U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number 0-27083
W3 GROUP, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-1108035
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
444 Madison Avenue, Suite 2904, New York, NY 10022
(Address of principal executive offices)
(212) 750-7878
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
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
3,888,435 shares of Common Stock, no par value, outstanding on
September 30, 2001.
W3 GROUP, INC.
Form 10-QSB Quarterly Report
For Period Ended September 30, 2001
Table of Contents
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Balance Sheets at
September 30, 2001 and Audited Balance Sheet
at December 31, 2000 4 - 5
Unaudited Statements of Operations
For Three and Nine Months Ended September 30, 2001 6
and September 30, 2000
Unaudited Statements of Cash Flows For Nine
Months Ended September 30, 2001 and September 30, 2000 7
Statement of Stockholders' Equity (Deficit) 8
Notes to Financial Statements 9 - 13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 14 - 15
PART II -- OTHER INFORMATION 15
SIGNATURES 15
Item 1. Financial Statements:
BASIS OF PRESENTATION
The accompanying unaudited financial statements are presented in
accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB
and item 310 under subpart A of Regulation S-B. In the opinion of
management, all adjustments considered necessary for a fair
presentation have been included. Operating results for the nine
months ended September 30, 2001 are not necessarily indicative of
results that may be expected for the year ending December 31,
2001. For further information, refer to the financial statements
and footnotes thereto included in the Company's annual report on
Form 10-KSB and Form 10-KSB/A for the year ended December 31,
2000.
W3 GROUP, INC.
BALANCE SHEETS
(Unaudited) Audited
September 30, December 31,
2001 2000
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 14 $ 120
Prepaid Expenses 103,124 257,813
Loan Receivable (Note 8 and 9) 157,522 157,522
Interest Receivable (Note 8) 20,229 14,191
Rent Receivable 0 1,102
TOTAL CURRENT ASSETS: $ 280,889 $ 430,748
Fixed assets, net of accumulated
depreciation of 2,137 and $1,777 $ 359 $ 719
TOTAL ASSETS $ 281,248 $ 431,467
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) Audited
September 30, December 31
2001 2000
CURRENT LIABILITIES:
Accounts payable $ 239,335 $ 201,641
Accrued interest 10,254 6,654
Stockholders' loans 40,000 40,000
Due to Ameristar
Capital Corporation $ 212,669 $ 173,620
TOTAL CURRENT LIABILITIES $ 502,258 $ 421,915
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value,
100,000,000 shares authorized.
Series B Convertible, non-dividend
bearing, 706,360 and 793,360
shares issued and outstanding $ 529,362 $ 594,560
Series B Convertible Preferred
Stock Purchase Warrants issued $ 325,600 $ 325,600
and outstanding
Common stock, no par value,
500,000,000 shares authorized,
3,888,435 and 3,844,935 shares
issued and outstanding as of $ 1,082,755 $1,017,557
September 30, 2001 and
December 31, 2000
Additional paid-in-capital 34,625 34,625
Retained earnings(Deficit) (2,193,352)(1,962,790)
TOTAL STOCKHOLDERS' EQUITY(DEFICIT) (221,010) 9,552
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY(DEFICIT) $ 281,248 $ 431,467
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
STATEMENT OF OPERATIONS (Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2001 2000 2001 2000
REVENUES $ 0 $ 0 $ 0 $ 0
OPERATING EXPENSES:
Consulting $64,563 64,563 193,689 142,126
Depreciation expense $ 120 120 360 360
Insurance $ 0 0 0 2,394
Office expenses and postage$ 803 718 2,020 4,101
Legal and accounting expenses $ 0 0 0 29,352
Rent expense $12,183 11,856 36,549 35,568
Marketing $ 0 30,400 0 30,400
Transfer and filing fees $ 250 215 1,433 1,129
TOTAL OPERATING EXPENSES $77,919 107,875 234,051 245,430
NET INCOME(LOSS) BEFORE
OTHER EXPENSES $(77,919)(107,875)(234,051)(245,430)
OTHER INCOME AND (EXPENSES):
Interest Income $ 2,363 2,370 7,089 7,103
Interest (Expense) (1,200) (1,200) (3,600) (3,600)
TOTAL OTHER INCOME AND
(EXPENSES) 1,163 1,170 3,489 3,503
NET INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (76,756) (106,705)(230,562)(241,927)
ESTIMATED PROVISION FOR
INCOME TAXES 0 0 0 689
NET INCOME (LOSS) $(76,756)$(106,705)$(230,562)$(242,616)
NET INCOME (LOSS) PER
SHARE $ (0.02) $ (.028) $ (.06) $ (.064)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,888,435 3,824,935 3,881,185 3,823,335
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
CASH FLOW STATEMENTS
For the Nine Months Ended September 30, 2001 and 2000 (Unaudited)
Cash Flow Statements
September 30, September 30,
2001 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (230,562) $ (242,616)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Depreciation and amortization 360 360
(Increase)in receivable (4,936) (4,764)
(Increase)in prepaid expenses 154,689 (309,374)
Increase in due to Ameristar
Capital Corporation 39,049 51,324
Increase in payables 37,694 59,792
Decrease in deferred offering costs 0 17,929
Decrease in rent receivable 0 551
Increase in accrued interest 3,600 3,600
Cash Provided (Used)
by Operating Activities $ (106) $ (423,198)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) in common stock issuable (50,000)
Proceeds from issuance of Common 65,198 412,500
Stock and conversion of Preferred
Stock to Common Stock
Decrease in Preferred Stock from
conversion to Common Stock (65,198) 0
Net Cash Provided by Financing
Activities $ 0 $ 362,500
Net Increase (Decrease)in Cash $ (106) $ (60,698)
CASH, BEGINNING OF THE PERIOD $ 120 $ 60,826
CASH, END OF THE PERIOD $ 14 $ 128
The accompanying notes are an integral part of these financial
statements.
W3 GROUP, INC.
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
Statement of Stockholders' Equity
for the Nine Months Ended September 30, 2001
Preferred Series B
Stock Non- Convertible
Dividend Preferred Total
Bearing Stock Common Stock Common Additional Stockholders'
Series B Purchase Number of Stock Paid-in Deficit Equity
Convertible Warrants Shares Amount Capital Accumulated (Deficit)
Balance,
January 1, 2001 $594,560 $325,600 3,844,935 1,017,557 $34,625 $(1,962,790)$ 9,552
87,000 shares of
Series B Convertible
Preferred Stock
converted to
Common Stock
(first quarter) (65,198) 43,500 65,198
Net loss for the
Nine Months Ended
September 30, 2001 -- -- -- -- -- (230,562) (230,562)
Balance,
September 30, 2001 $529,362 $325,600 3,888,435 $1,082,755 $34,625 (2,193,352)
(221,010)
The accompanying notes are an integral part of these financial statements.
W3 GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED September 30, 2001
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 involved 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 8).
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 are 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, ending on October 14,
2002. As discussed below, the conversion right of the Series B
Preferred Shares has been adjusted as a result of a one for
thirty reverse split of the Company's Common Stock on October 1,
1999.
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 until February 1, 2002. 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 8). 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 Stock 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. None of the Common Stock Purchase Warrants were exercised
during the exercise period and all of them expired on October 1,
2001, subsequent to the period covered by the report (See "Note
10 - Subsequent Event").
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.
Note 5 - LEASES AND OTHER COMMITMENTS
The 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 $223,833 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 - 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) 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 8 - 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 9 - 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.
Note 10 - SUBSEQUENT EVENT
On October 1, 2001, subsequent to the period covered by this
report, all of the 520,056 Common Stock Purchase Warrants then
outstanding expired. These Warrants had been issued by the
Company on October 4, 1999 and none had been exercised (See Note
3 - "CAPITALIZATION").
ITEM 2: Management's Discussion and Analysis of Financial
Conditions and Results of Operations:
Results of Operations
The Company did not have any revenue during the three and nine
month periods ended September 30, 2001, or during the comparable
periods for the prior year.
Operating expenses for the three month period ended September 30,
2001 were $77,919, a decrease of $29,956 from the prior year's
period, resulting primarily from decreased professional fees and
marketing expenses.
The net loss for the three month period ended September 30, 2001
was $76,756 compared to a net loss of $106,705 for the comparable
period in the prior year, a decreased loss of $29,949,
resulting from the aforementioned decrease in operating expenses.
The net loss for the nine month period ended September 30, 2001
was $230,562, a decreased loss of $12,054 from the prior year's
comparable period, resulting primarily from decreased marketing
expenses of $30,400, decreased professional fees of $29,352,
decreased office and insurance expenses of $4,475 and increased
consulting expenses of $51,563.
The total cash and cash equivalents at March 31, 2001 totalled
$14 compared to $120 at December 31, 2000, a decrease of $106
Accounts Payable at September 30, 2001 totalled $239,335 compared
to $201,641 at December 31, 2000, an increase of $37,694, which
resulted from consulting expenses.
The Company is continuing to look for suitable acquisition
candidates. 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.
Business Objectives
W3 Group, Inc. intends to acquire, finance, and restructure
profitable companies that can utilize the Internet to expand
their business and distribution channel. 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. W3's
objective 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 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.
Liquidity and Capital Resources
At September 30, 2001, the Company had an insignificant amount of
cash totalling $14. There is no assurance that the Company will
be able to raise the amount of capital needed to meet its working
capital needs.
General Risk Factors Affecting the Company
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.
OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable.
Item 2. Change in Securities. None
Item 3. Defaults Upon Senior Securities. Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information. None
Item 6. Exhibits and Reports of Form 8-K. None.
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed in its behalf by the undersigned,
thereunto duly authorized.
Date: October 25, 2001 By:/s/ Robert Gordon
Robert Gordon
Acting President
Executive Vice President
Principal Financial Officer