UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
AMENDMENT TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) DECEMBER 20, 1996
WESTMARK GROUP HOLDINGS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 0-18945 84-1055077
(STATE OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER
IDENTIFICATION NUMBER)
355 N.E. 5TH AVENUE
DELRAY BEACH, FLORIDA 33483
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (561)243-8010
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
Not applicable.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Westmark Group Holdings, Inc. acquired the stock of Green World
Technologies, Inc. in July of 1996 as provided in the financial
statements incorporated herein.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP.
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
Not applicable
ITEM 5. OTHER EVENTS.
Not applicable
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS.
Not applicable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
a. Financial Statements of Business Acquired-Green World Technologies,
Inc.
Report of Independent Accountants
Balance Sheet - September 30, 1996
Statement of Income and Accumulated Deficit for January 12, 1996 to
September 30, 1996
Statement of Cash Flows for January 12, 1996 to September 30, 1996
Notes to Financial Statements
c. Exhibits
Effective June 14, 1996, Mark Schaftlein was appointed Chief
Financial
Officer of the Company. On September 10, 1996, Norman Birmingham
resigned as President of the Company. Mr. Birmingham remains
Chairman of the Board and retains his role as Principal Accounting
Officer. Subsequently, Mr. Schaftlein was named Chief
Operations Officer on September 11, 1996.
ITEM 8. CHANGE IN FISCAL YEAR.
Not applicable.
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To the Board of Directors
Green World Technologies, Inc.
Valley Springs, California
We have audited the accompanying balance sheet of Green World Technologies, Inc.
(A Nevada corporation) as of September 30, 1996, and the related statements of
income, accumulated deficit and cash flows for the period January 12, 1996 to
September 30, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free 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 used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material reports, the financial position of Green World Technologies, Inc.
As of September 30, 1996, and the results of its operations and its cash flows
for the period January 12, 1996 to September 30, 1996 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2, to the
financial statements, the Company has incurred losses from operations and has
deficits in working capital and net worth. These conditions raise substantial
doubt about its ability to continue as a going concern. Management's plans
regarding those matters also are described in Note 2. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
KEMPER C.G. GROUP LIC
CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS
November 8, 1996
Stockton, California
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GREEN WORLD TECHNOLOGIES, INC.
BALANCE SHEET
SEPTEMBER 30, 1996
ASSETS
Current Assets
Cash and cash equivalents $ 1,140
Accounts receivable trade 18,711
Inventory 41,008
Other Current Assets 4,748
-------
Total Current Assets 65,607
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Property, Plant and Equipment
Mfg. Machinery & equipment 7,104
Leasehold improvements 9,528
Office furniture & equipment 10,421
Vehicles 1,000
Information processing equipment 3,840
Accumulated depreciation (6,438)
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Total Property, Plant & Equipment 25,455
-------
Total Assets $ 91,062
==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities
Accounts payable $ 46,949
Accrued expenses and withholding 9,614
Sales tax payable 1,010
Income taxes payable 800
Advances from Westmark 79,000
------
Total Current Liabilities 137,373
Stockholder's Deficit
Common stock, 10,000 shares authorized,
1 share issued and outstanding
Contributed capital 242,759
Accumulated deficit (289,070)
---------
Total Stockholder's Deficit (46,311)
---------
Total Liabilities & Stockholder's Equity $ 91,062
==========
SEE ACCOUNTANT'S REPORT AND NOTES TO FINANCIAL STATEMENTS
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GREEN WORLD TECHNOLOGIES, INC.
STATEMENT OF INCOME AND ACCUMULATED DEFICIT
FOR THE PERIOD JANUARY 12, 1996 TO SEPTEMBER 30, 1996
Income
Talon Sales $ 37,717
Audio, Video & Print Sales 5,404
Installation Income 400
Other Operating Income 99
----------
Total Income 43,620
Cost of Goods Sold 19,116
----------
Gross Profit (Loss) 24,504
----------
Operating Expenses
Research and Development 53,217
Selling Expenses 74,371
General and Administrative 184,452
---------
Total Operating Expenses 312,000
----------
Net Operating Income (Loss) (287,536)
Other Income (Expense)
Miscellaneous 66
----------
Net Income Before Income Taxes (287,536)
Income Taxes 1,600
----------
Net Income (289,070)
Accumulated deficit, end of period $(289,070)
==========
Net Income (Loss) per share $(289,070)
==========
SEE ACCOUNTANT'S REPORT AND NOTES TO FINANCIAL STATEMENTS
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GREEN WORLD TECHNOLOGIES, INC.
STATEMENT OF CASH FLOWS
FOR THE PERIOD JANUARY 12, 1996 TO SEPTEMBER 30, 1996
1996
Cash flows from operating activities:
Net Income $(289,070)
----------
Adjustment to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 6,438
(Increase) decrease in accounts receivable (18,711)
(Increase) decrease in inventories (41,008)
(Increase) decrease in other assets (4,748)
Increase (decrease) in accounts payable 46,949
Increase (decrease) in accrued liabilities 9,614
Increase (decrease) in sales tax payable 1,010
Increase (decrease) in income taxes payable 800
----------
Total adjustments 344
----------
Net cash provided (used) by operating activities (288,726)
----------
Cash flows from investing activities:
Cash payments for the purchase of property (31,893)
----------
Net cash provided (used) by investing activities (31,893)
----------
Cash flows from financing activities:
Net advances from Westmark 79,000
Contributed capital from parent company 242,759
Net cash provided (used) by financing activities 321,759
----------
Net increase (decrease) in cash and equivalents 1,140
Cash and equivalents, beginning of year
----------
Cash and equivalents, end of year $ 1,140
==========
SEE ACCOUNTANT'S REPORT AND NOTES TO FINANCIAL STATEMENTS.
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GREEN WORLD TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
NATURE OF BUSINESS
The Company was incorporated on January 12, 1996, under the laws of the State of
Nevada. The Company has acquired the rights to develop, manufacture and market
an efficiency management improvement device for cooling and heating equipment
through a licensing agreement with ECS, Inc. On April 19, 1996, the Company was
acquired by Heart Labs of America, Inc. ("HLOA"). Pursuant to the terms of that
acquisition, certain funds advanced to the Company were converted to
contributions to capital. On July 19, 1996, HLOA transferred its ownership
interest to GTB Company and was subsequently sold to Westmark Group Holdings,
Inc. ("WGHI").
NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FISCAL YEAR
The Company has began operations on January 12, 1996. The Company is currently
in its first fiscal year and has not completed its first full year of operation.
Absent any other timely election, the Company's fiscal year will end December
31.
USES OF ESTIMATES
Management uses estimates and assumptions in preparing financial statements.
Those estimates and assumptions affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and liabilities, and the
reported revenues and expenses.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Company considers all treasury bills,
certificates of deposit and money market funds purchased with an original
maturity of three months or less to be cash equivalents.
ACCOUNTS RECEIVABLE-TRADE
The Company provides credit to its commercial customers in the normal course of
its business. With respect to analyzing the collectibility of these accounts,
management evaluates the accounts individually and uses the "direct write-ff"
method for recording bad debts, and accordingly, writes off to earnings those
accounts which are deemed uncollectible.
INVENTORIES
Inventories consisting of components, supplies and finished goods are stated
for both financial reporting and income tax purposes at the lower of cost or
market using the first in, first out (FIFO) method.
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PROPERTY AND EQUIPMENT
For financial reporting purposes property and equipment are depreciated using
the straight line method over their estimated useful lives. For income tax
purposes, assets (other than leasehold improvements) are depreciated using an
accelerated method. The estimated useful lives used in the computation of
depreciation for financial statements were as follows:
Motor Vehicles 5 to 7 years
Office furniture and equipment7 to 10 years
Machinery and equipment 7 to 10 years
Leasehold improvements Remaining lease term
Betterments and improvements that extend the useful life of an asset are
capitalized. Maintenance and repairs are charged to expense as incurred. When
depreciable assets are retired or otherwise disposed, the cost and related
accumulated depreciation are eliminated from the accounts and the resulting gain
or loss is reflected in income.
RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred.
INCOME TAXES
The Company accounts for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" which requires the
use of the "liability method" of accounting for income taxes. Accordingly,
deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax bases of assets and liabilities, using
expected marginal tax rates in effect for the year in which the differences are
expected to reverse. Current income taxes are based on the year's income taxable
for Federal and state income tax purposes.
NOTE 2- GOING CONCERN
As shown in the accompanying financial statements, the Company has incurred
losses from operations and has deficits in working capital and net worth. The
Company is a development stage enterprise and has devoted most of its activities
to establishing a new business. A substantial portion of its activities have
been in research and development, building production facilities, acquiring
operation assets, training personnel, and developing markets. Absent additional
infusion of operating capital, there is substantial doubt about the Company's
ability to continue as a going concern.
Management has been working to reduce costs and improve results of operations as
well as searching for additional sources of capital. There can be no assurance
that the Company will be successful in its efforts. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
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NOTE 3- INVENTORY
Inventory consisted of finished goods $39,117, and components and supplies
$9,865.
NOTE 4 - PROPERTY AND EQUIPMENT
Depreciation and amortization expense was $1,238 and $4,306, respectively, for
the period January 12, 1996 to September 30, 1996.
NOTE 5- NOTE RECEIVABLE
Included in other current assets is a note receivable from Gary Phillippe for
funds advanced in the amount of $3,800. The note is due before April 25, 1997,
and bears interest at the rate of 10% per annum.
NOTE 6 - ADVANCES FROM WESTMARK
Advances from Westmark represent funds that have been provided by WGHI for
operating capital of Green World Technologies, Inc.
NOTE 7 - CONTRIBUTED CAPITAL
Capital contributed at the inception of the Company on January 12, 1996 was
$3,859 and consisted pf inventory $1,744, accounts receivable $2,153 and sales
tax payable $39. Other contributed capital arose from advanced made by HLOA in
the amount of $238,900, which were subsequently converted to contributed capital
pursuant to its acquisition of Green World Technologies, Inc.
NOTE 8 - PROVISION FOR INCOME TAXES
Provision is made for the tax effect of transactions reported in the financial
statements. The provision consists of taxes currently due plus deferred taxes
related to differences between items of income and expense for financial and
income tax reporting. The deferred taxes represent the future tax return
consequences of the differences, which will be either taxable or deductible when
the related assets or liabilities are recovered or settled.
Provision for federal and state income taxes consists of the following at
September 30, 1996:
Current:
Federal ................ $ 0
State .................. 1,600
------
1,600
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Deferred:
Federal ................ 0
State .................. 0
------
0
------
Total income taxes ..... $1,600
======
Deferred income taxes arise from timing differences resulting from income and
expense items reported for financial accounting and tax purposes in different
periods. Deferred taxes are classified as current or noncurrent, depending on
the classification of the assets and liabilities to which they relate. Deferred
taxes arising from timing differences that are not related to an asset
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or liability are classified as current or noncurrent depending on the periods in
which the timing differences are expected to reverse.
The financial statements do not include a provision for a deferred tax asset of
liability because the Company has yet to compete its first fiscal year. The
current period loss may give rise to future tax benefits, but because of
substantial doubt about the Company's ability to continue as a going concern, no
deferred tax asset has been recorded.
NOTE 9- LEASE COMMITMENTS
The Company currently leases its operating facilities. The lease term expires
February 27, 1997. Monthly rent payments are $850.
The Company also has entered into a lease agreement for copier equipment. Terms
of the agreement include monthly payments of $160 over a 60 month period
beginning in April 1996.
Future minimum lease payments for the next five years under the above agreements
are:
Year 1 ........... $ 6,170
Year 2 ........... 1,920
Year 3 ........... 1,920
Year 4 ........... 1,920
Year 5 ........... 1,120
- -----
Total ............ $13,050
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NOTE 10 - ADVERTISING
The Company uses nondirect-response advertising, which costs are expensed as
incurred. Total advertising costs for the period ended September 30, 1996
included media and publishing $38,950, trade shows and seminars $4,162, and
other promotions $725. No amount of advertising have been capitalized.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WESTMARK GROUP HOLDINGS, INC.
BY: /s/ NORMAN J. BIRMINGHAM
NORMAN J. BIRMINGHAM, DIRECTOR, CHAIRMAN,
(PRINCIPAL ACCOUNTING OFFICER & DULY AUTHORIZED
DIRECTOR OF THE REGISTRANT)
BY: /s/ MARK D. SCHAFTLEIN
MARK D. SCHAFTLEIN, DIRECTOR & PRESIDENT OF
WESTMARK MORTGAGE CORPORATION, CHIEF OPERATING
OFFICER OF WESTMARK GROUP HOLDINGS, INC.
(DULY AUTHORIZED DIRECTOR & OFFICER OF THE
REGISTRANT)
DECEMBER 20, 1996
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