FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter period ended September 30, 2000.
Commission file number
WAMEX HOLDINGS, INC.
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(Exact Name of small business issuer as specified in its charter)
NEW YORK 650789306
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
61 BROADWAY, ROOM 2805, NEW YORK, NY 10006
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(Address of principal executive offices)
212-785-4485
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(Registrant's telephone number, including area code)
1 WORLD TRADE CENTER, SUITE 7707, NEW YORK, NY 10048
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(Former name, former address and former fiscal year, if changed
since last report)
Check whether the registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of during the past 12 months (or for
such shorter periods that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
The number of shares of common stock, $.01 par value, outstanding as of October
31, 2000 was 119,677,660.
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FORWARD LOOKING INFORMATION
This report on Form 10-QSB contains various forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 and information that is based on management's
beliefs and assumptions, as well as information currently available to
management. When used in this document, the words "anticipate," "estimate,"
"expect," and similar expressions are intended to identify forward-looking
statements.
Although WAMEX Holdings, Inc. ("WAMEX" or the "Company"), believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Such
statements are subject to certain risks, uncertainties and assumptions. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or expected. Among the key factors that may cause actual
results to differ materially from those projected in forward-looking statements
include regulatory and legal matters, fluctuations in the economy, the degree
and nature of competition, fluctuations in interest rates, adverse regulatory
changes in the Company's existing and future markets, and the Company's ability
to expand its business, including its ability to complete acquisitions and
integrate the operations of acquired businesses, to recruit and retain qualified
employees, to expand into new markets and to maintain profit margins in the face
of competition. All forward-looking statements included in this report are based
on information available to the Company on the date hereof, and the Company
assumes no obligation to update any such forward-looking statement. Prospective
investors should also consult the risk described from time to time in the
Company's reports on forms 10-QSB and 10-KSB.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
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WAMEX Holdings, Inc.
(A Development Stage Company)
Balance Sheet at Sept. 30
Unaudited 2000 1999
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Assets
Current Assets
<S> <C> <C>
Cash $1,442 $250
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Total Current Assets 1,442 250
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Office fixtures & computer equipment 112,980 112,980
Less accumulated deprecation (67,235) (54,323)
Organization costs less accumulated 15,150 21,350
Trading system (ATS) 1,901,970 1,509,931
Prepaid Expenses 435,650 -
Stock Purchase (1) 272,600 -
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Total Assets 2,672,557 1,590,188
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Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable & accrued expenses 352,724 329,850
Loan from stockholders 89,490 55,890
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Total Current Liabilities 442,214 385,740
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Stockholders' Equity
Common stock , par value $0.0012,
100,000,000 shares authorized, 13,385 13,385
116,130,660 shares and 119,677,660
shares are outstanding at June 30
1999 and 2000 respectively
Additional paid-in capital 5,428,833 3,261,418
Retained (deficit) during the development stage (3,211,875) (2,070,355)
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Total Stockholders' Equity 2,230,343 1,204,448
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Total Liabilities and Stockholders' Equity 2,672,557 1,590,188
==================================
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NOTES:
(1) Stock Purchase relates to the acquisition transaction of Niphix Investments
described in the previous quarterly filing.
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<CAPTION>
WAMEX Holdings, Inc.
(A Development Stage Company)
Statements of Operations
For The Quarter Ended Sept. 30
Unaudited 2000 1999
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<S> <C> <C>
Revenues - -
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- -
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Costs and Expenses
Compensation of Officers 10,600 -
Compensation of Employees 5,850 -
Office Maintenance - 33,850
Rents 2,864 12,500
Registration and Fees 6,550 -
Programming 213,205 -
Depreciation 3,228 3,228
Amortization 1,550 1,550
Travel 5,706 -
Website Design 9,517 14,300
Telephone 176 1,220
Consultants - 50,233
Insurance - -
Professional Fees 6,456 20,000
Bank Charges 1,348 -
Relocation Expenses - 8,724
Automotive Expenses - -
Supplies - -
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Total Costs and Expenses 267,050 145,605
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Net (Loss) ($267,050) ($145,605)
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Net Loss Per Common Share (.00223)
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<PAGE>
<TABLE>
<CAPTION>
WAMEX Holdings, Inc.
(A Development Stage Company)
Statements of Operations
For 9 Months Ended Sept. 30
Unaudited 2000 1999
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<S> <C> <C>
Revenues - -
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- -
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Costs and Expenses
Compensation of Officers 151,600 -
Compensation of Employees 11,131 -
Office Maintenance 32,550 101,550
Rents 69,391 37,500
Registration and Fees 9,957 -
Programming 213,205 6,300
Depreciation 9,684 9,684
Amortization 4,650 4,650
Travel 25,311 2,456
Website Design 247,717 34,600
Telephone 2,299 5,980
Consultants 119,200 184,453
Insurance 3,970 -
Professional Fees 105,687 95,000
Bank Charges 1,348 120
Relocation Expenses 12,000 19,744
Automotive Expenses 3,300 -
Supplies 28,799 -
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Total Costs and Expenses 1,051,799 502,037
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Net (Loss) ($1,051,799) ($502,037)
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Net Loss Per Common Share YTD (.00879)
</TABLE>
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
PLAN OF OPERATION
It was the objective of the Company during this period to do the following:
Gain additional funding, enhance its Alternative Trading System ("ATS")
registration web site, acquire clients, close several strategic
agreements, continue research and development on peripheral products
and programs, to generate revenue through its products, services and
advertising and to achieve the re-listing of the Company stock on the
"OTCBB".
The circumstances regarding previously reported recent events that relate to the
Company or its key personnel, namely the Securities and Exchange Commission's
("SEC") suspension of public trading of the Company's common stock in June of
this year and the criminal charges filed against the Company's former Chief
Executive Officer and its Chief Administrative Officer, had an adverse effect on
the Company's ability to operate effectively. As a result, the Company did not
meet its goals or objectives for this period.
As a result of the SEC's suspension of trading, although no longer quoted on the
Over-The-Counter Bulletin Board (the "OTCBB"), the Company's common stock
resumed public trading after the expiration of the suspension. The Company has
made, and is making, efforts to have its common stock relisted on the OTCBB.
There can be no assurance by the Company that re-listing will be achieved, nor
when such re-listing will be achieved.
Funding
The Company is presently seeking short term bridge financing as well as long
term operational capital. The Company intends to pursue all funding options.
Client Acquisition Marketing and Advertising
During this period, the Company was able to obtain indications of interest from
prospective users of its technology. The Company has yet to employ the bulk of
its advertising strategies. The focus of the Company has shifted away from a
financial services business to a strictly technological approach, with the
purpose of providing the technology for financial services. Management feels
that the Company is positioned to acquire clients for its services when the
Company has made the necessary arrangements with financial services companies.
The Company intended to enhance its ATS Access and Registration site, accessible
at www.wamex.com, during the reporting period. This goal could not be
accomplished due to lack of primarily financial resources, and the lack of
partnerships to sponsor the financial aspects of its proposed ATS. The upgrading
of the web site is wholly dependant on the Company's financial condition at the
time and management can make no assurances that it will be able to launch the
web site or present its premium products.
The Product
During this period, the Company spent its time and resources on enhancing
software programs, construction of databases, and contingency planning. While
there have been some positive developments this period, much of the work done in
the previous quarters had to be modified to incorporate the Company's ATS Access
strategy, i.e. to provide its ATS product without being directly involved in the
financial industry aspects of such an operation.
The ATS software is in a state that would permit implementation with affiliate
partners in the financial industry within an amount of time that management
deems reasonable in view of current alternative trading system industry
developments. The Company continues to optimize the state of its software to
further shorten such a potential implementation period.
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During this period, the Company has pursued licensing situations outside of the
United States. Management feels that the strategy of becoming an ATS Gateway,
that is a technology provider for the global financial community, more closely
reflects the identity of the Company.
During this period, the Company has pursued partnerships for full Broker Dealer
sponsorship and ATS endorsement outside the United States, where the Company
would be the chief technology provider. Management feels that a possible ATS
very similar to the one originally planned but located outside the United States
would not be less attractive or desirable by the investing public than one
located in the United States.
Property
The Company had conducted its primary operations at a sub-leased suite in the
World Trade Center in New York. It is now conducting these activities in a
sub-leased suite in an office building at 61 Broadway in New York.
In the previous reporting period, the Company envisioned operating in a larger
location on Wall Street in New York City. The Company is negotiating settlement
of its obligations under the lease and the recovery of a portion of the security
deposit. Until now, the management firm of the Wall Street property has not
reacted to correspondence. The Company has resolved to intensify its efforts to
resolve the issue, if necessary through legal action.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Corporate
As reported previously, in June, 2000, the Securities and Exchange Commission
(SEC) temporarily suspended trading in the Company's securities. Pursuant to the
terms of the suspension order, public trading in the Company's common stock
resumed at the expiration of the order. To date, the SEC has not instituted any
legal action against the Company.
ITEM 5. OTHER INFORMATION
Officers and Directors
On October 11, 2000, Mitchell H. Cushing, the Company's Chief Executive Officer
and Chairman of the Executive Board, and Russell Chimenti, the Chief
Administrative Officer and a member of the Executive Board, resigned for
personal reasons.
Sascha Mundstein was appointed Chief Executive Officer and Chairman of the
Executive Board, replacing Mr. Cushing, and Christof Wessely was appointed Chief
Administrative Officer and a member of the Executive Board, replacing Mr.
Chimenti.
Certain Transactions
On October 15, the Company received a short term interest free loan of
approximately $50,000 in cash and credit extension from the CEO Sascha
Mundstein. Terms of repayment have not been arranged as of the date of this
filing.
<PAGE>
Share Issuance
The Company has concluded an arrangement with a non affiliated private investor
for bridge financing of $50,000. The arrangement foresees the issuance of
restricted Company stock upon the complete receipt of the funds.
Partners and Vendors
The relationship between the Company and IBChannel.com is a partnership
involving marketing, advertising and cross-introduction of users and
subscribers. The companies had been reevaluating their approach based on factors
that include the Company's ATS access strategy and its ability to employ this
strategy effectively. The companies have resolved to continue their affiliation.
During this period, the Company has continued to receive a great deal of support
from its key vendors, who have declared that they would be willing to continue
business with the Company in the future and allow for favorable credit extension
or repayment options. However, there have been significant delays in the
completion of the overall implementation and presentation phases of the
Company's business strategies. Key factors associated with these delays were:
inability to format linking platform software, insufficient capital and the
redirecting of corporate and business strategies that focus on the Company's ATS
access strategy.
Due to events discussed previously, during, and subsequent to, the reporting
period, the Company has had great difficulty in meeting its capital
requirements. The key vendors of the Company are working on large scale projects
with sensitive timelines and these projects require additional funding in order
to be completed and integrated into the Company's products and strategies.
Management can make no assurance as to the success of acquiring additional
capital and as such, can make no assurance of the completion of key projects
from vendors. Failure to obtain additional capital on reasonable terms would
have an adverse material effect on the Company and would delay the final
application of its products and services.
NIPHIX Investments
As reported previously, in mid-June, the transaction relating to the acquisition
of NIPHIX came under regulatory scrutiny. NIPHIX and the Company are presently
reviewing the transaction to determine if it could be restructured in a manner
which would meet regulatory concerns. Negotiations have led to no outcome so
far. The February contract has not been terminated, and neither has the
transaction been completed.
Because of the reevaluation of its relationship with NIPHIX, at this time the
Company does not have or own an "Approved ATS" or a registered broker dealer in
the United States.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WAMEX HOLDINGS, INC.
By: /s/ Sascha Mundstein
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Sascha Mundstein
Chief Executive Officer
Dated: November 14, 2000
