SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (date of earliest event reported): August 11, 2000 UPROAR INC. (Exact name of registrant as specified in its charter) Delaware 000-29971 522192125 -------- --------- --------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 240 West 35th Street, New York, NY 10001 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: (212) 714-9500 Item 2. Acquisition or Disposition of Assets On August 11, 2000, Uproar Inc. (the "Company" or "Uproar") completed the acquisition of Take Aim Holdings Ltd. a British Virgin Islands company in the development stage ("Take Aim"), and its subsidiaries, pursuant to an Agreement and Plan of Merger by and among the Company, Uproar Acqusition Corp., a Delaware corporation and a wholly owned subsidiary of the Company ("Acquisition"), Take Aim, and the shareholders and warrant holders of Take Aim. As a result of the transaction, Take Aim merged with and into Acquisition, which was the surviving corporation. In the transaction, the Company issued the shareholders of Take Aim an aggregate of 1,333,334 shares of common stock of the Company and assumed outstanding stock options to purchase an aggregate of (after assumption and conversion) 28,941 shares of common stock of the Company. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits The Company hereby files this Form 8K/A to file the financial statements and related pro forma consolidated financial statements required pursuant to Item 7 of Form 8-K with respect to the acquisition of Take Aim. (a) Consolidated Financial Statements of Business Acquired Audited Financial Statements: (i) Report of Somekh Chaikin, a member firm of KPMG International, dated April 28, 2000. (ii) Take Aim Balance Sheet as of December 31, 1999. (iii) Take Aim Statement of Operations for the period from January 4, 1999 (date of inception) to December 31, 1999. (iv) Take Aim Statement of Stockholders' Equity for the period from January 4, 1999 (date of inception) to December 31, 1999. (v) Take Aim Statement of Cash flows for the period from January 4, 1999 (date of inception) to December 31, 1999. (vi) Take Aim Notes to the Consolidated Financial Statements as of December 31, 1999 and for the period from January 4, 1999 (date of inception) to December 31, 1999. Condensed Financial Statements (unaudited): (i) Take Aim Unaudited Balance Sheet as of June 30, 2000. (ii) Take Aim Unaudited Statements of Operations for the six months ended June 30, 2000 and the period from January 4, 1999 (date of inception) to June 30, 2000. (iii) Take Aim Unaudited Statements of Cash Flows for the six months ended June 30, 2000 and the period from January 4, 1999 (date of inception) to June 30, 2000. (iv) Take Aim Notes to Financial Statements as of and for the six month period ended June 30, 2000 and the period from January 4, 1999 (date of inception) to June 30, 2000 (unaudited). (b) Pro Forma Financial Information Unaudited Pro Forma Condensed Consolidated Financial Statements: (i) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2000. (ii) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1999. (iii) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2000. (iv) Notes to the Unaudited Pro Forma Condensed Consolidated Financial Statements. The Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements of the Company and the related notes thereto which are included in the Company's Registration Statement on Form S-4, as amended, dated September 18, 2000 (as filed with the Securities and Exchange Commission) and the audited financial Statements of Take Aim that are filed herewith. The Pro Forma Condensed Consolidated Financial Information does not purport to present what the Company's results of operations would actually have been if the Take Aim acquisition had occurred on the assumed date, as specified above, or to project the Company's financial condition or results of operations for any future period. (c) Exhibits 2.1 Agreement and Plan of Merger, dated August 7, 2000 among Uproar Inc., Uproar Acquisition Corporation, Take Aim Holdings Ltd. and the Shareholders and Warrant Holders of Take Aim Holdings Ltd. 23.1 Independent Auditors' Consent. Independent Auditors' Report to the Shareholders of Take Aim Holding Ltd. and Subsidiaries We have audited the accompanying consolidated balance sheet of Take Aim Holding Ltd. (the Company) and its subsidiaries (a development stage enterprise) as of December 31, 1999, and the related consolidated statements of operations, changes in shareholders' equity and cash flows, for the period from January 4, 1999 (date of inception) to December 31, 1999. These financial statements are the responsibility of the Company's Board of Directors and of its Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards, including those prescribed by the Israeli Auditors' Regulations (Manner of Auditor's Performance) 1973, such auditing standards are substantially identical to generally accepted auditing standards in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance that 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 the Board of Directors and by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, based on our audit, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries (a development stage enterprise) as of December 31, 1999 and the results of its operations, the changes in the shareholders' equity and its cash flows for the period from January 4, 1999 (date of inception) to December 31, 1999 in conformity with generally accepted accounting principles (GAAP) in the United States. /S/ Somekh Chaikin ------------------- Certified Public Accountants (Isr.) April 28, 2000 (a) Consolidated Financial Statements of Business Acquired Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise) Notes to the Consolidated Financial Statements as at December 31, 1999 -------------------------------------------------------------------------------- Note 1 - General A. Take Aim Holding Ltd. (hereinafter - the Company) was incorporated on January 4, 1999 in the British Virgin Islands (hereinafter - BVI) and began operating on November 24, 1999. The purpose of the Company is to plan, construct and manage multi-participant betting game applications on the Internet. The Company and its subsidiaries is a development stage enterprise as of December 31, 1999, as it has not generated significant revenue from its planned principal operations. The Company has full control over a subsidiary in Antigua, Omninet Inc. (hereinafter - the subsidiary in Antigua), that was incorporated on May 26, 1999 for the purpose of developing the software intended for use on the Internet. On August 3, 1999 the subsidiary in Antigua incorporated a wholly owned company in Israel, Omninetworks Ltd. (hereinafter - the subsidiary in Israel). The subsidiary in Israel was incorporated for the sole purpose of providing the research, development, consultancy, planning and support services which the subsidiary in Antigua will require from time to time. The services are billed out at 108% of the cost incurred in performing the services. On November 24, 1999 the shareholders of the subsidiary in Antigua transferred their shares to the Company in return for all the Company's equity at the same rate of holding they had in the subsidiary in Antigua. Accordingly, the transaction was accounted for as a "Pooling of Interests." Furthermore, options for the purchase of shares and a loan convertible into shares of the subsidiary in Antigua were assigned to a purchase and conversion of shares of the Company (also see Note 7). On December 17, 1999 the Company incorporated a wholly owned subsidiary in Delaware, USA, Ibetcha Inc., (hereinafter - the subsidiary in U.S.) for the purpose of operating and marketing the Internet site. Subsequent to the balance sheet date, the Company was split into two separate companies - Bettingcorp Ltd., a company incorporated in BVI (hereinafter - "BC"), whose purpose is to concentrate the activity in real money betting, and the Company itself, which will continue to concentrate and operate the remaining activities. BC and the Company will cooperate in the area of R&D, content, recruiting of employees and other areas (see also Note 9D). B. Definitions 1. Related party - As defined in Statement of Financial Accounting Standards (SFAS) No. 57 "Related Party Disclosures". Note 2 - Significant Accounting Policies A. Financial statements in U.S. dollars ("dollar") The accompanying financial statements are presented in U.S. dollars. The currency of the primary economic environment in which the operations of the Company are conducted is the U.S. dollar, and as such, the Company uses the dollar as its functional currency. Certain of the dollar amounts in the financial statements represent the dollar equivalents in other currencies. The Company's transactions and balances denominated in U.S. dollars are presented at their original amounts. Non-dollar transactions and balances have been remeasured to U.S. dollars, in accordance with the principles set forth in the Statement of Financial Accounting Standards No. 52 as promulgated by the Financial Accounting Standards Board of the United States. All exchange gains and losses from remeasurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the income statement when they arise, and are included in financial income or expenses as appropriate. B. Estimations and assumptions in the financial statements The preparation of the 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, disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. These are management's best estimates based on experience and historical data, however, actual results may vary from these estimates. C. Basis of presentation The financial statements presented herein have been prepared in accordance with generally accepted accounting principles (GAAP) in the United States. D. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances were eliminated in consolidation. E. Cash equivalents All highly liquid investments with original maturities of generally three months or less are considered to be cash equivalents. Note 2 - Significant Accounting Policies (cont'd) F. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated by the "straight-line" method at annual rates considered adequate to write-off the assets over their estimated useful lives as estimated by the management of the Company. Annual depreciation rates are as follows: % -------------- Computers and peripheral equipment 15-33 Office furniture and equipment 6-15 Leasehold improvements are amortized by the straight-line method over the remaining life of the lease, which is shorter than the useful life of the improvements. G. Capitalized software development costs The Company capitalizes part of the software development costs in accordance with Statement of Position 98-1 (SOP) and EITF 00-2. Accordingly, a company that purchases or independently develops software for its own use which is not intended for sale, will capitalize the costs incurred during the planning, configuration, development of the application, coding and installment of the software as well as during its testing. The conditions for beginning to capitalize are a financing approval of the Management as well as it being anticipated that the project will be completed and will accomplish its purpose. The Company's software will be amortized by the straight line method according to its anticipated useful life. The software was not used at all in 1999 and its related costs will be amortized when the software is put into use on the Internet. H. Other Assets According to the Company's assessments that the U.S. patent office will approve its patent application, the legal fees incurred in connection with these applications were capitalized. Once the patent will be approved, the capitalized costs will be amortized using the straight-line method over the remaining estimated economic life of the Company's patent. I. Deferred income taxes The Company applies the provisions of Statement No. 109 of the FASB ("Accounting for Income Taxes"). Note 2 - Significant Accounting Policies (cont'd) J. Loss per share The Company adopted SFAS NO. 128, "Earnings per Share". Under SFAS 128, the Company presents two earnings per share (EPS) amounts. Basic EPS is calculated based on net earnings available to common shareholders and the weighted-average number of shares outstanding during the reported period. Diluted EPS includes additional dilution from potential common stock, such as stock issuable pursuant to the exercise of stock options outstanding. K. Stock options compensation The Company has adopted Accounting Principles Board Opinion No. 25 - "Accounting for Stock Issued to Employees", ("APB 25") and related interpretations. As such, compensation expenses related to employee stock options is recorded over the vesting period only if, on the date of grant the fair value of the underlying stock exceeds the exercise price. The Company adopted the disclosure-only requirements of Statement of Financial Accounting Standards ("SFAS") No. 123 "Accounting for Stock-Based Compensation", which allows entities to continue to apply the provisions of APB Opinion No. 25 for transactions with employees and provide pro forma net income disclosure for employee stock grants made as if the fair value based method of accounting in SFAS No. 123 had been applied to these transactions. Stock option compensation to non-employees are recorded in accordance with SFAS No. 123 and EITF 96-18, at the fair value of the stock options issued. L. Comprehensive income (loss) The Company adopted Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"). SFAS 130 establishes standards for the reporting of all changes in equity from non-shareholder sources. As applicable to these financial statements Comprehensive loss is the same as net loss for the period presented. Note 3 - Receivable and Prepaid Expenses December 31 1999 --------------- U.S. dollars --------------- Deferred income tax 2,119 Prepaid expenses 6,697 Government institutions 16,215 Employees 1,145 Related parties 625 Others 18,200 --------------- 45,001 =============== Note 4 - Property and Equipment, Net

Note 5 - Capitalized Software Development Costs During 1999, the Company capitalized software development costs in the total sum of US$ 192,135. The software was not used at all in 1999 and its related cost will be amortized when the software is put into use on the Internet. Note 6 - Other Payables and Accrued Expenses December 31 1999 --------------- U.S. dollars --------------- Payroll and related expenses 20,198 Expenses accrued 6,092 Government institutions 6,902 --------------- 33,192 =============== Note 7 - Convertible Loans On November 4, the subsidiary in Antigua signed a loan agreement with an investor for the receipt of a loan in the amount of US$ 50,000, which can be converted into Class A preference shares of the subsidiary in Antigua until the Company raises additional capital in the future. When the Company purchased the subsidiary in Antigua the loan was assigned to the Company, including all the conversion rights, so that it can be converted into class A preference shares of the Company with the same rights attached to them as to the class A preference shares of the subsidiary in Antigua. Subsequent to the balance sheet date, additional capital was raised and the loan was converted into preferred shares (also see Note 10B3). On December 27, 1999, the Company signed a loan agreement with a group of investors for the receipt of a loan in the amount of US$ 250,000, which can be converted at any time into Class B preference shares of the Company until the Company raises additional capital in the future. Subsequent to the balance sheet date the loan was repaid in full with the addition of accrued interest without being converted into preference shares. Note 8 - Severance Pay Under the Israeli law, the Company is required to make severance payment to dismissed employees (including officers) and to employees leaving employment in certain other circumstances. The liability for severance pay is calculated on the basis of the latest salary paid to each employee multiplied by the number of years of employment. The liability of the Company for the payment of pensions, retirement compensation and severance pay to its employees is covered partly by current deposits in the names of the employees with an insurance company. The liability in respect of employee severance benefits reflected in the balance sheets represents the unfunded amounts. Note 8 - Severance Pay (cont'd) December 31 1999 --------------- US$ --------------- Provision for severance pay 4,610 Amounts funded 3,077 --------------- 1,533 =============== Note 9 - Commitments and Contingencies A. Development agreement In July 1999, the subsidiary in Antigua signed an agreement with Shelron Internet Ltd., an Israeli Company, for the development of the Company's Internet site for the price of US$135,000 (with a possible deviation of 15%), 50,000 ordinary shares US$ 0.01 par value of the Company and 20,000 options for the purchase of ordinary shares US$ 0.01 par value at an exercise price of US$ 0.92. Development of the program was completed at the beginning of 2000 and in March 2000 a final agreement was signed in which the deviation was settled as well as other additions to the program in the total additional amount of US$ 87,000. B. Rental commitments Premises occupied by the subsidiary in Israel are rented under a rental agreement which expires in August 2000. The agreement is renewable at the Company's option. Minimum future rental payments due under the above agreements assuming no renewal options are exercised, are US$ 25,872. C. Concentration of credit risk Financial instruments that may subject the Company to significant concentrations of credit risk consist of cash investments. Cash and cash equivalents and short-term deposit are maintained by major financial institutions in Israel and in the United States. D. Engagement with BC As part of the goal of the spin-off process, the Company gave exclusive rights to BC, to use the required technology and IP for real money betting activity. Moreover, the Company undertook to give a non-guaranteed loan to BC in 2000, in the amount of US$ 250,000. E. Advertisement agreement Subsequent to the balance sheet date, the Company signed an advertising agreement with an advertising company in the USA. The Company's liability to the advertising company, as a result of the agreement, amounts to a total of US$ 155,000. Note 10 - Shareholders' Equity A. Share capital

B. Change in the shareholders' equity 1. On January 10, 2000 the Company amended its Articles of Association so that 50,000 of the registered ordinary shares of a par value of US$1 each were split at the ratio of 1 to 100 for a total amount of 5,000,000 shares of a par value of US$0.01 each, divided into 4,000,000 ordinary shares and 1,000,000 Series A convertible accumulating preferred shares. The figures in notes 10A to 10D are described as if the stock split of the ordinary shares took place upon the Company's inception. 2. Upon its incorporation, the subsidiary in Antigua initially issued to a number of executives 1,000,000 ordinary shares of par value US$0.01 each. In addition 71,000 ordinary shares of par value US$ 0.01 each were granted at no cost as part of an agreement for services rendered. On July 12, 1999 the subsidiary in Antigua issued, to a number of investors 400,400 ordinary shares of a par value of US$ 0.01 each for the price of US$ 0.70 per share and for the total amount of US$280,280. Expenses in the amount of $8,400 incurred in connection with the share issuance have been deducted from share premium. Certain investors were granted an option to purchase, in a future raising of capital, shares in an amount that is equivalent to the amount of their present investment at a price per share that reflects a 12.5% discount from the price of the share set for the following raising of capital, and some investors had the option to make an additional investment of four times their original investment at a price per share that reflects a 20% discount (see also Note 10B3). On November 24, 1999, the Company issued 1,471,400 ordinary shares of a par value of US$ 0.01 each to the shareholders of the subsidiary in Antigua in return for their shares in the subsidiary in Antigua, so that their rate of holding in the Company on the day of issue is identical to that they had in the subsidiary in Antigua. Note 10 - Shareholders' Equity (cont'd) B. Change in the shareholders' equity (cont'd) 3. Subsequent to the balance sheet date the Company issued to a number of investors, as part of a share purchase agreement, 814,181 series A Preferred Shares at US$ 2.481 per share for the total amount of US$ 2,020,000. Furthermore, certain investors exercised their option to purchase 20,733 ordinary shares for the total amount of US$ 44,976, an amount that is equivalent to their previous investment in the Company (see also Note 10B2), and a loan in the amount of US$ 50,000 was converted into 20,153 Series A preferred shares of a par value US$ 0.01 each, reflecting a purchase price of US$ 2.481 per share. With the approval of the majority of these investors, an additional 100,765 series A preferred shares at a par value of US$ 0.01 each, at a same purchase price and at an aggregate purchase price of US$ 250,000, were issued to new investors who joined the share purchase agreement. The holders of the Series A preferred shares shall be entitled to the following rights: (a) Preference in respect of dividend payments over all other holders of equity securities of the Company up to the full amount paid for the Series A preferred shares plus interest at a rate of 8% per annum. Thereafter, the holders of the Series A Preferred shall participate in any remaining dividend distribution pro-rata with all other equity securities on an as-converted basis. (b) Preference over all other holders of equity securities of the Company in the event of liquidation, bankruptcy or reorganization of the Company up to the full amount paid for the Series A preferred shares, plus accrued but unpaid dividends, and interest at the rate of 8% per annum. Thereafter, the holders of the preferred shares shall participate on an as converted basis in the distribution of any remaining proceeds but no more than three times the original issue price of the preferred shares then held by such holders. (c) Conversion into ordinary shares any time after the date of issuance until the earlier of an Initial Public Offering (in which the preferred shares shall be automatically converted into ordinary shares), or the affirmative vote of the holders of at least 51% of the preferred shares to convert the preferred shares into ordinary shares. The conversion ration is one ordinary share for each preferred share subject to adjustment specified in the Company's Articles of Association. C. Employee stock option plan 1. On June 24, 1999 the Board of Directors of the subsidiary in Antigua decided to allocate 250,000 of its US$ 0.01 par value shares for the purpose of forming an employee share option plan. 2. Upon incorporation of the Company, 250,000 ordinary shares of par value US$ 0.01 each, were allocated for the purpose of forming an employee share option plan. These shares were allocated to the existing employees enrolled in the stock option plan of the subsidiary in Antigua in exchange for their entitlement to the stock options in the subsidiary in Antigua. Note 10 - Shareholders' Equity (cont'd) C. Employee stock option plan (cont'd) 3. Subsequent to balance sheet date, additional 225,300 ordinary shares of par value US$0.01 were allocated by the Board of Directors of the Company to the purpose of the share option plan. 4. As of December 31, 1999, options to purchase 21,700 US$ 0.01 par value ordinary shares are outstanding under the plan at the exercise price of par value. The options will be exercisable per one of the following terms: (a) Options to be exercisable in three equal parts upon each of the first three anniversary dates of the issuance of the options provided that those employees continue to be employed by the Company on such dates, or (b) Options to be exercisable in three equal parts upon a vesting period of 18 months, 24 months and 30 months, respectively provided that those employees continue to be employed by the Company on such dates. According to Accounting Principles Board Opinion No. 25 - "Accounting for Stock Issued to Employees" ("APB 25"), the difference between the fair value of the shares on the date of grant of such option and the exercise price of such options should be charged as an expenses over the vesting period and, correspondingly, should be presented as capital surplus on the Company's financial statements. In October 1995, the Financial Accounting Standards Board (FASB) issued statement No. 123 "Accounting for Stock-based Compensation" ("SFAS 123") which established financial accounting and reporting standards for stock-based compensation plans. The statement defined a fair value based method of accounting for an employee stock option plan. The Company adopted the disclosures provision of SFAS 123, but opted to remain under the expenses recognition provision of APB 25. There was no material difference between the effect of the application of SFAS 123 and that of APB 25 for the period ended December 31, 1999. The Company and the subsidiary in Antigua recognized compensation expenses in 1999, related to the grant of options to employees in the sum of US$ 1,667 and US$ 4,167, respectively. The unamortized balance of the compensation expenses in respect of these stock options grants amounted to US$ 24,074 as of December 31, 1999 which will be amortized in accordance with the vesting period of the options. Note 10 - Shareholders' Equity (cont'd) C. Employee stock option plan (cont'd) 5. The following tables summarizes information about employees stock options as of December 31, 1999:

* No expiration dates indicated in the option agreement.

6. Subsequent to balance sheet date, the Company granted an additional 21,500 options to employees at the same terms mentioned in Note 10C4(a). D. Non-employee stock compensation According to specific agreements signed with consultants, the Company granted options to purchase shares under the terms and conditions specified in the said agreements. Note 10 - Shareholders' Equity (cont'd) D. Non-employee stock compensation (cont'd) FAS 123 determines that consultant fees paid in options should be recorded based on the fair value of the consideration. Compensation expenses derived from stock options granted to consultants are calculated according to the requirement of financial accounting standards No. 123 ("SFAS 123"). The following table summarizes information about options outstanding at December 31, 1999: For the period from January 4, 1999 (date of inception) to December 31 1999 --------------- Number of options --------------- Granted 55,500 Exercised - --------------- Outstanding at December 31, 1999 55,500 =============== Number exercisable at December 31, 1999 38,100 =============== Exercise prices range from US$ 0.01 to US$ 0.92. The Company and the subsidiary in Antigua recognized compensation expenses in 1999, related to the grant of options to consultants, in the sum of US$ 481 and US$ 12,068, respectively. The unamortized balance of the compensation expenses in respect of these stock option grants amounted to US$ 3,367 as of December 31, 1999 which will be amortized in accordance with the vesting period of the options. Note 11 - Taxes on Income A. Tax exemption under the BVI and the Antigua tax rules Since all of the operations of the Company and the subsidiary in Antigua are taking place out of the BVI and the Antigua territories, the Company and the subsidiary in Antigua are exempt of any tax assessment. B. The Israeli subsidiary 1. The subsidiary in Israel is taxed under the Israeli tax rules. All tax expenses derive from the Israeli subsidiary operations. 2. The Israeli subsidiary is assessed according to the Income Tax Law (Inflationary Adjustments), 1985 (hereinafter - the Adjustment Law). According to the law, taxable income is measured in real terms according to changes in the CPI. Income will be taxable at the regular corporate rate, which currently is 36%. The Israeli subsidiary has not received final assessments since inception. 3. Deferred income taxes December 31 1999 --------------- U.S. dollars --------------- Provision for vacation 1,567 Provision for severance pay 552 --------------- 2,119 =============== Note 11 - Taxes on Income (cont'd) C. Reconciliation of the Statutory Tax Expense to the Actual Tax Expense A reconciliation of statutory tax expense, assuming all income is taxed at the statutory rate of 36% applicable to the income of companies in Israel, and the actual tax expense, is as follows:

* Resulting from the difference between the changes in the Israeli CPI (the basis for computation of taxable income) and the exchange rate of Israeli currency relative to the U.S. dollar. Note 12 - Related party balances and transactions A. Inventions transfer agreement On January 19, 2000, a Company's director assigned to the Company all his inventions and domain names prior to his employment with the Company and related to the activities of the Company. Furthermore, the director assigned to the Company future inventions made by him during the period and as a result of his employment with the Company. B. Balance owed to, or due from, related parties December 31 1999 --------------- U.S. dollars --------------- Account receivable 625 =============== C. Expense to related parties For the period from January 4, 1999 (date of inception) to December 31 1999 --------------- U.S. dollars --------------- Payroll and related expenses 34,456 General and administrative expenses 1,712 --------------- 36,168 =============== Note 13 - Subsequent Events Subsequent to balance sheet date, the control of the subsidiary in Israel was transferred from the subsidiary in Antigua to the full control of the Company, at no cost. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise)

The accompanying notes are an integral part of the financial statements. Take Aim Holding Ltd. and Subsidiaries (A Development Stage Enterprise) Notes to the Consolidated Financial Statements as at June 30, 2000 (unaudited) -------------------------------------------------------------------------------- Note 1 - General The Company is a development stage enterprise as it has not generated any revenues from its planned principal operations. These financial statements are as at June 30, 2000 and for the period of the six months then ended. They should be read in conjunction with the annual audited financial statements of the Company as at December 31, 1999, and for the period from January 4, 1999 (date of inception) to December 31, 1999 and their accompanying notes (hereinafter - "the annual financial statements"). The accounting principles used in the preparation of the interim consolidated financial statements are consistent with those used in the preparation of the consolidated financial statements as of December 31, 1999. However, the accompanying unaudited consolidated financial statements have been prepared in accordance with US Generally Accepted Accounting Principles (GAAP) for interim financial information. All adjustments which, in the opinion of management are necessary for a fair presentation of the interim financial statements, have been included. Results of operations for the six months ended June 30, 2000, are not necessarily indicative of the results that may be expected for the year ended December 31, 2000. Note 2 - Commitments and Contingencies A. During the first quarter of 2000, the Company's subsidiary in Israel signed an additional lease agreement for an office building. The liabilities of the Company deriving from the previous and the additional agreement, assuming that the Company will not exercise options for additional periods, amount to US$ 77,000 and US$ 36,000 for 2000 and 2001, respectively. B. On January 16, 2000, the Company was split into two separate companies - Bettingcorp. Ltd. a company incorporated in BVI (hereinafter - "BC"), whose purpose is to concentrate the activity in real money betting, and the Company itself, which will continue to concentrate and operate the remaining activities. This transaction had no effect on shareholders' equity, assets and liabilities on transaction date. The Company gave an exclusive worldwide license to BC, a related party, to use the required technology and IP for real money betting activity. BC and the Company will cooperate in the area of R&D, content, recruiting of employees and other areas. On May 19, 2000, the Company granted a loan to BC in the amount of $ 250,000, bearing interest at the rate of Libor+1% per annum, for repayment at the earlier of December 31, 2002 or the date of future raising of capital in the amount of at least $ 500,000. BC has the right to convert the loan, in whole or in part, plus the accrued interest, into preference shares of BC, if additional capital is raised in the future. The quantity of preference shares receivable from this conversion will be determined by dividing the amount intended for conversion by 85% of the price paid for the preference shares in the said raising of capital. The balance of the loan and the interest accrued, which will not be converted in the raising of capital, will be repaid within 14 days thereafter. BC has the right to repay the loan at any time prior to the raising of capital. Note 3 - Shareholders' Equity A. Share capital

See accompanying notes to unaudited pro forma condensed consolidated financial statements. Unaudited Pro Forma Condensed Consolidated Statement of Operations (Amounts in thousands except share and per share data)

See accompanying notes to unaudited pro forma condensed consolidated financial statements. Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements (1) Calculation of estimated purchase price: Shares of common stock of Uproar issued in exchange for Take Aim shares 1,333,334 Average share price of Uproar common stock at the time of the merger announcement $ 6.8563 ------------------ Fair value of common stock issued 9,141,738 Fair value of Take Aim options to be assumed (see note 6) 198,207 Intrinsic value of unvested options (recorded as deferred compensation) (143,733) Estimated merger costs 300,000 ------------------ Estimated purchase price $ 9,496,212 ------------------ Preliminary allocation of purchase price: Net book value of Take Aim's pro forma net assets $ 1,156,807 Goodwill and other intangibles 8,339,405 ------------------ $ 9,496,212 ==================

(2) To record amortization of deferred compensation of $23,962 for the six months ended June 30, 2000. (3) To record amortization of deferred compensation of $47,924 for the twelve months ended December 31, 1999. (4) To record amortization of goodwill and other intangibles related to the merger of $8,339,405 over three years ($1,389,901 for six months). (5) To record amortization of goodwill and other intangibles related to the merger of $8,339,405 over three years ($2,779,802 per year). (6) Upon the closing of the merger, the outstanding options to purchase Take Aim common stock was assumed by Uproar. As of August 11, 2000, Take Aim had 74,800 options outstanding which, based on the exchange ratio of .387, were converted into options to purchase 28,941 shares of Uproar common stock. The estimated fair value of these options has been included as part of the purchase price, excluding the intrinsic value of the non-vested portion of the options allocated to deferred compensation. 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. UPROAR INC. Date: October 13, 2000 By /S/ Kenneth D. Cron -------------------- Kenneth D. Cron Chairman of the Board and Chief Executive Officer

Filing Compare · UPROAR INC