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As filed with the Securities and Exchange Commission on June 30, 1999
SEC File No.: 000-26479
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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers Under Section 12(b)
or 12 (g) of the Securities Exchange Act of 1934
WOLFPACK CORPORATION
(Name of Small Business Issuer in Its Charter)
Delaware 56-2086188
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(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
17 Glenwood Avenue,
Raleigh, North Carolina 27603
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(Address of Principal Executive Offices) (Zip Code)
(919) 831-1351
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(Registrant's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
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None None
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Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001 per share
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
(a) Business Development.
Wolfpack Corporation, a Delaware corporation (the "Company"), was
formed on March 16, 1998 to engage in any lawful act or activity for which
corporations may be organized under the Delaware General Corporation Law
("DGCL"). On May 14, 1998, the Company formed Wolfpack Subsidiary Corp., a
Delaware corporation and a wholly-owned subsidiary of the Company (the
"Subsidiary"), in order to effectuate and complete acquisitions of AAM
Investment Council, Inc. ("AAM") and Dina Porter, Inc. ("Dina Porter").
(Unless expressly stated otherwise, all references to the Company
hereinafter shall be deemed to include the Subsidiary. The acquisition of
AAM hereinafter shall be referred to as the "AAM Acquisition" and the
acquisition of Dina Porter hereinafter shall be referred to as the "Dina
Porter Acquisition." Together the AAM Acquisition and the Dina Porter
acquisition hereinafter shall be referred to as the "Acquisitions")
On January 4, 1999, the Company and the Subsidiary entered into two
acquisition agreements, one with AAM (the "AAM Acquisition Agreement") and
the other with Dina Porter (the "Dina Porter Acquisition Agreement")
(collectively the "Acquisition Agreements"). Under the terms of the
Acquisition Agreements, the Company (i) acquired all of the issued and
outstanding stock of AAM from the AAM shareholders in exchange for
1,000,000 shares of the Common Stock of the Company, and (ii) acquired all
of the issued and outstanding shares of stock of Dina Porter from the Dina
Porter shareholders in exchange for 1,000,000 shares of the Company's
common stock, par value $.001 (the "Common Stock"). The shares of Common
Stock issued to the shareholders of AAM and Dina Porter were issued
pursuant to an exemption from the registration requirements of the
Securities Act pursuant to Section 4(2). As a result of the Acquisition,
AAM, which was formed under Pennsylvania law on February 15, 1990, and
Dina Porter, which was formed under North Carolina law on May 8, 1998
became the wholly-owned subsidiaries of the Company.
(b) Business of the Issuer.
(1) Principal Products or Services and their Markets.
(i) The Company.
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The Company is a holding company, the principal assets of which
consist of the capital stock of each of AAM and Dina Porter. The Company
conducts no business on its own independent of AAM and Dina Porter.
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(ii) AAM
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The business in which AAM engages is the provision of investment
advisory services. AAM is presently inactive. Management has devoted the
majority of its efforts to (i) developing its marketing philosophy and
market strategy, (ii) obtaining new clients, (iii) pursuing and assembling
a management team to complete its marketing goals, and (iv) obtaining
sufficient working capital through loans and equity through private
placement offerings. These activities have been funded by the Company's
management and investments from stockholders. Among the services that AAM
has offered since its formation by prior management in 1990 has been
portfolio management designed to achieve unique investment objectives. AAM
acts as a financial adviser to select companies in order to: (i) provide
financial advice and consulting on an everyday basis according to a
company's needs; (ii) analyze certain historical and pro forma financial
information pertaining to the operation of a company; (iii) perform due
diligence on a company, its industry, markets and operations as well as on
the principals involved to the extent that AAM deems prudent; (iv) assist
in the preparation of financial pro formas or other presentation documents
to the extent requested by a client to assist in the structuring,
negotiation, documentation and placement of financing; (v) use its best
efforts to identify and contact qualified private, institutional and
industry investors or their representatives regarding the financing and to
make introductions regarding the same; (vi) under the direction of a
client, advise and assist in the negotiations and structuring of such
financing with potential investors; and (vii) assist in the closing of the
financing with the potential investors. At the current time, AAM does not
have the resources or personnel to assist a client in a large financial
transaction. AAM does have the capabilities of assisting with structuring,
negotiation, preparation of documentation, and placement of financing of a
small to medium-size equity, debt or sub-debt raise in the range of one
million dollars to thirty million dollars.
AAM can service any size investment advisory client as long as such
client has no more than ten portfolios. The ideal client of AAM has one to
three portfolios and clearly defined investment objectives.
The criteria that AAM looks for in selecting a client are those listed
above and reiterated below:
1. A small to medium-size client.
2. A client looking for financial consulting assistance on a small to
medium-size transaction. (Debt, equity or sub-debt raise)
3. A small company that needs "Start-up" financial consulting
assistance.
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4. An investment advisory client that has or is willing to create
clearly defined investment objectives.
5. An investment advisory client with one to three portfolios.
Market for AAM's Services
The market for AAM and the kind of companies that engage the services
of AAM are the "start-up" and the small to medium-size company. They do
not have to be in a specific industry, but they need to require financial
consulting services such as:
1. Provide financial advice and consulting on an everyday basis
according to a company's needs.
2. Analyze certain historical and pro forma financial information
pertaining to the operation of a company.
3. Perform due diligence on a company, its industry, markets and
operations as well as on the principals involved.
4. Assist in the preparation of financial pro formas or other
presentation documents to the extent requested by a client to assist in the
structuring, negotiation, documentation and for the offering.
5. Use its best efforts to identify and qualify private, institutional
and industry investors or their representatives regarding the financing and
to make introductions regarding same.
6. Under the direction of the client, advise and assist in the
negotiations and structuring of such financing with potential investors.
7. Assist in the closing of the financing with the potential
investors.
In the investment advisory business, AAM's clients are high net worth
individuals, small companies or institutional investors.
AAM's relationship with a client that needs financial advisory
services with a specific transaction would generally last about three or
four months, and AAM would get a specific fee only for completing the
transaction. Usually, 1% of the total transaction for raising debt, 3% of
the total transaction for raising sub-debt, and 5% of the total transaction
for raising equity.
For an investment advisory client that wants a specific portfolio
structured and managed, AAM would charge fees to that client as follows:
1/4 of 1% of the total
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assets per year for a debt portfolio, billed quarterly, or 3/4 of 1% of the
total assets per year for an equity portfolio, billed quarterly. The
investment advisory client could stay with AAM for a period as short as six
months or indefinitely, depending on the client's objective.
Expansion of AAM
Mr. Coker is the sole employee of AAM and at the moment is integral to
AAM's success. However, AAM is going to devote considerable time and
efforts to recruiting highly-skilled and experienced individuals. Once
recruited, AAM will compensate such individuals and provide incentives to
encourage them to remain with AAM. AAM intends to hire one person within
the next six (6) months at a yearly salary of approximately $75,000.
Thereafter, AAM will evaluate its needs for additional personnel and hire
such personnel accordingly.
To date, AAM's investment advisory services have been limited. AAM is
not registered with the Securities and Exchange Commission (the "SEC") as
an investment adviser under the Investment Advisers Act of 1940, as amended
(the "Advisers Act") due to the exemption from such registration for
investment advisers who have fewer than 15 clients in a twelve month
period. The Company intends to expand AAM's investment advisory business
and will register as an investment adviser under the Advisers Act, when it
is required to do so.
(ii) Dina Porter
The business in which Dina Porter engages is the operation of a
retail store which specializes in contemporary clothing, jewelry and fine
crafts. Dina Porter specializes in contemporary clothing for women ranging
from sizes XS to 3X and in fine gifts. Dina Porter carries clothing, gifts
and crafts that are "Made in America". The clothing is unconstructed,
offering maximum comfort, and is easy to care for, while using top fabrics
such as linen, silk and chiffon. Dina Porter carries casual to wedding
attire and certain lines can be custom ordered. Dina Porter carries over
100 lines of clothing, but only carries two or three items per style.
In addition to clothing, Dina Porter carries a wide selection of
accessories including scarves, hats, purses and limited edition jewelry.
The scarves that Dina Porter carries are usually one-of-a-kind, hand
painted silk. The jewelry carried consists of gold, silver, metal and
modern art pieces. For fine gifts, Dina Porter offers table pieces of hand
blown glass, clocks, hand-thrown pottery, perfume bottles, picture frames
and kaleidoscopes. Dina Porter does carry one line of gifts that is an
exception to the "Made in America" rule. That line is Halcyon Days, the
English Battersea Boxes that are considered to be highly desirable as
collectibles. Halcyon Days handmade enamel boxes are imported from Great
Britain. The manufacturer of the boxes was founded during the reign of
Queen Victoria, and is located in Bilston, England. Each box is made of
copper, covered in enamel, and then hand painted. The boxes
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are carried by some of the most prestigious retailers in the USA including
Tiffany's, Neiman Marcus, Gumps, and Scully and Scully. Many of their
editions are limited, and collectors seek outdated boxes as well as the
year boxes (e.g., Mother's Day 1999, Valentine's Day 1999). Dina Porter
provides a unique service by customizing the inside of these boxes.
The market for Dina Porter is the upscale customer (primarily female)
living in Raleigh, Chapel Hill, and Durham, North Carolina area (i.e., the
Research Triangle) and also the tourists who come to the capital city of
Raleigh. The clothing and fine crafts carried by Dina Porter are not
usually available to other stores in the area, as the suppliers are
smaller, more "mom and pop" vendors rather than large manufacturers. Thus,
the customers who come to the store appreciate the fact that the items
offered are not readily available elsewhere in the area. In addition, Dina
Porter is focusing on increasing its sales through the Internet by way of
its eleven (11) page web site.
There are definite seasonal effects on sales due to the nature of the
retail business. However, the mixture of hard goods (i.e., crafts) and
soft goods (clothing) help minimize any downturn in economic cycles
experienced by stores having only one or the other type of goods. For
example, Christmas is not a peak season for clothing, whereas September
through mid-November are, but by late November the hard goods pick up and
help outweigh any downswings found in the clothing industry. Usually the
worst two months of the year for retail sales are January and July, but
that is typical throughout the retail industry.
Susan H. Coker is the founder and full time employee of Dina Porter.
She does the buying, ordering and is responsible for the daily operations.
Her other employees often assist in the buying and focus on the selling
part of the store, i.e., the customer contact.
Dina Porter has conducted this line of business since its inception by
Susan H. Coker in 1983 as a Pennsylvania sole proprietorship, in 1995 as a
North Carolina sole proprietorship and as a North Carolina corporation
in 1998. The Company plans to build Dina Porter's retail merchandising
business by opening additional stores in the same geographic area and in
other locations in North Carolina. Dina Porter intends to open an
additional location in Chapel Hill, North Carolina within the next twelve
(12) months, in a retail space of approximately 2,000 square feet. After
opening the second location, Dina Porter and the Company will evaluate
the possibility of opening additional branches in other parts of North
Carolina. Dina Porter intends to pay no more than $20.00 per square foot
and estimates that one time set-up costs will be approximately $25,000.
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(2) Distribution Methods of the Products or Services.
Prior to the AAM Acquisition, AAM's investment advisory services have
been limited. AAM targeted only select clients via word of mouth and had
fewer than 15 clients in a twelve month period. The Company intends to
focus its efforts on enlarging its client base. Presently, AAM has, on the
average three (3) to four (4) clients per year. Prior to the Dina Porter
Acquisition, former management relied on local and Internet advertising, as
well as "word of mouth". The Company seeks to expand the business of AAM
and Dina Porter by increasing sales and marketing efforts to attain
significant penetration into targeted areas.
Dina Porter is constantly working on increasing sales in many
directions. Their advertising budget increases yearly, and Susan Coker
stresses the importance of customer retention with the sales staff. In the
Spring of 1999, several in-house fashion shows were held, with a percentage
of proceeds going to the charitable group that sponsored the show. These
proved very successful and Dina Porter plans to continue them in the
future. The web site is another way to expand, and Dina Porter will be one
of two key retailers mentioned on Citysearch's retail page over the ten
week period during the Fall/Winter 1999-2000 season. Dina Porter's semi-
annual newsletter is mailed to over a 3,000 customer base and reminds
customers of what is current in both fashion and crafts.
The web site for Dina Porter is maintained by Susan H. Coker and her
staff, in addition to backup provided by Citysearch.
Once a customer contacts Dina Porter via E-mail (which is contained in
the website) or by the "800" toll free number, the staff at Dina Porter
discuss the customer's needs. If Dina Porter has what the customer wants,
the merchandise is shipped directly to the customer via UPS (Dina Porter
maintains an account with UPS, which comes twice daily). Dina Porter has
purchased a digital camera in order to photograph merchandise and e-mail it
to a customer for viewing.
As most aspects of AAM's business will be dependent on highly skilled
and experienced individuals, AAM will devote considerable efforts to
recruiting and compensating such individuals and to providing incentives to
encourage them to remain with AAM. Further, approximately sixteen and one-
half (16.5%) percent of the proceeds derived from the March 26, 1999
private placement of the Company's common stock (the "Offering") have been
targeted for sales and marketing efforts and approximately fifty-eight
(58%) percent of the $271,500 raised by the Offering have been targeted for
the acquisition and expansion of AAM and Dina Porter.
(3) Status of any publicly announced new product or service.
There have been no publicly announced new products or services by the
Company, AAM or Dina Porter.
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(4) Competitive Business Conditions and the Company's Competitive Position
in the Industry and Methods of Competition.
(i) The Company.
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The Company is not aware of any competition that it may have from
other holding companies. However, AAM and Dina Porter do have significant
competition in their respective industries.
(ii) AAM.
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AAM will encounter intense competition in all aspects of its business
and will compete directly with many full service securities firms, a
significant number of which (x) offer their customers a broader range of
financial services including investment advisory services, (y) have
substantially greater resources and (z) may have greater operating
efficiencies. In addition, a number of firms offer investment advisory
services which are incidental to their other services and do not charge any
commission for this type of service. Moreover, there is substantial
commission discounting by full-service broker-dealers competing for
institutional and individual brokerage business. The possible increase of
this discounting could adversely affect AAM.
Other financial institutions, notably commercial banks and savings and
loan associations, offer customers some of the services and products
presently provided by investment advisers and securities firms. In
addition, certain large corporations and banks have entered the securities
industry by acquiring securities firms, which offer investment advice.
While it is not possible to predict the type and extent of competitive
services which banks and other institutions ultimately may offer to
customers, AAM may be adversely affected to the extent those services are
offered on a large scale.
(iii) Dina Porter.
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The specialty retail industry is highly competitive and fragmented.
Specialty retail means that the products offered are not available in
lower to mid-end department stores or from mass merchandisers. The
clothing and craft suppliers are usually smaller and create fewer products
to sell at a higher price. This duality of a more limited quantity and
higher price attracts the customer who prefers a more exclusive look and is
willing to pay for the exclusivity. Dina Porter competes with large
specialty retailers, traditional and better department stores, national
apparel chains, designer boutiques, individual specialty apparel stores and
direct marketing firms. Dina Porter competes for customers principally on
the basis of quality, assortment and presentation of merchandise, customer
service, store ambience, sales and marketing programs and value. Dina
Porter competes for quality merchandise and assortment principally based on
relationships with designer resources and purchasing power. Most of Dina
Porter's competitors are larger and have greater financial resources than
the
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Company. Certain of Dina Porter's merchandise resources have established
competing free-standing retail stores in the same vicinity as Dina Porter.
(5) Sources and Availability of Raw Materials and the Names of Principal
Suppliers.
None of the Company, AAM nor Dina Porter utilizes raw materials in its
respective business. The closest comparison to the utilization of raw
materials is the reliance by Dina Porter on designers of quality and
fashionable merchandise. The Company has no guaranteed supply arrangements
with its principal merchandising sources. The Company's success is
dependent in part upon initiating and maintaining strong relationships with
designers and that such designers will continue to meet Dina Porter's
quality, style and volume requirements.
(6) Dependence on one or a few major customers.
Neither the Company nor Dina Porter depends on one or a few major
customers. AAM, historically, has targeted only selected companies and
has fewer than 15 clients in a twelve month period. At present AAM has 4
clients. The loss of 2 clients could have a material adverse effect on its
business. However, the Company has targeted the build-up of the AAM
client base as part of its business plan.
(7) Patents, trademarks, licenses, franchises, concessions, royalty
agreements or labor contracts, including duration.
None.
(8) Need for any Government Approval of Principal Products or Services.
(i) The Company.
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The Company is a holding company and does not need any Government
approval of any principal products or services. It may be noted that
effectiveness of this Form 10-SB and approval of Form 211 as filed with
the NASD are prerequisites of the Company's common stock being quoted on
the National Association of Securities Dealers Over The Counter Bulletin
Board (the "Bulletin Board").
(ii) AAM
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AAM is not presently awaiting any governmental approval for its
services. Note that AAM is not registered with the SEC as an investment
adviser under the Advisers Act due to the exemption from such registration
for investment advisers who have fewer than 15 clients in a twelve month
period. The Company intends to expand AAM's investment advisory business
and will register as an investment adviser under the Advisers Act, when it
is required to do so.
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Assuming that a determination is made that AAM is no longer exempt
from registration under the Advisers Act, it will be required to register
with the SEC and/or potentially with the state in which it is located or
intends to conduct business. Jurisdiction over investment advisers is
allocated between the states and the federal government based generally
upon the amount of assets the investment advisor has under management.
Benefits to a client of an investment advisor registering under the
Advisers Act include the receipt of certain current audited financial
information and other non-financial information. As a public reporting
company, AAM already will be preparing audited financial statements and
providing non-financial disclosure to the investing public. Therefore, AAM
does not view the preparation and updating of the Form ADV to be an onerous
responsibility.
There is no requirement for investment advisers to pass any
examination or to meet any qualification requirements based on training.
However, all investment advisers are subject to restrictions against
engaging in fraudulent, deceptive or manipulative acts or practices and
such activities could result in the adviser being barred from registration
or being subject to remedial sanctions after registration. To register, AAM
would file a Form ADV in triplicate and submit with it a registration fee
of approximately $150. As AAM would probably request the assistance of an
attorney to complete this filing on its behalf, AAM anticipates incurring
several hundred dollars in attorney's fees.
Form ADV consists of a two part application which provides the SEC
with information regarding the educational and business background and the
business practices of the investment adviser and of those who control the
investment adviser. An investment adviser must include an audited balance
sheet with Form ADV where it (i) retains custody of client funds or
securities or (ii) requires prepayment of advisory fees six months or more
in advance and in excess of $500 per client.
Within 45 days after Form ADV is filed, the SEC should grant
registration or begin proceedings to deny the registration. Grounds for
denial are where the SEC finds that the investment adviser has committed
prohibited acts and, therefore, denial is in the public interest.
In order for the investment adviser to remain in good standing, the
Advisor's Act requires the investment adviser, among other things, to:
1. keep Form ADV current by filing periodic amendments whenever any
information previously reported becomes inaccurate;
2. file a brief report on Form ADV-S within 90 days of the end of
each fiscal year (along with an audited balance sheet when
applicable); and
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3. comply with the "brochure rule" which requires most investment
advisers to provide clients and prospective clients with
information about the investment adviser's business practices and
educational and business background. Part II of Form ADV can be
used for this purpose.
As previously stated, all investment advisers are subject to
restrictions against engaging in fraudulent, deceptive or manipulative acts
or practices. Registered investment advisers are subject to remedial
sanctions including censure, limitations on their operations, suspension
for a period not exceeding 12 months, and revocation for, among other
things, willfully violating or aiding or abetting a violation of the
Securities Act of 1933, the Securities Exchange Act of 1934, the Investment
Company Act of 1940 or the Advisers Act.]
(iii) Dina Porter
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Dina Porter does not need any Government approval of any principal
products or services. It may be noted that a facility's operating costs
are affected by increases in the minimum hourly wage, unemployment tax
rates, sales taxes and similar costs over which the Company has no control.
Some of Dina Porter's personnel may be paid at rates based on the federal
minimum wage. As a result, increases in the minimum wage may result in an
increase in the Company's labor costs.
(9) Effect of Existing or Probable Governmental Regulations on the
Business.
The business of AAM, the investment advisory industry and securities
industry generally, are subject to extensive regulation at both the federal
and state levels. Failure to comply with any of these laws, rules or
regulations could result in fines, suspension or expulsion, which could
have a material adverse effect upon AAM as well as the Company. As
previously stated, increases in the minimum wage may result in an increase
in the Dina Porter's as well as the Company's labor costs.
(10) Estimate of the amount spent during each of the last two fiscal years
on research and development activities, and the extent to which the cost of
such activities are borne directly by customers.
Since the Company's inception in 1998, the Company has incurred no
research and development expense. Neither Dina Porter nor AAM has incurred
corporate research and development expense since the Company's acquisition
of them in January 1999. It may be noted that AAM incurs certain
research expenses as a part of conducting its investment advisory services
and passes these expenses along to its client. However, this type of daily
activity is part of the very foundation of the service which AAM provides
and should be differentiated from the research and development expenses
incurred in overall technology or product development.
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(11) Costs and effects of compliance with environmental laws (federal,
state and local).
None of the Company, AAM nor Dina Porter is impacted directly by the
costs and effects of compliance with environmental laws.
(12) Number of total employees and number of full time employees.
As of the date of this filing, the Company had no full-time employees.
As of the date of this filing, AAM had one (1) full-time employee and Dina
Porter had nine (9) employees, two (2) of whom are full-time and seven (7)
of which are part-time.
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
The Company was formed on March 16, 1998, under the laws of the State of
Delaware to engage in any lawful act or activity for which corporations may be
organized under the general
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[corporation law of the State of Delaware. The Company's principal assets
consist of the assets of the Company's subsidiary, Dina Porter, Inc. and the
revenues it receives through the sales of products through its one retail store.
AAM is currently inactive with no revenues or operating expenses.
Development Stage Activities
The following discussion relates to the results of our operations to date,
and our financial condition:
The Company
For the next 12 months, the Company plans to expand the operations of its
two subsidiaries Dina Porter, Inc. and AAM. The expansion of the business of
Dina Porter, Inc. includes (i) increasing its customer base by continuing its
marketing efforts through direct mail and by opening additional stores in the
same geographic area as well as in other locations in North Carolina; (ii)
increasing its sources for inventory; and (iii) pursuing and assembling a
management team to complete its marketing goals and to market limited quantities
of expanded lines of merchandise.
The Company's subsidiary, AAM, intends to act as a financial adviser and
provide investment advisory services to select companies who have portfolios
ranging in size from an ideal number of three to a practical limit of 10 and
that have clearly defined investment objectives. At the moment, Mr. Coker is
the sole employee of AAM and is integral to the success of AAM. However, AAM
intends to devote considerable time and efforts to
<PAGE>
recruiting highly-skilled and experienced individuals. Once recruited, AAM will
compensate such individuals and provide incentives to encourage them to remain
with AAM. AAM is not registered with the SEC as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") due to the
exemption from such registration for investment advisers who have fewer than 15
clients in a twelve month period. The Company intends to expand AAM's investment
advisory business and will register as an investment adviser under the Advisers
Act, when it is required to do so.
The Company anticipates that with the completion of its private placement
offering, it will be in a position to complete its expansion activities. The
Company anticipates that results of its operations may fluctuate for the
foreseeable future due to several factors, including (i) whether and when new
products will be successfully integrated and accepted by Dina Porter's present
clientele and intended market, (ii) the continued market acceptance of current
products, (iii) competitive pressures on pricing, and (iv) changes in the mix of
products sold. Operating results would also be adversely affected by a downturn
in the market for current products. Because the Company is continuing to
increase its operating expenses for personnel and other general and
administrative expenses, the Company's operating results would be adversely
affected if its sales did not correspondingly increase. The Company's limited
operating history makes accurate prediction of future operating results
difficult or impossible. Although Dina Porter has experienced growth in recent
years, there can be no assurance that, in the future, the Company will sustain
revenue growth or remain profitable on a quarterly or annual basis or that its
growth will be consistent with predictions made by securities analysts.
The Company anticipates that its results of operations may fluctuate for
the foreseeable future for AAM due to several factors, including (i) whether
and when new services are successfully integrated and accepted by AAM's target
market, (ii) market acceptance of initial and planned services, and (iii)
competitive pressures on fees for services. Operating results also would be
adversely affected by a downturn in the market for current products and
services and volatility in the financial markets and changes in the regulated
environment. Because the Company is continuing to increase its operating
expenses for personnel and other general and administrative expenses, the
Company's operating results would be adversely affected if its income did not
correspondingly increase. The Company's limited operating history makes
accurate prediction of future operating results difficult or impossible.
AAM is a development stage enterprise with no activity for the year ended
December 31, 1998 and for the six months ended June 30, 1999. During this
period, management had devoted the majority of its efforts to (i) developing its
marketing philosophy and market strategy, (ii) obtaining new clients for its
services, (iii) pursuing and assembling a management team to complete its
marketing goals, and (iv) obtaining sufficient working capital through loans and
equity through private placement offerings. These activities were funded by the
Company's management and investments from stockholders.
Dina Porter is an operating entity with business operations going back to
1995 and with increased revenue for the year ended December 31, 1998 and for the
six months ended June 30, 1999. During this period, management has devoted the
majority of its efforts to (i) developing its marketing philosophy and market
strategy, (ii) obtaining new customers for its products, (iii) enhancing its
sources for inventory, (iv) pursuing and assembling a management team to
continue the process of completing its marketing goals, (v) marketing its
products, and (vi) obtaining sufficient working capital through loans and equity
through private placement offering. These activities were funded by the
Company's management and investments from stockholders.
Results of Operations
Results of Operations for the year ended December 31, 1998 as compared to
December 31, 1997.
For the year ended December 31, 1998, AAM was inactive.
For the year ended December 31, 1998, Dina Porter generated net sales of
$672,619 as compared to $463,536 for the year ended 1997 for an increase of
209,083 or 45.1%. The Company's cost of goods sold for the year ended December
31, 1998 was $405,540 representing 60.3% as compared to $251,790 for the year
ended December 31, 1997 representing 62.1%. The Company's gross profit on sales
was approximately $267,079 or 39.7% for the year ended December 31, 1998 as
compared to $211,746 for the year ended December 31, 1997 or 45.6%. The
decrease in gross profit is the result of entering a period of reevaluation of
the Company's sources of supply and changing retail prices to yield a higher
gross profit.
The Company's general and administrative costs aggregated approximately
$251,938 for the year ended December 31, 1998 as compared to $219,220 for the
year ended December 31, 1997 representing a increase of $32,718. This increase
represents increased spending for advertising, sales help and increased costs
of handling credit cards.
Results of Operations for the six months ended June 30, 1999 as
compared to the six months ended June 30, 1998.
For the six months ended June 30, 1999, the Company generated net sales
of $316,119 as compared to $285,455 for the six months ended June 30, 1998
representing an increase of $30,664 or 10.74%. The Company's cost of goods sold
for the six months ended June 30, 1999 was $186,281 or 58.9% as compared to
$177,952 or 62.3% for the six months ended June 30, 1998. The Company's gross
profit on sales was $129,718 or 41.0% for the six months ended June 30, 1999 as
compared to $107,503 or 37.7% for the six months ended June 30, 1998. The
increase in gross profit is the result of increased sales for Dina Porter's
lines of products resulting from increased advertising.
<PAGE>
The Company's general and administrative costs aggregated approximately
$175,978 for the six months ended June 30, 1999 as compared to $109,294 for the
six months ended June 30, 1998 representing an increase of $104,948. This
increase represents increased spending for advertising, sales help and credit
card cost of handling credit cards.
Liquidity and Capital Resources
The Company increased cash by $152,652 from a balance of $132,070 at
January 4, 1999 to $284,722 at June 30, 1999 through the process of receiving
net cash from the sale of $244,027 in shares of common stock. The Company
increased working capital by $150,891 from a balance of $233,928 at January 4,
1999 to $384,819.
The Company expended an aggregate of $251,938 and $214,242 for operating
expenses for the year ended December 31, 1998 and for the six months ended June
30, 1999 and expended $35,139 for a new vehicle for Dina Porter and a capital
withdrawal of $7,500 while Dina Porter was operating as a sole proprietorship
for the year ended December 31, 1998. Dina Porter expended $59,136 to increase
inventory for the six months ended June 30, 1999.
Management believes that it will be able to fund the Company through the
proceeds of its private placement offerings and through positive cash flows from
Dina Porter until such time as the Company has developed the business of AAM and
is experiencing positive cash flows.
Thereafter, if cash generated from operations is insufficient to satisfy
the Company's working capital and capital expenditure requirements, the Company
may be required to sell additional equity or debt securities or obtain
additional credit facilities. There can be no assurance that such financing, if
required, will be available on satisfactory terms, if at all.
Year 2000 Issues
The Company has completed its assessment of Year 2000 compliance with
respect to its products that are currently being sold to customers and has
concluded that all significant products are compliant. With respect to third
parties, the Company is in the process of identifying and contacting its
significant suppliers to determine the extent to which the Company may be
vulnerable to such third parties' failure to address their own year 2000 issues.
As a result, the Company's assessment will be substantially dependent upon
information provided by third parties. The Company expects to materially
complete this assessment process by the third quarter of this fiscal year.
Based upon the Company's current estimates, additional out-of-pocket costs
associated with its Year 2000 compliance are expected to be immaterial. Such
costs do not include internal management time, which is not expected to be
material to the Company's results of operations or financial condition.
<PAGE>
The Company believes that its most significant risk with respect to Year
2000 issues relates to the performance and readiness status of third parties. As
with all manufacturing and wholesale companies, a reasonable worst case Year
2000 scenario would be the result of failures of third parties (including
without limitation, governmental entities, utilities and entities with which the
Company has no direct involvement) that negatively impact the Company's
inventory supply chain or ability to provide products to customers or the
ability of customers to purchase products, or events affecting regional,
national or global economies generally. The impact of these failures cannot be
estimated at this time; however, the Company is considering contingency plans to
limit, to the extent possible, the financial impact of these failures on the
Company's results of operations. Any such plans would necessarily be limited to
matters over which the Company can reasonably control.
Known trends, events or uncertainties that could be reasonably likely to
have a material adverse effect on the businesses of Dina Porter , AAM and the
Company and may thereby materially impact the Company's short-term or long-
term liquidity and/or net sales, revenues or income from continuing operations
are , as to Dina Porter: seasonality of sales and the continuation of inventory
from present and future vendors at prices that will permit Dina Porter to
operate at the current or improved gross profit levels; as to AAM: Federal
Securities regulations that may effect the ability for AAM to complete its
marketing strategy and a favorable environment in which AAM will conduct its
consulting activities. The following is a detailed explanation of these trends,
events, or uncertainties.
1. As to AAM.
A. Fluctuating Securities Volume and Prices
AAM (and the securities industry in general) will be directly
affected by national and international economic and political conditions,
broad trends in business and finance, the level and volatility of interest
rates, changes in and uncertainty regarding tax laws and substantial
fluctuations in the volume and price levels of securities transactions.
AAM (and the securities industry in general) will be subject to other
risks, including customer fraud, employee errors or misconduct and
litigation. In addition, price fluctuations may cause losses on securities
positions, which AAM recommends.
B. Competition from Securities Firms
AAM will encounter intense competition in all aspects of its
business and will compete directly with many full services securities
firms, a significant number of which offer their customers a broader
range of financial services including investment advisory services,
have substantially greater resources and may have greater operating
efficiencies. In addition, a number of firms offer investment
advisory services which are incidental to their other services and do
not charge any commission for this type of service. Moreover, there
is substantial
<PAGE>
commission discounting by full-service broker-dealers competing for
institutional and individual brokerage business. The possible increase
of this discounting could adversely affect AAM.
C. Competition from Banks
Other financial institutions, notably commercial banks and
savings and loan associations, offer customers some of the services and
products presently provided by investment advisers and securities firms.
In addition, certain large corporations and banks have entered the
securities industry by acquiring securities firms, which offer investment
advice. While it is not possible to predict the type and extent of
competitive services which banks and other institutions ultimately may
offer to customers, AAM may be adversely affected to the extent those
services are offered on a large scale.
D. Potential Litigation
Many aspects of AAM's business will involve substantial risks of
liability, including exposure to substantial liability under federal and
state securities laws in connection with the suitability of the advice
given to clients and the risk of liability arising out of the activities of
its employees. AAM may not be able to maintain an errors and omissions
insurance policy insuring it against these risks. In recent years, there
has been an increasing incidence of litigation involving the securities
industry, including class actions which generally seek rescission and
substantial damages.
E. Personnel
Most aspects of AAM's business will be dependent on highly
skilled and experienced individuals. AAM will devote considerable efforts
to recruiting and compensating those individuals and to providing
incentives to encourage them to remain with it. Individuals associated with
AAM may in the future leave it at any time to pursue other opportunities.
An inability of AAM to compete with other companies in the same type of
business as AAM in salary and benefits] could have an adverse impact on
AAM's ability to attract and retain those personnel.
F. Regulation
AAM's business, the investment advisory industry and securities
industry generally, are subject to extensive regulation at both the federal
and state levels. Failure to comply with any of these laws, rules or
regulations could result in fines, suspension or expulsion, which could
have a material adverse effect upon the Company.
<PAGE>
2. Risk Factors Relating to Dina Porter
A. Sensitivity To Economic Conditions and Consumer Confidence
The specialty retail industry is highly dependent upon the level
of consumer spending, particularly among affluent customers, and may
be adversely affected by an economic downturn, increases in consumer
debt levels, uncertainties regarding future economic prospects, or a
decline in consumer confidence. An economic downturn in the areas in
which Dina Porter is located, could have a material adverse effect on
Dina Porter's business and results of operations, and thereby effect
the Company.
B. Changing Consumer Preferences
Dina Porter's success depends in substantial part upon its
ability to anticipate and respond to changing consumer preferences and
fashion trends in a timely manner. Although Dina Porter attempts to
stay abreast of emerging lifestyle and consumer preferences affecting
its merchandise, any failure by Dina Porter to identify and respond to
such trends could have a material adverse effect on Dina Porter's
business and results of operations.
C. Dependence on Designer Resources
Because Dina Porter offers high end apparel, the Company's
success is dependent in part upon initiating and maintaining strong
relationships with designers. The Company has no guaranteed supply
arrangements with its principal merchandising sources. Accordingly,
there can be no assurance that such sources will continue to meet Dina
Porter's quality, style and volume requirements. The inability of Dina
Porter to obtain quality and fashionable merchandise in a timely
fashion could have a material adverse effect on Dina Porter's business
and results of operations.
D. Seasonality; Fluctuation in Quarterly Results
The specialty retail industry is seasonal in nature, with a
disproportionately high level of sales and earnings typically
generated in the fall and holiday selling seasons. Working capital
requirements and inventory fluctuate during the year, increasing
substantially in the first quarter in anticipation of the holiday
selling season. If actual sales for a quarter do not meet or exceed
projected sales for that quarter, expenditures and inventory levels
could be disproportionately high for such quarter and Dina Porter's
cash flow and earnings for that quarter and future quarters could be
adversely affected.
<PAGE>
E. Competition
The specialty retail industry is highly competitive and
fragmented. Dina Porter competes with large specialty retailers,
traditional and better department stores, national apparel chains, designer
boutiques, individual specialty apparel stores and direct marketing firms.
Dina Porter competes for customers principally on the basis of quality,
assortment and presentation of merchandise, customer service, store
ambience, sales and marketing programs and value. Dina Porter competes for
quality merchandise and assortment principally based on relationships with
designer resources and purchasing power. Most of Dina Porter's competitors
are larger and have greater financial resources than the Company.
It should be noted that The Private Securities Litigation Reform Act of
1995 provides a "safe harbor" for certain forward-looking statements. The
forward-looking statements contained in this Form 10-SB are subject to certain
risks and uncertainties. Actual results could differ materially from current
expectations. Among the factors that could affect the Company's actual results
and could cause results to differ from those contained in the forward-looking
statements contained herein is the Company's ability to implement its business
strategy successfully, which will be dependent on business, financial, and other
factors beyond the Company's control, including, among others, prevailing
changes in consumer preferences, availability of trained personnel and changes
in regulations. There can be no assurance that the Company will continue to be
successful in implementing its business strategy. Other factors could also
cause actual results to vary materially from the future results covered in such
forward-looking statements.
Item 3. Description of Property.
The Company, the Subsidiary and AAM maintain their executive and
administrative offices at 17 Glenwood Avenue, Raleigh, North Carolina 27603.
Dina Porter leases store space comprised of approximately 4,251 square feet in
the Cameron Village Shopping Center, Daniels Street, Raleigh, North Carolina.
The lease agreement for the premises is from a five year period from October 1,
1995 to September 30, 2000. As rent, Dina Porter presently pays the greater of
(i) the base minimum monthly rent of $4,989.33 or (ii) 6% of gross sales. In
addition, Dina Porter pays its pro rata share of ad valorem property taxes on
the premises, its pro rata portion of insurance and Cameron Village Merchants
Association marketing fund dues. The annual rent for the premises paid by Dina
Porter from October 1, 1995 through September 30, 1999 is as follows:
$54,355 for the year of October 1, 1995 through September 30, 1996.
$56,194 for the year of October 1, 1996 through September 30, 1997.
$58,033 for the year of October 1, 1997 through September 30, 1998.
$59,872 for the year of October 1, 1998 through September 30, 1999.
<PAGE>
Item 4. Security Ownership of Certain Beneficial Owners and Management.
(a) Security Ownership of Certain Beneficial Owners.
The following information relates to those persons known to the
Company to be the beneficial owner of more than five percent (5%) of the
Common Stock, par value $.001 per share, the only class of voting
securities of the Company outstanding.
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- -------------------- --------------------- -------------------------- -----------
<S> <C> <C> <C>
Common Stock, par Peter L. Coker 1,000,000 shares/(1)/ 20.08%
value $.001 per share 12804 Morehead
Chapel Hill, North Carolina 27514-8443
Direct
Common Stock, par Susan H. Coker. 2,000,000 shares/(1)/
value $.001 per share 12804 Morehead Chapel Hill, North Carolina
27514-8443
Direct 40.17%
</TABLE>
- ----------
* Based on 4,977,875 shares issued and outstanding.
/(1)/ Mr. and Mrs. Coker own 1,000,000 shares of stock as tenants
by the entirety.
(b) Security Ownership of Management.
The number of shares of Common Stock of the Issuer owned by the
Directors and Executive Officers of the Issuer is as follows:
<TABLE>
<CAPTION>
Name and Amount and
Title of Address of Nature of Percentage
Class Beneficial Owner Beneficial Ownership of Class*
- ------------ ----------------------- ------------------------ -----------------
<S> <C> <C> <C>
Common Stock, par Peter L. Coker 1,000,000 shares/(1)/ 20.08%
value $.001 per share 12804 Morehead
Chapel Hill, North Carolina
27514-8443 Direct
Common Stock, par Susan H. Coker. 2,000,000 shares/(1)/
value $.001 per share 12804 Morehead Chapel Hill,
North Carolina 27514-8443 Direct 40.17
Common Stock, par Ira A. Hunt, Jr. 0 0%
value $.001 per share 7102 Capitol View Drive
McLean, VA 22101 Direct
All Officer and Directors as
a Group (3 persons) 2,000,000 40.17%
</TABLE>
- ----------
* Based on 4,977,875 shares issued and outstanding.
/(1)/ Mr. and Mrs. Coker own 1,000,000 shares of stock as tenants by
the entirety.
<PAGE>
Item 5. Directors, Executive Officers, Promoters and Control Persons.
(a) Directors and Executive Officers.
The Directors and Executive Officers of the Company are as follows.
Directors of the Company serve for a term of one year or until their
successors are elected. Officers are appointed by, and serve at the
pleasure of, the Board.
Peter L. Coker, Sr., President, Treasurer and Director
Mr. Coker, age 56, has held the offices of President and Treasurer,
and has been a Director of the Company and Subsidiary since inception.
Mr. Coker has been a Partner and Senior Managing Director of Capital
Investment Partners, an investment banking firm located in Raleigh,
North Carolina since June of 1996. Since November of 1979, he
has also served as President, Director and shareholder of American
Asset Management, Inc., an investment advisory firm located in New
York, New York. Mr. Coker founded American Asset Management, Inc. in
1978. Mr. Coker served as President and Assistant Secretary of
AAM since it was formed in February 1990 until June 1996. Mr.
Coker currently acts as a consultant to American Asset Management
Inc. Mr. Coker is also a Director of Dina Porter, Inc. Mr.
Coker is currently a member of the Board of Directors of the following
companies: Leading Edge Packaging, Inc. ("LEPI"), Remote Source
Lighting International, Inc., Nations Page, Inc., Centennial Venture
Partners, LLC, Persimmon IT, Bear Rock Foods, Inc., and North Carolina
State University Foundation. Mr. Coker is also a member of the New
York Society of Security Analysts.
Susan H. Coker, Secretary and Director
Mrs. Coker, age 56, has held the office of Secretary and] has been a
Director of the Company and Subsidiary since inception. Mrs. Coker has
been the President and a Director of Dina Porter, Inc. since it was
organized in May 1998. Since February 1990, Mrs. Coker has served as
Secretary and Treasurer and as sole Director of AAM. From September 1983 to
January 1999, Mrs. Coker was the sole proprietor of Dina
Porter, a clothing and gift store, first in Pennsylvania and from 1995 to
January 1999, in North Carolina. Since May 1998, Mrs. Coker has held the
office of President and has served as a Director of Dina Porter, Inc.
Ira A. Hunt, Jr., Director
Mr. Hunt, age 74, has served as a director of the Company since
September 1, 1998. Mr. Hunt has been self-employed as a management
consultant since 1993. Mr. Hunt has served on the board of directors of
Data Measurement Corp., Information Resources Engineering, American
Multipleyer Corp., and Card
<PAGE>
Guard International, all public companies. Mr. Hunt received a B.S. in 1945
from the U.S. Military Academy, an MBA in 1958 from the University of
Detroit, an MS in 1950 from the Massachusetts Institute of Technology, a
Doctor of Business Administration in 1964 from George Washington University
and a Doctor of University in 1954 from the University of Grenoble, France.
(b) Significant Employees.
The participation of Peter L. Coker and Susan Coker in AAM and Dina
Porter, respectively is significant to the success of each of AAM and Dina
Porter as well as to the Company. The Company presently does not have an
employment agreement with either of Peter Coker and Susan Coker.
( c) Family relationships.
Peter L. Coker, Sr. and Susan H. Coker are married to each other.
(d) Involvement in certain legal proceedings.
None of the directors or officers of the Company, the Subsidiary, AAM and
Dina Porter (i) have had any bankruptcy petitions filed by or against them,
(ii) have been convicted in a criminal proceeding or been subject to a pending
criminal proceeding, (iii) have been subject to any order, judgment, or decree,
not subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities or
banking activities; nor (iv) have been found by a court of competent
jurisdiction (in a civil action), the Commission or the Commodity Futures
Trading Commission to have violated a federal or state securities or commodities
law, and the judgment has not been reversed, suspended, or vacated.
Item 6. Executive Compensation.
None of the Company, the Subsidiary, AAM nor Dina Porter have commenced
paying Susan Coker or Peter Coker any salary or fees.
Item 7. Certain Relationships and Related Transactions.
(a) Transactions where Key Company Members have a direct or indirect
material interest.
On January 4, 1999, the Company and the Subsidiary entered into the
AAM Acquisition Agreement and the Dina Porter Acquisition Agreement. The
terms of the Acquisition Agreements are identical in most respects. Under
the terms of the
<PAGE>
Acquisition Agreements, the Company acquired all the issued and outstanding
stock of AAM from the shareholders of AAM in exchange for 1,000,000 shares
of the Common Stock of the Company, and acquired all the issued and
outstanding shares of stock of Dina Porter from its shareholders in
exchange for 1,000,000 shares of the Common Stock of the Company. The
shares of Common Stock issued to the shareholders of AAM and Dina Porter
were issued pursuant to an exemption from the registration requirements of
the Securities Act pursuant to Section 4(2).
(b) Transactions with Promoters.
None.
Item 8. Description of Securities.
(a) Common Stock
The Company is authorized to issue up to 25,000,000 shares of common
stock, par value $.001 per share ("Common Stock"), of which
4,977,875 shares are outstanding on the date hereof. Holders of Common
Stock are entitled to one vote for each share held of record on each matter
submitted to a vote of stockholders. There is no cumulative voting for
election of directors.
Subject to the prior rights of any series of preferred stock which may
from time to time be outstanding, if any, holders of Common Stock are
entitled to receive ratably, dividends when, as, and if declared by the
Board of Directors out of funds legally available therefor, and upon the
liquidation, dissolution, or winding up of the Company, to share ratably in
all assets remaining after payment of liabilities and payment of accrued
dividends and liquidation preferences on the preferred stock, if any.
Holders of Common Stock have no preemptive rights and have no rights to
convert their Common Stock into any other securities. The outstanding
Common Stock is validly authorized and issued, fully paid, and
nonassessable.
(b) Preferred Stock
The Company is authorized to issue up to 5,000,000 shares of "blank
check" preferred stock, par value $.001 per share ("Preferred Stock"), none
of which are outstanding on the date hereof. The Board of Directors of the
Company has to date not established the rights and preferences of the
Company's Preferred Stock.
<PAGE>
PART II.
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and Other Shareholder Matters.
(a) Market information.
There is no public trading market on which the Company's common stock
is traded. The Company will file a Form 211 with the National Association
of Securities Dealers ("NASD") in order to allow the quote of the Company's
Common Stock on the Bulletin Board. The Company's 2,715,000 shares of
Common Stock may trade on the Bulletin Board under the symbol "WOLF", if
available. The 2,000,000 shares of Common Stock held by Peter Coker and
Susan Coker can be sold pursuant to Rule 144 ("Rule 144") under the
Securities Act of 1933, as amended, after satisfying all holding periods
and other requirements imposed by Rule 144.
The 262,875 shares of the common stock that have been sold pursuant to
the Rule 506 Offering, may be sold pursuant to Rule 144 after satisfying
all holding periods and other requirements imposed by Rule 144.
(b) Holders.
There are approximately eighty-one (81) record holders of common
equity.
(c ) Dividends.
As of the date hereof, no cash dividends have been declared on the
Common Stock. Subject to the prior rights of any series of preferred stock
which may from time to time be outstanding, if any, holders of Common Stock
are entitled to receive ratably, dividends when, as, and if declared by the
Board of Directors out of funds legally available therefor. Under the
DGCL, the Company may only pay dividends out of capital and surplus, or out
of certain enumerated retained earnings, as those terms are defined in the
DGCL. The payment of dividends on its common stock is, therefore, subject
to the availability of capital and surplus or retained earnings as provided
in the DGCL.
Item 2. Legal Proceedings.
None of the Company, AAM nor Dina Porter is party to any pending legal
proceeding, nor is its property the subject of any pending legal proceeding that
is not routine litigation that is incidental to its business. It may be noted
that many aspects of AAM's business will involve substantial risks of liability,
including exposure to substantial liability under federal and state securities
laws in connection with the suitability of the advice given to clients and the
risk of
<PAGE>
liability arising out of the activities of its employees. AAM may not be able to
maintain an errors and omissions insurance policy insuring it against these
risks. In recent years, there has been an increasing incidence of litigation
involving the securities industry, including class actions which generally seek
rescission and substantial damages.
Item 3. Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
Item 4. Recent Sales of Unregistered Securities.
On January 4, 1999, the Company and the Subsidiary entered into two
acquisition agreements, one with AAM (the "AAM Acquisition Agreement") and the
other with Dina Porter (the "Dina Porter Acquisition Agreement") (collectively
the Acquisition Agreements"). The terms of the Acquisition Agreements are
identical in most respects. Under the terms of the Acquisition Agreements, the
Company acquired all the issued and outstanding stock of AAM from the
shareholders of AAM, Peter L. Coker, Sr. and Susan H. Coker, in exchange for
1,000,000 shares of the Common Stock of the Company/(1)/, and acquired all
the issued and outstanding shares of stock of Dina Porter from its shareholder,
Susan H. Coker in exchange for 1,000,000 shares of the Common Stock of the
Company. The shares of Common Stock issued to the shareholders of AAM and Dina
Porter were issued pursuant to an exemption from the registration requirements
of the Securities Act pursuant to Section 4(2).
(1) Mr. And Mrs. Coker own these 1,000,000 shares of stock as
tenants by the entirety.
<PAGE>
In March 1999, the Company offered and sold 2,715,000 shares of its common
stock, at a price of $0.10 per share, aggregating $271,500, pursuant to Rule 504
of Regulation D promulgated under the Act (the "Rule 504 Offering"). The
offering closed on April 6, 1999. As part of the Rule 504 Offering, the Company
issued to Kaplan Gottbetter & Levenson, LLP, 50,000 shares of the common stock
in consideration for legal services valued at $5,000 or $.10 per share.
Since June 1999, the Company has sold 262,875 shares of its common stock,
aggregating $26,287.50 to fourteen (14) persons, two (2) of which purchased
shares of the Company's common stock in the Rule 504 Offering. The shares of
common stock are being offered and sold at a price of $.10 per share, pursuant
to Rule 506 of Regulation D (the "Rule 506 Offering"). All the persons who have
purchased shares of the Company's common stock in the Rule 506 Offering are
aware that the shares are restricted under the Act and that the shares must be
held indefinitely until the shares are registered under the Act or an exemption
from registration is available. The Rule 506 Offering is ongoing and has not
yet closed. However, the Company will not raise more than an aggregate of
$1,000,000 between the Rule 504 Offering and the Rule 506 Offering.
Item 5. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation contains provisions to (i)
eliminate the personal liability of its directors for monetary damages resulting
from breaches of their fiduciary duty (other than breaches of the duty of
loyalty, acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, violations under Section 174 of the
DGCL or for any transaction from which the director derived an improper personal
benefit) and (ii) indemnify its directors and officers to the fullest extent
permitted by Section 145 of the DGCL, including circumstances in which
indemnification is otherwise discretionary. The Company believes that these
provisions are necessary to attract and retain qualified persons as directors
and officers. The SEC has taken the position that the provision will have no
effect on claims arising under the federal securities laws.
Part F/S
Financial Statements.
The Company's Audited Financial Statements as of December 31, 1998 appear
on pages F-1 to F-19 of this Form 10-SB. All such financial statements are
incorporated by reference herein.
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
Fax (973) 790-8845
To The Board of Directors and Shareholders
of Wolfpack Corporation and subsidiaries
I have audited the accompanying consolidated balance sheet of Wolfpack
Corporation and subsidiaries as of December 31, 1998 and the related
consolidated statements of operations, cash flows and shareholders' equity for
the year ended December 31, 1998. These financial statements are the
responsibility of the Company's management. My responsibility is to express an
opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Wolfpack Corporation and subsidiaries as of December 31, 1998 and the
results of its operations, shareholders equity and cash flows for the year
ended December 31, 1998 in conformity with generally accepted accounting
principles.
Thomas Monahan
--------------------------
Thomas P. Monahan, CPA
June 10, 1999
Paterson, New Jersey
F-1
<PAGE>
WOLFPACK CORPORATION
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, 1999
Dec. 31, 1998 Unaudited
------------- --------------
Assets
Current assets
<S> <C> <C>
Cash and cash equivalents $ 132,07 $ 284,722
Inventory 60,367 119,503
Prepaid expenses 57,091 28,545
-------- ---------
Current assets 249,528 432,770
Property and equipment-net 43,811 39,611
Other assets
Security deposits 5,500 5,500
-------- ---------
Total other assets 5,500 5,500
-------- ---------
Total assets $298,839 $ 477,881
======== =========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable $ 15,600 $ 42,951
-------- ---------
Stockholders' equity
Preferred stock - authorized 5,000,000 shares,
$.001 per share each. At December 31, 1998 and
June 30, 1999, there - 0- and -0- shares
outstanding. 15,600 42,951
Common Stock authorized 20,000,000 shares,
$0.001 par value each. At December 31, 1998
and June 30, 1999, there are 2,000,000 and
4,795,000 shares outstanding respectively. 2,000 4,795
Additional paid in capital 281,165 522,397
Retained earnings 74 (92,262)
-------- ---------
Total stockholders' equity 283,239 434,930
-------- ---------
Total liabilities and stockholders' equity $298,839 $ 477,881
======== =========
</TABLE>
F-2
<PAGE>
WOLFPACK CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the six For the six
For the For the months ended months ended
year ended year ended June 30,1998 June 30, 1999
Dec. 31, 1997 Dec. 31, 1998 Unaudited Unaudited
------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenue $ 463,536 $ 672,619 $ 285,455 $ 316,119
Costs of goods sold 251,790 405,540 177,952 186,281
---------- ---------- ---------- -----------
Gross profit 211,746 267,079 107,503 129,718
Operations:
General and administrative 219,220 251,938 109,294 214,242
Non cash payment of legal fees 5,000
Depreciation 2,258 7,278 3,000 4,200
---------- ---------- ---------- -----------
Total expenses 221,478 259,216 112,294 223,442
Income (loss) from operations and (9,732) 7,863 (4,791) (93,724)
before corporate income taxes
Other income
Interest income 4,270 3,013 1,112 1,388
---------- ---------- ---------- -----------
Total other income 4,270 3,013 1,112 1,388
Net income $ (5,462) $ 10,876 $ (3,679) $ (92,336)
(loss) ========== ========== ========== ===========
Net income (loss) per share -basic $(0.00) $0.00 $(0.00) $(0.02)
========== ========== ========== ===========
Number of shares outstanding-basic 2,000,000 2,000,000 2,000,000 4,795,000]
========== ========== ========== ===========
</TABLE>
F-3
<PAGE>
WOLFPACK CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
<TABLE>
<CAPTION>
Preferred Preferred Common Common Additional Retained
Date Stock Stock Stock Stock paid in capital earnings Total
- ---------------- --------- --------- ------- -------- ---------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Issuance of -0- $-0- 2,000,000 $2,000 $281,165 $ 283,165
shares for
acquisitions
Net income 74 74
--------- ------ -------- -------- ---------
Balance -0- $-0- 2,000,000 $2,000 $281,165 $ 74 $ 283,239
December 31, === ==== ========= ====== ======== ======== =========
1998
Balances 01- -0- $-0- 2,000,000 $2,000 $281,165 $ 74 $ 283,239
04-1999
Unaudited
Sale of shares 2,795,000 2,795 276,705 279,500
Offering (35,473) (35,473)
expenses
Net loss (92,336) (92,336)
--------- ------ -------- -------- ---------
06-30-1999 -0- $-0- 4,795,000 $4,795 $522,397 $(92,262) $434,930]
=== ==== ========= ====== ======== ======== =========
</TABLE>
F-4
<PAGE>
WOLFPACK CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the
six months For the
ended six months
For the For the June 30, ended
year ended year ended 1998 June 30, 1999
Dec. 31, 1997 Dec. 31, 1998 Unaudited Unaudited
-------------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $(5,462) $ 10,876 $ (3,679) (92,336)
Non cash payments - legal fees 2,258 5,000
Depreciation 7,278 3,000 4,200
Adjustments to reconcile net income (loss) to net cash
Inventory (7,235) 60,754 (15,622) (59,136)
Prepaid expenses 5,700 28,716 2,000 28,546
Accounts payable 27,279 15,600 6,200 27,351
------- -------- -------- ---------
TOTAL CASH FLOWS FROM OPERATIONS 22,540 65,792 (8,101) (86,375)
CASH FLOWS FROM INVESTING ACTIVITIES
Capital withdrawal (7,500)
Purchase of assets (5,000) (35,139)
------- --------
TOTAL CASH FLOWS FROM INVESTING (5,000) (42,635)
ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Sale of stock 279,500
Offering expenses (35,473)
---------
TOTAL CASH FLOWS FROM FINANCING 244,027
ACTIVITIES
NET INCREASE (DECREASE) IN CASH 27,540 30,653 (8,101) 152,652
CASH BALANCE BEGINNING OF PERIOD 71,980 101,417 99,520 132,070
------- -------- -------- ---------
CASH BALANCE END OF PERIOD $99,520 $132,070 $ 91,419 $284,722]
======= ======== ======== =========
</TABLE>
F-5
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 1 - Organization of Company and Issuance of Common Stock
a. Creation of the Company
Wolfpack Corporation (the "Company") was formed under the laws of Delaware
on March 16, 1998 and is authorized to issue 20,000,000 shares of common stock,
$0.001 par value each and 5,000,000 shares of preferred stock, $0.001 par value
each.
b. Description of the Company
The Company was formed as a holding company for the acquisition of
Wolfpack Subsidiary, Corp. which has two (2) subsidiaries Dina Porter, Inc.
and AAM Investment Council, Inc. Dina Porter, Inc. (Dina Porter) is a retail
store which specializes in contemporary clothing, jewelry and fine crafts. AAM
Investment Council, Inc. (AAM) was formed in on February 15, 1990 under the laws
of Pennsylvania by Peter Coker and Susan Coker. AAM is an investment adviser,
that offers portfolio management designed to achieve unique investment
objectives.
c. Issuance of Shares of Common Stock
On January 4, 1999, the Company issued 1,000,000 shares of common stock
each to Susan Coker and Peter Coker in consideration for all of the issued and
outstanding shares of common stock of Wolfpack Subsidiary, Corp. and its
subsidiaries.
As of June 30, 1999, the Company offered and sold 2,745,000 shares of
common stock for an aggregate cash consideration of $274,500. The Company paid
$40,473 as offering expense consisting of $35,473 in cash and issued 50,000
shares of common stock in consideration for an offset of $5,000 in legal
expense. The shares of common stock were sold at $0.10 per share.
Note 2 - Summary of Significant Accounting Policies
------------------------------------------
a. Basis of Financial Statement Presentation
The consolidated financial statements presented at December 31,
1998, reflect the reorganization of the Company on January 4, 1999 which
consists of the financial statements of the Company at January 4, 1999, the
balance sheet of AAM as of December 31, 1998 and the balance sheet of Dina
F-6
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Porter, Inc. as of December 31, 1998 and the related consolidated statements of
operations, stockholders' equity and cash flows for the Company for period
from inception, March 16, 1998, to January 4, 1999 and the statement of
operations and cash flows of AAM and Dina Porter, Inc. for the years ended
December 31, 1997 and 1998. Dina Porter was operated as a sole proprietorship
for the year ended December 31, 1997 and 1998 and was reorganized into a
corporation on January 4, 1999 as Dina Porter, Inc. for the purposes of this
reorganization into the Company.
The unaudited consolidated financial statements presented consist of the
unaudited financial statements of the Company as at June 30, 1999 consisting of
the balance sheets of the Company, AAM and Dina Porter as at June 30, 1999 and
the related unaudited consolidated statements of operations, stockholders'
equity and cash flows for the six months ended June 30, 1998 and 1999 consist
of the unaudited statements of operations, cash flows and stockholders' of the
Company, AAM and Dina Porter. The unaudited statements of operations, cash flows
and statements of stockholders' equity of Dina Porter for the six months ended
June 30, 1998, reflect the transactions of Dina Porter while Dina Porter was
operated as a sole proprietorship.
b. Cash and Cash Equivalents
The Company treats cash equivalents which includes temporary investments
with a maturity of less than three months as cash.
c. Revenue Recognition
Revenue is recognized at the point of sale for products sold over the
counter.
d. Property and Equipment
Depreciation of property and equipment is computed using the straight-line
F-7
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
method over five years. Amortization of leasehold improvements is computed using
the straight-line method over the shorter of the estimated useful lives of the
assets or the remaining lease term.
Buildings 31 years
Furniture, Fixtures and Equipment 3 to 10 years
Leasehold improvements 5 years
Earnings Per Share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings per Share ("Statement No.
128"). Statement No. 128 applies to entities with publicly held common stock or
potential common stock and is effective for financial statements issued for
periods ending after December 15, 1997. Statement No. 128 replaces APB Opinion
15, Earnings per Share ("EPS"). Statement No. 128 requires dual presentation
of basic and diluted earnings per share by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing net
income by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution of securities that could
share in the earnings of the Company such as common stock which may be issuable
upon exercise of outstanding common stock options or the conversion of debt into
shares of common stock. As of December 31, 1998 and June 30, 1999, there are no
matters that would effect the number of shares of common stock outstanding.
Shares used in calculating basic and diluted net income per share were as
follows:
<TABLE>
<CAPTION>
Dec. 31, 1998 June 30, 1999
-------------- ---------------
<S> <C> <C>
Shares used in calculating per share
amounts - Basic (Weighted average
common shares outstanding) 2,000,000 4,795,000
</TABLE>
F-8
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
f. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect 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.
g. Asset Impairment
The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of.
Long-lived assets and certain identifiable intangibles are reviewed for
impairment whenever events or changes in circumstances indicate that full
recoverability is questionable. There was no effect of such adoption on the
Company's financial position or results of operations.
h. Significant Concentration of Credit Risk
At December 31, 1998 and June 30, 1999, the Company has
concentrated its credit risk by maintaining deposits in several banks. The
maximum loss that could have resulted from this risk totaled $-0-which
represents the excess of the deposit liabilities reported by the banks over the
amounts that would have been covered by the federal insurance.
i. Recent Accounting Standards
Accounting for Derivative Instruments and Hedging Activities
------------------------------------------------------------
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS 133) was issued in
June 1998. It is effective for all fiscal years beginning after June 15, 1999.
The new standard requires companies to record derivatives on the balance sheet
as assets or liabilities, measured at fair value. Gains or losses resulting from
changes in the values of those derivatives would be accounted for depending on
the use of the derivatives and whether they qualify for hedge accounting. The
key criterion for hedge
F-9
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
accounting is that the hedging relationship must be highly effective in
achieving offsetting changes in fair value or cash flows. The Company does not
currently engage in derivative trading or hedging activity. The Company will
adopt SFAS 133 in the fiscal year ending December 31, 2000, although no impact
on operating results or financial position is expected.
Accounting for the Costs of Computer Software Developed or Obtained for
-----------------------------------------------------------------------
Internal Use
------------
In March of 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use". SOP 98-1 requires computer
software costs associated with internal use software to be charged to operations
as incurred until certain capitalization criteria are met. SOP 98-1 is effective
beginning January 1, 1999. The Company is currently assessing the impact that
adoption of this statement will have on consolidated financial position and
results of operations.
j. Unaudited financial information
In the opinion of Management, the accompanying unaudited financial
statements contain all adjustments (consisting only of normal recurring items)
necessary to present fairly the financial position of the Company as of June
30, 1999 and the results of its operations and its cash flows for the six
months ended June 30, 1998 and 1999. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the SEC's rules and regulations of the Securities and Exchange
Commission. The results of operations for the periods presented are not
necessarily indicative of the results to be expected for the full year.
Note 3 - Transfer of Assets
The Company was formed as a holding company for the acquisition of certain
assets and operating entities through its subsidiary Wolfpack Subsidiary, Corp.
which has two subsidiaries Dina Porter, Inc. and AAM Investment Council, Inc.
The Company entered into an Agreement with Wolfpack Subsidiary, Corp. on
January 4, 1999, pursuant to which the Company exchanged all the issued and
outstanding shares of common stock of Wolfpack Subsidiary, Corp. and its
subsidiaries for an aggregate of 2,000,000 shares of common stock of the
Company. The transaction has been accounted for as a transfer and is accounted
for as if a pooling of interests had occurred using historic costs with the
recording of the net assets acquired at their historical book value with
restatement of periods prior to the reorganization on a combined basis.
F-10
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 4 - Related Party transactions
a. Certain relationships
Susan Coker and Peter Coker are officer's and directors of the Company,
Wolfpack Subsidiary, Corp., Dina Porter and AAM.
Peter Coker and Susan Coker are husband and wife.
b. Officer Compensation
No officer or employee has received in excess of $100,000 compensation as
of December 31, 1998 and June 30, 1999.
c. Capital Withdrawal
For the year ended December 31, 1998, Susan Coker withdrew $7,500 cash from
the Dina Porter, reducing Dina Porter's capital while Dina Porter was operated
as a sole proprietorship.
Note 5 - Commitments and Contingencies
Lease Agreements
On June 26, 1995, the Susan H. Coker d/b/a/ Dina Porter entered into a
lease agreement for 4,251 square feet of retail space at The Cameron Village
Shopping Center at 446 Daniel Street, Raleigh, North Carolina with an unrelated
party for a period of 5 years beginning October 1, 1995 and ending September 30,
2000 for a rental of $4,530 per month. The lease requires a security deposit of
$4,530. The amount of rent to be paid over the life of the lease is as follows:
$54,355 per year October 1, 1995 through September 30, 1996
$56,194 per year October 1, 1996 through September 30, 1997
$58,033 per year October 1, 1997 through September 30, 1998
$59,872 per year October 1, 1998 through September 30, 1999
$61,711 per year October 1, 1999 through September 30, 2000
F-11
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
The Company will pay its pro rata share of ad valorem property taxes on the
premises. This will be paid monthly in advance based on estimates of costs for
the year. The monthly amounts due for this space is $173.58 for property taxes
and $63.76 for insurance. These amounts will be adjusted once a year to reflect
the actual pro rata costs for the year.
AAM occupies office space at 17 Glenwood Avenue, Raleigh, North Carolina
27603.
Note 6 - Inventory
Inventory has been recorded at the lower of cost or market under the first-
in first-out method. At December 31, 1998 and June 30, 1999, inventory of
goods available for sale was $60,367 and $119,503 respectively.
Note 7 - Property and Equipment
Property and Equipment for the Company consisted of the following at
December 31, 1998:
<TABLE>
<CAPTION>
Accumulated
Asset Depreciation Balance
-------- ---------------- --------
<S> <C> <C> <C>
Vehicles................ $35,139 $ 5,020 $ 30,119
Furniture and fixtures.. 16,444 6,826 9,618
Leasehold Improvements.. 7,358 3,284 4,074
------- ------- -----------
Total................... $58,941 $15,130 $ 43,811
======= ======= ===========
</TABLE>
Property and Equipment for the Company consisted of the following at June
30, 1999:
<TABLE>
<CAPTION>
Accumulated
Asset Depreciation Balance
-------- ------------------- ------------------
<S> <C> <C> <C>
Vehicles................ $35,139 $ 7,520 $ 27,619
Furniture and fixtures.. 16,444 $ 8,001 $ 8,443
Leasehold Improvements.. 7,358 3,809 $ 3,549
------- --------------- ---------------
Total................... $58,941 19,330 39,611
======= =============== ===============
</TABLE>
F-12
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
Note 8 - Income Taxes
------------
Prior to January 4, 1999, the Company's subsidiary, Dina Porter reported
income and expenses as a sole proprietorship utilizing Form 1040 Schedule C and
reflecting any profit and loss as a component of reportable income of Susan
Coker on Form 1040. The Company's subsidiary AAM was inactive for the year
ending December 31, 1998.
The Company provides for the tax effects of transactions reported in the
financial statements. The provision if any, consists of taxes currently due plus
deferred taxes related primarily to differences between the basis of assets and
liabilities for financial and income tax reporting. The deferred tax assets and
liabilities, if any represent the future tax return consequences of those
differences, which will either be taxable or deductible when the assets and
liabilities are recovered or settled. As of June 30, 1999, the
Company had no material current tax liability, deferred tax assets, or
liabilities to impact on the Company's financial position because the deferred
tax asset related to the Company's net operating loss carryforward and was fully
offset by a valuation allowance.
The Company's effective tax rate on tax benefits differs from the expected
federal tax rate as follows:
<TABLE>
<CAPTION>
<S> <C>
Income tax benefit at statutory rate $ 31,369
Increase in valuation allowance $(31,369)
--------
Actual income taxes $ -0-
The Components of the deferred tax assets and liabilities are as follows:
Net operating loss available for carryforward $ 31,369
--------
Total deferred tax assets $ 31,369
Less valuation allowance $(31,369)
--------
Deferred tax assets, net of valuation allowance $ -0-
========
</TABLE>
At June 30, 1999, the Company had net operating loss carry forwards for
Federal income tax purposes of $92,262. This carryforward is available to offset
future taxable income, if any, and expires in the year 2010. The Company's
utilization of this carryforward against future taxable income may become
subject to an annual limitation due to a cumulative change in ownership of the
Company of more than 50 percent.
F-13
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
The Company recognized no income tax benefit for the loss generated for the
year ended December 31, 1998 and for the six months ended June 30, 1999. SFAS
No. 109 requires that a valuation allowance be provided if it is more likely
than not that some portion or all of a deferred tax asset will not be realized.
The Company's ability to realize benefit of its deferred tax asset will depend
on the generation of future taxable income. Because the Company's subsidiary AAM
has yet to recognize any revenue from operations and Dina Porter will be
expending greater amounts of cash to expand operations, increase cash expended
for advertising, labor, and other pre-opening expenses to open new stores, the
Company believes that a full valuation allowance should be provided.
F-14
<PAGE>
Note 9 - Segment Information
Segment information for the Company is as follows:
On January 4, 1999, Dina Porter (a sole proprietorship) was reorganized
into a corporation. The transaction has been accounted for as a transfer and is
accounted for as if a pooling of interests had occurred using historic costs
with the recording of the net assets acquired at their historical book value
with restatement of periods prior to the reorganization on a combined basis.
Owner's equity for Dina Porter (a sole proprietorship) is as follows:
<TABLE>
<CAPTION>
<S> <C>
Owner's equity January 1, 1998 $277,966
Less capital withdrawal (7,500)
Net profit 10,839
--------
Balance owner's equity December 31, 1998 $281,305
</TABLE>
F-15
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
The consolidated balance sheet for the Company at January 4, 1999 consists
of the balance sheets of AAM as at December 31, 1998 and Dina Porter Inc. as at
December 31, 1998 with the following components.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Balance Sheet
- ----------------------------------------------------------------------------------------------
Wolfpack Dina Porter Wolfpack
Corporation AAM Inc. Corporation
Dec. 4, 1999 Dec. 31, 1998 Jan. 4, 1999 Adjustments Consolidated
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Current assets
Cash $-0- $1,934 $130,136 $ 132,070
Inventory 60,367 60,367
Prepaid expenses 57,091 57,091
-------- ---------
Total Current assets 1,934 247,594 249,528
Fixed assets 43,811 43,811
Other assets 5,500 5,500
-------- ---------
Total assets $-0- $1,934 $296,905 $ 298,839
============ ====== ======== =========
- ----------------------------------------------------------------------------------------------
Liabilities and stockholders' equity
- ----------------------------------------------------------------------------------------------
Current liabilities
Accounts payable $ 15,600 $ 15,600
-------- ---------
Total liabilities 15,600 15,600
Stockholders' equity
Preferred stock
Common stock 1,000 1,000 2,000
Additional paid in
capital 860 280,305 281,165
Retained earnings 74 74
---------
Total stockholders'
equity 1,934 281,305 283,239
------ -------- ---------
Total liabilities and
stockholders' equity $-0- $1,934 $296,905 $ 298,839
============ ====== ======== =========
- ----------------------------------------------------------------------------------------------
</TABLE>
F-16
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
The consolidated balance sheet of the Company at June 30, 1999 consists of
the balance sheets of AAM as at June 30, 1999 and Dina Porter, Inc. as at June
30, 1999 with the following components:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Balance Sheet
June 30, 1999
- ---------------------------------------------------------------------------------------
Wolfpack Dina Porter, Wolfpack
Corporation AAM Inc. Adjustments Corporation
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Current assets
Cash $200,763 $1,971 $ 82,023 $ 284,757
Inventory 119,503 119,503
Prepaid expenses 28,545 28,545
-------- -------- ---------
Total Current assets 200,763 1,971 230,071 432,805
Fixed assets 39,611 39,611
Other assets 5,500 5,500
-------- ---------
Total assets $200,763 $1,971 $275,182 $ 477,916
======== ====== ======== =========
- ---------------------------------------------------------------------------------------
Liabilities and stockholders' equity
- ---------------------------------------------------------------------------------------
Current liabilities
Accounts payable $ 42,951 $ 42,951
-------- ---------
Total liabilities 42,951 42,951
Stockholders' equity
Preferred stock
Common stock 2,795 1,000 1,000 4,795
Additional paid in
capital 276,705 860 280,229 557,794
Retained earnings (78,737) 111 (48,998) (127,624)
-------- -------- ---------
Total stockholders'
equity 200,763 1,971 232,231 434,965
-------- ------ -------- ---------
Total liabilities and
stockholders' equity $200,763 $1,971 $275,182 $ 477,916
======== ====== ======== =========
- ---------------------------------------------------------------------------------------
</TABLE>
F-17
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Consolidated Statement of Operations
For the year ended December 31, 1998
- ----------------------------------------------------------------------------------------------
Wolfpack
Wolfpack Dina Corporation
Corporation AAM Porter, Inc. Adjustments Consolidated
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $-0- $-0- $672,619 $672,619
Costs of goods sold -0- -0- 405,540 405,540
---- ---- -------- --------
Gross profit -0- -0- 267,079 267,079
Operations:
General and administrative -0- -0- 251,938 251,938
Depreciation -0- -0- 7,278 7,278
---- ---- -------- --------
Total expenses -0- -0- 259,216 259,216
Income (loss) from operations -0- -0- 7,863 7,863
Other income
Interest income 37 2,976 3,013
---- -------- --------
Total other income 37 2,976 3,013
Net income (loss) $-0- $ 37 $ 10,839 $ 10,876
==== ==== ======== ========
- ----------------------------------------------------------------------------------------------
</TABLE>
F-18
<PAGE>
WOLFPACK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Consolidated Statement of Operations
For the six months ended June 30, 1999
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $ -0- $316,119 $ 316,119
Costs of goods sold -0- 186,281 186,281
-------- -------- ----------
Gross profit -0- 129,718 129,718
Operations:
General and administrative 38,264 175,978 214,242
Non cash payments for legal
services 5,000 5,000
Depreciation 4,200 4,200
-------- -------- ----------
Total expenses 43,264 180,178 223,442
Income (loss) from operations (43,264) (50,460) (93,724)
Other income
Interest income 479 909 1,388
-------- -------- ----------
Total other income 479 909 1,388
Net income (loss) $(42,785) $-0- $(49,551) $ (92,336)
======== ==== ======== ==========
- -----------------------------------------------------------------------
</TABLE>
F-19
<PAGE>
PART III
Item 1. Index to Exhibits.
Exhibit No. Description
----------- -----------
2.1* Acquisition Agreement dated as of January 4, 1999
by and between Wolfpack Corporation, Wolfpack
Subsidiary Corp. and AAM Investment Council, Inc.
2.2* Acquisition Agreement dated as of January 4, 1999
by and between Wolfpack Corporation, Wolfpack
Subsidiary Corp. and Dina Porter, Inc.
3.1* Certificate of Incorporation of Registrant
3.2* By-laws of Registrant
10.1* Material Contracts (Lease dated April 20, 1995 by and
between Dina Porter Gallery and York Properties, Inc.)
21. List of Subsidiaries of the Registrant
27. Financial Data Schedule (filed by EDGAR)
- ------------
* Previously Filed
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WOLFPACK CORPORATION
Date: September 22, 1999 By: /s/ Peter L. Coker, Sr.
-----------------------------------------------
Peter L. Coker, Sr.
President, Treasurer and Director
Date: September 22, 1999 By: /s/ Susan H. Coker
----------------------------------------------
Susan H. Coker
Secretary and Director
<PAGE>
EXHIBIT 21
Subsidiaries of the Issuer
The Issuer has three wholly-owned subsidiaries, Wolfpack Subsidiary Corp.
(which was organized under the laws of the State of Delaware on May 14, 1998),
AAM Investment Council, Inc. (which was organized under the laws of the State
of Pennsylvania on February 15, 1990) and Dina Porter, Inc. (which was organized
under the laws of the State of North Carolina on May 8, 1998).
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the six month period ended June 30, 1999 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 284,722
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 119,503
<CURRENT-ASSETS> 432,770
<PP&E> 58,941
<DEPRECIATION> 19,330
<TOTAL-ASSETS> 477,881
<CURRENT-LIABILITIES> 42,951
<BONDS> 0
0
0
<COMMON> 4,795
<OTHER-SE> 430,135
<TOTAL-LIABILITY-AND-EQUITY> 477,881
<SALES> 316,119
<TOTAL-REVENUES> 316,119
<CGS> 186,281
<TOTAL-COSTS> 223,442
<OTHER-EXPENSES> (1,388)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (92,336)
<INCOME-TAX> 0
<INCOME-CONTINUING> (93,724)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (92,336)
<EPS-BASIC> (.02)
<EPS-DILUTED> (.02)
</TABLE>
