8-K/A 1 f8ka1_waycool.txt AMENDMENT NO. 1 TO FORM 8-K W/FINANCIALS UNTIED STATES SECURITIES AND EXCHANGE COMMISSION AMENDMENT NO. 1 TO FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): April 30, 2002 WAYCOOL3D, INC. (Exact Name of Registrant as Specified in Its Charter) New Jersey (State or Other Jurisdiction of Incorporation) 000-31365 22-3720629 --------- ---------- (Commission File Number) (IRS Employer Identification No.) 306 DEMERS AVENUE, EAST GRAND FORK MINNESOTA 56721 ------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (218)773-3297 (Registrant's Telephone Number, Including Area Code) SEGWAY VII CORP. 4400 ROUTE 9, 2ND FLOOR FREEHOLD, NEW JERSEY 07728 (Former Name or Former Address, if Changed Since Last Report) INFORMATION TO BE INCLUDED IN THE REPORT Item 1. Changes in Control of Registrant On April 30, 2002 (the "Effective Date"), pursuant to a Stock Purchase Agreement and Share Exchange between Waycool3d, Inc., a New Jersey corporation (the "Company"); Richard I. Anslow ("Anslow") and Gregg Jaclin ("Jaclin"), (collectively Anslow and Jaclin shall be known as the "Company Shareholders"); WayCool3D.com, Inc., a Nevada Corporation ("WayCool") and the shareholders of WayCool ("WayCool Shareholders") (collectively WayCool and the shareholders of WayCool shall be known as the "WayCool Group"), the Company acquired all of the Waycool shares from the Waycool shareholders. Pursuant to the terms of the Agreement, the Waycool shareholders and designees received a total of 9,000,000 shares of the Company's common stock from the Company shareholders and Waycool became a wholly owned subsidiary of the Company. Pursuant to the terms of the Agreement, Richard Anslow resigned as the sole director of the Company and the following individuals were appointed to the Board of Directors: Bradly Kerr, Jon Zavoral and Peter Zavoral. In addition, Mr. Anslow resigned as President and Chief Executive Officer and the following individuals were named as officers of the Company: Bradly Kerr Chairman, President and Director John Zavoral Secretary and Director Peter Zavoral Treasurer and Director The Acquisition was approved by the unanimous consent of the Board of Directors of the Company and Waycool on April 30, 2002. The following table sets forth information regarding the beneficial ownership of the shares of the Common Stock (the only class of shares previously issued by the Company) at May 1, 2002, by (i) each person known by the Company to be the beneficial owner of more than five percent (5%) of the Company's outstanding shares of Common Stock, (ii) each director of the Company, (iii) the executive officers of the Company, and (iv) by all directors and executive officers of the Company as a group, prior to and upon completion of this Offering. Each person named in the table, has sole voting and investment power with respect to all shares shown as beneficially owned by such person and can be contacted at the address of the Company.

The following is a biographical summary of the directors and officers of the Company: Bradly Kerr has been our President and Chairman of the Board since April, 2002. He has been President of our subsidiary Waycool3D.com, Inc since February, 2002 and prior to that time he was General Manager of Waycool3D.com, Inc. since August, 2001. Mr. Kerr was Director of Athletics at Jamestown College, Jamestown North Dakota for several years. During this time he developed goals and objectives, athletic scholarships, a corporate sponsorship program, enhancement of the Booster Club, new athletic programs (golf, soccer, women's hockey) and developed facility expansion (athletic training facility, soccer complex, and a football stadium). He was a representative for the college to internal and external constituencies to gain support (Chamber of Commerce, City Planning Commission, Municipal Airport, Promotion and Tourism, City Council, Public Schools, North Dakota State Hospital, Parks and Recreation, and Medical Clinic). Mr. Kerr also fulfilled duties of Budgeting, fund raising, staffing and Tournament Director (4 National Tournaments, 12 Regional Tournaments, and 12 Conference Tournaments). Prior to Jamestown College, Mr. Kerr taught and coached for 11 years at the University of North Dakota. During Mr. Kerr's athletic director/coaching/teaching career, he received the following distinctions: NDCAC Administrator of the Year, Great Plains Region Administrator of the Year, Finalist for National Administrator of the Year, NCAA Rookie Coach of the Year, and NCC Coach of the Year. He received his Bachelor of Science from the University of North Dakota in 1978 and he received his Master of Education in 1985 from the University of North Dakota. John Zavoral has been our Secretary since April, 2002. He has been Secretary of our subsidiary, Waycool3D.com, Inc. since May 2000. Mr. Zavoral brings 25 years of business experience to WayCool3D.com, Inc. and has been actively involved in the major decision-making and hiring of our management team. Since high school, John has worked as part of the management team at R.J. Zavoral & Sons, Inc. where he has served as the Secretary and Director of such company. Mr. Zavoral is part owner and manager of R.J Zavoral and, as such, supervises over 50 employees in their operations to build and grade roads, prepare sites, and underground construction. The business has grown under his management from 5 employees to over 70 employees with similar growth in income. Some of the projects that Mr. Zavoral oversees at R.J. Zavoral & Sons, Inc. are state highways, federal dike projects, emergency services for Army Corp. of Engineers (flood protection) and Arnold Palmer Golf Course development. Peter Zavoral has been our Treasurer since April, 2002. He has been Treasurer of our subsidiary, Waycool3D.com, Inc. since May 2000. He is presently the President of RJ Zavoral & Sons, Inc. and has been part of their management team for 23 years. In addition, since 1991 he has been President of Clay Products, Inc where he supervises 7 employees. Clay Products, Inc. is a clay material and aggregate supplier. Mr. Peter Zavoral received his Administrative Arts Degree from Assumption College in 1973. Peter Zavoral is actively involved in our community. He serves in the following capacities: Trustee at Sacred Heart Church, East Grand Forks, MN; Member, Finance Committee at Sacred Heart Church, East Grand Forks, MN; Altru Health Services Board Member since 1976, Grand Forks, ND; Huntsville Township Planning & Zoning Board; Board Member, Community Foundation of Grand Forks, ND; and a Member of the Board of Directors of the Diocese of Crookston, MN. In addition to R.J. Zavoral & Sons, Inc. and Clay Products, Inc., John and Peter Zavoral are involved in these partnerships: Deacons Greens Development (LLP),Grand Forks ND (this is a housing development with about 128 acres surrounding an Arnold Palmer signature golf course) and the River City Speedway (the goal of the speedway is to bring the Nascar(R) image to Grand Forks). The Directors named above will serve until the next annual meeting of the shareholders of the Company in the year 2001. Directors will be elected for one year terms at each annual shareholder's meeting. Officers hold their positions at the appointment of the Board of Directors. ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS Pursuant to the Agreement, the Company acquired one hundred percent (100%) of the issued and outstanding shares of common stock (Common Stock) of Waycool from the Waycool shareholders for a total of 9,000,000 shares of $0.001 par value common stock of the Company from the shareholders of the Company and Waycool became a wholly owned subsidiary of the Company. Waycool is a development stage company, with 5 years of technology development experience and one patent (for the Video Wall) being brought to us by our founders. The Video Wall product has international sales and a billion dollar quarterly revenue potential, through the sales of equipment and Internet/video services. Waycool is currently producing video flooring and various video projectors (from video cubes to walls to the crystal ball and double view kiosks). Because of the breadth of the potential market for 3D related products, there is an array of other commercial and consumer 3D products that are currently under development, such as a line of 3D lighting fixtures, a computer monitor attachment, a credit card advertising tool and even a jewelry box. Waycool will manufacture 3Dimensional video image projectors, provide video advertising content to fit the informational needs of our clients and provide a major broadcasting hub for the Internet community. This medium is appropriate for the location-based entertainment industry, for independent businesses, for the professional training market and home entertainment market. We will also manufacture and produce unique and innovative products for home and office use. Waycool will accomplish this by producing high quality hardware, hiring experienced personnel, and maintaining a determination to create a unique and enjoyable 3D experience for our customers. Clients will soon discover that working with us is a unique and professional way to develop new informational applications that are appropriate for any industry. Waycool's short term goals include the (1) designing, manufacturing, and distribution of 3D machines to a broadening user market; (2) establishing ourself as an innovative company of 3-Dimensional imaging projecting systems and 3D video production; and (3) bringing the unique aesthetic and entertainment qualities of 3D technology into every home and business through affordable, unique and practical products (such as lighting fixtures, home decor, 3D video games and 3D picture frames). One of our long-term goals is to set up the only transmitting source of 3D programming available on the Internet. We will provide Internet programming domestically and internationally, with a monthly user fee generating revenue from worldwide users. Waycool offers unique products for advertising and novelty use in commercial, office and home arenas. There are a few other companies with similar 3D video image projectors throughout the world. Most of the kiosks used at trade and craft shows, malls and similar locations use video projectors with two- dimensional formats, so the market is wide open to the introduction of the unique attention--getting 3D format that we offer. Waycool is developing lighter, more portable units which will further increase sales appeal. No other company offers a similar product to our patented 3D Video Wall. The unique attention--getting qualities of our products are especially evident when combining the 3D advertising with 2D broadcasting that our 3D Video Wall offers. The company anticipate that sports arenas and sports bars will be a great niche for this product. The potential for growth is tremendous, both for sales of the machines and for a large volume of video production and Internet business; 3D advertising is eye- catching and immediately draws attention to the product. Additionally, viewing broadcasts in 3D is a unique experience, which will attract viewers around the world. Distributors to large chain stores are begging for new home consumer products. The innovative, practical, eye-catching 3D home decor, lighting and entertainment products are already catching the attention of these distributors. We already have the distributors/Independent Sales Representatives in the following states: California, New Mexico, New York, Washington and Wisconsin. We have also established a distributor in Quebec, Canada and have interested parties in Australia. The commercial products market is an ever-growing market. Advertisers, trade shows and retail establishments are always looking for a new and better way to grab the attention of consumers. They currently are limited to one- or two- dimensional viewing venues. Waycool has already found enthusiasm for our 3D video projectors and video walls. The advertiser and retailers using our 3D projectors are finding out that when a consumer looks at a product or service advertised in 3D, they remember it. 3D viewing is an exceptional experience and advertising is a very competitive market, so Waycool forecasts that the demand for our 3D machines will grow steadily. And since all of its 3D video projectors out in the field need to have new videos produced on a monthly, bi-annual or annual basis, video production will provide Waycool with an on-going source of income. The target market for Waycool's 3D projectors, Video Wall and corresponding 3D video content will be establishments involved with advertising. This includes advertising agencies who wish to sell advertising bits, trade show participants who want to increase traffic to their displays, retailers who wish to draw customers into their establishments or highlight specific products within their stores, and also entertainment, event and sports entities who wish to promote their star figures and main events. The 3D still and video bar tables will be a great new venue for bars, lounges and restaurants. A still image or specially formatted 3D video are projected out of the middle of the table for a unique, clean and always present advertising. This is especially effective for lower-lit atmospheres. The images can easily be changed with changing promotions. Waycool's home and office consumer products (3D lighting fixtures, 3D computer components, 3D picture frames and 3D conference or end/coffee tables and handheld video games) will draw a wide variety of customers. People of most ages, genders and income levels can enjoy the novelty of its 3D products. Waycool will keep the prices affordable for most income groups and since the content of the 3D image can vary tremendously, Waycool has the ability to come up with the perfect image for nearly everyone. Office buildings will be able to use the lighting to create a desired atmosphere or to use it to draw attention to certain areas or advertise their logo, products or services. Since its 3D lighting products can be used with basic lighting fixtures, businesses can easily and affordably enjoy the special atmosphere of 3D lighting. Its 3D Conference Table is perfect for displaying still or moving images to boost company morale and to spark product interest in customers. Products and Services Waycool is currently producing a series of 3D video image projection products. These products are revolutionizing the way consumers watch video productions by allowing the dynamic dimension of 3D viewing. Its current customers of our 3D Video Image Projectors use them for advertising and attracting customers. Waycool supplies the video projectors and also creates, shoots, edits, and animates videos to meet the specific needs of these clients. This video is delivered in DVD format or broadcast directly to the customer via the Internet. Waycool is are also well on its way to break into the home and office decor industries with our unique 3D lighting, table and decorative products. It has a 3D table which can be adapted for coffee or end tables for the living room or for conference rooms. Its 3D lighting products are available for use outdoors, indoors, commercially or at home. The lighting fixtures can be stand alone, wall-mounted or ceiling-mounted. It is also developing a line of 3D computer monitors, computers and video games for home consumers. Waycool's goal is to provide a new 3D viewing experience (without the aid of special eyewear) with a software package that allows end-consumers to create their own 3D images. The current market already produces some videos whose 3D effect requires the use of special optical wear. There are also some novelty items that are called 3D, but WayCool is the virtually the one of the few, if not the only, company producing equipment that actually projects has actual projected 3D images 6--8 inches in front of the projector, giving a 3D effect that is are visible with the naked eye. There are few other products on the market today that compare to our 3D table video image projectors or lighting fixtures. And likewise, Waycool currently creates the special videos that are displayed with our projectors. Images are specially formatted by its video & imaging department. Images in most products can be still or moving video with sound. Still image units are designed for consumers to easily change the video images. Holiday & Seasonal images will be sold as sets for some of the units. Changing the specially formatted video in the units with DVD's is as simple as changing the DVD. Businesses can order new videos as their advertising needs change. Patents and Trademarks Waycool has one patent granted for the video wall and are in the process of filing for a patent on our 3D Video Monitor Attachment, 3D golf unit, 3D crystal ball kiosk, and 3D double view kiosk. It has patent pending status for the 3D casino games. It will continue to apply for patents and file additional design and utility patent applications as we develop and market our new products to maintain and protect our market opportunities. We have applied to register WAYCOOL3D.COM/WAYCOOL3D as our trademark. Manufacturing and Production Plan WayCool3D has secured a building for manufacturing in East Grand Forks, Minnesota, which gives it ample space to expand as our production grows. At present, it does not require any special machinery and the highest noise level that we will produce is that of an air compressor. There will be no toxic smells or environmental issues associated with the production of our 3D products. Item 7. Financial Statements and Exhibits. (a) Financial statements of businesses acquired Financial statements of the Company are filed herewith after the signature page. (b) Pro forma financial information Pro forma financial information are filed herewith after the signature page. (c) Exhibits Number Exhibit 10 * Stock Purchase Agreement and Share Exchange dated as of April 30, 2002 between Waycool3d, Inc.; Richard I. Anslow and Gregg Jaclin; WayCool3D.com, Inc., and the shareholders of WayCool. * Filed with the original Form 8-K. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized. WAYCOOL3D, INC. By: /s/ Bradley Kerr -------------------------------- Bradly Kerr President July 15, 2002 WAYCOOL3D.COM, INC A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA FINANCIAL STATEMENTS MARCH 31, 2002 TOGETHER WITH ACCOUNTANT'S REVIEW REPORT WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA TABLE OF CONTENTS Page ACCOUNTANT'S REVIEW REPORT 1 BALANCE SHEET 2 STATEMENT OF OPERATIONS 3 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 4 STATEMENT OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-8 * * * * * * * * * * * * * * * ACCOUNTANT'S REVIEW REPORT To the Board of Directors WayCool3D.com, Inc. East Grand Forks, Minnesota We have reviewed the accompanying balance sheet of WayCool3D.com, Inc. (A Development Stage Company) as of March 31, 2002, and the related statements of income, stockholder's equity, and cash flows for the three months then ended and for the cumulative total from Inception to March 31, 2002, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of WayCool3D.com, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. /s/ Brady Martz BRADY, MARTZ & ASSOCIATES, P.C. June 12, 2002 BRADY, MARTZ & ASSOCIATES, P.C. 401 Demers Avenue Suite 300, P.O. Box 14296 Grand Forks, ND 58208-4296 (701) 775-4685 Fax (701) 795-7498 OTHER OFFICES: Minot and Bismarck, ND Thief River Falls, MN -1- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY BALANCE SHEET March 31, 2002

See Accountant's Review Report and Notes to Financial Statements -2- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF OPERATIONS For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Financial Statements -3- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Financial Statements -4- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF CASH FLOWS For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Financial Statements -5- NOTES TO FINANCIAL STATEMENTS As of March 31, 2002 NOTE 1 Summary of Significant Accounting Policies -------------------------------------------------- The Corporation is a development stage company and has not yet begun full operations. When fully implemented the company will operate as a product manufacturer and wholesaler in East Grand Forks, Minnesota. The operations will consist primarily of manufacturing numerous types of products which project a 3D image. Cash and cash equivalents include deposits in local banks. Inventories are valued at the lower of cost (first-in first-out method) or market value. Inventory includes raw material, work in process, and finished goods. Inventory at March 31, 2002 is comprised primarily of raw materials. Property and equipment are capitalized at cost, while maintenance and repairs, which do not enhance the value or increase the basic productive capacity of the property, are charged to expense as incurred. Depreciation is computed using the straight-line method, over estimated useful lives of three to seven years. The patents and trademarks, are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over 15 and 40 year periods, respectively. Current quarter amortization was $117, and accumulated amortization was $181 at March 31, 2002. Advertising costs are expensed as incurred. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at March 31, 2002 and revenues and expenses during the period then ended. The actual outcome of the estimates could differ from the estimates made in the preparation of the financial statements. NOTE 2 Related Party Transactions ---------------------------------- The corporation has an unsecured line of credit with a shareholder in the amount of $200,000. It expires on May 2, 2002, and has an interest rate at 5.75%. As of March 31, 2002 the outstanding balance was $200,000. The corporation also has a note payable to John Zavoral, who is a director, officer and shareholder, in the amount of $100,000. There is no stated interest rate on this note, it guarantees a 30% return upon WayCool receiving funding. The corporation also has entered into noncash transactions by issuing stock during 2002 for services and fees incurred during start up, which total $5,500. NOTE 3 Depreciation -------------------- Depreciation expense included in operating expenses for the three months ended March 31, 2002 is $4,362. -6- NOTE 4 Notes Payable --------------------- Notes payable at March 31, 2002 consists of the following: Interest Rate Amount Collateral ---- ------ ---------- City of East Grand Fork 4.00% $ 148,766 Inventory, fixtures & equipment Maurice Horn 25,000 Unsecured Total $173,766 Current Portion (37,732) --------- $136,034 ========= The required principal payments for the next five years and thereafter are as follows: 2003 $ 37,732 2004 13,251 2005 13,791 2006 14,353 2007 14,938 Thereafter 79,701 -------- $173,766 ======== The note payable to Maurice Horn guarantees a 30% return, upon the corporation receiving funding. NOTE 5 Operating Leases ------------------------ WayCool3D.com, Inc. leases office space, workshop space, and a copier for its operation. These leases are operating leases and have the following minimum lease payments for the next five years: 2003 $ 38,190 2004 38,190 2005 38,190 2006 37,425 2007 33,600 -------- $185,595 ======== The leases for the office space and the workshop space are on a monthly basis and are cancelable at anytime. -7- NOTE 6 Income Taxes -------------------- The corporation has net operating loss carryforwards of $454,368 which expire between 2020 and 2021. Income tax benefit realization is dependent on the corporation generating sufficient tax income prior to the expiration of the loss carryforward. Deferred tax assets of $68,155 are completely offset by a valuation reserve due to the lack of earnings history for the corporation. NOTE 7 Subsequent Event ------------------------ On May 1, 2002, the Company conducted a reverse stock split of 1 for 3 shares. The shareholders of the Company following this split exchanged their shares of WayCool3D.com, Inc. for 9,000,000 shares of WayCool3D, Inc., a New Jersey Corporation. The number of shares at March 31, 2002, has not been restated for the effect of the reverse split on May 1, 2002. -8- * * * * * * * * * * * * WAYCOOL3D.COM, INC A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA FINANCIAL STATEMENTS DECEMBER 31, 2001 TOGETHER WITH INDEPENDENT AUDITOR'S REPORT WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA TABLE OF CONTENTS Page INDEPENDENT AUDITOR'S REPORT 1 BALANCE SHEET 2 STATEMENT OF OPERATIONS 3 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 4 STATEMENT OF CASH FLOWS 5 NOTES TO FINANCIAL STATEMENTS 6-8 * * * * * * * * * * * * * * * INDEPENDENT AUDITOR'S REPORT To the Board of Directors WayCool3D.com, Inc. East Grand Forks, Minnesota We have audited the balance sheet of WayCool3D.com, Inc. (A Development Stage Company) as of December 31, 2001 and 2000, and the related statements of operations, changes in shareholders' equity, and cash flows for the year ended December 31, 2001 and the period from May 20, 2000 (the date of inception) to December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those 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 WayCool3D.com, Inc. as of December 31, 2001 and 2000, and the results of its operations, changes in shareholders' equity, and its cash flows for the periods then ended in conformity with accounting principles generally accepted in the United States of America. /s/ Brady Martz BRADY, MARTZ & ASSOCIATES, P.C. February 4, 2002 BRADY, MARTZ & ASSOCIATES, P.C. 401 Demers Avenue Suite 300, P.O. Box 14296 Grand Forks, ND 58208-4296 (701) 775-4685 Fax (701) 795-7498 OTHER OFFICES: Minot and Bismarck, ND Thief River Falls, MN -1- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY BALANCE SHEET December 31, 2001 and 2000

See Accompanying Notes to Financial Statements -2- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF OPERATIONS For the Periods Ended December 31, 2001 and 2000

See Accompanying Notes to Financial Statements -3- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the Periods Ended December 31, 2001 and 2000

See Accompanying Notes to Financial Statements -4- WAYCOOL3D.COM, INC. A DEVELOPMENT STAGE COMPANY STATEMENT OF CASH FLOWS For the Periods Ended December 31, 2001 and 2000

See Accompanying Notes to Consolidated Financial Statement -5- NOTES TO FINANCIAL STATEMENTS As of December 31, 2001 NOTE 1 Summary of Significant Accounting Policies -------------------------------------------------- The Corporation is a development stage company and has not yet begun full operations. When fully implemented the company will operate as a product manufacturer and wholesaler in East Grand Forks, Minnesota. The operations will consist primarily of manufacturing numerous types of products which project a 3D image. Cash and cash equivalents include deposits in local banks. Inventories are valued at the lower of cost (first-in first-out method) or market value. Inventory includes raw materials, work in process, and finished goods. Inventory at December 31, 2001 is comprised entirely of raw materials. Property and equipment are capitalized at cost, while maintenance and repairs, which do not enhance the value or increase the basic productive capacity of the property, are charged to expense as incurred. Depreciation is computed using the straight-line method, over estimated useful lives of three to seven years. The patents and trademarks, are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over 15 and 40 year periods, respectively. Current year and accumulated amortization was $63 for 2001, there was no amortization taken in 2000. Advertising costs are expensed as incurred. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at December 31, 2001 and revenues and expenses during the period then ended. The actual outcome of the estimates could differ from the estimates made in the preparation of the financial statements. NOTE 2 Related Party Transactions ---------------------------------- The corporation has an unsecured line of credit with a shareholder in the amount of $100,000. It expires on February 2, 2002, and has an interest rate at 5.75%. As of December 31, 2001 the outstanding balance was $80,000. The corporation also has a note payable to Lani Hatch, who is a shareholder, in the amount of $100,000. There is no stated interest rate on this note, it guarantees a 30% return upon WayCool receiving funding. The corporation also has entered into numerous noncash transactions by issuing stock during 2001 and 2000 for services and fees incurred during start up, which total $27,558 and $30,944, respectively. NOTE 3 Depreciation -------------------- Depreciation expense included in operating expenses for the years end December 31, 2001 and 2000 is $3,415 and $36, respectively. -6- NOTE 4 Notes Payable --------------------- Notes payable at December 31, 2001 consists of the following:

The required principal payments for the next five years and thereafter are as follows: 2002 $35,736 2003 13,120 2004 13,654 2005 14,210 2006 14,789 ------- Total $175,000 ======== The note payable to Maurice Horn guarantees a 30% return, upon the corporation receiving funding. NOTE 5 Operating Leases ------------------------ WayCool3D.com, Inc. leases office space, workshop space, and a copier for its operation. These leases are operating leases and have the following minimum lease payments for the next two years: 2002 $38,190 2003 38,190 ------- $76,380 ======= The leases for the office space and the workshop space are on a monthly basis and are cancelable at anytime. NOTE 6 Income Taxes -------------------- The corporation has net operating loss carryforwards of $383,523 which expire between 2020 and 2021. Income tax benefit realization is dependent on the corporation generating sufficient tax income prior to the expiration of the loss carryforward. Deferred tax assets of $57,528 are completely offset by a valuation reserve due to the lack of earnings history for the corporation. -7- NOTE 7 Consulting Fees ----------------------- Consulting and professional fees incurred during the first two years of operations were paid in connection with receiving professional advice about formation and funding, technical expertise, and sales consulting. ************************ -8- WAYCOOL3D, INC A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA PROFORMA CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2002 TOGETHER WITH ACCOUNTANT'S REVIEW REPORT WAYCOOL3D, INC. A DEVELOPMENT STAGE COMPANY EAST GRAND FORKS, MINNESOTA TABLE OF CONTENTS Page ACCOUNTANT'S REVIEW REPORT 1 PROFORMA CONSOLIDATED BALANCE SHEET 2 PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS 3 PROFORMA CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY 4 PROFORMA CONSOLIDATED STATEMENT OF CASH FLOWS 5 NOTES TO PROFORMA CONSOLIDATED FINANCIAL STATEMENTS 6-8 * * * * * * * * * * * * * * * ACCOUNTANT'S REVIEW REPORT To the Board of Directors WayCool3D, Inc. East Grand Forks, Minnesota We have reviewed the accompanying proforma consolidated balance sheet of WayCool3D, Inc. (A Development Stage Company) as of March 31, 2002, and the related proforma consolidated statements of income, stockholder's equity, and cash flows for the three months then ended and the cumulative total from Inception to March 31, 2002, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these proforma consolidated financial statements is the representation of the management of WayCool3D, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the proforma consolidated financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the accompanying proforma consolidated financial statements in order for them to be in conformity with accounting principles generally accepted in the United States of America. /s/ Brady, Martz & Associates, P.C. BRADY, MARTZ & ASSOCIATES, P.C. June 12, 2002 BRADY, MARTZ & ASSOCIATES, P.C. 401 Demers Avenue Suite 300, P.O. Box 14296 Grand Forks, ND 58208-4296 (701) 775-4685 Fax (701) 795-7498 OTHER OFFICES: Minot and Bismarck, ND Thief River Falls, MN -1- WAYCOOL3D, INC. A DEVELOPMENT STAGE COMPANY PROFORMA CONSOLIDATED BALANCE SHEET March 31, 2002

See Accountant's Review Report and Notes to Consolidated Proforma Financial Statements -2- WAYCOOL3D, INC. A DEVELOPMENT STAGE COMPANY PROFORMA CONSOLIDATED STATEMENT OF OPERATIONS For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Consolidated Proforma Financial Statements -3- WAYCOOL3D, INC. A DEVELOPMENT STAGE COMPANY PROFORMA CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Consolidated Proforma Financial Statements -4- WAYCOOL3D, INC. A DEVELOPMENT STAGE COMPANY PROFORMA CONSOLIDATED STATEMENT OF CASH FLOWS For the Three Months Ended March 31, 2002

See Accountant's Review Report and Notes to Consolidated Proforma Financial Statements -5- NOTES TO CONSOLIDATED PROFORMA FINANCIAL STATEMENTS As of March 31, 2002 NOTE 1 Summary of Significant Accounting Policies -------------------------------------------------- The Corporation is a development stage company and has not yet begun full operations. WayCool3D, Inc., a company incorporated in the state of New Jersey, is the parent company of WayCool 3D.com, Inc., of which it owns 100% of the outstanding common stock. WayCool3D.com, Inc, a company incorporated in the state of Nevada, is a product manufacturer and wholesaler in East Grand Forks, Minnesota. The operations will consist primarily of manufacturing numerous types of products, which project a 3D image. Cash and cash equivalents include deposits in local banks. Inventories are valued at the lower of cost (first-in first-out method) or market value. Inventory includes raw material, work in process, and finished goods. Inventory at March 31, 2002 is comprised primarily of raw materials. Property and equipment are capitalized at cost, while maintenance and repairs, which do not enhance the value or increase the basic productive capacity of the property, are charged to expense as incurred. Depreciation is computed using the straight-line method, over estimated useful lives of three to seven years. The patents and trademarks, are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over 15 and 40 year periods, respectively. Current quarter amortization was $117, and accumulated amortization was $181 at March 31, 2002. Advertising costs are expensed as incurred. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at March 31, 2002 and revenues and expenses during the period then ended. The actual outcome of the estimates could differ from the estimates made in the preparation of the financial statements. NOTE 2 Proforma Adjustments ---------------------------- The financial statements have been adjusted to show the effects of the following transactions, as if they took place March 31, 2002. On April 5, 2002, the Company undertook a 2-1 forward split of its outstanding common shares increasing the amount of shares of common stock outstanding in the company to 10,000,000. On April 23, 2002, the Company filed a Certificate of Amendment in the State of New Jersey changing its name to WayCool3D, Inc. On April 30, 2002, the Company entered into a Stock Purchase Agreement and Share Exchange ("Agreement") with WayCool3D.com, Inc. ("WayCool"), pursuant to which the principal shareholders of the Company transferred a total of 9,000,000 shares to the WayCool shareholders and the Company acquired all of the outstanding shares of capital stock of WayCool. Upon the effective date of the Agreement, WayCool became the wholly owned subsidiary of the Company and the current shareholders of WayCool own approximately 90% of the Company's shares of common stock outstanding. -6- NOTE 3 Shareholder's Equity ---------------------------- Common stock includes 200,000,000 shares authorized at par value of $.0001, of which 19,000,000 have been issued. The Company has also authorized 20,000,000 shares of preferred stock at par value of $.0001, none of which have been issued. NOTE 4 Related Party Transactions ---------------------------------- The corporation has an unsecured line of credit with a shareholder in the amount of $200,000. It expires on May 2, 2002, and has an interest rate at 5.75%. As of March 31, 2002 the outstanding balance was $200,000. The corporation also has a note payable to John Zavoral, who is a director, officer and shareholder, in the amount of $100,000. There is no stated interest rate on this note, it guarantees a 30% return upon WayCool receiving funding. The corporation also has entered into noncash transactions by issuing stock during 2002 for services and fees incurred during start up, which total $5,500. NOTE 5 Notes Payable --------------------- Notes payable at March 31, 2002 consists of the following: Interest Rate Amount Collateral ---- ------ ---------- City of East Grand Fork 4.00% $ 148,766 Inventory, fixtures & equipment Maurice Horn 25,000 Unsecured Total $173,766 Current Portion (37,732) --------- $136,034 ========= The required principal payments for the next five years and thereafter are as follows: 2003 $ 37,732 2004 13,251 2005 13,791 2006 14,353 2007 14,938 Thereafter 79,701 -------- $173,766 ======== The note payable to Maurice Horn guarantees a 30% return, upon the corporation receiving funding. -7- NOTE 6 Operating Leases ------------------------ WayCool3D, Inc. leases office space, workshop space, and a copier for its operation. These leases are operating leases and have the following minimum lease payments for the next five years: 2003 $ 38,190 2004 38,190 2005 38,190 2006 37,425 2007 33,600 -------- $185,595 ======== The leases for the office space and the workshop space are on a monthly basis and are cancelable at anytime. NOTE 7 Income Taxes -------------------- The corporation has net operating loss carryforwards of $456,256, which expire between 2020 and 2021. Income tax benefit realization is dependent on the corporation generating sufficient tax income prior to the expiration of the loss carryforward. Deferred tax assets of $68,438 are completely offset by a valuation reserve due to the lack of earnings history for the corporation. * * * * * * * * * * * * -8-

WAYCOOL3D INC 8-K/A