1998 ANNUAL REPORT

1998 turned out to be an exceptional and successful year for our children’s charity. The organization has experienced a great deal of growth in all areas of operations and programming. The most prevalent and noticeable growth included the participation of new companies, the ever-growing number of new and past volunteers, the addition of two new staff members and the expansion of and inclusion of new board members that joined our efforts. In addition, the charity also experienced an increase in the amount of charitable contributions from individuals, corporations and special events.

This year the organization received more outside financial contributions and again, received more support through the sale of our charity water at Sun Devil Stadium. The charity introduced its new line of "Prickly Pear" flavored lemonades, continued the "Champion of the Year" program, watched as our first ever expansion chapter unfolded in Flagstaff, Ariz. in late April and the development of a new charity partnership with Citizens Against Substance Abuse (CASA) in Flagstaff. In addition, EKC’s Educational Committee finalized the Interactive Educational Enhancement Program and began offering the Intramural portion of the program to Carl Hayden Community High School this past fall. The charity’s long-standing tradition of service continued with the presentation of the 4^th Annual Christmas Party with the ASU Phi Sigma Kappa Fraternity and the Single Parents Association and the inaugural Christmas Party in Flagstaff with the help of the NAU Phi Sigma Kappa Fraternity brothers. The charity president and volunteers ended the year of giving by hosting the inaugural President’s Christmas Party - Food and Toy Drive.

Over all the year was fun and exciting to say the least. The following is EKC’s year-end status and the financial programming statement that is being reported to the Corporation Commission and the IRS on our 990 Form for 1998/99:

Executive Council:                        Board of Directors Elected:

Calvin Schexnayder                         Robert Perelka (Chairman) Mark Gefroh

Gordon Le Blanc                              Darrin Palmer                             Douglas Thomas

Mike Gibson                                     Patrice Parker                             Ed Price

Sherdrick Bonner                             Bryant Sewall                             Mike Briody

Mike Muraco                                    Garth Jax                                     Steve Channen

President & Executive Director: Robert J. Perelka

Vice President: Calvin Schexnayder

Secretary: Shelly King

Treasurer: Dan Perovich

Special Events Director: Kelly Halliday

Volunteer Coordinator: Barbara Ruben/ Barbara Kehl

Media Relations: Mike Muraco

Communications Director: Russell Stevens

Northern Arizona Chapter in Flagstaff - Board of Directors:

Rob Perelka – Dan Perovich – LaDonna Wiley – Sgt. Gerald Blair - Bradley Eckhardt

Financial Income Activity:

1/1/1998 through 12/31/1998

Corporate Contribution $18,827.50

Individual Donations 8,897.88

Grants (MHS Title V) 2,000.00

Special Events 4,140.73

Subtotal EKC Main Account Income Categories: $33,866.11

Every Kid Counts of Northern Arizona – Flagstaff

Income Categories: Total:

Cash Donations: $240.00

Fund-raisers/Special events 1,835.29

Grants: Diamondbacks (Red Ribbon) 2,000.00

Subtotal EKC NAZ Total: $4,050.29

Total charity income from all accounts: $37,816.40

Interactive Educational Enhancement Program: Over the past four years, EKC Children’s Charity has provided numerous educational, athletic and social enrichment events, mentoring and various support to over forty-five schools, parks and community organizations. In 1996 our Board of Directors requested the establishment of a "Program Development Team" for the purpose of developing educational programs, which resulted in this Interactive Educational Enhancement Program.

The development team’s main focus was to research and design a positive interactive program to be integrated into high school curriculum through synergistic programming, mentoring and community involvement. This proactive approach is designed to build self-esteem, encourage academic growth, reduce absenteeism and keep students from dropping out of school. In addition, this program will provide an interactive teen concept that deals with societal challenges that effect our youth and their community.

Cost to develop program: $5,500.

Champion of the Year Program: To best serve the community, especially in the areas of education and special assistance, Every Kid Counts developed the "Champion of the Year Program." This program has been designed to feature young children who have shown great courage through very challenging times. The children are featured as part of our Every Kid Counts, Inc. retail water bottle label program.

For our inaugural champion we chose five-year-old Michael Joseph Arias from Chandler, Arizona to be featured. In April of 1997, Michael was diagnosed with Neuroblastoma cancer, a solid tumor cancer that effects the nervous system. In October, Michael received a bone marrow transplant. Currently he is in very strong spirits and wining the battle. Michael has the spirit and fight of many healthy kids his age and he and his family have shown great interest in educating and providing assistance to help others just like him. Every Kid Counts is proud to be a part of the Arias Family and their drive to provide a healthy life for Michael and all of Arizona’s children.

Costs to develop program $4,700.

Athlete Intramural & Mentoring Program: Over the past five years, EKC has placed professional athletes in schools for one-time visits. For the first time in our charity history, Calvin Schexnayder became the first professional athlete to work a part-time program at Maryvale High School. Funded through a Title V Government Grant, Calvin served the students of Maryvale High School by conducting the "Lunchtime Intramural and Self-esteem-building Program." This program helped the school administrators alleviate the problems that were causing difficulties during the lunch time periods. This program filtered over to the campus of Carl Hayden Community High School and consisted of Arizona Rattler player Brian Easter administering a Lunch and After-school Intramural Program.

Cost of the program: $3,500.

3rd Annual Flag Football Benefit Game: This game involved a good number of members from the World Champion Arizona Rattlers competing in a celebrity flag football game with Phoenix Police Department. This year’s game played benefit to TAPS and saw the name change to "The Tim Landers Memorial Game." Officer Landers lost his life in a traffic accident. This program, which the officers from all departments sold tickets, raised $14,300. A large multi-prize raffle was conducted at half-time. EKC provided water and the Fine Host Corporation donated products and equipment for the Pancake Breakfast. This program has been taken over by the TAPS program. EKC will develop a new program in 1999 to benefit our programs and local children’s hospitals. Cost of this program: 300.

Single Parent’s Association Christmas Party: For the third year in a row, brothers of ASU’s Phi Sigma Kappa Fraternity along with the sisters of Alpha Phi Sorority played host to 54 boys, girls and their parent’s for our December 9th, 4th Annual Christmas Party. This party consisted of dinner, games and a special visit from Santa Clause. Each member from the fraternity and sorority contributed a gift for each child and spent the entire evening with that child to help ensure a special evening. This event was a major success and we are looking forward to continuing this annual event. (Rumor has it the adults had as much fun as the children). Program cost: $3,450

Drug Prevention Assemblies: This year we were able to visit a good number of Elementary, Junior and Senior high schools throughout the State of Arizona. Professional Athletes visited the schools with the messages of: stay away from drugs, the importance of a good education, setting goals, and making the right choices. Program cost: $3,200

Product Donations: In keeping with EKC’s tradition of providing other non-profits and youth groups with support, EKC provided nearly 10,000 bottles of product to other groups for their event programs or fund-raisers. This includes the Phoenix Parks and Recreation, Single Parents Organization, Arizona Youth Baseball, CASA and many schools and church groups throughout the state. Program costs: $3,324

Tickets to Events: This past year saw a great deal of support from many of the local professional sports programs. Through their generosity, we were able to provide literally thousands of tickets to underprivileged youth throughout the state of Arizona. Program costs: $1,300.

Equipment/Service Donations: Every year we seek to provide assistance in the way of equipment to schools and/or parks and recreation facilities as well as material support. This past year turned out to be very special one for our organization. EKC not only continued its traditional support of two Valley parks, we also provided materials to the Thomas J. Pappas School. In addition, EKC teamed up with the Scottsdale Sunrise Kiwanis Club and provided water to several schools in Scottsdale. We also provided a stereo system to Yavapai Elementary school, replacing one that was stolen the year before. Program costs: $1,700.

Red Ribbon Campaign: Citizens Against Substance Abuse and Every Kid Counts of Northern Arizona - Flagstaff Red Ribbon Campaign against Substance Abuse: October 30 - Nov. 6, 1998

This program provides red ribbons and posters to children from grades K - 12. The ribbons signify that the student wearing it will remain drug free. The posters signify the partnerships of organizations and agencies working together and "Teaming up Against Drugs." This event has been on going for the past nine years as part of the National Red Ribbon Campaign.

This event benefits more than 35,000 youth in Northern Arizona. This includes the communities of Flagstaff, Williams, Parks, Tuba City and Showlow. Every Kid Counts’ roll was to provide all the posters for the campaign and the Red Ribbons for the communities outside of Flagstaff as well as the professional athlete personnel to present them at these communities. The program was a huge success and included several Arizona Rattlers and Arizona Thunder players. Program Cost: $7,500.

CASA Partnership: Every Kid Counts of Northern Arizona - Flagstaff is proud to be working closely with CASA on many worthwhile projects. EKC is also renting office space from this organization whose goals and mission are significantly similar to ours. Without CASA, EKC would still be working out of a house in Flagstaff.

Coconino County Youth Coalition: Every Kid Counts of Northern Arizona - Flagstaff was part of the Coconino Coalition for Children and Youth in Flagstaff in October. Their goal was to decide what needs the children of Flagstaff and Coconino County had that could be changed with proactive programming. To find these needs, the coalition requested that EKC get a number of questionnaires filled out across Flagstaff. Phi Sigma Kappa volunteered their time and had the questionnaires filled out by the deadline.

They worked for 90 hours and at $6/hour, a total of $540 was donated in-kind.

Children of Single Parents Christmas Event: Every Kid Counts of Northern Arizona - Flagstaff and Phi Sigma Kappa Christmas Party for Children of Single Parents: December 1, 1998

The Christmas party provided an opportunity for under privileged youth from all over Flagstaff to experience and enjoy some of the Christmas Holiday spirit. This program is a joint venture of EKC, the brothers of Phi Sigma Kappa Fraternity, Delta Delta Delta Sorority, Single Parents Association and Citizens Against Substance Abuse. This year's event included the pairing up of a big brother and sister from the Greek organizations for the children, dinner, games and a visit from Santa Clause.

We invited 35 youth from Flagstaff to participate in this event and are pleased to report that the event went off without a hitch. The fraternity and sorority both had a fantastic time, the parents had a chance to relax while their kids were being taken care of and, best of all, the kids had a blast. This event is going to become an annual happening in Flagstaff. Special thanks to SAM's Club for their fundraising efforts ($2,000) and volunteer help to make this event possible. Program Cost: $2,700.

EKC Inaugural Toy and Food Drive Christmas Party: On December 13, 1998, Board of Director member Bryant Sewall opened his home to the first ever EKC Toy and Food Drive Christmas Party. Of the many friends of EKC that were invited, 65 joined in the holiday festivities. In addition, we were blessed with visits from representatives of the Phoenix Mercury, Major League Players Alumni Association, Arizona Rattlers, Arizona Thunder, the Governors office and a special surprise visit from the Mayor of Scottsdale Sam Campana. All in all, we received a great amount of food and toys that benefited a Scottsdale Family and the Thomas J. Pappas School for Homeless Kids. It was a fantastic first time event and we look forward to holding it again this coming December. Cost of Program: $1,100.

Combined Program Costs: $38,274

5th Annual Celebrity Golf Tournament: Gainey Ranch Golf Club was the sight of this year’s 5th Annual Celebrity Golf Tournament. The event was held on September 19 and raised approximately $1,700 in revenues.

1998 Arizona State Fair: Through the dedicated efforts of Every Kid Counts own Dan Perovich, Barbara Ruben and all the volunteers, EKC made its second appearance at the 1998 Arizona State Fair with an information and products booth. During this sixteen-day event, we introduced our new Prickly Pear Lemonades and we raised nearly $2,200 and presented well over 2,500 pieces of EKC literature to the fair goers. Everyone did an outstanding job for the charity. Net Funds Generated: $668.88

Magic Bird Craft Shows: In late April and early May, our friends at Magic Bird Arts and Crafts Shows invited EKC to set up a booth to sell our charity labeled water and pass out information to the participants at no cost to the organization.

Funds Raised: $1,443.

Country Thunder USA: In late April, EKC participated in the biggest Country and Western Show in the state of Arizona. We developed a special Country Thunder water label which included sponsorships provided by Ramirez Roofing, Inc., Layout Specialist, Inc., Scottsdale Sunrise Kiwanis Club and Crown Press as well as KLME 108 and Phi Sigma Kappa Fraternity. Country Thunder sold close to 1000 cases at this four-day event. In addition to having the EKC water sold at this music festival, 72 volunteers braved the elements and volunteered nearly 850 hours of community service manning the VIP Tent.

Funds Raised: $3,920

Champion of the Year Water/Lemonade Club: The EKC Products program had one of its better years. This program is two years old and, with the addition of the Champion of the year program, it took on a whole new look. Combining the corporate and the individual participants, the charity received a great deal of support.

Funds Raised: $8126.38

Sam’s Club Grand Opening BBQ: In early June, Sam’s Club opened a new location at 20th St. and Indian School Road. EKC was invited to be a part of this event. The associates hosted a BBQ during the day and members of the Arizona Rattlers and Arizona Thunder joined in by signing autographs and giving away memorabilia.

Funds contributed: $375.

A very special donation: In early March, Dan Perovich, now EKC Vice President of Operations for Northern Arizona in Flagstaff, joined the Every Kid Counts team. In late June, Dan received an inheritance and contributed some of the funds to charity. Dan has been a valuable asset to the organization and his contribution was a great surprise.

Personal Contribution: $6,000

Coconino County Fair: This Northern Arizona event helped EKC to further spread its message of helping "Today’s Youth become Tomorrow’s Leaders." Response was very positive and EKC passed out many information brochures to help spread the word for Flagstaff and its surrounding communities.

Funds Raised: $1,700

Sam’s Club Helping Hands Campaign: This program was also of benefit to EKC’s Northern Arizona chapter. Through the help of Sam’s Club employees, EKC was able to raise more than $2,000 that directly effected the lives of underprivileged youth. A portion of the proceeds also went to benefit the Christmas Party for Children of Single Parents held in Flagstaff.

Multi-prize Raffles: Held at both Flagstaff Sam’s Club and Showlow. Wal-Mart, the raffles distributed sports memorabilia at autograph sessions. Funds raised helped to benefit EKC’s athletic enrichment and Red Ribbon programs.

Diamondback Grant: A grant of $2,000 was awarded to EKC to help fund the Red Ribbon Campaign in Northern Arizona. The campaign helped further EKC’s educational enrichment program and helped educate the youth of Northern Arizona against the dangers of drug abuse.

Total Expenses: $3,500

These grants provided assistance in the area of education, athletic and substance abuse awareness programming. With funding of public education on the down swing, EKC is working to do its part in providing alternative funding to ensure the development of our youth’s mental and social environment.

Products and Equipment Donations:

Every Kid Counts Charity Water: 10,000 bottles to various programs $3,324

Food and Materials For University and Willow Park 250

New Basketball Jerseys for Carl Hayden High School 850

Total Contributions: $4,424

Administrative and office expenses:

Because of low budgeting and funding, EKC has yet to hire a full staff to support the charity’s day-to-day operations. Therefore, the organization has yet to pay any full-time salaries. However, the following is the breakdown of the cost of running the charity office:

Office Rent (EKC’s Portion is $200 per month): $2,400

Storage Rental $ 583

Phone Services $2,144

Office Supplies $1,827

Printing Costs $2,500

Travel, Rentals and Auto Expenses $1,264

Total Expenses: $10,718

Total Revenues $37,816

Total Expenses $48,992

Surplus/Loss ($11,176)*

*Owed to Kidco Products Line of Credit.

1998 CONTRIBUTORS

In 1998 EKC was honored to have many supporters of our charity programs. One of our main goals was to provide the most recognition possible for those who have chosen to be partners in our programs. The following are the various businesses that sponsored the charity during our 1998 fiscal year:

Crown Press: For the fourth consecutive year, Crown Press has participated in all aspects of the charity’s operations with support and donations well over $10,000 in printing. Mark Gefroh, a partner in the firm, first joined the Board of Advisors in 1996 and has been re-elected to the Board of Directors. His enthusiasm continues to be a great contribution to the communication and the development aspect of our programs. We appreciate his dedication and the support of his staff.

Sam’s Club: Patrice Parker has continued to be of great help and assistance in the development of our program as well as developing new relationships with other kid’s programs. We are greatly appreciative to Patrice, who was appointed to the Board of Directors in the last quarter of our 1997 fiscal year. Sam’s Club at 20^th Street and Indian School Road continues to participate and remains a large part of many of our charity events.

Arizona Rattlers: The players and coaches were inspirational in their participation in our golf tournament and our youth outreach and mentoring programs throughout the year. Participating in the charity program were Sherdrick Bonner, Calvin Schexnayder, Brian Easter, Joe Birch, Rattlers Vice President of Administration Gene Nudo, as well as many other players. DC Headley, Rattlers Community Relations, assisted the organization by providing numerous tickets to various games throughout the season. This gave us the opportunity to present these tickets to many underprivileged youth throughout Arizona. In addition, Matt Anderson, Rattlers Trainer, provided a number of memorabilia items that we were able to utilize during our fund-raising events. We truly appreciate their dedication to our community’s youth and our programs.

Arizona Thunder Professional Indoor Soccer Team: The players and staff joined in partnership with our organization and were inspirational in their participation in our youth outreach and mentoring programs throughout the second half of the year. Participating in the charity program were new board of director member Mike Briody, Mark Kerlin, Mac Magee, Milo Iniguez and Freddy Haase. In addition, Mike also provided thousands of tickets which we presented to many underprivileged youth throughout Arizona. Director of Public Reactions Rick Elder provided a number of memorabilia items that we were able to utilize during our fund-raising events. We truly appreciate their dedication to our community’s youth and our programs.

Basha’s Markets: In Late July, Basha’s Market joined the efforts of EKC by purchasing and offering the EKC Water in their stores throughout the State of Arizona. A Special Thanks to Steve Vanderpluge and Basha’s Market for their generous support of our program and the youth of Arizona.

Ryder Transportation Services: Ryder has been providing truck services to support our ASU Water Program for the past three years. Ryder has provided their trucks to EKC for low mileage and gas fees, with no cost on the rental if returned within three hours.

Arizona Diamondbacks: 1998 saw the inaugural season of Arizona’s first ever Major League Baseball team and Every Kid Counts was just one of the many organizations that received major league support. A special thanks to the Diamondback organization for several contributions of memorabilia as well as the $2,000 grant they provided our Flagstaff Chapter.

Fast Signs @ 32nd Street and Indian School Road: Ross Meager and his staff continue to provided a great deal of support by donating, at or below cost, all of our banners and signs. For this, EKC is proud to have them as a major partner in our organization.

Sedona Bottling Company: Again in 1998 the water label took on a whole new look for the ASU Sun Devil Stadium and Water Club program. The label now has a more colorful look to it as well as the logos of companies that donated money to help in our charity’s programming. We are also in our fourth year working with our water manufacturer, Sedona Bottling Co. (Dan Delaney is the company’s president). We greatly appreciate the support that Dan and the Sedona Bottling Company have provided over these great developing years.

Fine Host Corporation: The Every Kid Counts water program has made it through its third straight year thanks to the Fine Host Corporation. It was one of the biggest years we have had. The first year Fine Host purchased over 4,100 cases of water. The second year they sold nearly 5,200 cases and this past year they sold over 6,300 cases of water raising nearly $4,700 to support youth in the Valley. In late September, the label took on a whole new look and in January the water was featured at the first ever College National Championship Game, in which the head coach of the National Champion Tennessee Volunteers displayed it on national television after the game. In addition to the water sales, Brian Hartman, Regional Manager for Fine Host Corporation, continues to be a part the Board of Advisors and has participated in a number of programs throughout the year. We appreciate Brian, his staff and the Fine Host Corporation’s dedication and support of our organization and our community’s youth. We look forward to yet another productive season.

Ramirez Roofing Incorporated: President and owner Eddie Ramirez and wife Linda continued to be a large part of our charity program this past year. Ramirez Roofing provided $4,700 in corporate donations (label sponsorships) as well as $1,500 in purchases of the EKC water. Their support paved the way to continue our Annual Christmas Party for Children of Single Parents, 5th Annual Celebrity Golf Tournament, and again joined Crown Press as the first ever Water Label Charity Partners. We greatly appreciate the dedication that both Eddie and Linda provided not only to our program but to other youth organizations as well. They are definitely heroes of our community.

WB61 and Channel 3: This past year, WB61 and Channel 3 provided a great deal of public information broadcasting for our various events. They also sponsored the EKC Arizona Water Label. Thanks again for your support.

Arizona Major League Baseball Alumni Association: Many of the members have been very generous in their support of our organization. For the past five years they have been involved in all of our golf tournaments, they have donated funds to help Carl Hayden Community High School and memorabilia and financial assistance for our fund raising events. A special thanks to Lou Klimchock, JayD Schlueter, Robin Yount, Bert Campaneris, Ethan Blackaby, Jim Cox, Jim Umbarger, Ken Rudolph, Byron Browne and many others. We appreciate their dedication and support to our community’s youth.

Every Kid Counts, Inc., would like to also acknowledge other sponsors and contributors who have faithfully assisted us in the past year and, whether large or small, it made a difference:

Yoshi’s Restaurant

For any questions please contact us at(480) 248-6753 or email us at: everykidcounts1994@msn.com

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