The Unabridged History of Winners and Losers

[Tatari Gami]

Minutes of the Shareholders' Meeting,
as posted on http://www.winr.net on August 3, 2001.
Winners Internet Network, Inc.
Minutes of the Shareholders Meeting
Saturday, July 28, 2001
4:00 PM (Central European Time)
10:00 AM (East Coast US)
7:00 AM (West Coast US)

Burotel
Landstrasse 163
9494 Schaan
Liechtenstein

Representing Winners Internet Network, Inc.:

Mr. Stefan Vogt, Chief Executive Officer
Mr. Philipp Buechel, Operations
Dr. Reinhard Proksch, Member of the Board
Mr. William Moore, Consultant

Business:

The Winners Internet Network, Inc. (“Company”) shareholders meeting was called to order by Mr. Stefan Vogt at 4:00 PM CET. Mr. Vogt introduced himself and the attendees sitting with him at the head table. Messrs. Buechel and Moore and Dr. Proksch provided brief explanations about their respective responsibilities and background. Mr. Vogt announced that Mr. Ronald Oehri, Member of the Board, is unable to attend due to illness, that the meeting will be conducted in English, that it is being broadcast on the Internet, and that management would report first and take questions from shareholders second.

Mr. Vogt welcomed shareholders and thanked them for their interest in the Company. He then made several announcements concerning the resignations of Mr. David Skinner and Mr. Douglas Morgan as members of the Board of Directors, composition of the board and negotiations with potential new members. Mr. Vogt also made a commitment to keep shareholders appraised of the situation through regular reports.

Mr. Vogt indicated that he believes, overall, that the Company has a reasonable chance of survival. He then reviewed the Company’s current operating status. He indicated that the Company has sufficient cash to operate for 3-4 months based on the following: 1) an analysis of cash revenues expected from old business 2) an assumption that the Company’s resources are primarily used to rebuild the customer base and 3) no new investors are found. Mr. Vogt indicated that he is reviewing each customer relationship and will keep those that are satisfactory and end those that are not. He also indicated that negotiations are underway with VISA to establish a new contract and that the Company expects to receive a proposal from VISA on August 15. He also explained that it is difficult to recruit new customers until negotiations with VISA are completed. Mr. Vogt also discussed efforts to attract new customers, which is ongoing.

Mr. Vogt asked Mr. Moore to talk about the Company’s current financial condition. Mr. Moore reiterated and elaborated on the key point made by Mr. Vogt – the Company’s survival is dependent primarily on its ability to rebuild the customer base and revenue stream. He indicated that the priority would be to continue operations and that pending regulatory, legal and reporting issues would be a second priority. He indicated that it is still not possible to provide reliable financial statements due to the following: 1) incomplete Company records 2) the need to review Company records recently sent to Liechtenstein from the United States 3) discrepancies in records that need to be reconciled and 4) the need to review all contracts that affect revenues and costs. Mr. Moore indicated that the Company expects to have approximately 3-4 months cash to continue operations based on the assumptions provided by Mr. Vogt and that it was using a simple cash budgeting tool in lieu of financial statements to monitor the Company’s financial situation. He also indicated that it is unlikely that the Company will receive additional cash revenues from old and new customers until a new contract with VISA is in place and that the Company has identified more than one potential new investor. He indicated that contracting with new customers and finding new investors would have a positive impact on the Company’s cash flow.

Representatives of the Company took questions from shareholders. The key items from that discussion are the following:

The Company’s operating costs currently run approximately $30,000 per month. Approximately $90,000 in positive cash flow is expected from settlement of old business. Therefore, the Company expects to have sufficient cash to operate for 3 + months exclusive of cash flow related to new business and new investors.

Corporate records were received in Liechtenstein approximately four weeks ago. The records are being reviewed and organized.

The Company notified the SEC in May that it was no longer able to retain counsel. The Company has had no subsequent contacts with the SEC and does not plan to initiate any until after it rebuilds the customer base and can retain counsel.

The credit card processing software is working well. No upgrades are planned due to resource constraints.

The current staffing level of the Company is three full time employees and Mr. Moore who is advising the Company on recovery strategies.

Most of the Company’s old business was generated by gambling and adult related websites. The Company’s strategy is to move away from this market segment into more traditional retail e-commerce.

The Company uses the latest versions of encryption software provided by Supra Secure Net, a member of the SupraNet family of companies.

In closing, Mr. Vogt thanked shareholders for their participation and adjourned the meeting.

End of summary.

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Subsequent to the shareholders meeting, Mr. Vogt decided that an update would be posted on the Company’s website during the last week of each month. The first update will be posted during the week of August 27, 2001.