W3 GROUP, INC.
444 MADISON AVENUE, SUITE 1710
NEW YORK, NY 10022
December 10, 1999
BY EDGAR
Securities and Exchange Commission
Division of Corporation and Finance
450 5th Street, NW
Washington, DC 20549
Re: W3 Group, Inc.
SEC File No. 000-27083
Report on Form 8-K/A (Item 7)
Ladies and Gentlemen:
Enclosed for filing is the registrant's Form 8-K/A which files as
Exhibits a copy of audited financial statements and pro forma
financial information for W3 Group, Inc., a Delaware corporation
acquired by the registrant, as reported in Form 8-K filed on
October 15, 1999.
If there are any questions, please advise the undersigned. Thank
you very much.
Sincerely yours,
/s/ Robert Gordon
Robert Gordon
Executive Vice President
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Date of Report: October 12, 1999
W3 GROUP, INC,
(Exact name of registrant as specified in its charter)
Colorado 33-21546-D 84-1108035
(State or other Commission File (IRS Employer
Jurisdiction of Number)
Identification No.)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (212) 317-0060
Concorde Strategies Group, Inc.
Former Name or Former Address If Changed Since Last Report
Item 1. Change in Control of Registrant.
(a) On September 20,, 1999 the registrant filed Articles of Share
Exchange with the Colorado Secretary of State, reflecting a change in
control of the registrant pursuant to the consummation as of October 1, 1999
of the Agreement and Plan of Share Exchange ("Agreement") between the
registrant and W3 Group, Inc., a Delaware Corporation, dated April 21, 1999.
Pursuant to the Agreement, which was approved by shareholders at a
special meeting of shareholders on August 12, 1999, (i) the registrant has
issued 3,275,000 restricted shares of Common Stock, on a post reverse split
basis, in exchange for all of the outstanding stock of W3 Group, Inc.;
(ii) all outstanding shares of Common Stock were subjected to a 1 for 30
reverse split as of September 30, 1999, such that as of October 1, 1999
there were 3,401,667 shares issued and outstanding; (iii) as of October 1,
1999 the directors and officers of the registrant elected the following
persons to the board of directors and to serve as officers:
Name Position
P. Richard Sirbu President and the Chief Executive Officer,
Director
Thomas C. Hushen Senior Vice President, Chief Operating
Officer, Secretary, Director
Robert Gordon Executive Vice President
Martin I. Saposnick Director of Strategic Planning, and Director
Joseph J. Messina Director
Robert Gordon, William C. Hayde, and David Vigor resigned as Directors
of the registrant; Robert Gordon, the former President of the registrant was
elected Executive Vice President; and Gera Laun, the former Secretary
resigned, effective October 1, 1999.
(iv) the name of the registrant was changed to W3 Group, Inc. ; and
(v) the registrant may change its legal domicile from Colorado to Delaware
at a subsequent date.
Pursuant to the closing of the Agreement, W3 Group, Inc. has become a
wholly-owned subsidiary of the registrant, and the business of the
registrant shall be the acquisition and development of Internet related
companies.
The above five new officers and directors to whom the registrant
issued 2,475,000 (post reverse split) shares of Common Stock had acquired
the shares of W3 Group, Inc. (a Delaware corporation) which were exchanged
for 2,475,000 shares of the registrant, for a total of $24,750 cash (their
personal funds). The balance of 800,000 (post reverse split) shares of
Common Stock were issued by the registrant to minority shareholders in
exchange for 800,000 shares of W3 Group, Inc. (a Delaware corporation). None
of the minority shareholders own more than 1.53 percent of the total shares
outstanding.
(b) In connection with the acquisition of W3 Group, Inc., as of
October 1, 1999, three new directors were elected (Mr. Sirbu, Mr. Hushen,
and Mr. Saposnick), and new shares of common stock were issued by the
registrant to an entity controlled by Mr. Sirbu, and to entities controlled
by Mr. Saposnick and Mr. Messina and to Mr. Hushen, and Mr. Gordon, all of
whom constituted the principal shareholders of W3 Group, Inc. before the
acquisition. The election of such three persons as directors, and the issue
of more stock, constitutes a change in control of the registrant, even
though entities controlled by Mr. Saposnick and Mr. Messina, and by Mr.
Gordon individually, previously owned stock in the registrant. The
percentage of issued and outstanding shares of Common Stock of the
registrant owned by (i) each officer and director of the registrant and the
officers and directors of the registrant as a group, are stated below. All
numbers are stated on a 1 for 30 post-reverse stock split basis (approved
by shareholders on August 12, 1999) which was effected on October 1, 1999.
Name and Address of
Beneficial Owner
Number of shares
of Common Stock
Owned
Percent of
Class
Sirbu Enterprises, LLLP a
Colorado Limited Liability
Limited Partnership (1) *
16414 Sandstone Drive
Morrison, CO 90465
625,000
18.37%
Wilmont Holdings Corp.(2) *
444 Madison Avenue, Suite
1710
New York, NY 10022
630,000
18.52%
Lomar Corp.(3) *
444 Madison Avenue, Suite
1710
New York, NY 10022
625,000
18.37%
Thomas C. Hushen*
33278 Bluebell Circle
Evergreen, CO 80439
500,000
14.70%
Robert Gordon *
444 Madison Avenue, Suite
1710
New York, NY 10022
103,667
3.04%
Dunhill Limited (4) *
444 Madison Avenue
New York, NY 10022
3,333
0.10%
Remsen Group, Ltd. (5) *
21 Schermerhorn Street
Brooklyn, NY 11201
5,000
0.15%
Ameristar Group Incorporated
(6) *
444 Madison Avenue
New York, NY 10022
22,500
0.66%
Officers and Directors
as a Group (5 Persons)
2,514,500
73.92%
* Officer and/or Director
(1) Sirbu Enterprises, LLLP, a Colorado Limited Liability Limited
Partnership is privately owned and controlled equally by P. Richard
Sirbu, Chairman and CEO, and President of the Company and his wife
Karen K. Sirbu.
(2) Wilmont Holdings Corp. is a privately held corporation principally
owned and controlled by Joseph J. Messina, a Director of the Company.
(3) Lomar Corp. is privately held corporation principally owned and
controlled by Martin I. Saposnick, a Director of the Company.
(4) Dunhill Limited is a privately held corporation principally owned and
controlled by Joseph J. Messina and Martin I. Saposnick, Directors of
the Company.
(5) Remsen Group, Ltd. is a privately held corporation principally owned
and controlled by Martin I. Saposnick, a Director of the Company.
(6) Ameristar Group Incorporated is a privately held corporation
principally owned and controlled by Joseph J. Messina and Martin I.
Saposnick, Directors of the Company.
Item 2. Acquisition or Disposition of Assets.
As described under Item 1, the registrant has acquired W3 Group, Inc.
as a wholly owned subsidiary. The only assets acquired in connection with
the transaction consist of minimal cash.
The registrant divested itself of its sole operating subsidiary,
L'Abbigliamento, Ltd., under the terms of a Termination Agreement, effective
as of March 31, 1999, and previously reported on Form 10-QSB for the three
months ended March 31, 1999. Pursuant to the terms of such Agreement, which
was approved by shareholders on August 12, 1999, the subsidiary resumed
operations as an independent company and returned to the registrant all of
the Class A Preferred Shares in exchange for all of the subsidiary's capital
stock held by the registrant. The former subsidiary will repay its
outstanding indebtedness to the registrant 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.
Item 7. Financial Statements and Exhibits.
(a) and (b) Financial statements of the acquired company, W3 Group,
Inc., and pro forma financial information will be filed by amendment to this
Form 8-K Report before the expiration of 60 days from the date this initial
Form 8-K Report was required to be filed.
(c) Exhibits.
The Agreement and Plan of Share Exchange(1) and Termination
Agreement with L'Abbigliamento, Ltd.(2) are filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Dated: October 15, 1999 W3 GROUP, INC.
By: /s/ P. Richard Sirbu
P. Richard Sirbu, Chairman and CEO
W3 GROUP, INC.
(A Development Stage Enterprise)
AUDIT REPORT
June 30, 1999
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
W3 GROUP, INC.
(A Development Stage Enterprise)
INDEX TO FINANCIAL STATEMENTS
TABLE OF CONTENTS
ITEM PAGE
Report of Certified Public Accountant . . . . . . . . . 1
Balance Sheet, June 30, 1999 . . . . . . . . . . . . . 2
Statement of Operations, for the period
From January 28, 1999 to June 30, 1999 . . . . . . . . 3
Statement of Stockholders' Equity (Deficit),
From January 28, 1999 to June 30, 1999 . . . . . . . . 4
Statement of Cash Flows, for the period
From January 28, 1999 to June 30, 1999 . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . . 6
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 South Tamarac Drive, Suite 120
Denver, Colorado 80237
(303) 220-0227
Board of Directors
W3 Group, Inc.
444 Madison Avenue, Suite 1710
New York, New York 1002
I have audited the accompanying Balance Sheet of W3 Group, Inc. (A
Development Stage Enterprise) as of June 30, 1999 and the Statements of
Operations, Stockholders' Equity, and Cash Flows for the period from
January 28, 1999 (Inception) through June 30, 1999. My examination was
made in accordance with generally accepted auditing standards and,
accordingly, included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances.
In my opinion, the financial statements referred to above present fairly
accurately, in all material respects, the financial position of W3 Group,
Inc. (A Development Stage Enterprise) as of June 30, 1999, and the results
of its operations and changes in its cash flows for the period from
January 28, 1999 (Inception) through June 30, 1999, in conformity with
generally accepted accounting principles applied on a consistent basis.
/s/Janet Loss
Janet Loss, C.P.A., P.C.
July 13, 1999
1
W3 GROUP, INC.
(A Development Stage Enterprise)
BALANCE SHEET
June 30, 1999
ASSETS
CURRENT ASSETS:
Common Stock Subscription
Receivable $ 27,750
OTHER ASSETS:
Organizational Costs, net
Of amortization $42 458
TOTAL ASSETS $ 28,208
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 500
STOCKHOLDERS' EQUITY:
Common stock, $.01 par
Value; 10,000,000 shares
Authorized; 2,775,000 shares
Issued and outstanding 27,750
Retained earnings (Deficit) (42)
Total Stockholders' Equity 27,708
Total Liabilities and
Stockholders' Equity $ 28,208
The accompanying notes are an integral part of the financial statements.
2
W3 GROUP, INC.
(A Development Stage Enterprise)
STATEMENT OF OPERATIONS
For the period from January 28, 1999 (Inception)
Through June 30, 1999
REVENUES: $ 0
OPERATING EXPENSES:
Amortization Expense 42
Total Operating Expenses 42
NET (LOSS) $ ( 42)
NET (LOSS) PER
SHARE OF COMMON STOCK N/A
Weighted Average
Number of shares
Outstanding 2,775,000
The accompanying notes are an integral part of the financial statements.
3
W3 GROUP, INC.
(A Development Stage Enterprise)
STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
For the period from January 28, 1999 (Inception)
Through June 30, 1999
(Deficit)
Common Accumulated
Stock Common During the Total
Number of Stock Development Stockholders'
Shares Amount Stage Equity
Balance
January 28, 1999 0 $ 0 $ 0 $ 0
Shares issued 2,775,00 27,750 0 27,750
for cash,
April 20, 1999
Net (Loss) for
the period ended
June 30, 1999 0 0 (42) (42)
Balance June
30, 1999 2,775,000 $ 27,750 $ (42) $ 27,708
The accompanying notes are an integral part of the financial statements.
4
W3 GROUP, INC.
(A Development Stage Enterprise)
STATEMENT OF CASH FLOWS
For the period from January 28, 1999 (Inception)
Through June 30, 1999
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net Income (Loss) $ (42)
Adjustments to Reconcile
Net (Loss) to Cash Flow From
Operating Activities:
Increase in Common stock
Subscription receivable (27,750)
Increase in organizational costs $ (500)
Increase in accounts payable 500
Amortization 42
Net cash provided (Used)
By operating activities (27,750)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Issuance of Common
Stock 27,750
Net increase in Cash 0
CASH, BEGINNING OF PERIOD 0
CASH, END OF PERIOD $ 0
The accompanying notes are an integral part of the financial statements.
5
W3 Group, Inc.
(A Development Stage Enterprise)
NOTES TO FINANCIAL STATEMENTS
June 30, 1999
NOTE I - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Development Stage Activities
The Company has been in the development stage since its
incorporation on January 28, 1999 in the state of Delaware.
Accounting method
The Company records income and expenses on the accrual method.
NOTE II - CAPITALIZATION
On April 20, 1999, the Company issued 2,775,000 shares of common stock to
certain parties at $.01 per share.
NOTE III - AGREEMENT AND PLAN OF SHARE EXCHANGE WITH CONCORDE STRATEGIES
GROUP, INC.
On April 21, 1999, W3 Group, Inc. entered into an Agreement and Plan of
Share Exchange with Concorde Strategies Group, Inc. subject to approval by
shareholders, whereby Concorde will acquire 100 percent of the Common Stock
of W3 Group, Inc. in exchange for the issuance of Common Stock of Concorde
Strategies Group, Inc., at the rate of one Concorde Share for one W3 Share.
W3 Group, Inc. will become a wholly owned subsidiary of Concorde and
Concorde will amend its Articles of Incorporation to change its corporation
name to W3 Group, Inc. Concorde's Management expects to conduct a meeting
of shareholders during the second week of August 1999 to ratify the
Agreement which has been approved by its Board of Directors.
6
W3 GROUP, INC.
PRO FORMA FINANCIAL INFORMATION
OCTOBER 1, 1999
W3 GROUP, INC.
(FORMERLY KNOWN AS CONCORDE STRATEGIES GROUP, INC.)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
OCTOBER 1, 1999
CONCORDE STRATEGIES W3 GROUP, ADJUST-
ASSETS GROUP, INC. INC. MENTS PRO FORMA
CASH $ 1,464 25,251 - 26,715
SUBSCRIPTION RECEIVABLE - 3,000 - 3,000
RENT RECEIVABLE 3,394 - - 3,394
PREPAID EXPENSES 17,625 - - 17,625
RECEIVABLE, CONCORDE
STRATEGIES GROUP, INC. - 8,265 (8,265) -
TOTAL CURRENT ASSETS $ 22,483 36,516 (8,265) 50,734
PROPERTY AND EQUIPMENT,NET 1,398 - - 1,398
ORGANIZATIONAL COSTS - 433 - 433
DEFERRED OFFERING COSTS - 5,000 - 5,000
NOTE RECEIVABLE 157,522 - - 157,522
TOTAL ASSETS 181,403 41,949 (8,265) 215,087
LIABILITIES AND
STOCKHOLDERS'
EQUITY (DEFICIT)
ACCOUNTS PAYABLE 107,042 500 8,265 99,277
TOTAL CURRENT LIABILITIES 107,042 500 8,265 99,277
PAYABLES, AMERISTAR
CAPITAL CORPORATION 99,927 - - 99,927
STOCKHOLDERS' LOANS - 40,000 - 40,000
TOTAL LONG TERM
LIABILITIES 99,927 40,000 - 139,927
TOTAL LIABILITIES 99,927 40,500 - 239,204
STOCKHOLDERS' EQUITY (DEFICIT):
PREFERRED STOCK, NO PAR
VALUE, 100,000,000
SHARES AUTHORIZED - - - -
SERIES B CONVERTIBLE
PREFERRED STOCK NON-
DIVIDEND BEARING
1,056,000 SHARES ISSUED
AND OUTSTANDING 791,383 - - 791,383
SERIES B PREFERRED STOCK
PURCHASE WARRANTS 325,600 - - 325,600
COMMON STOCK, NO PAR
VALUE 500,000,000 SHARES 372,834 35,750 (35,750) 372,834
AUTHORIZED 3,401,667
SHARES ISSUED AND
OUTSTANDING
ADDITIONAL PAID-IN CAPITAL 1,875 - (35,750) 37,625
DEFICIT (1,517,258) (34,301) - (1,551,559)
TOTAL STOCKHOLDERS'
EQUITY (DEFICIT) (25,566) 1,449 - (24,117)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $181,403 41,949 (8,265) 215,087
W3 GROUP, INC.
(FORMERLY KNOWN AS CONCORDE STRATEGIES GROUP, INC.)
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Nine Months Ended October 1, 1999
CONCORDE W3 GROUP,
STRATEGIES INC. ADJUST-
GROUP, INC. MENTS PRO FORMA
REVENUES
SALES 837,486 - - 837,486
COST OF GOODS SOLD 595,713 - - 595,713
GROSS PROFIT 241,773 - - 241,773
OPERATING EXPENSES
AMORTIZATION - 67 - 67
ACCOUNTING AND LEGAL EXPENSES 20,297 600 - 20,897
CONSULTING SERVICES 746,284 8,000 - 754,284
DEPRECIATION 3,495 - - 3,495
INSURANCE 19,638 - - 19,638
FILING AND TRANSFER FEES 5,690 248 - 5,938
MARKETING - 5,000 - 5,000
MERGER & ACQUISITION COSTS - 14,446 - 14,446
OFFICE 2,416 1,641 - 4,057
PRINTING - 3,413 - 3,413
PRESS RELEASES 533 735 - 1,268
RENT 46,514 - - 46,514
TELEPHONE 7,733 150 - 7,883
COMMISSIONS 10,188 - - 10,188
AUTO AND TRAVEL 8,062 - - 8,062
ENTERTAINMENT 3,168 - - 3,168
BANK CHARGES, INTEREST AND
SELLING EXPENSES 31,529 - - 31,529
ADVERTISING 7,400 - - 7,400
REPAIRS AND MAINTENANCE 729 - - 729
WAGES AND PAYROLL TAXES 71,976 - - 71,976
TOTAL OPERATING EXPENSES 985,652 34,300 - 1,019,952
OPERATING (LOSS) BEFORE
OTHER INCOME AND (EXPENSES) (743,879) (34,300) - (778,177)
OTHER INCOME AND (EXPENSES)
EQUIPMENT RENTAL 3,394 - - 3,394
INTEREST (EXPENSE)INCOME 3,982 - - 3,982
TOTAL OTHER INCOME 7,376 - - 7,376
NET INCOME (LOSS) BEFORE (736,503) (34,300) - (770,803)
PROVISION FOR INCOME TAXES
ESTIMATED PROVISION (REFUND)
INCOME TAXES 7,099 - - 7,099
NET INCOME (LOSS) (743,602) (34,300) (777,902)
(LOSS) PER COMMON SHARE * (.21) * (.23)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 3,401,667 3,401,667