W3 Group, Inc.
444 Madison Avenue, Suite 1710
New York, NY 10022
(212) 317-0060 (212) 750-2326 fax
By EDGAR
May 4, 2001
Securities and Exchange Commission
Division of Corporation Finance
450 5th Street NW
Washington, DC 20549
Re: W3 Group, Inc.
Form 10-KSB/A
Dear Sirs and Ladies:
W3 Group, Inc. hereby files Form 10-KSB/A with a new audit report
covering financial statements containing a minor adjustment resulting in
a decrease of $8,908 in stockholders' equity.
Please advise the undersigned by telephone or fax if there are any
questions regarding this
filing.
Yours sincerely,
W3 GROUP, INC.
/s/ Robert Gordon
Robert Gordon
Executive Vice President
RG:gl
enc.
SECURITIES & EXCHANGE COMMISSION
Washington, D.C., 20549
__________________________
FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
of the Securities Exchange Act of 1934
__________________________
For the Fiscal Year Ended December 31, 2000
Commission File Number: 0-27083
W3 GROUP, INC.
(Exact name of Registrant as specified in its Charter)
Colorado 84-1108035
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Ident. Number)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of principal executive offices) (zip code)
(212) 317-0060
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class Name of
each exchange on
which registered
Common Stock, no par value None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months
(or for such shorter period that the Registrant was required to file such
reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
_X_ No __
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation
S-K (Sec. 229.405 of this chapter) is not contained herein, and will not
be contained, to the
best of registrant's knowledge, in definitive proxy or information
statements incorporated
by reference in Part III of this Form 10-K [ ]
Indicate the number of shares outstanding of each of issuer's classes of
common stock, as of
the latest practicable date. At March 30, 2001, 3,888,435 shares of
Common Stock, no par
value were outstanding; at December 31, 2000, 3,844,935 shares , no par
value, outstanding.
The aggregate market value of the voting stock held by non-affiliates of
registrant on March
30, 2001 was $131,309.
FORM 10-KSB/A
December 31, 2000
W3 GROUP, INC.
TABLE OF CONTENTS
Item
No. Description
Page
PART I
1. Business 3
2. Properties 4
3. Legal Proceedings
5
4. Submission of Matters to a Vote of Security Holders 5
PART II
5. Market for Registrant's Common Equity and Related
Stockholder Matters 5
6. Selected Financial Data 6
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
8. Financial Statements 8
9. Disagreements on Accounting and Financial Disclosure 23
PART III
10. Directors and Executive Officers of the Registrant 23
11. Executive Compensation 24
12. Security Ownership of Certain Beneficial Owners
and Management 24
13. Certain Relationships and Related Transactions 25
PART IV
14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 26
Signatures 26
FORM 10-KSB/A
W3 GROUP, INC.
December 31, 2000
PART I
ITEM 1. BUSINESS: Introduction
W3 Group, Inc. ("Registrant" or the "Company" or "W3") was formed in 1988
under the laws of the state of Colorado for the purpose of participating,
either through acquisition or merger, in a viable business opportunity.
Registrant has since its inception been evaluating various privately held
companies which management believed could be viable business
opportunities.
On September 23, 1996, the Company, then named Concorde Strategies Group,
Inc., entered into an Agreement and Plan of Reorganization pursuant to
which it acquired 100 percent of the issued and outstanding capital stock
of Concorde Management, Ltd. ("CML") and its wholly owned subsidiary,
L'Abbigliamento, Ltd. This acquisition was concluded as of July 1, 1997.
L'Abbigliamento, Ltd., a New York based distributor of Italian made men's
apparel, was later divested by the Company, effective March 31,1999, as
described below.
In the beginning of 1999, the Company decided to reorganize and focus its
acquisition efforts on Internet related technology companies. The
Internet industry is going through fundamental and rapid changes as
technology advances, providing significant business growth opportunities.
The emergence of the Internet into homes and offices has provided a
powerful new mechanism for areas such as electronic commerce,
communication via E mail, and the dissemination of information.
Reorganization of Business Operations
In regard to the Company's changed business focus, an Agreement and Plan
of Share Exchange was entered into with W3 Group, Inc., a privately held
company, and after approval by shareholders, said Agreement became
effective on October 1, 1999 (Refer to Form 8-K filed on October 15,
1999). At that time, the Company changed its corporation name to W3
Group, Inc. Also, as part of the reorganization, the Company divested its
subsidiary, L'Abbigliamento, Ltd., which resumed operations as an
independent public company ( See "Note 8- DIVESTITURE OF SUBSIDIARY").
The Company also effected a reverse split of its Common Stock on the
basis of one new share for each 30 existing shares, after which 3,275,000
new shares (post reverse split) of Common Stock were issued to W3
shareholders in exchange for 100 percent of the capital stock of W3
Group, Inc. The Agreement and Plan of Share Exchange transaction was
intended to qualify as a tax free "reorganization" within the meaning of
Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended.
The reverse split of the Company's Common Stock included a special
distribution, post split, of Common Stock Purchase Warrants ("Common
Warrants") to all holders of all classes of capital stock as of the close
of business on September 30, 1999. These Common Warrants each represent
the right to purchase one share of Common Stock at a price of $6.00 per
share until
October 1, 2001 (Refer to Form 8-K filed on October 15, 1999 for
additional information
regarding the Common Warrants).
Present Operations
W3 intends to acquire, finance, and restructure profitable companies that
can utilize the Internet to expand their business and distribution
channel. These companies would become wholly owned, or majority owned,
subsidiaries of W3. W3's plan is based on analysis and evaluation of the
current industry environment, trends, and perceived opportunities in
certain industries within the Internet. W3 intends to focus on existing
companies that have proven markets, profitability, and management. The
Company's goal is to provide a platform for selected companies to expand
their markets via use of the Internet, strengthen internal functions by
providing consulting services and professional management support, and
expansion capital, while allowing the companies to continue management of
daily operations.
W3's objective is to better meet the needs of growing companies that may
have had difficulty obtaining capital from traditional sources such as
banks, large asset based lenders, and the public securities markets.
Also, W3 believes that its opportunity is enhanced because of the
consolidation in the commercial banking industry and the emphasis in
investment banking toward increasingly larger financings. The resulting
diminishing of available capital has affected the flow to smaller
companies, where the need for capital is the most critical.
W3's approach is to develop "partnerships" with companies having
exceptional management in order to improve the long term value of a
business. The participation of management through equity based
compensation and stock ownership is a crucial ingredient of W3's plan.
As described in the preceding section, "Reorganization of Business
Operations", as a result of the divestiture of L'Abbigliamento, Ltd.,
effective March 31, 1999, the Company essentially has not had any
business operations since that time, pending the completion of future
acquisitions, of which there can be no assurance.
Regulation
Although the Company's planned operations are not subject to any
regulations governing the Internet, services which are provided via the
Internet or the companies which provide such services, it is likely that,
in the future, such regulations will be instituted. Although it is not
possible to predict the extent of any such future regulations, and
although management is not aware of any pending regulations which would
be applicable to its planned business operations, it is possible that
future or unforseen changes may have an adverse impact upon the Company's
ability to continue or expand its operations as presently planned.
The extent of such regulations is impossible to predict, as it is the
potential impact upon the business operations of the Company in
accordance with its business plan.
Competition
The Registrant is, and is expected to remain, an insignificant entity
among a great many other companies who are engaged in mergers and
acquisitions of other business entities. There are many established
venture capital and financial concerns seeking to attract merger
or acquisition candidates, virtually all of which have significantly
greater financial and personnel resources and technical expertise than
the Registrant.
The Internet marketplace is new, rapidly evolving and highly competitive,
and it is expected that this competition will persist and intensify in
the future, New competitors may emerge and rapidly acquire significant
market share. Competitors may be able to respond more quickly than the
Company to new or emerging technologies and changes in the marketplace.
ITEM 2. PROPERTIES
Facilities
The Company utilizes the offices and business facilities of Ameristar
Group Incorporated ("Ameristar"), a privately held corporation
principally owned and controlled by two Directors of the Company, at a
current monthly rental of $4,061 ( See "Note 5- LEASES AND OTHER
COMMITMENTS").
Employees
The Company's employees consist of its officers. The one outside Director
is engaged in other business activities and devotes so much of his time
to the affairs of the Company as is required.
ITEM 3. LEGAL PROCEEDINGS
The Company knows of no litigation pending, threatened or contemplated,
or unsatisfied judgments against it, or any proceedings in which the
Company is a party. The Company also knows of no legal action pending or
threatened or judgments entered against any officers or directors of the
Company in their capacity as such.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A special meeting of shareholders was held on January 18, 2000. Reference
is made to Schedule 14A, Notice of Special Meeting of Shareholders, and
Proxy Statement filed on November 24, 1999 and Form 8-K filed on January
24, 2000. This special meeting of shareholders did not involve the
election of directors. The only matter voted on, which was approved by
shareholders, was to amend the issuer's Articles of Incorporation to
adjust the conversion right of the Series B Convertible Preferred Stock
from an amount equal to .0416 shares to an amount equal to .5 (one half)
share of Common Stock for each one share of Series B Convertible
Preferred Stock. A total of 2,823,942 votes were cast for this proposal,
50,156 votes against, 6,220 abstentions, and 7,830 broker non-votes.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock trades under the symbol "WWWG" and the Series
B Convertible Preferred Stock trades under the symbol "WWWGP" on the OTC
Electronic Bulletin Board. The number of record shareholders on December
31, 2000 for the Company's Common Stock was 389 and for its Series B
Convertible Preferred Stock was 24 shareholders. There currently are 10
market makers for the Company's Common Stock and 8 market makers for its
Series B Convertible Preferred Stock.
The following tables show for the periods indicated the range of high and
low bid quotes for the Common Stock and Series B Convertible Preferred
Shares obtained from the OTC Electronic Bulletin Board and are between
dealers, do not include retail mark-ups, mark-downs, or other fees or
commissions, and may not necessarily represent actual transactions.
COMMON STOCK TRADING HISTORY
Fiscal 1999
Quarter ended March 31, 1999 $0.6250 $0.0400
Quarter ended June 30, 1999 $0.5000 $0.1563
Quarter ended September 30, 1999 $0.3125 $0.1000
Quarter ended December 31, 1999 $9.5000 $1.2500
Fiscal 2000
Quarter ended March 31, 2000 $8.5000 $1.5000
Quarter ended June 30, 2000 $1.5000 $0.7500
Quarter ended September 30, 2000 $1.2500 $0.2500
Quarter ended December 31, 2000 $1.2500 $0.3750
SERIES B CONVERTIBLE PREFERRED SHARE TRADING HISTORY
Fiscal 1999
Quarter ended March 31, 1999 $6.0625 $1.5500
Quarter ended June 30, 1999 $6.1250 $2.0625
Quarter ended September 30, 1999 $6.3125 $1.0625
Quarter ended December 31, 1999 $3.0000 $0.9375
Fiscal 2000
Quarter ended March 31, 2000 $2.1250 $0.5000
Quarter ended June 30, 2000 $0.7000 $0.1875
Quarter ended September 30, 2000 $0.1875 $0.0625
Quarter ended December 31, 2000 $0.1250 $0.0625
The Company has not paid any dividends and, there are no plans to pay any
cash dividends in the foreseeable future. The declaration and payment of
dividends in the future, of which there can be no assurance, is
determined by the Board of Directors based upon conditions then existing.
There are no restrictions on the Company's ability to pay dividends.
ITEM 6. SELECTED FINANCIAL INFORMATION
Summary Balance Sheet Data: YEAR ENDED DECEMBER 31,
2000 1999 1998 1997
Total Assets $ 440,375 $ 247,263 $3,598,222 $3,440,634
Total Current Assets 439,656 228,136 3,454,374 3,341,282
Total Liabilities 421,915 287,780 2,041,520 2,276,451
Retained Earnings (Deficit)(1,953,882) (1,650,359) (263,995) (111,164)
Stockholders' Equity $ 18,460 $ (40,517) $1,556,702 $1,164,183
Summary Earnings Data: YEAR ENDED DECEMBER 31,
2000 1999 1998 1997
Revenues $ 0 $ 837,486 $3,845,393 $1,827,502
Cost of goods sold 0 595,713 3,043,546 1,419,701
Selling, general &
administrative expense 327,398 1,124,623 899,077 495,162
Income (loss) from operations(327,398) (882,850) (97,230) (87,361)
Net Income (Loss) (312,431) (869,904) (152,831) (100,361)
Earnings (Loss) per Share (.085) (.91) ( 1.32)* (1.64)*
* Adjusted for reverse split of Common Stock on October 1, 1999, on 1-30
basis.
The foregoing is selected financial information only, and is qualified by
the financial statements and the notes thereto, in their entirety, which
are set forth elsewhere in this Report. The selected financial
information for 1997 includes the results of the Company's subsidiary,
L'Abbigliamento, Ltd. from July 1, 1997, the effective date of the
acquisition. The 1999 totals include the results of L'Abbigliamento, Ltd.
for the first quarter only since the subsidiary was divested effective
March 31, 1999 (See Item 7).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Investors and shareholders should bear in mind that the Company's only
operating subsidiary was fully divested effective March 31, 1999, the end
of the first quarter of fiscal 1999.
For the prior year ended December 31, 1999, consolidated results include
the results of operations of the Company's former subsidiary,
L'Abbigliamento, Ltd., for the three month period ended March 31, 1999,
the effective date of the divestiture of the Subsidiary.
The Company did not have any business operations during the year 2000. In
1999, the sales of $837,486 occurred during the first quarter from
operation of L"Abbigliamento, Ltd., as well as the gross profit realized
of $241,773, after cost of sales of $595,713.
Operating expenses for 2000 were $325,105 compared to $1,124,623 in 1999,
which included $199,428 for the operation of L'Abbigliamento, Ltd. Not
including L'Abbigliamento, Ltd., operating expenses in 2000 decreased
$600,900 from the prior year, resulting primarily from decreased
consulting fees for services performed.
The net loss for the twelve month period ended December 31, 2000 was
$325,105 compared to a net loss of $912,249, not including
L'Abbigliamento, Ltd., for the prior year period, a decrease of
$587,144, reflecting the decreased consulting expenses.
The total cash and cash equivalents at December 31, 2000 totaled $120,
compared to $60,826 at December 31, 1999. Accounts payable at December
31, 2000 totaled $201,641, which represents the Company's normal business
overhead expenses and consulting services.
The Company is continuing to look for suitable acquisition candidates in
its new area of concentration, to wit, Internet technology and related
companies. As of the date of this Report, no additional acquisition
candidates have been found, and there is no assurance that any additional
candidates will be found.
Liquidity and Capital Resources
At the end of fiscal 2000, the Company had an insignificant amount of
cash totaling $120. There is no assurance that the Company will be able
to raise the amount of cash required for working capital purposes.
Year 2000 Compliance
The Company has not experienced any problems to date as a result of the
Year 2000 issue. Although the change in date to the year 2000 has
occurred, no assurance can be made that all aspects of the Year 2000
issue that may affect the Company including those related to suppliers,
or third parties, have been fully resolved. As of the date of this
report, no additional costs have been incurred by the Company resulting
from the Year 2000 issue.
General Risk Factors Affecting the Company and its Subsidiary
Various factors could cause actual results of the Company to differ
materially from those indicated by forward-looking statements made from
time to time in news releases, reports, proxy statements, registration
statements and other written communications (including the preceding
sections of this document), as well as oral statements made from time to
time by representatives of the Company. Except for historical
information, matters discussed in such oral and written communications
are forward-looking statements that involve risks and uncertainties,
including, but not limited to the following:
Continued growth, use, and acceptance of the Internet as a business
medium, and development of the required infrastructure to support
Internet growth.
Rapidly changing technology.
Intense competition within the Internet marketplace.
Many well established companies and smaller entrepreneurial
companies have significant
resources that will compete with the Company's limited resources in
the acquisition of
Internet technology companies.
There can be no assurance that the Company will be able to compete
successfully in the
acquisition of subsidiary companies.
The management of growth is expected to place significant pressure
on the Company's
managerial, operational, and financial resources.
The Company will not be able to accomplish its growth strategy if it
is not able to
consummate future acquisitions and raise capital.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements:
For the Years Ended December 31, 2000 and 1999: Reference
Report of Janet Loss, C.P.A., P.C., Independent
Certified Public Accountant F-9
Report of Jay Fox, C.P.A., Independent Certified Public Accountant F-10
Financial Statements:
Balance Sheet and Consolidated Balance Sheet F-11,
12
Statement of Operations and Consolidated Statement
Of Operations F-13
Statement of Cash Flows and Consolidated Statement
Of Cash Flows F-14
Statement of Stockholder's Equity and Consolidated Statement
Of Stockholders' Equity F-15,
16
Notes to Financial Statements F-17,
18, 19, 20,
21, 22
Janet Loss, C.P.A., P.C.
Certified Public Accountant
1780 S Bellaire Drive, Suite 500
Denver, Colorado 80222
Board of Directors
W3 Group, Inc.
(Formerly Known as W3 Group, Inc. and Subsidiary)
444 Madison Avenue, Suite 1710
New York, New York 10022
I have audited the accompanying balance sheet of W3 Group, Inc. as of
December 31, 2000 and
the consolidated balance sheet of W3 Group, Inc. and Subsidiary as of
December 31, 1999 and
the related statement and consolidated statements of income, changes in
stockholders' equity
and cash flows for the years ended December 31, 2000 and 1999. The
above-mentioned
financial
statements are the responsibility of the Company's management. My
responsibility is to
express an opinion on the financial statements at December 31, 2000 and
the consolidated
financial statements at December 31, 1999 based on my audits. I did not
audit the statements
of Company's former subsidiary, L'Abbigliamento, Ltd., as of March 31,
1999 and the related
statements of income, changes in stockholders' equity and cash flows for
the three months
ended March 31, 1999. (See Note 1) The former subsidiary's statements
reflect total revenues
of $837,486 for the three months ended March 31, 1999. The subsidiary's
financial statements
are included in the consolidated financial statements of W3 Group, Inc.
and Subsidiary until
the completion of the divestiture of L'Abbigliamento, Ltd. at March 31,
1999. The
subsidiary's financial statements were audited by other auditors whose
report has been
furnished to me, and my opinion in so far as it relates to the comments
of the subsidiary is
based solely on the report of such other auditors.
I conducted my audits in accordance with generally accepted accounting
standards. These
standards require that I plan and perform the audit 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. I believe that my audit provides a reasonable basis for my
opinion.
In my opinion, based upon my audit and the report of other auditors the
financial statements
at December 31, 2000 and the consolidated financial statements at
December 31, 1999 referred
to above present fairly, in all material respects, the financial position
of W3 Group, Inc.
and W3 Group, Inc. and Subsidiary as of December 31, 2000 and 1999, and
the results of their
operations and their cash flows for the years ended December 31, 2000 and
1999 in conformity
with generally accepted accounting principles.
/s/Janet Loss
Janet Loss, C.P.A., P.C.
May 3, 2001
JAY FOX, C.P.A.
4315 AUSTIN BLVD.
ISLAND PARK, NY 11558
July 6, 1999
To the Board of Directors and Shareholders
L'Abbigliamento, Ltd. and Vista International Ltd.:
We have audited the accompanying consolidated balance sheet of
L'Abbigliamento, Ltd. and
Vista International ltd. as of March 31, 1999, and the related
statements of income,
retained earnings and cash flow for the three months then ended. These
consolidated
financial statements are the responsibility of the Company's management.
Our responsibility
is to express an opinion on the financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material
aspects, the financial position of L'Abbigliamento, Ltd.
and Vista International Ltd. as of March 31, 1999, and the results of
its operations and its cash flows for the three months then ended in
conformity with
generally accepted accounting principles.
/s/ Jay Fox
Jay Fox, C.P.A.
W3 GROUP, INC.
(Formerly W3 Group, Inc. and Subsidiary)
BALANCE SHEET AND CONSOLIDATED BALANCE SHEET
DECEMBER 31, 2000 AND 1999
2000 1999
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 120 $ 60,826
Prepaid Expenses 257,813 0
Loan Receivable (Note 8 and 10) 157,522 157,522
Interest Receivable (Note 8 and 10) 14,191 4,740
Rent Receivable 1,102 5,048
TOTAL CURRENT ASSETS: $ 430,748 $ 228,136
Fixed assets, net of accumulated
depreciation of 1,777 and $1,298 $ 719 $ 1,198
Deferred Offering Costs $ 0 17,929
TOTAL ASSETS $ 431,467 $ 247,263
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
2000 1999
CURRENT LIABILITIES:
Accounts payable $ 201,641 $ 138,307
Accrued interest 6,654 1,854
Stockholders' loans 40,000 40,000
Due to Ameristar
Capital Corporation $ 173,620 $ 107,619
TOTAL CURRENT LIABILITIES $ 421,915 $ 287,780
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value,
100,000,000 shares authorized. 0 0
Series A Convertible, redeemable
Preferred, 0 and 1,000 shares issued
at December 31, 2000 and 1999 0 0
Series B Convertible, non-dividend
bearing, 793,360 and 1,056,000
shares issued and outstanding $ 594,560 $ 791,383
Series B Convertible Preferred
Stock Purchase Warrants issued $ 325,600 $ 325,600
and outstanding
Common stock, no par value,
500,000,000 shares authorized,
3,844,935 and 3,413,582 shares
issued and outstanding as of $ 1,017,557 $ 408,234
December 31, 2000 and 1999
Common stock issuable 0 50,000
Additional paid-in-capital 34,625 34,625
Retained earnings(Deficit) (1,962,790) (1,650,359)
TOTAL STOCKHOLDERS' EQUITY 9,552 (40,517)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 431,467 $ 247,263
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
(Formerly W3 GROUP, INC. And Subsidiary)
STATEMENT OF OPERATIONS AND CONSOLIDATED STATEMENT OF
OPERATIONS
For the Years Ended December 31, 2000 and 1999
December 31, 2000 December 31, 1999
REVENUES
Sales $ 0 $ 837,486
COST OF GOODS SOLD 0 595,713
GROSS PROFIT: 0 $ 241,773
OPERATING EXPENSES:
L'Abbigliamento Expenses $ 0 $ 199,428
Consulting 206,688 789,909
Depreciation and amortization 479 3,695
Insurance 2,393 20,430
Office 5,639 6,378
Legal and Accounting 28,102 27,138
Rent 47,751 58,052
Transfer and filing fees 2,783 8,243
Marketing 33,563 11,350
TOTAL OPERATING EXPENSES 327,398 1,124,623
(LOSS) FROM OPERATIONS (327,398) (882,850)
OTHER INCOME AND (EXPENSES):
INTEREST INCOME 9,451 8,722
INTEREST (EXPENSE) (4,800) 0
EQUIPMENT RENTAL 0 5,048
FORGIVENESS OF DEBT 11,005 0
TOTAL OTHER INCOME AND (EXPENSES) 15,656 13,770
NET (LOSS) BEFORE
PROVISION FOR INCOME TAXES (311,742) (869,080)
PROVISION FOR INCOME TAXES 689 824
NET (LOSS) $ (312,431) $(869,904)
NET (LOSS PER SHARE) $ (.085) $ (0.91)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,681,357 945,618*
*Adjusted for October 1, 1999 reverse split on shares, 1-30 basis.
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
(Formerly W3 GROUP, INC. And Subsidiary)
CASH FLOW STATEMENT AND CONSOLIDATED CASH FLOW STATEMENT
For the Years Ended December 31, 2000 and 1999
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (312,431) $ (869,904)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Depreciation and amortization 479 3,695
Decrease in accounts receivable 0 1,361,173
Decrease (Increase)in inventory 0 2,014,517
Decrease (Increase)in prepaid expenses (257,813) 76,347
Decrease in Security Deposits 0 40,500
(Increase) in Loan Receivable 0 (157,522)
(Increase) in Interest Receivable (9,451) (4,740)
(Increase) in Rent Receivable 3,946 (5,048)
(Increase) in Deferred Offering Costs 17,929 (17,929)
(Decrease)Increase in payables 134,135 (1,116,678)
Increase(Decrease)in corporate income
taxes payable $ 0 $ (63,147)
Cash Used by Operating Activities $ (423,206) $1,261,264
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease (Increase) in fixed assets 0 41,139
Increase in Leasehold Improvements 0 57,317
Divestiture of Subsidiary 0 (516,460)
Net Cash used in investing activities 0 (418,004)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance
of preferred stock & warrants 0 582,000
Proceeds and (Return) of Common
Stock Issuable (50,000) 50,000
Proceeds from Issuance of Common
Stock and conversion of Preferred
Stock to Common Stock 532,025 100,395
Decrease in Preferred Stock due to
Conversion to Common Stock (119,525) 0
(Decrease) in additional Paid-in
Capital 0 (943,250)
Increase(Decrease)in amounts
due to factor 0 (394,185)
Repayment of bank and other loans 0 (219,731)
Increase in Stockholders'loans 0 40,000
Net cash provided (used) by
financing activities 362,500 (784,771)
Net Increase (Decrease)in Cash $ (60,706) $ 58,489
CASH, BEGINNING OF THE PERIOD $ 60,826 $ 2,337
CASH, END OF THE PERIOD $ 120 $ 60,826
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
(Formerly W3 GROUP, INC. AND SUBSIDIARY)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) and
Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2000
and 1999
Preferred Series B
Stock Non- Convertible
Dividend Preferred Common Total
Bearing Stock Stock Common Common Additional
Stockholders'
Series B Purchase Number of Stock Stock Paid-in
Deficit Equity
Convertible Warrants Shares Amount Issuable Capital
Accumulated (deficit)
Balance,
January 1, 1999 $209,383 $325,600 3,600,000 $307,839 -- $ 977,875 $(263,995)
$ 1,556,702
April 1, 1999 Divestiture
of Subsidiary,
L'Abbigliamento, Ltd.
(Note 12) $ (976,000)$(516,460)$(1,492,460)
175,000 shares of Series
B Convertible Preferred
Stock issued for services
April 1, 1999 $350,000 $ 350,000
May 21, 1999 199,995
shares issued for
consulting services 199,995 $ 64,995 $ 64,995
116,000 shares of Series
B Convertible Preferred
issued for services,
September 30, 1999 $232,000 $ 232,000
1-30 reverse split on
October 1, 1999 (3,673,213)
October 1, 1999, issuance
of 3,275,000 shares, post
reverse split, for
acquisition of W3 Group,
Inc. (Note 13) 3,275,000 $ 32,750 32,750
October 16, 1999 Issues
to original private
placements investors 11,800 $ 35,400 35,400
Cash received for private
placement, December 1999
Net loss for the year
ended December 31, 1999 -- -- -- -- -- $ (869,904) $ (869,904)
Balance, December 31,
1999 $ 791,383 $325.600 3,413,582 $408,234 50,000 $ 34,625 1,650,359) $(40,517)
2000
25,812 shares of Series B
converted to Common Stock
(first quarter) $ (19,344) 13,317 $ 19,344
300,000 shares issued for
consulting services on
April 27, 2000 300,000 $412,500 $ 412,500
Return of Private
Placement Proceeds on
May 3, 2000 (50,000) (50,000)
190,428 shares of Series
B Convertible Preferred
Stock converted to Common
Stock (second quarter)$(142,707) 94,836 $142,707
6,400 shares of Series B
Convertible Preferred
Stock converted to Common
Stock (third quarter) $ (4,796) 3,200 $ 4,796
40,000 shares of Series B
Convertible Preferred
Stock converted to Common
Stock (fourth quarter) $ (29,976) 20,000 $ 29,976
Net Loss for the year
ended December 31, 2000 (312,431) (312,431)
Balance, December 31,
2000 $594,560 $325,600 3,844,935 $1,017,557 0 $ 34,625 (1,962,790) $ 9,552
W3 GROUP, INC.
(Formerly W3 GROUP, INC. AND SUBSIDIARY)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED DECEMBER 31, 2000
Note 1 - ORGANIZATION AND HISTORY
The Company is a Colorado corporation and had been in the development
stage since its
formation on February 12, 1988. The Company was formed to seek potential
business
acquisitions and its activities since inception are primarily related to
its initial public
offering and merger activities.
Upon the completion of the acquisition of Concorde Management, Ltd. and
its wholly owned
subsidiary, L'Abbigliamento, Ltd., the Company had ceased being a
development stage company.
This acquisition was effective July 1, 1997.
L'Abbigliamento, Ltd. is a New York State corporation which was
incorporated in March,
1992. L'Abbigliamento, Ltd. commenced operations in August of 1992 as an
importer of fine
men's clothing. In October of 1995 Vista International Ltd.,
incorporated in the Cayman
Islands, was organized to acquire raw material and to sell finished goods
to areas outside
the United States. Effective July 1, 1997 L'Abbigliamento, Ltd. and
Vista International
Ltd. were acquired through an exchange of stock by Concorde Strategies
Group, Inc. As a
result of the Company's changed focus, an agreement for the divestiture
of L'Abbigliamento,
Ltd. effective March 31, 1999, was approved by shareholders on August
12, 1999 (See Note
8), and the divestiture was completed.
On April 21, 1999, the Company entered into an Agreement and Plan of
Share Exchange with W3
Group, Inc. a Delaware corporation which was formed to acquire and
develop young companies
whose businesses involve the development of Internet related technology
and applications.
Effective October 1, 1999, the Agreement was completed and the Company
changed its name to
W3 Group, Inc. (See Note 9).
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, cash on deposit and
highly liquid
investments with maturities generally of three months or less.
Deferred Offering Costs
Costs associated with the Company's private offerings have been charged
to the proceeds of
the offering. If the offerings are unsuccessful, the costs will be
charged to operations.
Sales and expenses
Sales and expenses are recorded using the accrual basis of accounting.
Fixed assets and accumulated depreciation
Fixed assets consist of a computer system and are stated at cost less
accumulated
depreciation which is provided for by charges to operations over the
estimated useful lives
of the assets.
Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting
principles requires management to make estimates and assumptions that
affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the
date of the financial statements and revenues and expenses during the
reporting period.
Actual results could differ from those estimates.
Note 3 - CAPITALIZATION
In April 1996, the Company undertook a private placement of its
securities pursuant to the
provisions of Rule 504 under Regulation D under the Securities Act of
1933, as amended,
whereby it issued 9,000,000 shares of its Common Stock in exchange for
the satisfaction of
$45,000 in debts owed by the Registrant. Also in April 1996, the Company
effected a 1-for-10
reverse split of its common stock as the result of which the Company had,
following the
aforesaid private offering, 1,200,000 shares issued and outstanding. This
reverse split was
effected in anticipation of management's renewed efforts to find a
suitable business
opportunity for the Company.
In June, 1997 the Company issued 300,000 shares of common stock to
certain parties who had
performed services on behalf of the Company. The shares were issued in
consideration for
the cancellation of payments owed by the Company at the agreed upon rate
of $.10 per share
and were sold through a Private Placement pursuant to the exemption
provided by Rule 504 of
Regulation D under the Securities Act of 1933, as amended.
On October 24, 1997, the Company completed a Private Placement Offering
of 450,000 non
dividend bearing, no par value, Series B Convertible Preferred Shares.
All of the shares
were sold by the Company and no Placement Agent was involved in this
Offering. The shares
were sold at a purchase price of $.3125 per share and the Company
realized proceeds of
$130,633 from the Offering, net of offering expenses in the amount of
$9,992. The shares
were sold through a Private Placement pursuant to the exemption provided
by Rule 504 of
Regulation D under the Securities Act of 1933, as amended. Each
Preferred Share is
convertible into one and one quarter (1.25) shares of the Company's
Common Stock, no par
value, at the election of the Preferred Shareholder at any time after
thirteen months from
the date of issuance thereof and for a period of four years thereafter.
On January 7, 1998, the Company issued 315,000 shares of Series B
Convertible Preferred
shares to certain parties who had performed services on behalf of the
Company, including two
companies which are principally owned by two Directors of the Company.
The shares were
issued by the Company in consideration for the cancellation of debt owed
by the Company at
the agreed upon rate of $.25 per share and were sold through a Private
Placement pursuant
to the exemption provided by Rule 504 of Regulation D under the
Securities Act of 1933, as
amended.
On June 22, 1998, the registrant issued 300,000 shares of Common Stock to
a company which
has performed services on behalf of the registrant. The shares were
issued pursuant to an
option in the Consulting Agreement to pay for the consulting fees through
the issuance of
restricted shares of Common Stock at the agreed upon rate of $.47 per
share.
On August 12, 1998, the Company completed a Private Placement of 337,600
Series B Convertible
Preferred Stock Purchase Warrants. All of the Warrants were sold by the
Company and no
Placement Agent was involved in this Offering. The Warrants were sold at
a purchase price
of $1.00 per Warrant and the Company realized proceeds of $325,600 from
the Offering, net
of offering expenses in the amount of $12,000. The Warrants were sold
through a Private
Placement pursuant to the exemption provided by Rule 504 of Regulation D
under the Securities
Act of 1933, as amended. Each warrant entitles the holder thereof to
purchase one Series
B Convertible Preferred Share at a price of $3.00 per share during the
period commencing
thirteen months after the date of the issuance thereof and continuing
thirty (30) months
thereafter. The warrants are redeemable by the Company at any time after
thirteen months
after their issuance and prior to their expiration at a price of $0.05
per warrant, upon 30
days prior written notice, provided that the closing sale price of the
shares as reported
on the NASD Electronic Bulletin Board shall have been at least $4.80
(160% of the exercise
price of the warrants) on each of the 20 consecutive trading days ending
on the tenth day
prior to the day on which the notice of redemption is given.
On April 1, 1999, the Company sold 175,000 shares of Series B Convertible
Preferred stock
to certain parties who had performed services on behalf of the Company,
including one company
which is principally owned by a Director of the Company. The shares were
sold by the Company
in consideration for the cancellation of payments owed by the Company at
the agreed upon rate
of $2.00 per share and were sold through a Private Placement pursuant to
the exemption
provided by Rule 504 of Regulation D under the Securities Act of 1933, as
amended.
On May 21, 1999, 199,995 restricted shares of Common Stock were sold to a
principal of
L'Abbigliamento, Ltd. who had performed consulting services on behalf of
the registrant.
These shares were issued in October, 1999 in consideration for the
cancellation of payments
in the total amount of $64,995 owed by the registrant for said services.
In October, 1999, the Company issued 116,000 shares of the Series B
Convertible Preferred
Stock to three shareholders in satisfaction of a previously existing
obligation relating to
consulting services performed on behalf of the Company by an independent
third party.
Effective October 1, 1999, the Agreement and Plan of Share Exchange (the
"Agreement") with
W3 Group, Inc. a privately owned company, was completed. (See Note 13).
Under the terms of
this Agreement, Concorde acquired 100 percent of the capital stock of W3
Group, Inc. in
exchange for an equal number of shares (3,250,000) of Concorde's post
split Common Stock.
W3 Group, Inc, became a wholly owned subsidiary of Concorde, and Concorde
changed its
corporation name to W3 Group, Inc.
Also, on October 1, 1999, the reverse split of Concorde's Common Stock on
the basis of one
new share for each 30 existing shares was effected. The number of
outstanding shares of
Concorde's Series B Convertible Preferred Stick and Series B Convertible
Preferred stock
Purchase Warrants remained unchanged, however, the conversion feature has
been adjusted to
reflect the reverse split.
As per the Agreement, a special distribution of 520,056 Common Stock
Purchase Warrants was
made on October 4, 1999 to holders of the registrant's Common Stock,
Series B Convertible
Preferred Stock, and Series B Convertible Preferred Stock Purchase
Warrants. The special
distribution was made on the basis of one Common Stock Purchase Warrant
for each ten shares
of Common Stock (pre-reverse split) either outstanding as of September
30, 1999 or committed
to be issued upon conversion of the then outstanding Preferred shares, or
the currently
outstanding Warrants to purchase Preferred Shares. The Common Stock
Purchase Warrants are
callable and each represent the right to purchase one share of Common
Stock at a price of
$6.00 per share during the exercise period, which is from the date of
their issuance until
October 1, 2001.
On October 16, 1999, the Company issued 11,800 shares of Common Stock to
the original
investors in Series B Convertible Preferred Stock and Series B
Convertible Preferred Stock
Purchase Warrants to adjust for the effect of the Company's
restructuring.
At a special meeting of shareholders on January 18, 2000, shareholders
approved amending the
articles of incorporation to adjust the conversion right of the Series B
Convertible
Preferred Stock from an amount equal to 0.0416 shares to 0.5 (one half)
share of Common Stock
for each one share of Series B Convertible Preferred Stock. Series B
Convertible Preferred
Stock may be converted to Common Stock at the election of the shareholder
until October 14,
2002.
On April 27, 2000, the registrant issued 300,000 restricted shares of
Common Stock to a
former director of the Company in consideration for services being
performed on behalf of
the registrant. The shares were issued in lieu of cash payment at the
agreed upon rate of
$1.375 per share.
The Company withdrew its private placement offering which had commenced
on December 14, 1999,
and returned the private placement proceeds of $50,000 to the subscribers
on May 3, 2000.
Note 4 - PROVISION FOR TAXES ON INCOME
The estimated provision for income taxes are based on the statutory
federal and state income
tax rates. The State of New York does not allow a foreign company to
offset its income by
the parent company's losses.
Note 5 - LEASES AND OTHER COMMITMENTS
The parent company leases its premises from Ameristar, an affiliated
company, for the
following annual rent expenses.
(eleven months) November 1, 1997 thru September 30, 1998 $41,173
October 1, 1998 thru September 30, 1999 46,152
October 1, 1999 thru September 30, 2000 47,424
October 1, 2000 thru September 30, 2001 48,732
Total Rent Commitment
$183,481
Note 6 - RELATED PARTY TRANSACTIONS
The Company has received advances of monies for its operating expenses
from an affiliated
company, Ameristar Group Incorporated. W3 is leasing office space from
Ameristar on a monthly
rental, commencing on November 1, 1997 for a term of three years and
eleven (11) months.
(See Note 5)
The Company has incurred consulting fees of $184,833 to its Executive
Vice President, and
$45,000 to "Ameristar" (an affiliate corporation) since the beginning of
1996.
The Company has issued 200,000 shares of common stock to two related
privately owned
companies in consideration of $.10 per share for consulting services
performed on behalf of
the Company. (See Note 3. - Capitalization)
On January 7, 1998, the Company issued 315,000 shares of Series B
Convertible Preferred Stock
to certain parties who had performed services on behalf of the Company.
Of that total,
222,000 shares were issued to two related privately owned companies in
consideration of $.25
cents per share.
On June 22, 1998, the Registrant issued 300,000 shares of its Common
Stock to a company
principally owned by a Director of the Registrant in consideration of
$.47 per share for
consulting services performed on behalf of the Registrant. (See Note 3 -
Capitalization).
On April 1, 1999, the Registrant issued 71,666 of its preferred stock to
a company
principally owned by a Director of the Registrant in consideration of
$2.00 per share for
consulting services performed on behalf of the Registrant. (See Note 3
Capitalization).
On May 21, 1999, 199,995 restricted shares of common stock were sold to a
principal of
L'Abbigliamento, Ltd. who had performed consulting services on behalf of
the registrant.
These shares were issued in October, 1999 in consideration for the
cancellation of payments
in the total amount of $64,995 owed by the registrant for said services.
Note 7 - CONSOLIDATION OF FINANCIAL INFORMATION
The consolidated financial statements of the Company for the period ended
December 31, 1999
include the results of the acquisition of Concorde Management, Ltd. and
its wholly owned
subsidiary, L'Abbigliamento, Ltd., for the first quarter of 1999, prior
to the divestiture
of L'Abbigliamento, Ltd.
All material inter-company accounts and transactions have been
eliminated.
Due to the divestiture of the subsidiary, effective April 1, 1999, the
financial statements
from April 1, 1999 reflect financial data of the parent company and its
wholly owned
subsidiary, W3 Group, Inc. (Delaware) only.
Note 8 - DIVESTITURE OF SUBSIDIARY
A Termination Agreement was executed on May 5, 1999, for the divestiture
of L'Abbigliamento,
Ltd., the Company's sole operating subsidiary and was ratified by
shareholders on August 12,
1999. Under the terms of the Agreement, (1) management of both companies
mutually elected
to rescind and cancel the acquisition of L'Abbigliamento, Ltd. by the
Company, effective as
of the close of business on March 31, 1999; (2) L'Abbigliamento, Ltd.
returned to the
Company 100 percent of the Class A Preferred Shares in exchange for which
the Company
delivered 100 percent of the L'Abbigliamento, Ltd. capital stock held by
it; (3)
L'Abbigliamento, Ltd. will repay its outstanding indebtedness to the
Company in the
principal amount of $158,000 in five equal monthly payments of $1,300,
plus 55 monthly
payments of $1,700, which payments shall be inclusive of interest at the
rate of six percent
per annum, to be followed by a final payment at the end of aforesaid term
equal to the sum
of any accrued but unpaid interest due thereon plus the entire unpaid
principal amount; (4)
subsequent to the period covered by this report, on January 10, 2001,
L'Abbigliamento, Ltd.
paid off the balance due on its loan from State Bank of Long Island,
ending the Company's
liability for said loan pursuant to a guarantee of payment previously
made by the Company.
Note 9 - MERGER AND ACQUISITIONS
On April 21, 1999, the Company entered into an Agreement and Plan of
Share Exchange with W3
Group, Inc., which was approved by shareholders on August 12, 1999,
whereby Concorde acquired
100 percent of the Common Stock of W3 Group, Inc. in exchange for the
issuance of 3,275,000
shares of post reverse split Common Stock of Concorde Strategies Group,
Inc., at the rate
of one Concorde Share for one W3 Share. Upon completion of the exchange
of shares, effective
October 1, 1999, W3 Group, Inc. became a wholly owned subsidiary of
Concorde and Concorde
amended its Articles of Incorporation to change its corporation name to
W3 Group, Inc.
Concorde conducted a meeting of shareholders on August 12, 1999 to ratify
the Agreement and
certain other matters which had been approved by its Board of Directors.
Note 10 - LOAN RECEIVABLE
L'Abbigliamento, Ltd., the Company's former subsidiary, is in default
with its payment
obligations to repay the Company the principal amount of $157,522.
Management believes that
the loan will be repaid but does not know when payments will commence.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the Company are as follows:
NAME Age POSITION(S) HELD
Robert Gordon
65
Executive Vice President
Martin I. Saposnick
54
Director of Corporate Development and Director
Joseph J. Messina
46
Director
William C. Hayde
40
Secretary, Director
Profiles of the directors and officers of the Company are set forth
below. All directors hold
office until the next annual shareholders meeting or until their death,
resignation,
retirement, removal, disqualification or until their successors have been
elected and
qualified. Vacancies in the Board may be filled by majority vote of the
remaining directors.
Officers of the Company serve at the will of the Board of Directors.
There is no Executive
Committee or other committee of the Board of Directors. Election to the
Board of Directors
is for a period of one year or until the next shareholder's meeting and
elections are
ordinarily held at the Company's Annual Meeting of Shareholders. There
are no family
relationships among officers and directors.
Profiles of Officers and Directors
Robert Gordon is Acting President and Executive Vice President. From
1996-1999, Mr. Gordon
was President and a Director of Concorde Strategies Group, Inc. and from
1993-1996, Executive
Vice President of Contex, Inc., an investment banking and consulting firm
in Naples, Florida.
From 1990-1993, as Managing Director of a specialty apparel company, he
was responsible for
marketing and sales, finance, manufacturing, retail and mail order
operations, MIS, strategic
planning, organizational development, and re-structuring the business.
From 1988-1989, Mr.
Gordon was President and Chief Operating Officer of a public company that
manufactured
precision parts, performed engineering design services, and conducted
technology research
and development. Previously, he was Executive Vice President of a
financial services firm,
responsible for administration, business operations, and organizational
development. Mr.
Gordon also had a management consulting practice and performed broad
based professional
services which included strategic and financial planning, marketing and
growth studies,
business re-structuring, acquisition plans, implementation of new
business strategies, MIS
development, and training programs. Previously, Mr. Gordon was Director
of MIS for Kinney
Shoe Corporation.
Mr. Gordon has conducted numerous business seminars and made
presentations at many
conferences. He received an Achievement Award from the International
Association of Systems
Management in recognition of his contribution to the business systems
profession, and is also
a past Chapter President. He was an advisor to Guidance International, a
professional
association of computer users. Mr. Gordon has a B.A. in Economics from
Union College.
Martin I. Saposnick is Director of Corporate Development and a Director
of the Company.
Since 1992, Mr. Saposnick has also been President of Ameristar Group
Incorporated, a private
investment and financial consulting firm specializing in "micro cap" and
"small cap"
companies, and was a Director of Concorde Strategies Group, Inc. until
February, 1999. From
1983-1993, Mr. Saposnick provided independent investment banking and
financial consulting
services and, as President, founded Remsen Group, Ltd. Previously, Mr.
Saposnick was
Chairman of the Board and President of Marsan Securities Co., Inc., a
financial services
firm, which was a wholly owned subsidiary of Marsan Capital Corporation,
a publicly held
company. Mr. Saposnick was also Chairman of the Board and President of
Marsan Capital
Corporation. In 1985, Mr. Saposnick entered into a consent decree with
the Commission; the
agreement ended administrative proceedings initiated by the Commission in
connection with
Mr. Saposnick's alleged participation in the initial public offering of
securities of North
Atlantic Airlines, Inc. Previously, Mr. Saposnick was Vice President of
Chestman
Securities, Co., Inc. and had been Assistant Manager of Specialist
Surveillance Division of
the New York Stock Exchange. Mr. Saposnick is a graduate of Hunter
College and completed
graduate studies in Finance and Investments at Baruch College.
Joseph J. Messina is a Director. In 1992, he became Chairman and CEO of
both Ameristar
Capital Corporation, a lease financing and asset based lender and
Ameristar Group
Incorporated, an investment banking and financial consulting firm
specializing in "small cap"
companies. Mr. Messina was a Director of Concorde Strategies Group, Inc.
From 1978-1992,
Mr. Messina was President and Chief Operating officer of Vendor Funding
Co., Inc. a
subsidiary of Bank of Ireland First Holdings. Vendor Funding, a national
middle market lessor
and asset based lender, was co-founded by Mr. Messina and subsequently
sold to First NH Banks
of Manchester, New Hampshire. Mr. Messina is a Director of Credit America
Venture Capital,
an entity formed to acquire the manufacturing and distribution network of
Mako Marine
International, Inc. He is a former Director of Mako Marine International,
Inc., a publicly
held corporation, and past President of the Eastern Association of
Equipment Lessors.
William C. Hayde is a Director and also Secretary. Mr. Hayde is an
investment banker and
co-owner of Brockington Securities, a broker-dealer specializing in
wholesale and
institutional trading, mergers and acquisitions, and equity and debt
financings. Mr. Hayde
is also President of B.R.Equities, which owns and operates an electronic
trading room, as
well as Chairman of the Board of Toscana Group, Inc., a venture capital
and consulting
company. Mr. Hayde, who has been active in the brokerage business since
1983, was previously
Director of Corporate Finance for Aegis Capital. He has a Bachelor's
Degree in Psychology
from Stony Brook University.
Changes in Officers and Directors
As reported in the Company's Form 10-QSB report for the period ended
September 30, 2000, the
Company accepted resignations on November 10, 2000 from P. Richard Sirbu,
Chairman, CEO,
President and Director, and from Thomas C. Hushen, Senior Vice President
and Secretary. Mr.
William C. Hayde was then elected as a Director and appointed Secretary,
and Mr. Robert
Gordon, Executive Vice President of the Company, was appointed acting
President.
ITEM 11. EXECUTIVE COMPENSATION
Robert Gordon, Executive Vice President of the Company, currently
receives consulting fees
of $52,000.00 per year. As of December 31, 2000, consulting fees of $
148,733.00 remain
unpaid. In 1998, Robert Gordon was President of the Company and received
wages of $30,330.00
and consulting fees of $15,000.00. As of December 31, 2000, the Company
has accrued
obligations for payments to Mr. Gordon of $ 138,733.00. No other
officers or directors
received compensation during 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
PRINCIPAL SHAREHOLDERS
The following chart sets forth, at the date of this report, information
with respect to (1)
any person known by the Company to own beneficially more than five (5%)
percent of the
Company's Common Stock (2) Common Stock owned beneficially by each
officer or director of
the Company and (3) the total of the Company's Common Stock owned
beneficially, directly or
indirectly, by the Company's officers and directors as a group.
Name
Number of shares of
Common Stock Owned
Percentage
of Class
Sirbu Enterprises, LLLP
a Colorado Limited Liability
Limited Partnership
(4)
16414 Sandstone Dr.
Morrison, CO 80465
525,000
13.50%
Wilmont Holdings Corp.(5)*
33 Wilputte Place
New Rochelle, NY 10804
630,000
16.20%
Lomar Corp.(6)*
21 Schermerhorn
Brooklyn, NY 11201
625,000
16.07%
Thomas C. Hushen
33278 Bluebell Circle
Evergreen, CO 80439
500,000
12.86%
William C. Hayde*
76 Cliff Road
Belle Terre, NY 11777
300,100
7.72%
Robert Gordon*
201 East 19th Street
New York, NY 10003
103,667
2.67%
Dunhill Limited (7)*
444 Madison Avenue
New York, NY 10022
3,333
.08%
Remsen Group Ltd. (8)*
21 Schermerhorn Street
Brooklyn, NY 11201
7,617
0.20%
Officers and Directors
as a Group (4 Persons)(3)
1,669,717
42.94%
* Officer and/or Director
__________________________
(1) Persons beneficially owning more than 5% of the Company's Common
Stock.
(2) Common Stock beneficially owned by each officer and director of the
Company.
(3) Beneficially Owned, directly or indirectly, by the Company's
officers and
directors as a group.
(4) Sirbu Enterprises, LLLP, a Colorado Limited Liability Limited
Partnership, is
privately owned and controlled equally by P. Richard Sirbu, former
Officer and
Director of the Company, and his wife, Karen K. Sirbu. The total
shares reflect
a donation of 100,000 shares to a charitable trust in late 1999.
Mr. Sirbu is not
affiliated with the trust.
(5) Wilmont Holdings Corp. is a privately held corporation principally
owned and
controlled by Joseph J. Messina, a Director of the Company.
(6) Lomar Corp. is privately held corporation principally owned and
controlled by
Martin I. Saposnick, a Director of the Company.
(7) Dunhill Limited is privately held corporation principally owned and
controlled
by Joseph J. Messina and Martin I. Saposnick, Directors of the
Company.
(8) Remsen Group, Ltd. is a privately held corporation principally
owned and
controlled by Martin I. Saposnick, a Director of the Company.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM
8-K
(a) 1. The following documents are filed as a part of this report:
Financial Statements
Auditors Report of Janet Loss, C.P.A., P.C. dated April 17, 2001
together with;
Auditors Report of Jay Fox, C.P.A. dated July 6, 1999;
Balance Sheet and Consolidated Balance Sheet as of December 31,
2000 and 1999;
Statement of Operations and Consolidated Statement of Operations
for the years
ended December 31, 2000 and 1999;
Statement of Stockholders' Equity and Consolidated Statement
of Stockholders'
Equity for the years ended December 31, 2000 and 1999;
Statement of Cash Flow and Consolidated Statement of Cash Flows for
the years
ended December 31, 2000 and 1999;
Notes to Financial Statements.
2. Financial Statement Schedules.
All applicable information is contained in the financial statements
or notes
thereto.
3. Exhibits -
Exhibit 27- Financial Data Schedules (Electronic filing only).
(b) Form 8-K filings:
January 24, 2000 re: Special meeting of shareholders concerning
adjustment of
conversion right of Series B Convertible Preferred Stock (See
PART 1, ITEM
4).
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned,
thereunto duly authorized.
W3 GROUP, INC.
Dated: April 15, 2001 By:
Robert Gordon
Acting President and Executive Vice
President
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been
signed below by the following persons on behalf of the Registrant and in
the capacities and
on the dates indicated.
Dated: By:
Martin I. Saposnick
Director of Corporate Development and
Director
Dated: By:
Joseph J. Messina
Director
Dated: By:
William C. Hayde
Director