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 June 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 1710, New York, NY 10022
(Address of principal executive offices)
(212) 317-0060
(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 June 30, 2001.
W3 GROUP, INC.
Form 10-QSB Quarterly Report
For Period Ended June 30, 2001
Table of Contents
Page
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements 3
Unaudited Balance Sheets at
June 30, 2001 and Audited Balance Sheet
at December 31, 2000 4 - 5
Unaudited Statements of Operations
For Three and Six Months Ended June 30, 2001 6
and June 30, 2000
Unaudited Statements of Cash Flows For Six
Months Ended June 30, 2001 and June 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 six months ended
June 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
June 30, December 31,
2001 2000
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 110 $ 120
Prepaid Expenses 154,687 257,813
Loan Receivable (Note 8 and 9) 157,522 157,522
Interest Receivable (Note 8) 17,866 14,191
Rent Receivable 0 1,102
TOTAL CURRENT ASSETS: $ 330,185 $ 430,748
Fixed assets, net of accumulated
depreciation of 2,017 and $1,777 $ 479 $ 719
TOTAL ASSETS $ 330,664 $ 431,467
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
(Unaudited) Audited
June 30, December 31
2001 2000
CURRENT LIABILITIES:
Accounts payable $ 226,878 $ 201,641
Accrued interest 9,054 6,654
Stockholders' loans 40,000 40,000
Due to Ameristar
Capital Corporation $ 198,986 $ 173,620
TOTAL CURRENT LIABILITIES $ 474,918 $ 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 3,426,899 shares
issued and outstanding as of $ 1,082,755 $1,017,557
June 30, 2001 and December 31, 2000
Additional paid-in-capital 34,625 34,625
Retained earnings(Deficit) (2,116,596) (1,962,790)
TOTAL STOCKHOLDERS' EQUITY(DEFICIT) (144,254) 9,552
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY(DEFICIT) $ 330,664 $ 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 Six
Months Ended Months Ended
June 30, June 30,
2001 2000 2001 2000
REVENUES $ 0 $ 0 $ 0 $ 0
OPERATING EXPENSES:
Consulting $64,563 64,563 129,126 77,563
Depreciation expense $ 120 120 240 240
Insurance $ 0 1,197 0 2,394
Office expenses and postage $ 709 2,020 1,217 3,383
Legal and accounting expenses $ 0 5,525 0 29,352
Rent expense $12,183 11,856 24,366 23,712
Transfer and filing fees $ 781 215 1,183 911
TOTAL OPERATING EXPENSES $78,356 85,496 156,132 137,555
NET INCOME(LOSS) BEFORE
OTHER EXPENSES $(78,356) (85,496) (156,132) (137,555)
OTHER INCOME AND (EXPENSES):
Interest Income $ 2,363 2,370 4,726 4,733
Interest (Expense) (1,200) (1,200) (2,400) (2,400)
TOTAL OTHER INCOME AND (EXPENSES) 1,163 1,170 2,326 2,333
NET INCOME (LOSS) BEFORE PROVISION
FOR INCOME TAXES (77,193) (84,326) (153,806) (135,222)
ESTIMATED PROVISION FOR
INCOME TAXES 0 0 0 689
NET INCOME (LOSS) $(77,193) $ (84,326) $(153,806)$(135,911)
NET INCOME (LOSS) PER SHARE $ (0.20) $ (.024) $ (.04) $ (.04)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,888,435 3,624,317 3,881,185 3,624,317
The accompanying notes are an integral part of these financial statements.
W3 GROUP, INC.
CASH FLOW STATEMENTS
For the Six Months Ended June 30, 2001 and 2000 (Unaudited)
Cash
Flow Statements
June 30, 2001 June 30, 2000
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (153,806) $ (135,911)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Depreciation and amortization 240 240
(Increase)in receivable (2,573) (3,564)
(Increase)in prepaid expenses 103,126 (360,937)
Increase in due to Ameristar
Capital Corporation 25,366 24,468
Increase in payables 25,237 32,357
Decrease in deferred offering costs 0 17,929
Increase in accrued interest 2,400 2,400
Cash Provided (Used)
by Operating Activities $ (10) $ (423,018)
CASH FLOWS FROM FINANCING ACTIVITIES:
(Decrease) in common stock issuable (50,000)
Proceeds from issuance of Common Stock 65,198 412,500
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 $ (10) $ (60,518)
CASH, BEGINNING OF THE PERIOD $ 120 $ 60,826
CASH, END OF THE PERIOD $ 110 $ 308
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 Six Months Ended June 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
Six Months Ended
June 30, 2001 -- -- -- -- -- (153,806) (153,806)
Balance,
June 30, 2001 $529,362 $325,600 3,888,435 $1,082,755 $34,625 (2,116,596)
(144,254)
The accompanying notes are an integral part of these financial statements.
W3 GROUP, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED JUNE 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 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 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.
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.
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 $210,833 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.
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 six month periods
ended June 30, 2001, or during the comparable periods for the prior year.
Operating expenses for the three month period ended June 30, 2001 were
$78,356, a decrease of $7,140 from the prior year's period, resulting
primarily from decreased professional fees and office expenses.
The net loss for the three month period ended June 30, 2001 was $77,193
compared to a net loss of $84,326 for the comparable period in the prior year,
a decreased loss of $7,133, resulting from the aforementioned decrease in
operating expenses.
The net loss for the six month period ended June 30, 2001 was $153,806, an
increased loss of $17,895 from the prior year's comparable period, resulting
primarily from an increase in consulting expenses, while professional fees
decreased by $29,352.
The total cash and cash equivalents at March 31, 2001 totalled $110 compared
to $120 at December 31, 2000, an insignificant decrease of $10. Accounts
Payable at June 30, 2001 totalled $226,878 compared to $201,641 at December
31, 2000, an increase of $25,237, 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 June 30, 2001, the Company had an insignificant amount of cash totalling
$110. 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: August 10, 2001 By:/s/ Robert Gordon
Robert Gordon
Acting President
Executive Vice President
Principal Financial Officer