UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-KSB/A
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997.
[ ] 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: 0-23439
HARBOR TOWN HOLDING GROUP I, INC.
(Name of small business issuer in its charter)
Florida 65-0755340
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
324 Datura Street, Suite 200, West Palm Beach, FL 33401
Address of principal executive offices ) (Zip Code)
Issuer's telephone number, including area code (561) 659-1196
Securities registered pursuant to Section 12(b) of the Exchange
Act:
Title of each class Name of
exchange on which registered
None None
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Common Stock, no par value
(Title of Class)
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
<PAGE>
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 ___ No__X__
Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and
no disclosure will 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-KSB or any
amendment to this Form 10-K [ X ]
State issuer's revenues for its most recent fiscal year....$00.00
State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the
price at which the common equity was sold, or the average
bid and asked prices of such common equity, as of a specified
date within the past 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act).
As of April 13, 1998, the aggregate market value of common stock,
no par value, held by non-affiliates was approximately $2,957
(1,739,540 shares at $0.0017, which is the last price which the
registrant's common equity was sold).
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practical date.
As of April 13, 1998, there were 20,000,000 shares of common
stock, no par value, issued and outstanding.
<PAGE>
PART I
Item 1. Description of Business
(a) Business Development
Harbor Town Holding Group I, Inc. (the "registrant"), was
incorporated under the laws of the State of Florida on May 6,
1997 as a wholly owned subsidiary of Net Lnnx, Inc., a publicly
traded Pennsylvania shell corporation traded on the
over-the-counter trading market ("Net Lnnx"). Net Lnnx is a
shell company conducting virtually no business operation, other
than its efforts to seek merger partners or acquisition
candidates. The registrant was originally created to act as the
receiver of a certain Net Lnnx asset (the "Transferred Asset")
which consisted of a $475,000 note receivable made to Net Lnnx.
Net Lnnx was required to dispose of the Transferred Asset
pursuant to the terms of a letter of intent entered into between
Net Lnnx and another unrelated company in connection with an
anticipated merger between Net Lnnx and such other unrelated
company. The parties intended to consummate a reverse merger
transaction between Net Lnnx and the unrelated company whereby
Net Lnnx would issues shares of Net Lnnx stock to the
shareholders of the unrelated company. Since Net Lnnx and the
unrelated company could not determine and agree upon an actual
value of the Transferred Asset due to its practically unsecured
nature, and the unrelated company did not wish to purchase the
Transferred Asset with the possibility of never collecting on it
due to its practically unsecured nature, Net Lnnx transferred the
Transferred Asset to the registrant in exchange for 2,058,209
shares of the registrant's common stock, no par value (the
"Common Stock"). On May 21, 1997, Net Lnnx distributed all
2,058,209 shares of the registrant which it owned to Net Lnnx
shareholders as a stock dividend on a share for share basis
intending to register the Common Stock pursuant to Form 10-SB
promulgated under the Securities Exchange Act of 1934 ("the
"Exchange Act") and to utilize the registrant along with such
Transferred Asset to enter into a certain fragmented industry and
acquire local business entities in exchange for shares of the
registrant's Common Stock. This plan was subsequently aborted as
a result of the following: (i) the aforementioned Net Lnnx
reverse merger was called off; (ii) the Transferred Asset became
the subject of litigation; and (iii) the registrant determined it
was not feasible to enter into that certain industry at that
time. Further, the registrant did not have sufficient funds to
pursue the litigation in connection with the Transferred Asset;
therefore, on June 6, 1997 the registrant and Net Lnnx agreed
to suspend the transfer of the Transferred Asset until such time
that the litigation concerning the Transferred Asset terminated.
Several months thereafter, the registrant and its litigation
counsel determined that the resolution of the litigation
concerning the Transferred Asset would not occur in the
foreseeable future; therefore, on November 6, 1997 the registrant
agreed to cancel the transfer of the Transferred Asset in
exchange for substitute consideration for the shares of Common
Stock it issued to Net Lnnx so that the registrant could pursue
other opportunities -- such as registering the Common Stock
hereunder to create a reporting "shell" company. On November 6,
1997 the registrant and Net Lnnx canceled the instrument which
transferred the Transferred Asset and the registrant and Net Lnnx
agreed that in exchange for Net Lnnx canceling a promissory note
dated June 2, 1997 made by the registrant to Net Lnnx in the
amount of $12,600, such release from liability would constitute
substitute consideration for the 2,058,209 shares the registrant
previously issued to Net Lnnx. Presently, the registrant is a
"shell" company with a shareholder base of approximately 2,000
shareholders and 20,000,000 shares of Common Stock outstanding,
all of which are restricted pursuant to Rule 144 of the
Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
Presently, the registrant does not engage in any substantive
commercial business or other business operations.
After the registrant aborted its original purposes, the
registrant decided to create a corporate vehicle to seek to
effect a merger, exchange of capital stock, asset acquisition or
other similar business combination (a "Business Combination")
with an operating or development stage business (the "Target
Business") which desires to employ the registrant's shareholder
base to obtain the perceived advantages of being a publicly held
reporting corporation. On November 6, 1997, the registrant issued
17,631,250 shares of Common Stock to Wheeler Group II, Inc., a
Florida corporation ("Wheeler"), and 300,000 shares to David M.
Bovi, president and controlling shareholder of Wheeler in
exchange for (i) $6,000 cash; and (ii) Wheeler purchasing $25,000
in pre-paid legal services on behalf of the registrant to
effectuate the legal aspects of this registration statement on
Form 10-SB on a voluntary basis. See "Security Ownership of
Certain Beneficial Owners and Management" and "Certain
Relationships and Related Transactions." This transaction
resulted in a change in the voting control of the registrant
whereby Wheeler could completely control the registrant's board
of directors. See "Directors, Executive Officers, Promoters and
Control Persons." The registrant's management effectuated the
above transaction between the registrant and Wheeler because in
management's opinion, a shell company voluntarily reporting to
the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934 is significantly more valuable than a shell
company which does not engage in such reporting.
(b) Business of Registrant
The registrant is presently a holding company conducting
virtually no business operation, other than its efforts to seek
merger partners or acquisition candidates. The registrant
encounters intense competition from other entities having a
business objective similar to that of the registrant. Many of
these entities are well-established and have extensive experience
in connection with identifying and effecting business
combinations directly or through affiliates. Many of these
competitors possess greater financial, marketing, technical,
personnel and other resources than the registrant and there can
be no assurances that the registrant will have the ability to
compete successfully. The registrant's financial resources are
limited in comparison to those of many of its competitors. This
inherent competitive limitation could compel the registrant to
select certain less attractive acquisition prospects. There can
be no assurances that such prospects will permit the registrant
to meet its stated business objectives. The registrant believes,
however, that the registrant's status as a reporting public
entity could give the registrant a competitive advantage over
privately held entities having a similar business objective to
that of the registrant in acquiring a business with significant
growth potential.
The registrant's present officers and directors are the
registrant's only employees who devote approximately 10% of their
time to the business of the registrant.
Item 2. Properties.
The executive and business office of the registrant
consist of office space located at 324 Datura Street, Suite 200,
West Palm Beach, FL 33401.
<PAGE>
Item 3. Legal Proceedings.
No material legal proceedings are pending of which the
registrant is a party.
Item 4. Submission of Matters to a Vote of Security Holders.
On November 10, 1997, the registrant received written
consents without a shareholders' meeting from 1,485,340 of
2,058,209 shares entitled to vote to (i) authorize an increase in
the authorized number of shares of the registrant from 20,000,000
to 50,000,000; (ii) effectuate a registration statement on Form
10-SB with the Securities and Exchange Commission on behalf of
the registrant to register the registrant's outstanding class of
common stock, no par value; and (iii) ratify the execution of the
Cancellation of Instrument, dated November 6, 1997, between the
registrant and Net Lnnx, Inc. which cancels the assignment of the
Promissory Note Net Lnnx, Inc. offered to the registrant as a
subscription for the registrant's shares of Stock. No votes were
cast against the above action.
On November 12, 1997, the registrant received written
consents without a shareholders' meeting from 19,216,590 of
20,000,000 shares entitled to vote to (i) increase the number of
directors of the registrant from One (1) to Three (3); (ii)
appoint William R. Colucci and David M. Bovi to the board of
directors of the registrant; and (iii) resolve that Ronald W.
Hayes, Jr., William R. Colucci and David M. Bovi serve as
directors of the registrant until their successors are appointed
or elected and shall qualify. No votes were cast against the
above action.
Pursuant to Florida Statute 607.0704(3), a Notice of Action
Taken By Shareholder's Written Consent was provided to all
shareholders of the registrant with respect to the above action
taken on November 10, 1997 and November 12, 1997.
PART II
Item 5. Market for Common Equity and Related Stockholders
Matters.
No public trading market presently exists for the
registrant's Common Stock. The likelihood of a trading market
developing for the registrant's Common Stock is conditioned
upon, among other things, the effectuation of a Business
Combination. Once a Business Combination is effectuated, the
registrant intends to begin developing a trading market in the
registrant's Common Stock. The registrant has no present
intention of developing any type of trading market prior to the
effectuation of a Business Combination. Presently, there are no
plans, proposals, arrangements or understandings with any person
with regard to the development of a trading market in any of the
registrant's securities. No assurances are made that a trading
market for the registrant's Common Stock will ever develop. No
shares of Common Stock of the registrant are subject to
outstanding options or warrants to purchase, or securities
convertible into, common equity of the registrant.
Approximately 2,000 shareholders hold the registrant's
common stock, no par value (the "Common Stock"). The registrant
presently has 20,000,000 shares of Common Stock outstanding.
All such shares are deemed to be "restricted securities," as that
term is defined under Rule 144 promulgated under the Securities
Act, in that such shares were issued in private transactions not
<PAGE>
involving a public offering. No such shares will be eligible for
sale under Rule 144, as currently in effect, prior to May 6,
1998, at which time 2,058,209 shares will be eligible for sale
under Rule 144, so long as all other conditions of Rule 144 are
met. The registrant has not provided to any shareholder
registration rights to register under the Securities Act any
shareholder's shares for sale.
In general, under Rule 144, as currently in effect, subject
to the satisfaction of certain other conditions, a person,
including an affiliate of the registrant (or persons whose shares
are aggregated), who has beneficially owned restricted shares of
Common Stock for at least one year is entitled to sell, within
any three-month period, a number of shares that does not exceed
the greater of 1% of the total number of outstanding shares of
the same class or, if the Common Stock is not quoted on NASDAQ,
the average weekly trading volume during the four calendar weeks
preceding the sale. A person who has not been an affiliate of
the registrant for at least the three months immediately
preceding the sale and who has beneficially owned restricted
shares of Common Stock for at least two years is entitled to sell
such shares under Rule 144 without regard to any of the
limitations described above. No assurances are made; however,
that all of the other conditions of Rule 144 will be met on May
6, 1998, or any date subsequent thereto, or that Rule 144 will be
available at that time for any shareholder's shares.
The registrant has no present plans, proposals,
arrangements, understandings or intention of selling any
additional shares of Common Stock pursuant to any type of private
or public offering prior to the consummation of a Business
Combination.
The registrant has no present plans, proposals,
arrangements, understandings or intention of selling any amount
of shares of Common Stock in the public market subsequent to a
Business Combination. Nevertheless, in the event that
substantial amounts of Common Stock are sold in the
public market subsequent to a Business Combination, such sales
may adversely affect the price for the sale of the registrant's
equity securities in any trading market which may develop. No
prediction can be made as to the effect, if any, that market
sales of restricted shares of Common Stock or the availability of
such shares for sale will have on the market prices prevailing
from time to time.
The registrant has not paid any dividends on its Common
Stock to date and does not presently intend to pay cash dividends
prior to the consummation of a Business Combination. The payment
of cash dividends in the future, if any, will be contingent upon
the registrant's revenues and earnings, if any, capital
requirements and general financial condition subsequent to
consummation of a Business Combination. The payment of any
dividends subsequent to a Business Combination will be within the
discretion of the registrant's then Board of Directors. It is the
present intention of the Board of Directors to retain all
earnings, if any, for use in the registrant's business operations
and, accordingly, the Board does not anticipate paying any cash
dividends in the foreseeable future.
As of the date of this registration statement, the
registrant has issued an aggregate of 20,000,000 shares of Common
Stock as follows:
On May 6, 1997, the registrant was created as a wholly owned
subsidiary of Net Lnnx, Inc., ("Net Lnnx") a publicly traded
Pennsylvania shell corporation traded on the over-the-counter
trading market. Net Lnnx is a shell company which conducts
virtually no business operation, other than its efforts to seek
merger partners or acquisition candidates. The registrant issued
<PAGE>
2,058,209 shares of the registrant's capital stock to Net Lnnx in
exchange for the Transferred Asset. The registrant relied on
Section 4(2) of the Securities Act since such transaction did not
involve any public offering. On May 21, 1997, Net Lnnx
distributed the shares of the registrant which it owned to Net
Lnnx shareholders as a stock dividend on a share for share basis.
This transaction did not constitute a sale of securities since
Net Lnnx did not dispose of such shares for value; therefore, the
registrant was not required to utilize a transactional exemption
for such disposition. On November 6, 1997, the registrant and Net
Lnnx agreed to cancel the instrument which transferred the
Transferred Asset and the registrant and Net Lnnx agreed that in
exchange for Net Lnnx releasing the registrant from debt in the
amount of $12,600 owed to Net Lnnx by the registrant, such
release from liability would constitute substitute consideration
for the 2,058,209 shares the registrant previously issued to Net
Lnnx.
On November 6, 1997, the registrant issued 17,631,250 shares
of Common Stock to Wheeler Group II, Inc., a Florida corporation
("Wheeler"), and 300,000 shares to David M. Bovi, president and
controlling shareholder of Wheeler in exchange for (i) $6,000
cash; and (ii) Wheeler purchasing $25,000 in pre-paid legal
services on behalf of the registrant to effectuate the legal
aspects of this registration statement. Wheeler and Mr. Bovi were
the only offerees in connection with this transaction. The
registrant relied on Section 4(2) of the Securities Act since
such transaction did not involve any public offering.
On November 12, 1997, the registrant issued 10,541 shares of
Common Stock to William R. Colucci, a director of the registrant,
in exchange for his services as a director of the registrant.
Mr. Colucci was the only offeree in connection with this
transaction. The registrant relied on Section 4(2) of the
Securities Act since such transaction did not involve any public
offering.
No underwriters were utilized and no commissions or fees
were paid with respect to any of the above transactions. No
other shares of Common Stock have been issued by the registrant
in any other transaction.
Item 6. Management's Discussion and Analysis or Plan of
Operation.
(a) Plan of Operation
The registrant is presently a development stage company
conducting virtually no business operation, other than its
efforts to effect a Business Combination with a Target Business
which the registrant considers to have significant growth
potential. To date, the registrant has neither engaged
in any operations nor generated any revenue. It receives no cash
flow. In November, 1997 the registrant received the following
from Wheeler Group II, Inc. ("Wheeler"): (i) a capital infusion
of $6,000; and (ii) $25,000 in pre-paid legal services purchased
by Wheeler on behalf of the registrant to effectuate the legal
aspects of this registration statement. See "Certain
Relationships and Related Transactions." The registrant
anticipates no other additional capital infusions prior to
effectuating a Business Combination. Until such time as the
registrant effectuates a Business Combination, with the exception
of certain other professional fees and costs for such a
transaction, the registrant expects that it will incur minimal
operating costs throughout 1998. Since inception, all of the
registrant's expenses, which approximated $12,600, were paid
pursuant to a $12,600 capital infusion made to the registrant by
Net Lnnx (former parent company of the registrant) in exchange
<PAGE>
for a promissory note in the same amount made to Net Lnnx by the
registrant. As per that November 6, 1997 agreement with Net Lnnx
which canceled the $12,600 promissory note, the registrant is not
indebted to Net Lnnx for any such expenses. See "Description of
Business".
No officer or director of the registrant is paid any type of
compensation by the registrant and presently, there are no
arrangements or anticipated arrangements to pay any type of
compensation to any officer or director in the near future. The
registrant expects that it will meet its cash requirements until
such time as a Business Combination occurs. However, in the
event the registrant depletes its present cash reserves, the
registrant may cease operations and a Business Combination
may not occur. There are no agreements or understandings of any
kind with respect to any loans from officers or directors of the
registrant on behalf of the registrant.
Item 7. Financial Statements
Financial Statements of Registrant are attached as Appendix
A (following Exhibits) and included as part of this Form 10-KSB
Report. A list of said Financial Statements is provided in
response to Item 13 of this Form 10-KSB Report.
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable.
PART III
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange
Act.
(a) Identity of directors and executive officers.
The current directors and executive officers of the
registrant are as follows:
Name Age Position Term
Ronald W. Hayes, Jr. 31 Director, CEO, President, Since 5/97
Secretary, Treasurer
William R. Colucci 59 Director Since 11/97
David M. Bovi 31 Director Since 11/97
___________________________
Each director is elected until the next Annual Meeting of
shareholders and until his successor is qualified.
<PAGE>
(b) Business experience of directors and executive officers.
Mr. Hayes has served as a director, chief executive officer,
president, treasurer, and secretary of the registrant since the
registrant's inception in May, 1997. Mr. Hayes formalized his
position with the registrant pursuant to an employment agreement
dated June 1, 1997 in order to delineate his and the registrant's
rights and obligations. This employment agreement was
subsequently terminated on August 1, 1997, and presently, Mr.
Hayes continues to hold such offices without receiving any type
of compensation or benefits. Mr. Hayes presently also serves as
the chairman of the board, president and a director of Net Lnnx,
Inc., a publicly traded Pennsylvania "shell" corporation. He has
held this position since January, 1997 where he has been in
charge of implementing Net Lnnx's acquisition strategy. Mr.
Hayes is also presently the president of a privately held
management firm known as Harbor Town Management Group, Inc., a
Florida corporation, which provides investment banking and
business consulting services, and is the president and a director
of both Harbor Town Holding Group III, Inc. and Harbor Town
Holding Group IV, Inc., which are privately held Florida "shell
corporations". From 1994 to 1997, Mr. Hayes served as president
and chairman of R. H. Financial Services, Inc. an investment
services company which provided investment banking, brokerage and
consulting services. Also, from 1994 to 1995 Mr. Hayes served as
a director of Action Products, Inc., a publicly traded Nasdaq
listed company. From 1991 to 1995, he was employed as a
stockbroker and office manager with Prudential Securities and
First Montauk Securities, Inc. Mr. Hayes majored in business
finance at Palm Beach Junior College from 1985 to 1987. He
received his Real Estate Sales License and Mortgage Broker
License from Gold Coast Real Estate School in 1987 and 1988,
respectively, and received his Series 7 and 63 Licenses from the
Johnson Lipman School in 1991.
Mr. Colucci has served as a director of the registrant since
November, 1997. Mr. Colucci is also the executive vice president
and a director of Net Lnnx, Inc., a publicly traded Pennsylvania
"shell" corporation. He has held this position since September,
1997. His duties include assisting Net Lnnx in implementing its
acquisition strategy. Mr. Colucci is also presently a consultant
with a privately held management firm known as Harbor Town
Management Group, Inc., a Florida corporation, which provides
investment banking and business consulting services. From June
1996 to May 1997, Mr. Colucci served as Chief Operating Officer
and SEC Compliance officer for Physicians Laser Services, Inc., a
publicly traded Delaware corporation. From April 1991 to May
1996, Mr. Colucci served as a senior partner of Decision
Dynamics, Inc., a private business and real estate consulting
firm. Prior to this, Mr. Colucci has served in senior management
positions, including president and CEO of various companies.
These companies included Bandak Corporation, a privately held
jewelry and manufacturing company, Inmont Corporation, a publicly
held division of United Technologies, Inc., a billion dollar a
year chemical and paint manufacturing company and Butcher &
Sherrerd a privately held securities brokerage firm based in
Philadelphia, Pennsylvania. Mr Colucci received his Bachelor of
Science Degree in Economics from St. Joseph's University in
Philadelphia in 1964 and has successfully completed advanced
courses of study at Stanford University's Graduate School of
Business for executives of emerging growth companies.
Mr. Bovi has served as a director of the registrant since
November, 1997. Mr. Bovi is also presently the sole shareholder,
officer and director of David M. Bovi, P.A., a private practice
law firm which concentrates its practice in representing public
and private entities with respect to corporate and securities law
and merger and acquisition transactions. He has held this
<PAGE>
position since April, 1996. From November 1995 to April 1996 he
worked as a transactional corporate and securities and mergers
and acquisitions attorney at Communications/USA, a privately held
cellular paging services firm located in Palm Beach County,
Florida. During 1994 and 1995 he served as an associate attorney
in the corporate securities law department of the law firm of
Robert C. Hackney and Associates, Chartered, of counsel to the
law firm of Desantis Gaskill & Hunston, Palm Beach County,
Florida. Also, in 1994, he served as an associate attorney in
the corporate securities law department of the law firm of Cohen
Chernay et al., Palm Beach County, Florida. From September
1993 to December 1993 Mr. Bovi served as a "contract" attorney to
various small privately held entities where he assisted such
entities with raising private capital. Mr. Bovi received his
LL.M. Degree (Masters Degree of Law) in Securities Regulation
from Georgetown University Law School in May, 1993, his Juris
Doctor Degree from St. Thomas University School of Law in May,
1992, and his Bachelor of Arts Degree in Economics from the State
University of New York at Buffalo in May, 1989. He has been a
member in good standing of the Florida Bar since October, 1992.
Section 16(a) Beneficial Ownership Reporting Compliance.
To the best of registrant's knowledge, no officer, director
and/or beneficial owner of more than 10% of the registrant's
common stock, failed to file reports as required by Section 16(a)
of the Exchange Act during the most recent fiscal year.
Item 10. Executive Compensation.
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards Payouts
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other All
Name & Annual Restricted Securities Other
Position Year Salary ($) Bonus($) Compen- Stock Underlying LTIP Compen-
sation Award(s) Options/ Payouts sation
($) ($) Sars(#) ($) ($)
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ronald W.
Hayes, Jr.
Director
Chmn. of the
Board/Presi
dent/CEO 1997 10,000 -0- -0- -0- -0- -0- -0-
</TABLE>
Compensation of Directors
In consideration for William R. Colucci serving as a
director of the registrant, the registrant issued Mr. Colucci
10,541 shares of the registrant's common stock, no par value.
No other person received any type of compensation for serving as
a director of the registrant during 1997.
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
The following table sets forth, as of the date hereof, the
names, addresses, amount and nature of beneficial ownership and
percent of such ownership of each person known to the registrant
to be the beneficial owner of more than five percent (5%) of
registrant's Common Stock:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class(1)
of Beneficial Owner of Beneficial Owner(1)
<S> <C> <C>
Wheeler Group II, Inc. 17,931,250 89.7%
_______________________________
</TABLE>
(1) Includes 300,000 shares held directly by David M. Bovi, a
director of the registrant. Mr. Bovi is the president and
controlling shareholder of Wheeler Group II, Inc., a privately
held Florida corporation which serves as a business consulting
and holding corporation.
The following table sets forth, as of the date hereof, the
names, addresses, amount and nature of beneficial ownership and
percent of such ownership of the registrant's Common Stock of
each of the officers and directors of the registrant, and the
officers and directors of the registrant as a group:
<TABLE>
<CAPTION>
Name and Address Amount and Nature Percent of Class
of Beneficial Owner of Beneficial Ownership
<S> <C> <C>
Ronald W. Hayes, Jr. 318,669 1.6%
324 Datura Street, Suite 303
West Palm Beach, FL 33401
William R. Colucci 10,541*
324 Datura Street, Suite 303
West Palm Beach, FL 33401
David M. Bovi (1) 17,931,250 89.7%
319 Clematis Street, Suite 804
West Palm Beach, Fl 33401
All Officers and Directors
as a Group (3 persons).(1) 18,260,460 91.3%
_______________________________
</TABLE>
* Less than .01%.
(1) Includes 17,631,250 shares held indirectly by Mr. Bovi, a
director of the registrant, through Wheeler Group II, Inc. Mr.
Bovi is the president and controlling shareholder of Wheeler
Group II, Inc., a Florida corporation.
As of the date of this report, no arrangement exists
regarding a change in control of the registrant.
<PAGE>
Item 12. Certain Relationships and Related Transactions.
As of the date of this registration statement, the
registrant has issued an aggregate of 20,000,000 shares of
Common Stock as follows:
Harbor Town Holding Group I, Inc. (the "registrant"), was
incorporated under the laws of the State of Florida on May 6,
1997 as a wholly owned subsidiary of Net Lnnx, Inc., a publicly
traded Pennsylvania shell corporation traded on the
over-the-counter trading market ("Net Lnnx"). Net Lnnx is a
shell company conducting virtually no business operation, other
than its efforts to seek merger partners or acquisition
candidates. The registrant was originally created to act as the
receiver of a certain Net Lnnx asset (the "Transferred Asset")
which consisted of a $475,000 note receivable made to Net Lnnx.
Net Lnnx was required to dispose of the Transferred Asset
pursuant to the terms of a letter of intent entered into between
Net Lnnx and another unrelated company in connection with an
anticipated merger between Net Lnnx and such other unrelated
company. The parties intended to consummate a reverse merger
transaction between Net Lnnx and the unrelated company
whereby Net Lnnx would issues shares of Net Lnnx stock to the
shareholders of the unrelated company. Since Net Lnnx and the
unrelated company could not determine and agree upon an actual
value of the Transferred Asset ( due to its practically
unsecured nature) and the unrelated company did not wish to
purchase the Transferred Asset with the possibility of never
collecting on it due to its practically unsecured nature, Net
Lnnx transferred the Transferred Asset to the registrant in
exchange for 2,058,209 shares of the registrant's common stock,
no par value (the "Common Stock").
On May 21, 1997, Net Lnnx distributed all 2,058,209 shares
of the registrant which it owned to Net Lnnx shareholders as a
stock dividend on a share for share basis. Ronald W. Hayes, Jr.,
an officer and director of the registrant, received 318,669
shares of Common Stock in this transaction as a result of his
ownership of 318,669 shares of Net Lnnx stock on such date. Mr.
Hayes is the president and a director of Net Lnnx. On November
6, 1997 the registrant and Net Lnnx agreed to cancel the
instrument which transferred the Transferred Asset and the
registrant and Net Lnnx agreed that in exchange for Net Lnnx
releasing the registrant from debt in the amount of $12,600 owed
to Net Lnnx by the registrant, such release from liability would
constitute substitute consideration for the 2,058,209 shares the
registrant previously issued to Net Lnnx.
On November 6, 1997, the registrant issued 17,631,250
shares of Common Stock to Wheeler Group II, Inc. ("Wheeler")
and 300,000 shares to David M. Bovi, president and controlling
shareholder of Wheeler in exchange for (i) $6,000 cash, and
(ii) Wheeler purchasing $25,000 in pre-paid legal services on
behalf of the registrant to effectuate the legal aspects of this
registration statement. David M. Bovi is the president and
controlling shareholder of David M. Bovi, P.A., the law firm
retained by Wheeler on behalf of the registrant to effectuate
the legal aspects of this registration statement.
On November 12, 1997, David M. Bovi and William R. Colucci
were elected directors of the registrant. Also, on that date,
the registrant issued 10,541 shares of Common Stock to William
R. Colucci in exchange for his services as a director of the
registrant.
As the owner of approximately 88.2% of the registrant's
<PAGE>
shares of Common Stock, Wheeler is a "parent" corporation of the
registrant and is the registrant's controlling shareholder.
David M. Bovi, a director of the registrant, is the president
and controlling shareholder of Wheeler.
The executive and business office of the registrant consist
of office space located at 324 Datura Street, Suite 200, West
Palm Beach, FL 33401. Pursuant to an oral agreement, until the
effectuation of a Business Combination, the registrant utilizes,
free of charge, the offices of Harbor Town Management Group,
Inc., a corporation controlled by Ronald W. Hayes, Jr., a
stockholder of the registrant and the registrant's chief
executive officer and a director. The registrant believes this
office space is adequate to serve its needs until such time as a
Business Combination occurs. The registrant expects to be able
to utilize these offices, pursuant to the terms described above,
until such time as a Business Combination occurs.
Item 13. Exhibits and Reports on Form 8-K.
(a) Exhibits.
(3) Charter and Bylaws.
(i) Articles of Incorporation and Amendment
to Articles of Incorporation.**
(ii) Bylaws.**
(4) Instruments defining the rights of security
holders.
(i) Articles of Incorporation and Amendment
to Articles of Incorporation.**
(ii) Bylaws.**
(10) Material Contracts.
(i) Ronald W. Hayes, Jr. Employment Contract.**
(ii) Addendum to Ronald W. Hayes, Jr. Employment
Contract.**
(iii) Wheeler Group II, Inc. Subscription
Agreement.**
(11) Earnings per share (See Appendix A).
(27) Financial Data Schedule.
(i) Financial Data Schedule.
** Incorporated by reference to registrant's Form 10-SB filed
December 1, 1997.
<PAGE>
(b) Reports on Form 8-K.
During the last quarter of the year ended December 31,
1997, no reports on Form 8-K were filed by the registrant.
Appendix A
Financial Statements.
The following Audited Financial Statements of Registrant
are filed as part of this Form 10-KSB Report:
1. Consolidated Balance Sheet as of December 31, 1997.
2. Consolidated Statement of Operation for the Year
ended December 31, 1997.
3. Consolidated Statement of Statement of
Shareholder's Equity for the Year ended
December 31, 1997.
4. Consolidated Statement of Cash Flows for the Year
ended December 31, 1997.
5. Notes to Consolidated Financial Statements.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized:
HARBOR TOWN HOLDING GROUP I, INC.
By:/s/ Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., CEO/President
Date: April 13, 1998
In accordance with the Exchange Act, this report has been
signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
By: /s/Ronald W. Hayes, Jr.
Ronald W. Hayes, Jr., CEO/President
Date: April 13, 1998
PART F/S
<PAGE>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Stockholders
Harbor Town Holding Group I, Inc.
West Palm Beach, FL 33401
We have audited the accompanying balance sheet of Harbor Town
Holding Group I, Inc., (a development stage company) as of
December 31, 1997 and the related statements of operations and
changes in cash flows from May 6, 1997 (inception) to December
31, 1997. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.
We conducted out 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 from 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 respects, the financial position
of Harbor Town Holding Group I, Inc., (a development stage
company) as of December 31, 1997 and the results of its
operations and cash flows for the period May 6, 1997 (inception)
to December 31, 1997, in conformity with generally accepted
accounting principles.
The Company is in the development stage and to date has had no
significant operations. The continuation of the Company's
business is dependent upon the ability to obtain adequate
financing arrangements and ultimately, future profitable
operations.
Sweeney, Gates & Co.
Boynton Beach, Florida
April 14, 1998
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
(A Development Stage Company
BALANCE SHEET
December 31, 1997
ASSETS
Current assets:
Cash $ 4,268
Total current assets 4,268
$ 4,268
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 1,530
Total current liabilities 1,530
Stockholders' equity:
Common stock; no par value; 50,000,000
shares authorized; 20,000,000 shares
outstanding 43,695
Retained deficit ( 40,957)
Total stockholders' equity 2,738
$ 4,268
The accompanying notes are an integral part of these financial
statements.
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the Period May 6, 1997 (Date of Inception)
to December 31, 1997
Sales, net $ -
Cost of sales -
Gross profit (loss) -
General and administrative expenses 40,957
Net loss ( 40,957)
Retained earnings(deficit), beginning
of period -
Retained earnings(deficit), end of period ( 40,957)
Net loss per share $ -
Weighted average shares outstanding 8,830,143
The accompanying notes are an integral part of these financial
statements.
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
(A Development Stage Company
STATEMENT OF CASH FLOW
For the Period May 6, 1997 (Date of Inception)
to December 31, 1997
Cash flows from operating activities:
Net loss $ ( 40,957)
Non cash compensation 25,095
Changes in assets and liabilities -
increase in account payable 1,530
Net cash provided (used) for operations ( 14,332)
Cash flows from financing activities:
Proceeds from sale of capital stock 18,600
Net increase (decrease) in cash 4,268
Cash, beginning of period -
Cash, end of period $ 4,268
Supplemental disclosure:
Cash paid for interest $ -
Income taxes paid $ -
The accompanying notes are an integral part of these financial
statements.
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
(A Development Stage Company
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period May 6, 1997 (Date of Inception)
to December 31, 1997
<TABLE>
<CAPTION>
Deficit
Accumulated
during the
Common Development
Shares Stock Stage Total
<S> <C> <C> <C> <C>
Issuance of share to Net Lnnx 2,058,209 $ 12,600 $ - $ 12,600
Issuance of share to Wheeler 17,931,250 31,000 - 31,000
Issuance of shares to a director 10,541 95 - 95
Net Loss - - (40,957) (40,957)
Balance, December 31, 1997 20,000,000 $ 43,695 $ (40,957) $( 2,738)
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
1. BASIS OF PRESENTATION
Organization - Harbor Town Holding Group I, Inc. (the "Company")
was incorporated in the State of Florida May 6, 1998 as a wholly
owned subsidiary of Net Lnnx, Inc.
The Company shares facilities and certain other resources free of
charge with Harbor Town Management Group, Inc.
Development Stage Activities - The Company has been in the
development stage since its inception on May 6, 1997. It has
conducted no business other than to organize as a corporation.
It intends to seek and acquire merger partners that have ongoing
operations.
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 the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
Income Taxes - The Company accounts for income taxes on an asset
and liability approach to financial accounting. Deferred income
tax assets and liabilities are computed annually for temporary
differences between the financial statement and tax bases of
assets and liabilities that will result in taxable or deductible
amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected
to affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount
expected to be realized. Income tax expense is the tax payable
or refundable for the period plus or minus the change during the
period in deferred tax assets and liabilities.
Loss per Share - The Company has adopted Financial Accounting
Standards No. 128, "Earnings per Share" ("FAS 128"), effective
October 1, 1997. FAS 128 requires presentation of earnings or
loss per share on basic and diluted earnings per share. The
Company does not have any potentially dilutive shares
outstanding, and therefore, only basic loss per share is
presented. Loss per share is computed by dividing net income by
the weighted average number of shares outstanding during the
period.
<PAGE>
HARBOR TOWN HOLDING GROUP I, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
2. CAPITALIZATION AND SALE OF STOCK
The Company initial cash contribution of $12,600 was from its
parent, Net Lnnx, Inc. As consideration the Company issued
2,058,209 shares of its stock to Net Lnnx, Inc. On May 21, 1997,
Net Lnnx, Inc. spun off all the shares of the Company to its
shareholders as a stock dividend on a share for share basis.
On November 6, 1997, the Company sold 17,931,250 shares for
$6,000 in cash and $25,000 in legal services on behalf of the
Company. The legal fees were in regarding the legal aspects of a
registration statement on Form 10-SB under the Securities Act of
1934. The $25,000 was charged to legal and professional fees
expense during the period.
On November 12, 1997, the Company issued 10,541 shares of common
stock to a director of the Company for services to the Company as
a director. These shares were recorded at $.009 per share, the
amount which Net Lnnx, Inc. paid for its shares. The $95 was
charged to compensation expense during the period.
3. INCOME TAXES
The Company has had no taxable income since inception to December
31, 1997, and as a result, has recorded no tax expense. The
Company recorded a deferred tax asset of $5,400 resulting from a
net operating loss. A valuation allowance was provided for the
same amount. The Company has fully reserved the tax benefits of
the operating loss carryforward because the likelihood of
realization of the benefit cannot be established. The Internal
Revenue Code contains provisions, which may limit the loss
carryforwards available if a significant change in stockholder
ownership of the Company occurs.
The Company had available net operating loss carryforwards of
approximately $16,000 and expire in 2012.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 4,268
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 4,268
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 4,268
<CURRENT-LIABILITIES> 1,530
<BONDS> 0
0
0
<COMMON> 43,695
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 4,268
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 40,957
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (40,957)
<INCOME-TAX> 0
<INCOME-CONTINUING> (40,957)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (40,957)
<EPS-PRIMARY> (.00)
<EPS-DILUTED> (.00)
</TABLE>
