our network.  We also include
previously   established   company  websites  that  want  to  benefit  from  the
business-to-business  exchange within the MRABA.COM network. The entire focus of
this business-to-business  portal is to showcase a company's merchandise through
a vast network of retailers.  For the first time user of the  internet,  we only
require that they provide product pictures,  descriptions and prices and we will
establish their internet presences.

MRABA.COM ADVANTAGE OVER OTHER e-COMMERCE OPTIONS.
We expect to provide superior technology to showcase a company's merchandise and
provide superior customer service. These elements include:

-    Superior Technology
Superior  technology provides the MRABA.COM merchant and enables various product
departments to offer merchandise with excellent product  presentations  that are
instantaneously  published and fully integrated into the MRABA.COM network.  The
result is a compelling shopping  experience for the retailer.  Completed product
sales through the system automatically generate orders for fulfillment.

-    Showcasing Merchandise
With very little effort,  MRABA.COM's flexible design capabilities  exploits and
presents  product  values.  Quality  photographs  and  descriptions  are the raw
materials  needed to create  an  effective  online  presentation.  Our  internet
specialists  work with a company to create the intital  product  offering.  When
this initial product selection is launched,  a participant can add, remove or or
modify the offering at any time using our simple internet-based management tools
that require no special installation or training.  By logging into the MRABA.COM
BackOffice  with a password,  changes can be made  directly  through the desktop
web-browser  (Netscape,  Internet  Explorer or AOL) at any time.  In addition to
merchandising  products in MRABA.COM's  network,  a company can also get to view
all transactions and orders on a real time basis.

Product pages become easily  accessed  through the  appropriate  departments.  A
participant  company  also  gains  access to a variety  of  special  promotional
options that move merchandise in ways that will benefit their product offerings.
Featured  Selections  and  What's  New are  both  areas  that  focus  retailer's
attention on specific products at the head of department pages. The Outlet Store
and Auction House are other examples that present MRABA.COM member's  selections
including  refurbished  items,  production  over-runs and  short-term  clearance
sales.

                                       10
<PAGE>


-    Superior Customer Service
One of  the  biggest  barriers  to  merchandising  on the  web is  reliable  and
trustworthy  customer  service.  We make the  process  easy for the  participant
company.  We have refined and developed  simple policies and procedures that are
easy to use for the consumer.

We have made  selling  merchandise  through the Internet an easy process for the
participant company. The complexities of presenting and marketing merchandise as
well as  administrating  customer  service  are  all  expeditiously  and  timely
handled. By providing and delivering quality merchandise,  a participant company
benefits within the MRABA.COM internet portal community.


MANUFACTURING
Our own toy products are  manufactured  through contract  manufacturers  whom we
choose on the basis of quality,  reliability and price. Consistent with industry
practice,  the use of third-party  manufacturers  enables us to avoid  incurring
fixed manufacturing costs. All of the manufacturing  services performed overseas
for us are paid for  either by letter  of  credit  or on open  account  with the
manufacturers.  To date,  we have not  experienced  any  material  delays in the
delivery of our  products;  however,  delivery  schedules are subject to various
factors beyond our control,  and any delays in the future could adversely affect
our sales.  Currently,  we have ongoing  relationships  with  approximately five
manufacturers.  We believe  that  alternative  sources of supply are  available,
although we cannot assure you that adequate  supplies of  manufactured  products
can be obtained.  At the present time, all of our manufactured products are sold
on the  basis of  letters  of  credit  or wire  transfers.  We do not  inventory
product.  As we expand our  business,  we would  expect to maintain a thirty-day
supply of inventory equal to our forecasted demand.  These inventory levels will
be subject to inventory risk in the form of obsolescence  or through  purchasing
too much inventory and obtaining low product demand.

Although we do not conduct the  day-to-day  manufacturing  of our  products,  we
participate in the design of the product  prototype and  production  tooling and
molds for the  products  we develop or  acquire,  and we seek to ensure  quality
control by actively  reviewing the  production  process and testing the products
produced by our manufacturers.

We use our officers for our research and development efforts that include travel
expenses to identify  manufacturers  and use their  participation in toy product
designs. However, our manufacturers bear a majority of the costs associated with
developing new toy products and  prototypes.  As a consequence of this approach,
we have no material research and development expenses.


INTELLECTUAL PROPERTY
The steps we take to protect our proprietary rights may be inadequate. We regard
our  copyrights,  service  marks,  trademarks,  trade dress,  trade  secrets and
similar  intellectual  property as critical to our success. We rely on trademark
and  copyright  law,  trade secret  protection  and  confidentiality  or license
agreements  with our  employees,  customers,  partners and others to protect our
proprietary  rights.  We have a trademark for  "Alottafun"  for toys,  games and
playthings and for sales of toys, games and playthings.  We have filed trademark
applications   for   Alottatoys.com(TM)   and   ToyPop.com(TM).   We  also  have
applications for Hearthside Treasures(TM), Microtoy Magic Capsule(TM) and Pocket
Ghosts(TM).  We have filed a patent application for the Pocket Ghost Capsule. We
have  not  received   confirmation   that  any  of  these  trademark  or  patent
applications  have been accepted or that the  trademarks  have been granted.  If
granted,  these trademarks will be protected from the use by others for a period
of 10 years  as long as our  usage of  these  trademarks  continue.  There is no
assurance  trademarks  will be granted  for these  names.  Effective  trademark,
service  mark,  copyright  and trade secret  protection  may not be available in
every country in which we will sell our products and services only. Furthermore,
the relationship between regulations  governing domain names and laws protecting
trademarks  and  similar  proprietary  rights is unclear.  Therefore,  we may be
unable to prevent third parties from acquiring domain names that are similar to,
infringe  upon or  otherwise  decrease  the  value of our  trademarks  and other
proprietary rights.

                                       11
<PAGE>

COMPETITION
Competition in the toy industry is intense. Many of our competitors have greater
financial resources,  stronger name recognition and larger sales,  marketing and
product  development  departments  and benefit from greater  economies of scale.
These factors, among others, may enable our competitors to market their products
at lower prices or on terms more  advantageous  to customers than those we could
offer for our competitive products. Competition often extends to the procurement
of  entertainment  and  product  licenses,  as  well  as to  the  marketing  and
distribution of products and the obtaining of adequate shelf space.  Competition
may result in price reductions,  reduced gross margins and loss of market share,
any of which could have a material  adverse  effect on our  business,  financial
condition  and results of  operations.  In each of our product  lines we compete
against one or both of the toy industry's two dominant  companies,  Mattel, Inc.
and Hasbro,  Inc. We also compete with numerous smaller domestic and foreign toy
manufacturers, importers and marketers in each of our product categories.

TOYPOP.COM and MRABA.COM
The online commerce market is new, rapidly  evolving and intensely  competitive.
We expect  competition  to intensify  in the future as more and more  businesses
develop an Internet presence. Barriers to entry are low which enable current and
new competitors to enter our market and sell  competitive  products without much
resistance.

We will compete with a variety of other companies,  including:
-    Current online toy  retailers.
-    Traditional store-based  toy  and  children's  product retailers.
-    Major discount retailers.
-    Entertainment companies that sell and license children's products.
-    Catalog retailers of children's  products;
-    Manufacturers of children's  products.
-    Online  retailers  that currently sell other products and could easily add
      children's products.
-    Internet portals and destination Web sites that host shopping.

 TOYPOP.COM will compete in the online  retail toy market based on the following
 factors:

-    brand  recognition;
-    selection;
-    convenience;
-    price;
-    speed and accessibility;
-    customer service;
-    quality of site content; and
-    reliability and speed of fulfillment.

Many of our current and potential traditional store-based and online competitors
have longer operating  histories,  larger customer or user bases,  greater brand
recognition and significantly  greater financial,  marketing and other resources
than  we do.  Many  of  these  current  and  potential  competitors  can  devote
substantially more resources to Web site and systems development than we can. In
addition,  larger,  well-established  and  well-financed  entities  may acquire,
invest in or form joint  ventures  with online  competitors  or  children's  toy
suppliers as the use of the Internet and other online services increases.

Certain of our  competitors  may be able to secure products from vendors on more
favorable  terms,  fulfill  customer  orders  more  efficiently  and adopt  more
aggressive pricing or inventory  availability  policies than we can. Traditional
store-based retailers also enable customers to see and feel products in a manner
that is not possible over the Internet.

                                       12
<PAGE>


Prospective  competitors  will be able to use the Internet as a marketing medium
to reach significant numbers of potential  customers.  Finally, new technologies
and the expansion of existing  technologies,  such as price comparison  programs
that select specific titles from a variety of Web sites and may direct customers
to other  online  toy,  video game,  software,  video and music  retailers,  may
increase competition.  If we face increased  competition,  our operating results
may be adversely affected.

There are several ways we intend to  differentiate  ourselves from other on-line
merchandisers.  First, we will sell products at  significantly  less than retail
prices.  Secondly,  our site will be much more child oriented than other on-line
toy  merchandisers  which  will  include  games and other  activities  for kids.
Finally,  we will be selling  our own line of  proprietary  collectible  toys to
children to stimulate traffic on our site.  However,  there is no assurance that
we will be able to successfully  differentiate  ourselves from our  competition.
Barriers  to entry are low,  therefore,  our  competitors  which  include  major
on-line  toy   merchandisers   may  adopt  our  strategies.   Our  inability  to
differentiate  ourselves from our competitors may have a material adverse effect
on our business.

With the withdrawal of M.W. Kasch Company,  to supply toy products to us, we are
confronted with major  uncertainty  that we can make a similar  arrangement with
another toy distributor or other manufacturers. If we are not able to accomplish
this,  then we will change the on-line  retail concept of TOYPOP to provide only
our toy products and collectibles.

We continue to intend to use a combination of off-line advertising in magazines,
television,  etc.  and  on-line  advertising  with e-mail  campaigns,  affiliate
programs and the like. However, due to limited advertising resources, we run the
risk that we will only be able to attract a limited  number of  customers to our
site once again opened and thus we may have an inability to generate significant
sales.


SEASONALITY
Sales of toy  products are  seasonal.  Traditionally,  the first  quarter is the
period  of  lowest  shipments  and  sales in our  business  that may  cause  our
operating  results to fluctuate  significantly  from quarter to quarter.  Due to
these  fluctuations,  our  results  of  operations  for  any  quarter  may  vary
significantly.  Our  results of  operations  may also  fluctuate  as a result of
factors such as the timing of new products  introduced by us or our competitors,
the advertising  activities of our  competitors,  delivery  schedules set by our
customers  and the  emergence of new market  entrants.  On a  quarter-by-quarter
basis,  we will do 40% of annual sales in the fourth quarter of the year. In the
first,  second and third  quarters of the year,  we will likely do 10%, 25%, and
25% of  annual  sales,  respectively.  Our  sales are  highly  dependent  on the
successful launch of our e-commerce site. A delay in restarting  TOYPOP.com site
could have an adverse effect on our sales in any given quarter. Furthermore, the
majority of our sales are expected to occur in the fourth quarter.  If either of
our  Internet  E-commerce  sites  are not fully  functional  and  attractive  to
potential  customers,  it could  have a major  affect on our sales in the fourth
quarter.

GOVERNMENT AND INDUSTRY REGULATION
Our products are subject to the  provisions of the Consumer  Product  Safety Act
("CPSA"),  the  Food  &  Drug  Administration  ("FDA"),  the  Federal  Hazardous
Substances Act ("FHSA"),  the Flammable  Fabrics Act ("FFA") and the regulations
promulgated  thereunder.  The FDA has review  function  over any candy  products
which we  produce or which we  purchase.  The FDA sets  standards  as to what is
proper color additives and food flavoring with regard to our candy products. All
our candy is  produced  under  FDA  approved  conditions.  The CPSA and the FHSA
enable  the  Consumer  Product  Safety  Commission  to  exclude  from the market
consumer products that fail to comply with applicable product safety regulations
or otherwise  create a  substantial  risk of injury,  and articles  that contain
excessive amounts of a banned hazardous substance.  The FFA enables the Consumer
Products Safety  Commission to regulate and enforce  flammability  standards for
fabrics used in consumer  products.  The Consumer Products Safety Commission may
also require the  repurchase by the  manufacturer  of articles which are banned.
Similar  laws exist in some  states  and  cities  and in  various  international
markets.  We maintain a quality  control program  designed to ensure  compliance
with all applicable laws.

                                       13
<PAGE>


PRODUCT LIABILITY INSURANCE
We have never had any liability claims asserted against us. However, we could be
subject to product  liability  claims in connection with the use of the products
that we sell. We currently  have product  liability of $1,000,000 per occurrence
and a $2,000,000  aggregate  limit.  There is no assurance  that we can maintain
this coverage or that it will be adequate to protect us against future claims.


EMPLOYEES
As of April 7, 2000, we employed 5 persons, all of whom are full-time employees,
including three executive  officers.  Our employment reflects our outsourcing of
manufacturing and the establishment of strategic  partnerships that allows us to
minimize  staffing.  We  believe  that  we  have  good  relationships  with  our
employees. None of our employees belong to a labor union.

EMPLOYMENT AGREEMENTS
We have employment  agreements with Mr. Michael Porter, the company's president,
Mr. David Bazel, its Executive Vice President,  and Mr. Gerald Couture, its Vice
President  of  Finance  and Chief  Financial  Officer.  The  specifics  of these
employment agreements are more fully explained in the proxy statement that is to
be filed shortly following this submission.

DIVIDEND POLICY
The Company has not paid any  dividends  on its common stock and does not intend
to pay cash dividends on its common stock in the foreseeable future. The Company
intends  to  follow a policy of  retaining  earnings,  if any,  to  finance  the
development and expansion of its business.

TRANSFER AGENT
Manhattan  Transfer  Registrar Company of Lake Ronkonkoma,  New York acts as the
Company's Transfer Agent.


ITEM 2.  DESCRIPTION OF PROPERTY

We lease approximately  2,000 square feet of space at 141 N. Main Street,  Suite
207,  West Bend,  Wisconsin,  53095,  which is currently  used for our principal
executive  offices.  The lease for the offices expires on December 31, 2001. The
monthly rent for the offices is approximately $900.00.

We also  lease  office  space in Hong  Kong,  which is used for our  outsourcing
operations.  The  office is  located  at the  Peninsula  Center,  67 Mody  Road,
Tsimshatsui  East,  Kowloon,  Hong Kong. In addition to the above locations,  we
also  maintain a New York office at 1178 Procan Ct,  Hewlett NY, and a office at
Flughafenstrafse  5264546,  Morfelden-Walldorf,  Germany. We pay no rent for the
offices in Hong Kong,  New York and  Germany.  In Hong Kong,  we have use of the
space  as it is in  our  supplier's  office.  In New  York,  our  office  is the
residence  of our COO,  David  Bezalel.  In  Germany,  we share an office with a
business partner of Mr. Bezalel, at no cost to us.

ITEM 3.  LEGAL PROCEEDINGS.

LEGAL PROCEEDINGS
There is no pending  litigation  case,  only threatened  litigation  against the
company from MHA, the company's past web site host and e-commerce  provider that
terminated  the  company's  TOYPOP  website  and  refused to provide  additional
e-commerce  support  services.  This dispute  involves a claim that we failed to
timely pay for past services  rendered.  However,  there is no executed  written
contract  between the parties.  Also,  MHA is refusing to turn over the HTML web
pages that comprise our TOYPOP web site. MHA has also asserted certain copyright
infringement  and trade  secret  misappropriation  claims.  No lawsuit  has been
filed,  merely an exchange of letters between respective  counsel. If necessary,
and if  litigation  is  instituted,  we plan to  vigorously  defend  and  assert
substantial   counterclaims.   The  likelihood  of  an  unfavorable  outcome  is
impossible  to assess at this time.  The  maximum  potential  loss to us is also
impossible to assess at this time.

                                       14
<PAGE>



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

No matters were submitted to a vote of stockholders during the fourth quarter of
fiscal 1999.


                                     PART II


ITEM 5. MARKET VALUE
Our Common  Stock is listed and traded on NASDAQ OTC  Bulletin  Board  under the
symbol ALFN.  Manhattan Transfer Registrar Company of Lake Ronkonkoma,  New York
is the transfer  agent and registrar for our Common Stock.  The following  table
sets forth for the periods  indicated the high and low sale prices for shares of
the Common Stock as reported on the OTC. These quotations  reflect  inter-dealer
prices, without retail mark-up,  mark-down or commission,  and may not represent
actual transactions.



                                                     High              Low
                                                     ----              ---

              1997
         Fourth Quarter                              5 1/8          1 5/16
         Third Quarter                               5              1 7/8

              1998
         Fourth Quarter                              11/2             5/32
         Third Quarter                               2 1/16            7/8
         Second Quarter                              2 5/8            9/16
         First Quarter                               3                   1

              1999
         First Quarter                               3 1/4             1/8
         Second Quarter                              1 3/4           13/16
         Third Quarter                               1 3/4             5/8
         Four Quarter                                7/8             11/16

(1)  Our Common Stock began trading on approximately March 11, 1997. There is no
     trading market for our warrants.

As of December  30,  1999,  there were  approximately  180 holders of record for
common stock However,  the Company' management believes that approximately 3,088
of shareholder's  beneficially own the Company's Common Stock as of December 31,
1999.

                                       15
<PAGE>




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


     This   Statement   contains   forward-looking    statements.    The   words
"anticipated,"   "believe,"  "expect,"  "plan,"  "intend,"  "seek,"  "estimate,"
"project,"  "will,"  "could,"  "may" and  similar  expressions  are  intended to
identify  forward-looking  statements.  These statements include,  among others,
information regarding future operations,  future capital expenditures and future
net cash flow. Such statements  reflect our current views with respect to future
events and financial performance and involve risks and uncertainties, including,
without  limitation,  general  economic  and  business  conditions,  changes  in
foreign, political,  social and economic conditions,  regulatory initiatives and
compliance with governmental regulations,  the ability to achieve further market
penetration and additional  customers,  and various other matters, many of which
are beyond our control, including, without limitation, the risks described under
the  caption  "Business."  Should  one or more of these  risks or  uncertainties
occur, or should underlying  assumptions  prove to be incorrect,  actual results
may vary materially and adversely from those anticipated,  believed,  estimated,
or otherwise indicated. Consequently, all of the forward-looking statements made
in this filing are qualified by these cautionary  statements and there can be no
assurance of the actual results or developments.


GENERAL
We were founded in August 1993. Until we generated significant revenues in 1996,
we were a development stage enterprise.  During the development stage period, we
devoted the majority of our efforts to  development  of a viable  product  line,
testing of product concepts, developing channels of distribution,  financing and
marketing.  These  activities were funded by investments  from  stockholders and
borrowings from unrelated third parties.

We have not, through the present time, been in a position to generate sufficient
revenues  during  our  limited  operating  history  to fund  on-going  operating
expenses or product development activities.  As a result, we resorted to raising
capital  through  equity  fundings  and from  borrowings.  In June of  1998,  we
acquired  inventory,  equipment,  and goodwill of the Mother Hubbard's Creations
toy line. We have renamed the Mother  Hubbard's  Creations  toy line  Hearthside
Treasures.  We have  sustained  significant  operating  losses  since  inception
resulting in an accumulated deficit of approximately  $4,715,397 at December 31,
1999.

Our present  strategy is focused on expanding  our core  products  including our
Hearthside  Treasures  toy line  and  collectible  toys;  entering  new  product
categories,  the development of the ToyPop.com  interactive online toy store and
the  MRABA.COM  business-to-business  e-Commerce  portal and pursuing  strategic
acquisitions.

We have taken a long-term approach to the development of our business model. Our
present strategy anticipates a systematic and cost efficient introduction of new
products  by  developing  the  marketing  channels  of  distribution  to  create
substantial  demand and  excitement for our product  offerings.  We believe this
more prudent  approach to development  of our business will further  enhance our
long-term prospects for profitable operations.

Because of the highly seasonal  nature of the toy business  industry with 80% of
sales  occurring  in the fourth  calendar  quarter of each year and the  present
timing of our advertising and marketing programs, we do not believe that we will
become  profitable  until the year  2001.  We missed our  opportunity  for sales
through our TOYPOP Internet site in the 1999 selling season.  We believe that we
are on target for  profitability in 2001. Our marketing program will continue to
be  developed  in 2000 to prepare  for the fourth  quarter  selling  season.  In
addition,  the introduction of our collectible toy products at Toy Fair 2000 may
support  additional sales in 2000 to help us become profitable.  However,  there
are no assurances that we will become profitable in 2001.

We believe  that recent  success in the  collectible  toy  market,  particularly
Pokeman and Beanie Babies have set the stage for a resurgence in the collectible
market,  which we are specifically  targeting.  Combined with our child oriented
internet  e-commerce  site, our line of collectibles  will generate  substantial
sales in relationship to the past. However, should our collectible toy lines not
be  received  favorably,  or  should  we not be able to  adequately  market  our
web-site, this will have a negative impact on our forecasts.

                                       16
<PAGE>


We will continue to incur losses until we are able to increase sales,  introduce
new product lines and establish distribution  capabilities  sufficient to offset
ongoing operating and administrative costs.


RESULTS OF OPERATIONS

Year ended December 31, 1999 compared to year ended December 31, 1998

Revenues
--------
Total revenues for the period ended December 31, 1999 were $128,844  compared to
$37,429 for the same period in 1998,  which represents an increase of $91,415 or
244%. The increase was the result of increased sales of our Hearthside Treasures
toy product lines.

Cost of Sales
-------------
Cost of sales for the three months ended December 31, 1999 increased  $70,127 or
245% to  $98,669  from  $28,543 in the same  period in 1998.  Cost of sales as a
percentage  of sales  remained  the same at 77% in 1999 as compared to 1998.  We
expect that  improvement  in gross  profit  margins will occur during 2000 as we
increase revenues.

Selling, General and Administrative Expenses
--------------------------------------------
For the three month period ended December 31, 1999,  total selling,  general and
administrative  expenses  ("S, G & A") were  $1,278,780 as compared to $454,126,
for the same period of 1998, a 181%  increase.  Within SG & A, selling  expenses
amount to $204,809  for the year ended 1999 as compared to $66,886 for the prior
year, a 206% increase amounting to $137,923.  General and administrative expense
amounted to $1,073,971  in 1999 as compared to $387,241 in the prior year.  This
increase  amounted to $686,730,  or a 177% increase  over the prior year.  These
increases are  attributed to the  additional  expense  included legal expense of
$80,719,  consulting  fees of $324,855,  officer  salaries of $129,231 and other
wages of $72,500.  Salaries,  wages and consulting fees included  payments using
common stock. In addition,  development  expenses associated with our Toypop.com
Internet site increased  $235,144 during the year ended December 31, 1999. There
were no  development  expenses in the prior year. It is  anticipated  that these
expenses as a percentage of revenues will decrease in the future as our business
grows.  We expect that S, G, & A expense as a percentage  of sales will eventual
be in the 20-25% range.

Other Expenses
--------------
We incurred  losses on the sale of  securities  for the year ended  December 31,
1999 in the amount of $271,686  that included  unrealized  losses of $110,558 as
compared to a $35,507  securities  trading loss for the year ended  December 31,
1998.  This  increase in loss  amounted to $236,179 for 1999 over 1998.  We have
discontinued  investing in securities and presently  deposit any operating funds
in money market accounts that bear no speculative risks.

Interest Expense
----------------
Interest  expense  decreased  14%,  or  $41,704 to  $253,187  for the year ended
December 31, 1999 from  $294,896 for 1998.  This decrease is  attributable  to a
reduction in convertible debt because of conversion into common stock.

Net Loss
--------
The net  loss  and the net  loss  per  share  before  extraordinary  items  were
$1,844,176  and $0.24 per share  respectively,  for the year ended  December 31,
1999, as compared to a net loss and net loss per share of $789,620 and $0.31 per
share  respectively,  for 1998. This loss was an increase of $1,054,556 or 134%,
over the previous year. During 1999, there was an extraordinary  gain of $28,018
attributed to the forgiveness of a debt. There was no similar extraordinary item
in 1998.  The net loss and the net loss per share were  $1,816,176 and $0.23 per
share  respectively,  for the year ended December 31, 1999, as compared to a net
loss and net loss per share of $789,620  and $0.31 per share  respectively,  for
1998.  For the year ended  December 31,  1999,  there were  7,771,193  shares of
common stock outstanding,  on a weighted average basis, as compared to 2,528,155


                                       17
<PAGE>

shares  outstanding in 1998, on the same basis.  This represents a 207% increase
in shares outstanding this year as compared to the previous year.


Calendar year 1998 compared to calendar year 1997

Revenues
--------
Total  revenues  for 1998 were $ 37,429  compared  to  $54,963  for 1997,  which
represents a decrease of $17,534,  or 32%. The decrease was primarily the result
of lower  sales for our  Surprise  Box  product  line.  We focused  our  efforts
primarily on expanding  into the toy industry and  decreased  our focus on candy
sales by doing much less promotion.  There was no  contribution  from the Mother
Hubbard  product line during 1998. The acquisition of this product line occurred
too late in the selling season to benefit  operating  results.  The  acquisition
occurred  late  in  the  second  quarter  and  there  was  not  enough  time  to
re-introduce this product line to the market.

Cost of Sales
-------------
Cost of sales for 1998  increased  $522 or 0.2% to $28,543 from $28,021 in 1997.
Cost of sales as a percentage  of sales  increased  from 51% to 76% from 1997 to
1998. This increase was the result of lower margins  realized on the sale of our
candy  products.  We expect that  improvement in gross profit margins will occur
during 1999 as we increase  revenues.  During the year ended  December 31, 1997,
cost of sales  included a  write-down  of inventory in the amount of $14,867 for
obsolete products.

Selling, General and Administrative Expenses
--------------------------------------------
For the year ended December 31, 1998, total selling,  general and administrative
expenses  ("S, G & A") were  $454,127 as compared to  $372,426,  for 1997, a 22%
increase.  This  increase is attributed  to the  additional  expense from higher
compensation  paid to our existing  personnel,  which increased by approximately
$96,000.  This compensation related to a bonus paid with our common stock. There
were no other material  factors that caused an increase in selling,  general and
administrative expenses.

Interest Expense
----------------
Interest  expense  increased 280%, or $217,229 to $294,896 for 1998 from $77,667
in 1997.  This increase in interest  expense is  attributed  to the  substantial
charge for issuance of warrants at par value, a significant discount to the then
market price of the common stock,  as part of the funding of $400,000  through a
convertible debenture.

Loss on disposal of impaired assets
-----------------------------------
During 1997, we experienced a loss from a write-off of fixed assets that were no
longer being used in our business.  These items consisted of dies, films, molds,
trademarks,  and packaging design costs.  These equipment assets previously were
used to  generate  income but they  became of no further  use in our  operations
during 1997.  These assets were disposed of in the year ended  December 31, 1997
and there were no similar charges during the year.

Net Loss
--------
The net loss and the net loss per  share  were  $789,620  and  $0.31  per  share
respectively,  for  1998,  as  compared  to a net loss and net loss per share of
$495,232 and $0.26 per share respectively, for 1997. The loss was an increase of
$294,388,  or 59%, over the previous year. The loss per share was about 19% more
than the  previous  year.  In 1997,  we  benefited  from  the  settlement  of an
outstanding  payable that resulted in a $0.02 per share  extraordinary gain. For
1998,  there were 2,528,155  shares of common stock  outstanding,  on a weighted
average basis, as compared to 1,917,013 shares  outstanding in 1997, on the same
basis.  This  represents a 32% increase in shares  outstanding  in 1998 over the
previous year.

                                       18
<PAGE>

ACQUISITION OF MOTHER HUBBARD CREATIONS PRODUCT LINE
On June 26, 1998, we purchased  Mother  Hubbard  Creations  Product Line of toys
from Vagabond  Associates and Gerald Waak. This purchase included license rights
to the toy line.  The  consideration  for this purchase was royalty  payments on
sales of Mother  Hubbard  products of 2% for 1999,  1% for 2000 and 0.5% in 2001
with a minimum guarantee royalty of $10,000 per year. Additionally,  we will pay
a 1% royalty for the exclusive use of the Mother Hubbard  trademark.  The Mother
Hubbard's Creations toy line has been renamed Hearthside Treasures.  We have had
Mother  Hubbard  product  sales  of  $109,459  through  December  31,  1999.  We
anticipate  that the  expansion of this new product line will  represent a niche
for young  girls that we believe  has been  neglected  and  should  represent  a
significant business opportunity for us.

LIQUIDITY AND CAPITAL RESOURCES
To date, we have funded our capital  requirements  and our business  operations,
including product line development activities with funds provided by the sale of
securities and from borrowings. The Swartz equity placement of up to $20 million
will provide  additional funding and will be utilized over the next three years,
subject to meeting funding conditions.  We are optimistic that we can meet these
conditions.  Upon funding from  Swartz,  we intend to repay all our  outstanding
indebtedness  and  utilize the  remainder  of this  funding for working  capital
purposes to grow the  acceptance  of our products  within the toy  industry.  We
estimate that the Swartz equity  placement  will  initially  repay $2 million of
debt  that  includes  note  payables  outstanding  and the  obligations  that we
anticipate  creating  with the  development  and the  initial  marketing  of our
website,  however,  there is no assurance  that these funds will be available to
repay all outstanding indebtedness.

Since our  formation  on August 2, 1993 and until  December  31,  1999,  we have
issued 9,034,104 shares of our common stock and raised  $2,071,248.  Some common
stock was issued for services, all of which has been appropriately valued at the
time of issuance.

During 1998, we issued  $400,000 of  convertible  debt together with warrants to
purchase  400,000  shares at $0.01 per share.  This debt  allowed  the holder to
convert  at the lower of $1.25 or 65% of the  five-day  average  of the  closing
price of the common  stock  before the  election to  convert.  All this debt was
converted  into common stock during year ended  December 31, 1999. We have since
January 1, 1999,  issued 1,101,000 shares of common stock and raised $693,851 in
cash and  converted  debentures  in the face  amount of $361,161  for  3,250,061
shares of common..  These funds were used to further  develop our product  line,
the hiring of key personnel, and for working capital purposes.

For the year ended  December 31, 1999 we used $687,039 in cash used by operating
activities  as  compared  to  $418,719  in the year  ended  December  31,  1998.
Investing  activities for the present year included the acquisition of equipment
in  the  amount  of  $115,441.  During  1999,  we  has a  loss  from  securities
transactions  in the amount of  $271,686.  In the prior  year,  we had a gain of
$116,437. Financing activities for 1999 provided $668,362 that included $693,851
from the issuance of common stock. Cash decreased  $405,804 for the year 1999 as
compared to a decrease of $372,092 in the prior year.


For  the  calendar  year  1998,  we used  $418,719  in  cash  used by  operating
activities as compared to $236,975 in calendar year 1997.  Investing  activities
for 1998 included the purchase and sale of  marketable  securities in the amount
of $1,320,231 and $1,203,794,  respectively,  for net proceeds of $116,437,  and
the acquisition of equipment in the amount of $34,969, thus providing $81,468 in
cash. For the prior year,  investing  activities used $182,488 from the purchase
of marketable securities for $440,320, the sale of such securities in the amount
of  $290,840,  and the  acquisition  of  equipment  in the  amount  of  $33,008.
Financing  activities for 1998 provide $709,343,  the major portion of which was
the issuance of a  convertible  debenture in the amount of $400,489 and proceeds
from stock issuance of $221,699.  For 1998, cash increased  $372,092 as compared
to an increase of $39,022 in the prior year.

Historically  we have not  generated  sufficient  revenues  from  operations  to
self-fund  our capital and  operating  requirements.  We expect that the working
capital  needed to grow our business will come from fundings that will primarily
include the equity  placement line for $20 million  arranged with Swartz Private
Equity LLC ("Swartz") subject to certain conditions. This placement will provide

                                       19
<PAGE>

funding for the establishment and marketing for our new Internet destination web
site and the introduction of our product lines. We do not anticipate significant
funding with this investment  agreement for the present  selling  season.  We do
expect that with the commencement of fundings in the first quarter of 2000 which
will permit more extensive marketing of new products and further development and
refinement of the features of the TOYPOP  website.  We presently do not have any
material capital  commitments other than the tools and molds for our collectible
product line. Presently, it is anticipated that molds for this product line will
cost not more than $60,000.

During the first quarter of this calendar year 2000, we issued 2,087,000 shares
of our common stock as  restricted  securities  to raise  $641,500 in additional
capital. We have an obligation to register these shares to provide the investors
future liquidity of their investment.

With our  present  business  strategy,  we  believe we are  focusing  on the key
elements  necessary  for  us to be  both  profitable  and  successful  over  the
long-term. We have recently adopted our present strategy with the key element of
using the  Internet as a  significant  channel of  distribution  for our product
lines.  We  have  focused  on  a  successful  implementation  of  this  Internet
opportunity.  We believe  that we will arrange for all the  financial  resources
needed to properly execute our plan.

We do not presently  have  sufficient  cash to operate for more than the next 90
days.  We will need capital to promote our toy  products  during this year's toy
selling season,  to provide product  availability for our Hearthside  Treasures,
and to development our Internet  projects.  We will need this capital to provide
for our anticipated  working  capital needs over the next twelve months.  We are
presently  seeking $500,000 in equity to allow us to sustain  ourselves until we
can  benefit  from the  Swartz  investment  agreement.  We  cannot  provide  any
assurance   that  we  will  be  successful  in  raising  such  capital  as  such
undertakings  are difficult to complete.  Should our Internet  endeavors  become
highly successful,  it will require more capital. Should this occur, the funding
availability in the Swartz  placement,  if available,  that is a periodic equity
funding that we are not permitted to entirely draw upon at any one time, may not
be  sufficient to meet these  capital  needs.  If this is the case or the Swartz
facility is  unavailable,  we have  negotiated  provisions with Swartz to permit
additional fundings outside of our obligation to them. We are optimistic that we
will be successful in obtaining  future  financing from Swartz or others to meet
our needs.


SEASONALITY AND FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
Within the toy industry,  there are significant  seasonal factors that result in
revenue and sales being  concentrated  in the last half of the calendar year. We
expect that as our product lines gain acceptance and that collectibles  become a
more significant component of our sales, some seasonality can be reduced.  Until
that occurs,  we will  experience the same season cycles within the toy industry
as other participants.


INFLATION
Inflation has not proven to be a factor in our business  since our inception and
is not  expected to have a material  impact on our  business in the  foreseeable
future.


INVESTMENT AGREEMENT OVERVIEW
On June 4, 1999, we entered into an  Investment  Agreement  with Swartz  Private
Equity,  LLC.("Swartz").  The Investment Agreement entitles us to issue and sell
our common  stock for up to an aggregate of $20 million from time to time during
a three-year period through June 3, 2002 subject to certain conditions.  This is
also referred to as a put right.  The Common Stock will be registered for resale
in a Form S-1 registration  statement to be filed in the near future.  There are
no provisions in this investment  agreement  requiring Swartz to vote shares for
or support current management in corporate governance matters.

The terms of the Amended  Investment  Agreement allow Alottafun!  to deliver Put
Notices to the investor,  at times and amounts  determined by us,  requiring the
Investor to purchase the specified  number of shares,  subject to maximum dollar
amounts and subject to limitations  based upon our trading volumes.  There is no

                                       20
<PAGE>

limit on the price of the shares provided that we, in our sole  discretion,  may
specify a minimum  price for each Put. The price of such Put is  dependent  upon
the closing  price of our common  stock.  We  determine  when and in what amount
funding will occur. The Company's discretion to determine both the timing of the
funding  and the  amount of  funding  avoids  the  conditions  that  exist  with
so-called  "toxic' or death spiral  convertible  stock issues.  The registration
statement,  once prepared,  will include the resale of the common stock issuable
upon  exercise of the warrants.  The warrants  will have an exercise  price that
resets based upon future market prices at fixed times outside of the  Investor's
control.
 There are no conditions within the control of Swartz, or which Swartz can cause
to not be  satisfied.  There is a limit  such that the  amount  of a single  Put
cannot exceed 9.9% of our market cap, but no limit on ownership  percentage.  We
do not expect to benefit from this funding until the third  calendar  quarter of
2000.

PUT RIGHTS
In order to invoke a put right, we must have an effective registration statement
on file with the Securities and Exchange  Commission  registering  the resale of
the common shares which may be issued as a consequence of the invocation of that
put  right.  Additionally,  we must give at least  ten but not more than  twenty
business  days  advance  notice  to  Swartz  of the date on which we  intend  to
exercise a  particular  put right and we must  indicate  the number of shares of
common stock we intend to sell to Swartz. At our option, we may also designate a
maximum  dollar amount of common stock (not to exceed $2 million)  which we will
sell to Swartz during the put and/or a minimum  purchase  price per common share
at which Swartz may purchase  shares during the put. The number of common shares
sold to Swartz may not exceed 15% of the aggregate daily reported trading volume
during a period which begins on the business day  immediately  following the day
we  invoked  the put  right  and ends on and  includes  the day  which is twenty
business  days after the date we invoked the put right.  For each common  share,
Swartz will pay us the lesser of (i) the market  price for such put,  minus $.10
or (ii) 91% of the market price for the put, with that percentage  determined by
the market price in effect on the date we inform Swartz of the put(see table A).
Market  price is  defined  as the  closing  bid  price for our  common  stock on
Alottafun!'s principal market However, the market price may not be less than the
designated  minimum per share price, if any, that we indicated in our notice. If
there were no shares  traded during the  applicable  Pricing  Period,  no shares
could be Put,  and there would be no need to  determine a market  price for that
Pricing Period.


Table A

Examples  of Swartz  Common  Stock  Underwriting  at Various  Market  Prices and
examples of the corresponding  percentage of total shares of Swartz ownership as
of December 31, 1999.

                            Common Stock Market Price
<TABLE>
<CAPTION>

                    $.50(1)    %    $1.00(1)  %    $1.11(2)   %   $2.00(3)    %   $5.00(3)  %
-----------------------------------------------------------------------------------------------
Dollars Converted

<S>               <C>         <C>  <C>       <C>  <C>        <C>  <C>        <C> <C>        <C>
$5,000,000        12,500,000  59%  5,555,555 40%  4,950,495  37%  2,747,253  25% 1,098,901  12%

$10,000,000       25,000,000  74% 11,111,111 57%  9,900,990  54%  5,494,505  40% 2,197,802  21%

$20,000,000       50,000,000  86% 22,222,222 73% 19,801,980  70% 10,989,011  57% 4,395,604  35%

</TABLE>

(1)  Conversion  at market  price  less $.10 per share (the  contracted  minimum
      discount to market  price)
(2) Price at which  conversion  at market  price less $.10 per share  changes
      to 91% of market price
(3)  Conversion  at 91% of market price

                                       21
<PAGE>


WARRANTS
In partial consideration of the equity line commitment,  we issued and delivered
to Subscriber or its designated assignee warrants to purchase a total of 450,000
shares of Common Stock.  Swartz is the sole subscriber.  Each Commitment Warrant
shall be exercisable at a price,  which shall initially  equal $1.00625.  Within
five  business days after the end of each  purchase  period,  we are required to
issued and  deliver to Swartz a warrant to purchase a number of shares of common
stock equal to 15% of the common shares issued to Swartz in the applicable  put.
Each warrant will be exercisable  at a price which will initially  equal 110% of
the market price on the last day of the applicable purchase period. The exercise
price of the warrants  resets based upon the market price at fixed times outside
of the Investor's control.

LIMITATIONS AND CONDITIONS PRECEDENT TO OUR PUT RIGHTS
Swartz is not required to acquire and pay for any common  shares with respect to
any particular put for which:  we have announced or implemented a stock split or
combination of our stock; we have paid a common stock  dividend;  we have made a
distribution  of our common stock or of all or any portion of our assets between
the  put  notice  date  and the  date  the  particular  put  closes;  or we have
consummated a major  transaction  (including a transaction,  which constitutes a
change  of  control)  between  the  advance  put  notice  date  and the date the
particular put closes.

" Major  Transaction"  shall mean and shall be deemed to have  occurred  at such
time upon any of the following events:

         (i) a consolidation,  merger or other business  combination or event or
         transaction following which the holders of our Common Stock immediately
         preceding such consolidation,  merger,  combination or event either (i)
         no longer hold a majority of the shares of our Common  Stock or (ii) no
         longer have the ability to elect the board of  directors  (a "Change of
         Control"); provided, however, that if the other entity involved in such
         consolidation,  merger,  combination  or  event  is a  publicly  traded
         company  with  "Substantially  Similar  Trading   Characteristics"  (as
         defined below) as we and the holders of our Common Stock are to receive
         solely  Common  Stock  or no  consideration  (if we are  the  surviving
         entity)  or solely  common  stock of such  other  entity (if such other
         entity is the surviving  entity),  such transaction shall not be deemed
         to be a Major Transaction (provided the surviving entity, if other than
         us, shall have agreed to assume all  obligations  under this  Agreement
         and the Registration Rights Agreement).  For purposes hereof, an entity
         shall have Substantially Similar Trading Characteristics as ours if the
         average daily dollar  trading volume of the common stock of such entity
         is equal to or in excess of $200,000  for the 90th through the 31st day
         prior to the public announcement of such transaction;

         (ii) the sale or  transfer  of all or  substantially  all of our assets
         that  includes  both  tangible and  intangible  assets that allow us to
         operate most profitably; or

         (iii) a  purchase,  tender or  exchange  offer  made to the  holders of
         outstanding shares of' Common Stock, such that following such purchase,
         tender or exchange offer a Change of Control shall have occurred.

Swartz is  irrevocably  committed  to purchase  and is not  entitled to make any
further investment decision with regard to the $20 million.

SHORT SALES
Swartz and its  affiliates  are  prohibited  from engaging in short sales of our
common  stock  unless  they have  received a put notice and the amount of shares
involved in a short sale does not exceed the number of shares  specified  in the
put notice.  Swartz is allowed  only to sell the number of shares that have been
put to Swartz,  after the Put Date that such  shares  are put to Swartz.  Such a
sale could be a short sale  (technically  defined as a "short exempt" sale). The
potential  profits  from short  exempt  sales is equal to the  Investor's  sales
price,  whatever  that may be when the Investor  elects to sell a portion of the
Put Shares,  less the Put Share Price (as defined in the  Investment  Agreement)
for those shares The  potential  effect on the market price is minimized  due to
the fact that the amount put is limited to 15% of the  trading  volume  over the
Pricing Period.

                                       22
<PAGE>


CANCELLATION OF PUTS
We must cancel a  particular  put between the date of the advance put notice and
the last day of the pricing period if we discover an  undisclosed  material fact
relevant to Swartz's investment decision, the registration statement registering
re-sales of the common shares becomes  ineffective,  or shares are delisted from
the then  primary  exchange.  However,  anytime  a Put  Cancellation  Notice  is
delivered to Investor  after the Put Date,  the Put shall remain  effective with
respect to a number of Put  Shares,  which  shall equal the lesser of (i) 15% of
the sum of the daily reported trading volume in the outstanding  Common Stock on
the  Company's  Principal  Market  during each  Evaluation  Day of the Truncated
Pricing  Period,  (ii) the number of Put Shares which,  when multiplied by their
respective  Put Share Prices,  equals the Maximum Put Dollar  Amount,  and (iii)
9.9% of the total amount of the Company's Common Stock that would be outstanding
upon  completion of the Put. As prerequisite to a Put, our Common Stock shall be
listed for and actively  trading on the OTC Bulletin Board, the NASDAQ Small Cap
Market, the NASDAQ National Market or the New York Stock Exchange.

TERMINATION OF INVESTMENT AGREEMENT
We may also  terminate  our right to  initiate  further  puts or  terminate  the
Investment  Agreement  by  providing  Swartz  with notice of such  intention  to
terminate;  however,  any such  termination  will not affect any other rights or
obligations  we  have  concerning  the  Investment   Agreement  or  any  related
agreement.


RESTRICTIVE COVENANTS
During  the  term of the  investment  agreement  and for a  period  of one  year
thereafter,  we are  prohibited  from certain  transactions.  These  include the
issuance of any debt or equity  securities  in a private  transaction  which are
convertible or  exercisable  into shares of common stock at a price based on the
trading price of the common stock at any time after the initial issuance of such
securities or with a fixed  conversion or exercise  price subject to adjustment.
We are  also  prohibited  from  entering  into  any  private  equity  line  type
agreements similar to the investment  agreement without obtaining Swartz's prior
written approval.

RIGHT OF FIRST REFUSAL
Swartz has a right of first refusal to purchase any variable  priced  securities
offered by us in any private  transaction  that closes on or prior to six months
after the termination of the investment agreement.

SWARTZ'S RIGHT OF INDEMNIFICATION
We are obligated to indemnify Swartz  (including their  stockholders,  officers,
directors,  employees and agents) from all liability and losses  resulting  from
any  misrepresentations  or breaches we made in connection  with the  investment
agreement, our registration rights agreement,  other related agreements,  or the
registration statement.

YEAR 2000
To the best of our knowledge  and belief,  the Company has not  experienced  any
disruption in data processing on our financial reporting and operational systems
or malfunction in equipment containing  microprocessors or significant delays in
receiving  goods  or  services  from  key  vendors  and  service   providers  or
delinquency in the receipt of payments from  significant  customers for services
provided by the  Company as a result of the year 2000  issue.  We cannot be sure
that  some  condition  relating  to the  year  2000  exists,  but has  not  been
identified.

                                       23
<PAGE>

SEASONALITY AND FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company believes it will experience  stronger demand for its products in the
spring,  summer and fall of each year. By directing its marketing efforts to the
warmer states,  the Company feels that  fluctuations  resulting from seasonality
will be minimized.


INFLATION
Inflation  has not  proven to be a factor in the  Company's  business  since its
inception  and is not  expected  to  have a  material  impact  on the  Company's
business in the foreseeable future.


ITEM 7. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     The information required by Item 7 appears at page F-1, which appears after
this page.



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

     None.


                                    PART III


ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.


     The  information  required by this item is incorporated by reference to the
     definitive  proxy  statement  to be filed  by the  Company  for the  Annual
     Meeting of Stockholders to be held on AUGUST 15, 2000.


ITEM 10: EXECUTIVE COMPENSATION

     The  information  required by this item is incorporated by reference to the
     definitive  proxy  statement  to be filed  by the  Company  for the  Annual
     Meeting of Stockholders to be held on AUGUST 15, 2000.



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

     The  information  required by this item is incorporated by reference to the
     definitive  proxy  statement  to be filed  by the  Company  for the  Annual
     Meeting of Stockholders to be held on AUGUST 15, 2000.



ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The  information  required by this item is incorporated by reference to the
     definitive  proxy  statement  to be filed  by the  Company  for the  Annual
     Meeting of Stockholders to be held on AUGUST 15, 2000.


                                       24
<PAGE>



                                     PART IV



  ITEM 13. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENTS, SCHEDULES AND REPORTS
ON FORM 8-K.

     (a) The following documents are filed as part of this report:

         (1)(2) CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
         SCHEDULES.

          A list of the Consolidated  Financial Statements filed as part of this
          Report is set forth in Item 8 and appears at Page F-1 of this  Report;
          which  list  is  incorporated  herein  by  reference.   The  Financial
          Statement  Schedules  and the  Report of  Independent  Auditors  as to
          Schedules follow the Exhibits.

     (a)(3) EXHIBITS.


All of the items below are incorporated by reference to the Registrant's General
Form 10SB and amendments for Registration of Securities as previously filed.

                       EXHIBITS AND SEC REFERENCE NUMBERS


<TABLE>
<S>                           <C>
       Number                     Title of Document
       ------                     -----------------
       2(a)                       Certificate of Incorporation (2)
       2(b)                       Plan of Merger (2)
       2(c)                       Agreement and Plan of Merger (2)
       2(d)                       Certificate of Merger (2)
       2(e)                       Amendment to Certificate of Incorporation to Increase
       2(f)                       ByLaws (2)
       3(a)                       Amended and Restated Certificate of Designation, Preferences
       3(b)                       Convertible Debenture Agreement by and between
       3(c)                       2% Convertible Debenture (2)
       3(d)                       Warrant to Purchase Common Stock (2)
       3(e)                       Escrow Agreement (2)
       3(f)                       Preferred Shareholder Agreement (2)
       6(a)                       Agreement by and between Michael Porter and Brian
       6(b)                       Employment Contract with Michael Porter dated 1/22/99 (2)
       6(c)                       Employment Contract with David Bezalel dated  1/22/99 (2)
       6(d)                       Employment Contract with Gerald Couture dated 1/22/99 (2)
       6(e)                       Amended Investment Agreement by and between
       6(f)                       Amended Registration Rights Agreement by and between

</TABLE>


                                       25
<PAGE>


<TABLE>

<S>                             <C>
       6(g)                       Stock Option Plan of Alottafun! dated May __, 1999 (3)

</TABLE>


(1)     Filed Herewith.
(2)     Filed as exhibits to Form 10-SB filed on June 9, 1999.
(3)     Filed as exhibits to Form 10-SB/A filed on September 21, 1999
(4)     Filed as exhibits to Form 10-SB/A filed on November 2, 1999

(b)     Reports on Form 8-K


                                       26
<PAGE>






SIGNATURES

Pursuant to the  requirements of 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.



Date:   April 14, 2000           By: /s/ Michael Porter
                                 ----------------------------
                                 Michael Porter
                                 Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the  following  persons on behalf of the  Registrant in
the capacities and on the dates indicated.


          DATE                         SIGNATURE /  TITLE


Dated: April 14, 2000            By: /s/ Michael Porter
                                 ----------------------------------
                                 Michael Porter
                                 Chief Executive Officer

Dated: April 14, 2000
                                 By: /s/ David Bazalel
                                 ----------------------------------
                                 David Bazalel
                                 Executive Vice President



Dated: April 14, 2000            By: /s/ Gerald Couture
                                 ----------------------------------
                                 Gerald Couture
                                 Chief Financial Officer, Principal
                                 Accounting Officer







                                       27
<PAGE>



<PAGE>










                              Financial Statements

                                Alottafun!, Inc.

                     Years Ended December 31, 1999 and 1998
                          Independent Auditors' Report



<PAGE>







                                Alottafun!, Inc.

                              Financial Statements

                     Years Ended December 31, 1999 and 1998










                                    Contents



Independent Auditors' Report on Financial Statements.......................F-1

Financial Statements:

    Balance Sheet..........................................................F-2
    Statements of Operations...............................................F-3
    Statements of Changes in Stockholders' Deficit...................F-4 - F-5
    Statements of Cash Flows.........................................F-6 - F-7
    Notes to Financial Statements...................................F-8 - F-19



<PAGE>




                          Independent Auditors' Report



Board of Directors
Alottafun!, Inc.
West Bend, Wisconsin


We have audited the accompanying balance sheet of Alottafun!,  Inc., hereinafter
referred to as the Company,  as of December 31, 1999 and the related  statements
of operations,  changes in stockholders'  deficit,  and cash flows for the years
ended  December  31,  1999  and  1998.   These  financial   statements  are  the
responsibility  of the  management  of the  Company.  Our  responsibility  is to
express an opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of the Company as of December 31,
1999 and the  results of its  operations  and its cash flows for the years ended
December 31, 1999 and 1998 in  conformity  with  generally  accepted  accounting
principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  As more fully  discussed in Note 2 to
the financial  statements,  the Company has sustained  substantial  losses since
inception that total approximately $4,700,000 and has used cash in operations of
approximately  $687,000 and  $418,700 for the years ended  December 31, 1999 and
1998. respectively.  The Company also has a negative working capital of $558,000
at December 31, 1999,  negative tangible net worth of approximately  $455,000 at
December 31, 1999, and is currently in default on approximately $81,000 of notes
payables.  Additionally,  the Company has not had significant  revenues over the
past two years. These issues raise substantial doubt about the Company's ability
to continue as a going concern. Realization of the Company's assets is dependent
upon the  Company's  ability to raise  additional  capital,  as well as generate
revenues  sufficient to result in future  profitable  operations.  The financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.




Certified Public Accountants
Tampa, Florida
March 31, 2000


                                       F-1
<PAGE>



                                Alottafun!, Inc.

                                  Balance Sheet

                                December 31, 1999



<TABLE>
<CAPTION>


<S>                                                                                                <C>
Assets
Current assets:
    Cash                                                                                            $         5,310
    Accounts receivable                                                                                       2,685
                                                                                                    ---------------
Total current assets                                                                                          7,995

Property and equipment, net of  accumulated depreciation                                                    102,397

Other assets, trademark, net of accumulated amortization                                                      3,043
                                                                                                    ---------------

                                                                                                    $       113,435
                                                                                                    ===============


Liabilities and Stockholders' Deficit Current liabilities:
    Current maturities of long-term debt                                                            $       132,691
    Accounts payable                                                                                        325,128
    Accrued expenses                                                                                        108,384
                                                                                                    ---------------
Total current liabilities                                                                                   566,203

Stockholders' deficit:
    Preferred stock; par value of $.0001 per share; 5,000,000
        shares authorized; 2,000,000 shares issued and outstanding                                              200
    Common stock; par value of $.01 per share; 50,000,000
        shares authorized; 9,034,104 shares issued and
        outstanding                                                                                          90,341
    Additional paid-in capital                                                                            4,750,988
    Accumulated deficit                                                                                  (4,715,397)
                                                                                                    ---------------
                                                                                                            126,132
    Deferred financing costs                                                                               (455,400)
    Stock subscription receivable                                                                          (123,500)
Total stockholders' deficit                                                                                (452,768)

                                                                                                    $       113,435
                                                                                                    ===============



</TABLE>


Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                        F-2
<PAGE>



                                Alottafun!, Inc.

                            Statements of Operations




<TABLE>
<CAPTION>

                                                                                       Year Ended December 31,
                                                                                 ----------------------------------
                                                                                       1999               1998
                                                                                 ----------------------------------

<S>                                                                              <C>                 <C>
Sales, net of allowance and discounts                                            $       128,844     $       37,429

Cost of sales                                                                             98,669             28,543
                                                                                 ----------------------------------

Gross profit                                                                              30,175              8,886
                                                                                 ----------------------------------

Operating expenses:
    Selling                                                                              204,809             66,886
    General and administrative                                                         1,073,971            387,241
    Depreciation and amortization                                                         51,801             13,976
                                                                                 ----------------------------------
                                                                                       1,330,581            468,103
                                                                                 ----------------------------------

Loss from operations                                                                  (1,300,406)          (459,217)
                                                                                 ----------------------------------

Other expenses:
    Net realized loss on sale of securities, trading                                    (161,128)           (35,507)
    Net unrealized loss on trading securities                                           (110,558)
    Interest expense                                                                    (253,187)          (294,896)
    Other expense                                                                        (18,897)
                                                                                 ----------------------------------
Total other expenses                                                                    (543,770)          (330,403)
                                                                                 ----------------------------------

Net loss before extraordinary gain                                                    (1,844,176)          (789,620)

Extraordinary gain on forgiveness of debt                                                 28,018
                                                                                 ----------------------------------

Net loss                                                                         $    (1,816,158)    $     (789,620)
                                                                                 ==================================

Loss per common share:
    Loss before extraordinary gain                                                         $(.24)             $(.31)
    Extraordinary gain                                                                       .01
                                                                                 ----------------------------------
Net loss per common share                                                                  $(.23)             $(.31)
                                                                                 ==================================



</TABLE>


Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                       F-3
<PAGE>



                                Alottafun!, Inc.

                 Statements of Changes in Stockholders' Deficit

                     Years Ended December 31, 1999 and 1998

<TABLE>
<CAPTION>



                                                               Preferred Stock                  Common Stock
                                                          ----------------------          -------------------------
                                                                         $.0001                              $.01
                                                          Shares            Par           Shares              Par
                                                          Issued           Value          Issued             Value
                                                          ----------------------          -------------------------

<S>                                                                                      <C>            <C>
Balance, December 31, 1997                                                                2,128,343      $   21,283

Acquisition of treasury stock

Issuance of common stock for
    services                                                                                237,700           2,377

Conversion of debt to equity
    by creditors                                                                             27,500             275

Issuance of common stock for cash                                                           730,900           7,309

Intrinsic value of convertible feature
    of debentures with detachable
    warrants

Issuance of common stock for
    conversion of debentures                                                                269,590           2,696

Exercise of detachable warrants                                                             411,000           4,110

Conversion of mandatorily
    redeemable equity instruments                                                             3,000              30

Net loss for year

                                                                                          -------------------------
Balance, December 31, 1998                                                                3,808,033          38,080


</TABLE>

Read independent  auditors' report.  The accompanying notes are an integral part
of the consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>


Additional                                                      Stock                Deferred
  Paid-In             Accumulated            Treasury       Subscription             Financing
  Capital               Deficit               Stock           Receivable               Costs                Total
---------------------------------------------------------------------------------------------------------------------
<S>                <C>                   <C>                                                         <C>
$    1,980,405     $     (2,109,619)     $     (61,133)                                              $     (169,064)

                                                (6,755)                                                      (6,755)


       152,078                                                                                              154,455


        44,725                                                                                               45,000

       220,798                                                                                              228,107



       440,949                                                                                              440,949


        37,304                                                                                               40,000

        (4,110)


         3,756                                                                                                3,786

                           (789,620)                                                                       (789,620)
-------------------------------------------------------------------------------------------------------------------

     2,875,905           (2,899,239)           (67,888)                                                     (53,142)

</TABLE>

                                       F-4
<PAGE>



                                Alottafun!, Inc.

                 Statements of Changes in Stockholders' Deficit

                     Years Ended December 31, 1999 and 1998

<TABLE>
<CAPTION>



                                                           Preferred Stock                     Common Stock
                                                          ---------------------           -------------------------
                                                                         $.0001                               $.01
                                                          Shares           Par              Shares             Par
                                                          Issued          Value             Issued            Value
                                                          ---------------------           -------------------------

<S>                                                      <C>            <C>            <C>               <C>
Stock issued for subscription and debt                                                      249,007           2,490

Issuance of common stock for services                                                       621,700           6,217

Issuance of preferred stock for services                  2,000,000      $   200

Issuance of common stock for cash                                                         1,100,100          11,002

Issuance of common stock from
    conversion of debentures and interest                                                 3,250,621          32,506

Conversion of mandatorily redeemable
    equity instruments                                                                        4,643              46

Intrinsic value of conversion feature on
    detachable warrants

Retirement of treasury stock

Net loss for year
                                                       ------------------------------------------------------------
Balance, December 31, 1999                                2,000,000      $   200          9,034,104      $   90,341
                                                       ============================================================


</TABLE>

Read independent  auditors' report.  The accompanying notes are an integral part
of the consolidated financial statements.


<PAGE>

<TABLE>
<CAPTION>


     Additional                                                     Stock             Deferred
      Paid-In             Accumulated           Treasury         Subscription         Financing
      Capital               Deficit               Stock           Receivable            Costs                Total
-------------------------------------------------------------------------------------------------------------------

<S>                                                   <C>                                             <C>
       146,111                                               $      (123,500)                                25,101

       307,288                                                                                              313,505

                                                                                                                200

       682,849                                                                                              693,851


       328,655                                                                                              361,161


        22,668                                                                                               22,714


       455,400                                                                     $   (455,400)

       (67,888)                                 67,888

                         (1,816,158)                                                                     (1,816,158)
-------------------------------------------------------------------------------------------------------------------

$    4,750,988     $     (4,715,397)     $           0       $      (123,500)      $   (455,400)     $     (452,768)
===================================================================================================================

</TABLE>


                                       F-5
<PAGE>


                                Alottafun!, Inc.

                            Statements of Cash Flows


<TABLE>
<CAPTION>



                                                                                         Year Ended December 31,
                                                                                     ------------------------------
                                                                                           1999             1998
                                                                                     ------------------------------
<S>                                                                                 <C>                <C>
Operating activities
    Net loss                                                                         $ (1,816,158)      $  (789,620)
                                                                                     ------------------------------
    Adjustments to reconcile net loss to net cash used
        by operating activities:
           Depreciation and amortization                                                   51,801            13,976
           Loss on sale of marketable securities                                          161,128            35,507
           Unrealized loss on marketable securities                                       110,558
           Interest on conversion of convertible debentures                               192,043           223,529
           Interest on warrants                                                                              25,377
           Preferred stock issued for services                                                200
           Common stock issued for services                                               313,505           154,455
           Loss on disposal of assets                                                      20,626
           (Increase) decrease in:
               Accounts receivable                                                         (2,685)
               Inventory                                                                    4,914             8,086
               Other assets                                                                 3,204            (1,013)
               Deposits                                                                    19,450           (19,250)
           Increase (decrease) in:
               Accounts payable                                                           226,007           (96,218)
               Accrued expenses                                                            28,368            26,452
                                                                                     ------------------------------
    Total adjustments                                                                   1,129,119           370,901
                                                                                     ------------------------------
    Net cash used by operating activities                                                (687,039)         (418,719)
                                                                                     ------------------------------

Investing activities
    Acquisition of equipment and intangible assets                                       (115,441)          (34,969)
    Proceeds from sale of marketable securities                                         6,466,046         1,320,231
    Purchase of marketable securities                                                  (6,737,732)       (1,203,794)
                                                                                     ------------------------------
    Net cash (used) provided by investing activities                                     (387,127)           81,468
                                                                                     ------------------------------

Financing activities
    Proceeds from collection of stock subscription                                                          126,213
    Proceeds from common stock and related paid-in capital                                693,851           221,699
    Purchase of treasury stock                                                                               (6,755)
    Principal reductions of long-term debt                                                (25,489)          (27,688)
    Issuance of convertible debentures                                                                      400,489
    Reduction in mandatorily redeemable equity instruments                                                   (4,615)
                                                                                     ------------------------------
    Net cash provided by financing activities                                             668,362           709,343
                                                                                     ------------------------------

Net (decrease) increase in cash                                                          (405,804)          372,092

Cash at beginning of year                                                                 411,114            39,022
                                                                                     ------------------------------

Cash at end of year                                                                  $      5,310       $   411,114
                                                                                     ==============================

</TABLE>


Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                       F-6
<PAGE>



                                Alottafun!, Inc.

                            Statements of Cash Flows

<TABLE>
<CAPTION>




                                                                                          Year Ended December 31,
                                                                                     ------------------------------
                                                                                           1999             1998
                                                                                     ------------------------------
<S>                                                                                 <C>                <C>
Supplemental disclosures of cash flow information
    and noncash financing activities
        Cash paid during the year for interest                                       $     30,494       $    14,821
                                                                                     ==============================

</TABLE>

    During the year ended December 31, 1998, the Company exchanged 27,500 shares
    of common stock as payment on $45,000 of notes payable.

    In  addition,  the  Company  reclassified  3,000  shares of the  mandatorily
    redeemable  equity  instruments  to common  stock.  This was done as payment
    against the outstanding payable of $3,786.

    The Company issued approximately  $400,000 in convertible debentures in 1998
    that were convertible  into common stock.  The Company recorded  interest of
    approximately  $223,500 to reflect  the  intrinsic  value of the  conversion
    feature of these  debentures.  In December  1998,  $40,000 of the debentures
    were  converted  into 269,590  shares of common stock.  During  December 31,
    1999, $361,161 of the balance of the debentures was converted into 3,250,621
    shares of common stock.

    In connection with the convertible debentures, the Company issued detachable
    stock warrants to acquire 411,000 shares of common stock valued at $217,420,
    which  was  recorded  as  other  intangible  assets.  The  Company  used the
    Black-Scholes  pricing model to value these warrants.  These debentures were
    converted in December 1999 and the intangible asset fully amortized.

    During  1999,  the  Company  issued  249,007  shares  of  common  stock  for
    satisfaction  of a note payable  totaling  $25,101 and a stock  subscription
    totaling $123,500 to a stockholder of the Company.

    The Company  reclassified  the  remaining  4,643  shares of the  mandatorily
    redeemable equity to common stock.

    In connection with the equity line  commitment,  the Company issued warrants
    to  purchase   700,000  shares  of  common  stock.   The  Company  used  the
    Black-Scholes  pricing  model to value the  options,  which  were  valued at
    $455,400. This intrinsic value has been recorded as capital in excess of par
    value.





Read independent auditors' report.  The accompanying
notes are an integral part of the financial statements.

                                       F-7
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



1.      Background Information

Alottafun!,  Inc. (the "Company") was  incorporated in the state of Wisconsin on
August 2, 1993,  and  effectively  re-incorporated  in the state of  Delaware on
September  17, 1998 by merging the  Wisconsin  corporation  into a newly created
Delaware  corporation.  The  Company  headquarters  is  located  in  West  Bend,
Wisconsin.

Initially,  the Company operated as an assembler of toy and candy packages.  Its
customers  were  retailers and  distributors  located  primarily  throughout the
mid-eastern United States.

In 1997,  the Company  ceased its assembly  operations  and changed its focus to
distribution  of toys and candy  packages.  Starting  in late 1998,  the Company
again  shifted its focus,  this time  towards  becoming a toy  manufacturer  and
marketer with a more extensive toy line.  Included in this line are tea and cook
sets,  housekeeping  toys,  games and  puzzles,  purses,  and ride on cars.  The
Company plans to distribute  the product line through toy retailers and over the
Internet.

During 1999,  the Company  increased the number of  authorized  common shares of
stock to 50,000,000.


2.      Going Concern

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will  continue as a going  concern.  However,  the Company has sustained
substantial losses since inception that total  approximately  $4,700,000 and has
used cash in  operations  of  approximately  $687,000 and $419,000 for the years
ended  December  31,  1999 and 1998,  respectively.  The  Company has a negative
working  capital of $558,000 at December 31, 1999 and has negative  tangible net
worth of  approximately  $455,000 at December 31, 1999. In addition,  as further
explained  in Note 5 to the  financial  statements,  the Company is currently in
default on  approximately  $81,000 of notes  payable.  The  Company  also has no
significant revenues.  Presently, the Company's ability to develop a product and
transition  to  attaining  profitable  operations  is dependent  upon  obtaining
adequate  financing  and  achieving  a level of sales  adequate  to support  the
Company's  cost  structure.  These  factors  raise  substantial  doubt about the
Company's ability to continue as a going concern.  These financial statements do
not include any adjustments relating to the recoverability and classification of
recorded assets or the amounts and  classification  of liabilities that might be
necessary in the event the Company cannot continue in existence.






Read independent auditors' report.

                                       F-8
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



3.      Significant Accounting Policies

The significant accounting policies followed are:

        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.

        The  Company  extends  credit  to its  various  customers  based  on the
        customer's  ability to pay.  Based on  management's  review of  accounts
        receivable, no allowance for doubtful accounts is considered necessary.

        Property and equipment are stated at cost. Additions and improvements to
        property and  equipment  are  capitalized.  Maintenance  and repairs are
        expensed as incurred. When property is retired or otherwise disposed of,
        the cost and  related  accumulated  depreciation  are  removed  from the
        accounts and any resulting  gain or loss is  recognized  in  operations.
        Depreciation is computed on the straight-line  method over the estimated
        useful lives of the assets ranging from 5 to 7 years.

        Selling  costs   related  to  the  issuance  of  debentures   have  been
        capitalized  and are  being  amortized  over the life of the  debentures
        using the interest method. Amortization for the years ended December 31,
        1999 and 1998 amounted to $32,390 and $549, respectively.

        The  Company  records  revenue  and  related  profit when the product is
        shipped to the customer.

        The Company  accounts  for  marketable  securities  in  accordance  with
        Financial   Accounting   Standards  Board  (FASB)   Statement  No.  115,
        "Accounting  for  Certain  Investments  in Debt and Equity  Securities."
        Management determines the appropriate  classification on its investments
        in marketable  securities at the time of purchase and  reevaluates  such
        determination at each balance sheet date.  Management has classified its
        marketable  securities as "trading  securities."  Trading securities are
        bought and held  principally for the purpose of selling them in the near
        term.  Unrealized  holding gains and losses are deemed temporary and are
        included in earnings.  The cost of the marketable securities is based on
        the specific  identification  method.  Interest and  dividends on equity
        securities are included in investment income. The Company had marketable
        securities with a fair market value of $100 at December 31, 1999.

Read independent auditors' report.

                                       F-9
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



3.      Significant Accounting Policies (continued)

        The  costs of the  trademark  acquired  are  being  amortized  using the
        straight-line  method over the estimated  useful life of five years. The
        useful life of the  trademark is evaluated  annually  and  adjusted,  if
        necessary.

        FASB   issued   Statement   No.   123,   "Accounting   for   Stock-Based
        Compensation,"  effective for fiscal years  beginning after December 15,
        1995.  This  statement  provides that expense equal to the fair value of
        all  stock-based  awards on the date of the grant be recognized over the
        vesting  period.  Alternatively,   this  statement  allows  entities  to
        continue to apply the  provisions of Accounting  Principles  Board (APB)
        Opinion No. 25,  "Accounting  for Stock  Issued to  Employees,"  whereby
        compensation  expense is recorded on the date the options are granted to
        employees  equal to the  excess of the  market  price of the  underlying
        stock over the  exercise  price.  The Company has elected to continue to
        apply  the  provisions  of APB  Opinion  No.  25 and  provide  pro forma
        disclosure of the provisions of FASB No. 123.

        Deferred tax assets and  liabilities  are  recognized  for the estimated
        future  tax  consequences   attributable  to  differences   between  the
        financial statements carrying amounts of existing assets and liabilities
        and  their  respective  income  tax  bases.   Deferred  tax  assets  and
        liabilities  are measured  using enacted tax rates  expected to apply to
        taxable  income in the years in which those  temporary  differences  are
        expected to be recovered  or settled.  The effect on deferred tax assets
        and  liabilities of a change in tax rates is recognized as income in the
        period that included the enactment date.

        The  Company  follows  FASB  Statement  No.  121,  "Accounting  for  the
        Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
        Of."  Statement  No. 121  requires  that  long-lived  assets and certain
        identifiable  intangibles  to be held and used by an entity be  reviewed
        for impairment whenever events or changes in circumstances indicate that
        the  carrying  amount  of  these  assets  may  not  be  recoverable.  In
        performing  the review for  recoverability,  the Company  estimates  the
        future cash flows are  expected to result from the use of the assets and
        their eventual disposition.









Read independent auditors' report.

                                       F-10
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



3.      Significant Accounting Policies (continued)

        The  Company  issues  stock  in lieu of cash for  certain  transactions.
        Generally,  the  fair  value of the  stock,  based  on  comparable  cash
        purchases, is used to value the transactions.

        Offering costs  associated  with the sale of stock are  capitalized  and
        offset  against the proceeds of the offering or expensed if the offering
        is unsuccessful.

        The Company issued approximately  $400,000 in convertible  debentures in
        1998.  These  debentures are convertible  into common stock. The Company
        has recorded  interest  totaling $223,529 to reflect the intrinsic value
        of  the  beneficial   conversion   feature  of  these  debentures.   The
        convertible  debentures  are  convertible  at any time over a  five-year
        period. During 1999, these debentures were converted into common stock.

        In  connection  with the  convertible  debentures,  the  Company  issued
        detachable  stock  warrants to acquire  411,000  shares of common  stock
        valued at $217,420, which was recorded as other intangibles. The Company
        used the Black-Scholes pricing model to value these warrants.  The value
        of these  warrants was being  amortized  over the five-year  life of the
        convertible  debentures.  The  conversion of the  debentures  into stock
        accelerated the amortization of the warrants, which amounted to $192,043
        for the year ended December 31, 1999.

        Basic loss per share is computed by dividing  loss  available  to common
        stockholders by the weighted average number of common shares outstanding
        for the period.  Common stock  equivalents  are not  considered  because
        their effect would be anti-dilutive.

        Advertising  costs are charged to operations  when incurred and amounted
        to $96,298  and $1,321 for the years ended  December  31, 1999 and 1998,
        respectively.












Read independent auditors' report.

                                       F-11
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



4.      Property and Equipment

Property and equipment consist of:

        Office equipment                                           $    26,439
        Warehouse equipment, dies, files, and molds                    107,420
                                                                   -----------
                                                                       133,859
        Less accumulated depreciation                                   31,462
                                                                   -----------
                                                                   $   102,397
                                                                   ===========


5.      Notes Payable and Long-Term Debt

Notes payable and long-term debt consist of:

<TABLE>

<S>                                                                                           <C>
        Revolving  note  payable to bank (loan  limited to lesser of $100,000 or
           $30,000,  plus 50.0% of accounts  receivable);  interest at 2.0% over
           the bank's base rate; interest payable monthly; outstanding principal
           payable via lockbox collection of accounts receivable; collateralized
           by a selective business security agreement and
           personal guarantees; due on demand                                                  $    30,000
        Note payable to Private  Industry  Council of  Milwaukee  County,  Inc.;
           interest at 18.0%;  unsecured;  payments of $8,750 each were required
           on July 5, 1996, October 5, 1996,
           and April 5, 1997; in default                                                            70,000
        Note payable, unsecured; payable in monthly
           installments of  $903, including principal
           and interest at 18.0% per annum; in default                                              11,043
        Note payable, unsecured; interest at 10.0% per
           annum; due on demand                                                                     21,648
                                                                                               -----------
                                                                                                   132,691
        Less current maturities                                                                    132,691
                                                                                               -----------
                                                                                               $         0
                                                                                               ===========


</TABLE>


Read independent auditors' report.


                                       F-12
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



6.      Stock

The Company  issued  $400,000 in  convertible  debentures in December  1998. The
debentures  paid  interest  at two  percent per annum and matured on December 8,
2003. The debentures were  convertible into shares of common stock at the option
of the holder and could be converted at any time  commencing  on the issue date.
The conversion  price for each debenture at the date of conversion is the lessor
of $1.25 or 65 percent of the  average  closing  bid price for the five  trading
days  immediately  preceding the  conversion  date. If the closing price is less
than or equal to $.10 per share, the Company,  at its sole option, may allow the
holder to proceed with the  conversion or may redeem the  unconverted  amount of
debentures  at 154  percent of such  unconverted  amount,  plus any  accrued and
unpaid  interest.  The  stock  was  trading  at $.53  per  share  on the date of
issuance. The Company has recorded interest of approximately $223,500 in 1998 to
reflect  the  intrinsic  value of the  conversion  feature of these  debentures.
During 1999,  the debentures  were  converted  into  3,250,621  shares of common
stock.

In association with the convertible  debentures listed above, the Company issued
detachable  stock  warrants  to  acquire  411,000  shares of common  stock.  The
warrants  entitle the holders to purchase common stock at $.001 per share at any
time prior to December 31,  2003.  The Company  used the  Black-Scholes  pricing
model to value  the  warrants.  Based on this  pricing  model,  the value of the
warrants  is  $217,519,  which  was  amortized  over the  five-year  life of the
convertible   debentures;   however,  the  conversion  of  debentures  to  stock
accelerated  this  amortization.  The  Company  has  amortized  $25,377  of  the
intrinsic  value during the year ended December 31, 1998.  During the year ended
December  31,  1999,  these  warrants  were  exercised  and the  balance  of the
intangible asset of $192,043 was expensed as interest.

On June 4, 1999,  the Company  entered into an investment  agreement with Swartz
Private Equity, LLC ("Swartz"). The investment agreement entitles the Company to
issue and sell common  stock for up to an  aggregate of $20 million from time to
time during a three-year  period through June 3, 2002.  This is also referred to
as a put  right.  In order to  invoke  a put  right,  the  Company  must  file a
registration statement with the Securities and Exchange Commission,  registering
the resale of the common shares.












Read independent auditors' report.

                                       F-13
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



6.      Stock (continued)

On each put right,  the  Company  must  indicate  the number of shares of common
stock or maximum  dollar  amount of common stock (not to exceed $2 million) that
it will sell to  Swartz.  The  number of common  shares  sold may not  exceed 15
percent of the  aggregate  daily  reported  trading  volume for 20 business days
after the date of the put right.  Swartz will pay the Company  either the lesser
of the market price minus $.10 or 91 percent of the market price.

In partial  consideration of the equity line  commitment,  the Company issued to
Swartz,  or its designee,  warrants to purchase  450,000 shares of common stock.
Each warrant is exercisable at $1.00625.  These warrants were valued at $292,757
using the Black-Scholes  pricing model and recorded as deferred  financing costs
in the  financial  statements.  Following  each  purchase of common  stock,  the
Company is obligated to issue to Swartz,  a warrant to purchase shares of common
stock equal to 15 percent of the common  shares  issued in each put right.  Each
warrant  is to be  exercisable  at a price  equal to 110  percent  of the market
price. In addition,  the Company issued warrants to acquire up to 250,000 shares
of common stock at an exercise price of $1.00625 to Dunwoody Brokerage Services,
Inc.,  an affiliate of Swartz.  These  warrants  were valued at $162,643 and are
also recorded as deferred financing costs in the financial statements. No shares
of the  Company's  common  stock have been  issued  under this  agreement  as of
December 31, 1999.

The Company has  authority  to issue up to 5,000,00  shares of  preferred  stock
pursuant  to action by the board of  directors.  In February  1999,  the Company
entered  into an  agreement  with two  stockholders/directors  that granted them
1,000,000  shares each of Series A voting  preferred  stock.  These  shares were
issued for nominal consideration and were valued at $.0001 par value. Each share
of the Series A preferred stock has the right to cast 25 votes per share on each
and any matter that the common stock is entitled to vote.  Accordingly,  the two
stockholders/directors  are able to control the affairs  and  operations  of the
Company including, but not limited to, election of directors, sale of assets, or
other  business  opportunities.  The Series A  preferred  stock has no  dividend
rights,  redemption provisions,  sinking fund provisions,  or preemptive rights.
However, Series A preferred stockholders have the right to convert each share of
the Series A preferred  stock into common  stock based on the Company  attaining
specified annual revenue limits.

In January 1999, the Company  initiated a stock option plan for employees of the
Company.  A total of 10,000,000 shares have been reserved for issuance under the
plan. Approximately 5,500,000 options to purchase a total of 5,500,000 shares of
stock were  granted to  executives  of the  Company as part of their  employment
agreements.





Read independent auditors' report.

                                       F-14
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



6.      Stock (continued)

The Company  grants  options and  warrants to purchase  shares of the  Company's
common stock to individuals under various agreements. The following is a summary
of stock option and warrant activity during the year ended December 31, 1999:

<TABLE>
<CAPTION>

                                                Options                           Warrants
                                   ---------------------------------  -------------------------------
                                     Number       Weighted Average        Number     Weighted Average
                                    of Shares     Exercise Price        of Shares    Exercise Price
                                   ------------------------------------------------------------------
<S>                                <C>              <C>               <C>              <C>
        Outstanding at
           December 31, 1997                0           $  .00                    0           $ .00
                                    ---------------------------------------------------------------
        Granted in 1998                     0              .00              411,000             .001
        Exercised in 1998                   0              .00             (411,000)           (.001)
                                    -----------------------------------------------------------------
        Outstanding at
           December 31, 1998                0              .00                    0             .00
        Granted in 1999             5,500,000              .15              700,000            1.01
        Exercised in 1999                   0              .00                    0             .00
                                    ---------------------------------------------------------------
        Outstanding at
           December 31, 1999        5,500,000           $  .15              700,000           $1.01
                                    ===============================================================
</TABLE>

The following table summarizes the status of outstanding options and warrants at
December 31, 1999:

                                                            Weighted Average
             Exercise                  Number                   Remaining
               Price                  of Shares             Contractual Life
          ---------------------------------------------------------------------
            $  0.15                   5,500,000                   9.08
            $  1.01                     700,000                   4.50
                                   --------------
                                       6,200,00
                                   ==============

As of December 31, 1999, all of the above were  exercisable,  the options expire
10 years after the date  granted,  and the warrants  expire five years after the
date of grant.













Read independent auditors' report.

                                       F-15
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



6.      Stock (continued)

FASB No. 123  requires  disclosure  of pro forma net income as if the fair value
based methods had been applied in measuring  compensation costs for common stock
options  and  warrants  granted.  Pro forma net income and net income per common
share are as follows for the year ended December 31, 1999:

        As reported:
           Net loss                                       $   (1,816,158)
                                                          ==============
           Basic loss per common share                    $         (.23)
                                                          ==============

        Pro forma:
           Net loss                                       $   (2,606,658)
                                                          ==============
           Basic loss per common share                    $        (.34)
                                                          ==============

The weighted  average fair value of the options and warrants at their grant date
during year ended  December 31, 1999 was $.20.  The estimated fair value of each
option granted is calculated using the  Black-Scholes  option pricing model. The
following summarizes the weighted average of the assumptions used in the model:

        Risk-free interest rate                                   5.072%
        Expected years until exercise                             8.23 Years
        Expected dividend yield                                     --

During 1998, the Company issued 1,060,100 shares of stock. The checks issued for
these  shares  were  returned  for  lack  of  sufficient  funds  and  all  stock
certificates  were  cancelled  subsequent  to  year-end.  These  shares  are not
included  in the  common  stock  outstanding  since  the  Company  did not  have
constructive receipt of the money paid for those shares.


7.      Operating Leases and Related Party Transactions

The Company is obligated under various  month-to-month  operating leases for the
rental of space and related equipment. For 1999 and 1998, total rent amounted to
$11,960 and $6,600, respectively.

The Company has use of offices in Hong Kong, Germany, and New York. The space in
Hong Kong is  provided by one of the  Company's  suppliers  free of charge.  The
space in New York and Germany is provided by a stockholder at no cost.

The above amounts are not necessarily  indicative of the amounts that would have
been incurred had  comparable  transactions  been entered into with  independent
parties.

Read independent auditors' report.


                                       F-16
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



8.      Income Taxes

The Company has incurred  significant  operating losses since its inception and,
therefore, no tax liabilities have been incurred for the years presented.  These
operating  losses give rise to a deferred tax asset at December 31, 1999 and are
as follows:

        Deferred tax assets                             $   1,634,000
        Allowance                                          (1,634,000)
                                                        -------------
                                                        $           0
                                                        =============

The difference  between the provision for income taxes and the amounts  obtained
by applying the statutory  U.S.  federal  income tax rate to the net loss before
income taxes is as follows:

                                                          1999          1998
                                                       -----------------------
        Tax benefit at statutory rate                 $(691,300)    $ (300,100)
        Extraordinary gain on forgiveness of debt        10,600
        Valuation allowance on net operating loss       680,700        300,100
                                                       -----------------------
        Tax expense                                   $       0     $        0
                                                       =======================

The Company has  available  at December 31, 1999  approximately  $4.3 million of
unused operating loss  carryforwards  that may be applied against future taxable
income,  which would reduce taxes payable by  approximately  $1.6 million in the
future.  These operating loss carryforwards expire beginning in 2008. Due to the
Company's  history of operating  losses,  management has established a valuation
allowance  in the full  amount of the  deferred  tax assets  arising  from these
losses because  management  believes it is more likely than not that the Company
will not generate  sufficient  taxable income within the  appropriate  period to
offset these operating loss  carryforwards.  Income tax benefits  resulting from
the  utilization  of these  carryforwards  will be  recognized in the periods in
which they are realized for federal and state tax purposes.


9.      Extraordinary Gain

During 1999, several creditors accepted partial payments on balances due to each
of them as payments in full. The net  differences  between  amounts  accepted as
full payments and the vendors outstanding  balances as of the date of acceptance
are shown in the  accompanying  financial  statements as  extraordinary  gain of
$28,018.






Read independent auditors' report.

                                       F-17
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



10.     Earnings Per Share

The following data shows the amounts used in computing earnings per share:

                                                    1999              1998
                                                 ----------------------------

        Net loss                              $ (1,816,158)     $   (789,620)
                                              ================================
        Weighted average number
           of common shares
          used in basic EPS                      7,771,193         2,528,155
                                              ================================


11.     Commitments

The Company  entered  into an agreement to purchase the rights to a line of toys
on June 26,  1998.  In  consideration  of these  rights,  the Company will pay a
royalty on all sales equal to two percent in 1999,  one percent in 2000, and .05
percent in 2001, with a minimum guarantee royalty of $10,000 per year.


12.     Employment Agreements

In January  1999,  the  Company  entered  into  employment  agreements  with two
stockholders of the Company.  Each employment agreement has a term of five years
and has an annual  base  compensation  beginning  at  $75,000  annually  for the
12-month period ending May 31, 2000. The agreements increase $10,000 per year to
an annual  compensation of $115,000 for the 12-month period ending May 31, 2004.
Each executive has the right,  at his election,  to receive  compensation in the
form of the  Company's  restricted  common  stock  valued at 50  percent  of the
closing bid price as of the date of the executive  election.  In addition,  upon
execution of the employment agreements, each executive was granted non-qualified
stock options to purchase  2,500,000  shares of the Company's common stock at an
exercise  price of $.15 per  share,  which was the fair value at the date of the
grant. These options are immediately  exercisable and have an exercise period of
10 years.

Additionally,  in January 1999, the Company entered into an employment agreement
with its chief financial officer.  This employment  agreement has a term of five
years.  The  annual  compensation  is  $60,000  for 480  hours  of  service.  As
consideration  for  this  employment  agreement,  the  chief  financial  officer
received an option to purchase 500,000 shares of the Company's common stock over
a 10-year period at $.15 per share,  which was the fair value at the date of the
grant. These options may be immediately exercisable.




Read independent auditors' report.


                                       F-18
<PAGE>



                                Alottafun!, Inc.

                          Notes to Financial Statements

                     Years Ended December 31, 1999 and 1998



12.     Employment Agreements (continued)

Each of the above employment agreements has a non-compete clause. The agreements
also generally provide for severance payments equal to 299 percent of the annual
base  compensation  then due under each  agreement  in the event of  termination
without cause.


13.     Joint Venture Agreement

In May 1999, the Company joint ventured with E-Commerce Fulfillment,  LLC (ECF),
which has  established  a contract  with M.W.  Kasch,  an  independent  U.S. toy
distributor,  to launch an e-commerce  internet  portal called  TOYPOP.COM.  The
joint venture is owned 33.3 percent by ECF and 67.7 percent by the Company.  ECF
is wholly owned by Jeffrey C. Kasch,  President  of M.W.  Kasch  Company.  ECF's
responsibilities  and  obligations  include  selling  toy  products to the joint
venture  at prices  that do not  exceed  the  prices  charged  to ECF's  typical
customers. ECF will provide its products based on regular availability. ECF will
also  merchandise  the toys on a website and make  decisions  as to what toys to
highlight  as special  buys,  promote,  or present  as a "hot" toy.  M.W.  Kasch
Company will warehouse and provide  fulfillment to ECF on an ongoing basis.  The
relationship  between M.W.  Kasch  Company and ECF is exclusive as far as ECF is
concerned,  but not exclusive with regard to M.W.  Kasch.  M.W. Kasch is free to
sell any and all other retailers, electronic or otherwise.

Subsequent  to  December  31,  1999,  M.W.  Kasch  Company,  on  behalf  of ECF,
terminated its interest in the joint venture.


14.     Contingencies

The  Company's  past website host and  e-commerce  provider has  terminated  the
Company's website and refused to provide additional e-commerce support services.
This dispute involves a claim that the Company has failed to timely pay for past
services  rendered.  However,  there is no executed written contract between the
parties.  Also, the website provider is refusing to turn over the HTML web pages
that  comprise  the  Company's   website  and  has  asserted  certain  copyright
infringement  and trade  secret  misappropriation  claims.  No lawsuit  has been
filed.  If  necessary,  and  litigation  is  instituted,  the  Company  plans to
vigorously  defend  and  assert  substantial  counterclaims.  Management  of the
Company and its legal  counsel  indicate that the  likelihood of an  unfavorable
outcome,  as well as the maximum potential loss, if any, is impossible to assess
at this time.





Read independent auditors' report.

                                       F-19