SECURITIES & EXCHANGE COMMISSION
Washington, D.C., 20549
__________________________
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d)
of the Securities Exchange Act of 1934
__________________________
For the Fiscal Year Ended December 31, 1997
Commission File Number: 33-21546-D
CONCORDE STRATEGIES GROUP, INC.
(Exact name of Registrant as specified in its Charter)
Colorado
84-1108035
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization) Ident.
Number)
444 Madison Avenue, Suite 1710, New York, NY 10022
(Address of principal executive offices) (zip
code)
(212) 317-0060
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 15(d) of the Act:
Title of each class
Name of each exchange
on which registered
Common Stock, no par value
None
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90
days. Yes _X_ No __
Indicate the number of shares outstanding of each of
issuer's classes of common stock, as of the latest
practicable date. At April 6, 1998, 3,300,000 shares of Common
Stock, no par value were outstanding.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (Sec.
229.405 of this chapter) is not contained herein, and will not be
contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K [ ]
The aggregate market value of the voting stock held by
non-affiliates of registrant on April 6, 1998 was
$1,501,875. .
FORM 10-KSB
CONCORDE STRATEGIES GROUP, INC.
TABLE OF CONTENTS
Item
No. Description Page
PART I
1. Business 3
2. Properties 5
3. Legal Proceedings 6
4. Submission of Matters to a Vote
of Security Holders 6
PART II
5. Market for Registrant's Common Equity
and Related Stockholder Matters 6
6. Selected Financial Data 7
7. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 8
8. Financial Statements 10
9. Disagreements on Accounting and
Financial Disclosure 24
PART III
10. Directors and Executive Officers
of the Registrant 24
11. Executive Compensation 25
12. Security Ownership of Certain
Beneficial Owners and Management 26
13. Certain Relationships and
Related Transactions 27
PART IV
14. Exhibits, Financial Statement
Schedules and Reports on Form 8-K 27
Signatures 28<PAGE>
FORM 10-KSB
CONCORDE STRATEGIES GROUP, INC.
December 31, 1997
PART I
ITEM 1. BUSINESS: Introduction
Concorde Strategies Group, Inc. ("Registrant" or the "Company" or
"Concorde") was formed under the
laws of the state of Colorado for the purpose of participating,
either through acquisition or merger, in a
viable business opportunity. Registrant has since its inception
been evaluating various privately held
companies which management believed could be viable business
opportunities.
On March 7, 1989, Registrant completed its initial public
offering and sold 2,000,000 Units at $0.05 per
Unit, and received total gross proceeds of $100,000. In April
1996, Registrant declared a 1-for-10
reverse split of its common stock.
On September 23, 1996, the Company entered into an Agreement and
Plan of Reorganization pursuant
to which it acquired 100 percent of the issued and outstanding
capital stock of Concorde Management,
Ltd. ("CML"). This acquisition was concluded as of July 1, 1997.
CML had previously entered into an Agreement and Plan of
Reorganization with L'Abbigliamento, Ltd.,
a New York based manufacturer and wholesale distributor of
Italian made men's clothing, on March 19,
1996. Under the terms of this Agreement, which was completed on
October 7, 1996, CML acquired all
of the outstanding shares of capital stock of L'Abbigliamento,
Ltd., in exchange for 100 percent of the
shares of CML's Class A Convertible Redeemable Preferred Stock,
and L'Abbigliamento, Ltd. became
a wholly owned subsidiary of CML. CML is currently an
intermediate holding company with no
independent business operations. The discussion herein relates
solely to the activities of the Company
and L'Abbigliamento, Ltd. See "Operations of Subsidiary" below.
The holders of the 1,000 shares of Class A Preferred Stock shall
be required to convert such Class A
Preferred Stock into the Company's Common Stock or into shares of
the Subsidiary, at the holder's
election, at such time as (i) the Company elects to undertake a
registration of the securities of the
Subsidiary, or otherwise elects to enter into a business
combination, whether by means of merger or
acquisition or otherwise, between the Subsidiary and a publicly
held corporation so that the Subsidiary
becomes a publicly held corporation, or the subsidiary of a
publicly held corporation, or (ii) in the event
that the Company proposes to enter into any transaction which
would have the effect of selling or
otherwise transferring a controlling interest in the Subsidiary,
or (iii) if after two years from the date of
its issuance the Company has not undertaken an initial public
offering of the Subsidiary's securities or
has determined to either search for a buyer of the business
assets of the Subsidiary or, alternatively, to
dissolve the Subsidiary and wind-up its affairs.
Present Operations
Concorde engages in the business of acquiring small growing
companies in diverse industries, providing
value added management services to those companies, and assisting
with capital formation. These
companies will become wholly owned, or majority owned,
subsidiaries of Concorde.
Concorde's objective is to better meet the needs of growing
companies that may have had difficulty
obtaining capital from traditional sources such as banks, large
asset based lenders, and the public
securities markets. Also, Concorde believes that its opportunity
is enhanced because of the consolidation
in the commercial banking industry and the emphasis in investment
banking toward increasingly larger
financings. The resulting diminishing of available capital has
affected the flow to smaller companies,
where the need for capital is the most critical.
Concorde's approach is to develop "partnerships" with companies
having exceptional management in order
to improve the long term value of a business. The participation
of management through equity based
compensation and stock ownership is a crucial ingredient of
Concorde's plan.
Operations of Subsidiary
The Registrant's wholly owned Subsidiary, L'Abbigliamento, Ltd.
(the "Subsidiary") is a wholesaler of
high quality, updated classic menswear imported from Italy. The
Subsidiary was founded in 1992, and
is incorporated in the State of New York.
L'Abbigliamento, Ltd. sells tailored clothing, which includes
mens suits, sport jackets, and blazers,
slacks, tuxedos, overcoats, shirts and ties to retail stores.
The Subsidiary works very closely with its
manufacturing resources, as well as some of the leading fabric
mills in Italy. The Subsidiary's close
coordination with its manufacturers and suppliers enables it to
maintain high quality standards and provide
timely deliveries to its customers.
L'Abbigliamento, Ltd. operates in a specialized segment of the
menswear business, selling to boutique
retail stores. The Subsidiary's success has been achieved as a
result of the management provided by its
founder, and President, Paolo Vista, the use of quality fabric,
consistently good workmanship,
experienced production staff at its manufacturing resources, and
a thorough knowledge of the retail
customers and the ultimate consumer.
L'Abbigliamento is located in close proximity to Kennedy Airport,
where most of its merchandise is
received from Italy. This facility in Lawrence, New York is
utilized for administrative and merchandise
distribution functions. The Subsidiary develops its merchandise
lines based on sales history, extensive
knowledge of the market, talking to customers, fashion trends,
reviewing fabrics, and keeping informed
of competition's plans.
In planning for a season, samples are made for various styles.
These samples together with fabric
swatches, are shown to customers at trade shows. The orders
which are obtained at the shows are
consolidated, and additional customers are called to obtain their
reaction to the styles being presented.
Based on analysis of orders and feedback from customers, the
merchandise lines are finalized. Fabric
is ordered from the mills, and production is scheduled with
manufacturers. The quantities to be produced
for each size are based on sales history. The merchandise line
contains about 200 styles, excluding
accessories.
As a result of effective sourcing of piece goods and
manufacturing cost controls, the company's
merchandise is offered at very competitive price points, which
provides a significant advantage over other
specialty wholesalers. The Subsidiary has excellent
relationships with its piece goods suppliers and
manufacturers, and feels that adequate merchandise will be
available to support its growth.
Most of the L'Abbigliamento's customers are located on the East
Coast of the United States and Puerto
Rico. In addition, some international business has been
developed in Latin America and Russia.
Regulation
All of Subsidiary's products are manufactured abroad, through
arrangements with independent foreign
contractors. As a result, the Subsidiary's operations may be
adversely affected by political instability
resulting in the disruption of trade from foreign countries in
which the Subsidiary's contractors are
located, the imposition of additional regulations relating to
imports or duties, taxes and other charges on
imports, any significant fluctuation of the value of the dollar
against foreign currencies and restrictions
on the transfer of funds. In addition, the Company's import
operations are subject to constraints imposed
by bilateral textile agreements between the United States and
certain foreign countries. These agreements
impose quotas on the amount and type of goods which can be
imported into the United States from these
countries.
Competition
Registrant is, and is expected to remain, an insignificant entity
among a great many other companies who
are engaged in mergers and acquisitions of other business
entities. There are many established venture
capital and financial concerns seeking to attract merger or
acquisition candidates, virtually all of which
have significantly greater financial and personnel resources and
technical expertise than Registrant.
The Registrant's subsidiary, L'Abbigliamento, Ltd., operates in
the apparel industry, which is highly
competitive because of the emphasis on fashion, the combination
of large and small producers, the flow
of imported merchandise, and a large variety of retail customers.
The key elements of competition in the
apparel industry include style, quality, price, brand loyalty,
comfort, customer service and advertising.
A large number of companies compete in the Subsidiary's segment
of the apparel industry, many of which
have significantly greater financial marketing and other
resources than the Subsidiary.
ITEM 2. PROPERTIES
Facilities
The Company utilizes the offices and business facilities of
Ameristar Group Incorporated ("Ameristar"),
which serves as a consultant to Concorde. Until October 31,
1997, the Company had the use of these
offices and business facilities rent free. Since November 1,
1997, the Company has paid a monthly rental
of $3,743.00 for use of the office space and related business
facilities to Ameristar.
The Company's wholly owned Subsidiary, L'Abbigliamento, ltd.
leases a building consisting of 5,786
square feet from a company whose owner is related to a
shareholder of Concorde, at an annual rent of
$84,000.
Employees
The Company has no full time employees except for its President,
Mr. Robert Gordon. The officers and
directors, all of whom are engaged in other full time business
activities, devote so much of their time to
the affairs of the Company as is required.
The Company's Subsidiary has seven full time employees, including
two outside salesmen who work on
a commission basis.
ITEM 3. LEGAL PROCEEDINGS
The Company knows of no litigation pending, threatened or
contemplated, or unsatisfied judgments
against it, or any proceedings in which the Company is a party.
The Company also knows of no legal
action pending or threatened or judgments entered against any
officers or directors of the Company in
their capacity as such.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Units sold in the Company's original public offering in 1989
had been trading on a limited basis,
with only a limited trading market for the shares of common stock
having ever been established. The
principal market on which the Company's securities have in the
past traded was the over-the-counter
market in the "pink sheets."
There had not been any trading market in the Company's securities
from July 19, 1989 through March
24, 1997. The stock resumed trading on March 24, 1997 under the
symbol "CSGG" on the OTC
Electronic Bulletin Board. The number of record shareholders on
December 31, 1997 for the Company's
Common Stock was 232 and for its Series B Convertible Preferred
Stock was 55 shareholders. There
currently are 7 market makers for the Company's Common Stock and
6 market makers for its Series B
Convertible Preferred Stock.
The following tables show for the periods indicated the range of
high and low bid quotes for the
Common Stock and Series B Convertible Preferred Shares obtained
from the OTC Electronic Bulletin
Board and are between dealers, do not include retail mark-ups,
mark-downs, or other fees or
commissions, and may not necessarily represent actual
transactions.
COMMON STOCK TRADING HISTORY (Since March 24, 1997)
High Low
Quarter ended March 31, 1997 $0.625 $0.375
Quarter ended June 30, 1997 $0.875 $0.8125
Quarter ended September 30, 1997 $2.00 $0.625
Quarter ended December 31, 1997 $1.9375 $1.3437
Quarter ended March 31, 1998 $1.5625 $0.625
SERIES B CONVERTIBLE PREFERRED SHARE TRADING HISTORY (Since
December 4, 1997)
High Low
Quarter ended December 31, 1997 $0.3125 $0.875
Quarter ended March 31, 1998 $4.75 $0.4375
On October 24, 1997, the Company completed a Private Placement
Offering of 450,000 non dividend
bearing, no par value, Series B Convertible Preferred Shares.
All of the shares were sold by the
Company and no Placement Agent was involved in this Offering.
The shares were sold at a purchase
price of $.3125 per share and the Company realized proceeds of
$130,633 from the Offering, net of
Offering expenses in the amount of $9,992. The shares were sold
through a Private Placement pursuant
to the exemption provided by Rule 504 of Regulation D under the
Securities Act of 1933, as amended.
Each Preferred Share is convertible into one and one quarter
(1.25) shares of the Company's Common
Stock, no par value, at the election of the Preferred Shareholder
at any time after thirteen months from
the date of issuance thereof and for a period of four years
thereafter.
Subsequent to the period covered by this report, on January 7,
1998, the Company issued 315,000 shares
of Series B Convertible Preferred shares to certain parties who
had performed services on behalf of the
Company, including two companies which are principally owned by
two Directors of the Company. The
shares were issued by the Company in consideration for the
cancellation of payments owed by the
Company at the agreed upon rate of $.25 per share and were sold
through a Private Placement pursuant
to the exemption provided by Rule 504 of Regulation D under the
Securities Act of 1933, as amended.
Also, subsequent to the period covered by this Report, the
Company commenced a Private Placement
Offering of 750,000 Series B Convertible Preferred Stock Purchase
Warrants. All of the Warrants are
being sold by the Company and no Placement Agent is involved in
this Offering. The Warrants are being
sold at a purchase price of $1.00 per Warrant. The Company will
realize proceeds of $138,000 from the
Offering, net of offering expenses in the amount of $12,000, if
the minimum number of 150,000
Warrants are sold. The Company will realize proceeds of $738,000
from the Offering, net of offering
expenses in the amount of $12,000, if the maximum number of
750,000 Warrants are sold. As of the
date of this Report, the Company has received proceeds totaling
$168,500 net of offering costs of $12,000
for the sale of 180,500 Warrants. This total exceeds the minimum
offering of 150,000 Warrants. The
Offering expires on April 30, 1998, unless extended for up to 60
business days by the Company. Each
Warrant entitles the holder thereof to purchase one Series B
Convertible Preferred Share at a price of
$3.00 per share during the period commencing thirteen months
after the date of the issuance thereof and
continue thirty (30) months thereafter.
The Company has not paid any dividends and, there are no plans to
pay any cash dividends in the
foreseeable future. The declaration and payment of dividends in
the future, of which there can be no
assurance, is determined by the Board of Directors based upon
conditions then existing. There are no
restrictions on the Company's ability to pay dividends.
ITEM 6. SELECTED FINANCIAL INFORMATION
Summary Balance Sheet Data: YEAR ENDED DECEMBER 31,
1997 1996
Total Assets $3,440,634 $ -0-
Total Current Assets 3,341,282 -0-
Total Liabilities 2,197,701 105,543
Retained Earnings (Deficit) (32,414) (244,527)
Stockholders' Equity. $1,242,933 $(105,543)
Summary Earnings Data: YEAR ENDED DECEMBER 31,
1997 1996
Revenues $1,827,502 $ -0-
Selling, general &
administrative expense 416,412 149,543
Income (loss) from operations (8,611) (149,543)
Net Income (Loss) (21,611) (149,543)
Earnings (Loss) per
Share $ n/a $ n/a
The foregoing is selected financial information only, and is
qualified by the financial statements and the
notes thereto, in their entirety, which are set forth elsewhere
in this Report. The selected financial
information for 1997 includes the results of the Company's
subsidiary, L'Abbigliamento, Ltd. from July
1, 1997, the effective date of the acquisition.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Until fiscal 1992, Registrant had generated only interest income
since its inception. Commencing in fiscal
1992, Registrant's available cash was reduced to a level where it
ceased to generate any interest revenues
at all. Following the write-off of the judgement obtained
against Nite-Lite, Limited, a Delaware corporation,
Registrant had no realistic expectation of any future revenues,
including interest income since its cash position
has been depleted to a balance of $-0- as of March, 31, 1997.
In April, 1996, Registrant undertook a private placement of its
securities pursuant to the provisions of Rule
504 under Regulation D under the Securities Act of 1933, as
amended, whereby it issued 9,000,000 shares
of its Common Stock in exchange for the satisfaction of $45,000
in debts owed by the Company. Also in
April 1996, the Company effected a 1-for-10 reverse split of its
common stock as the result of which the
Company had, following the aforesaid private offering, 1,200,000
shares issued and outstanding. This reverse
split was effected in anticipation of management's renewed
efforts to find a suitable business opportunity for
the Company.
The results of operations for the Company's subsidiary have been
included in the consolidated results of the
Company from July 1, 1997, the effective date of the acquisition.
These results do not include the
subsidiary's results of operations for the comparable periods in
1996.
Sales were $1,827,502 for the twelve month period ended December
31, 1997, all of which resulted from
the Company's acquisition of its operating subsidiary,
L'Abbigliamento, Ltd., which was completed effective
July 1, 1997. The Company did not have any revenue in the
comparable period for 1996. After cost of
revenues of $1,419,701 gross profit realized was $407,801 for the
period ended December 31, 1997. All of
the gross profit resulted from operations of the Company's
subsidiary, and the Company did not have any
gross profit in the comparable period for 1996. Gross profit for
the year ended December 31, 1997 was 22.3
per cent of sales.
Consolidated operating expenses for 1997 were $416,412, which
includes the Subsidiary's total of $306,979
and the parent Company's total of $109,433. The parent Company's
operating expenses decreased $40,110
from 1996 primarily due to reduced legal and consulting fees.
The Subsidiary's operating expenses were 16.8
per cent of sales for the period reported.
The net loss for the twelve month period ended December 31, 1997
was $8,611 compared to a net loss of
$149,543 for the comparable period ended December 31, 1996, a
decrease of $140,932. All of the decrease
in net loss during this period resulted from operations of the
Company's subsidiary.
The total cash and cash equivalents at December 31, 1997 totalled
$133,606. Of that amount the
Subsidiary's total was $62,459, and the parent company's total
was $71,147.
Accounts receivable at December 31, 1997 totalled $1,374,546, all
of which is owed to the Subsidiary. Of
that total, 25 per cent is current, 25 per cent is 30-60 days
old, and 50 per cent is over 60 days old. This
pattern is characteristic of the subsidiary's industry and
customer base.
Inventory at December 31, 1997 totalled $1,819,695, which was all
maintained by the Subsidiary. Of that
total, $761,552 represented raw material (fabric) for production.
Accounts payable at December 31, 1997 totalled $1,408,676, all of
which is current. Of that amount, the
Subsidiary's accounts payable total was $1,332,674, and the
parent company's total was $76,002. The
Subsidiary's accounts payable total consists mostly of raw
material purchases and cost of finished goods,
consistent with the Subsidiary's Cost of Goods Sold and Operating
Expense percentages of sales. The parent
Company's accounts payable represents its normal business
overhead expenses.
The amount of $361,098 due to a factor and the long term bank
loans in the amount of $252,414 represent
borrowings by the Subsidiary, as a result of the need to carry
customer accounts receivable and to purchase
fabric inventory in advance of the selling season.
The Company is continuing to look for suitable acquisition
candidates. As of the date of this Report, no
additional acquisition candidates have been found, and there is
no assurance that any additional candidates
will be found.
Liquidity and Capital Resources
At the end of fiscal 1997, the Company and its subsidiary had
cash totalling $133,606, which is not adequate
for working capital requirements, There is no assurance that the
Company will be able to raise the amount
of capital needed to meet its working capital needs.
As of the date of this Report, in a Private Placement Offering,
the Company has sold 180,500 Series B
Convertible Preferred Stock Purchase Warrants and received
proceeds of $168,500, net of offering costs of
$12,000. See Part II, Item 5.
General Risk Factors Affecting the Company and its Subsidiary
Various factors could cause the actual results of the Company to
differ materially from those indicated by
forward-looking statements made from time to time in news
releases, reports, proxy statements, registration
statements and other written communications (including the
preceding sections of this document), as well
as oral statements made from time to time by representatives of
the Company. Except for historical
information, matters discussed in such oral and written
communications are forward-looking statements that
involve risks and uncertainties, including, but not limited to,
economic and business conditions in the United
States and abroad; the level of demand for apparel products and
success of planned marketing programs; the
intensity of competition and the pricing pressures that may
result; changes in labor and import and export
regulations; the ability of the Subsidiary to timely and
effectively manage inventory levels and sourcing; the
ability to finance capital expenditures; and currency
fluctuation.
Change in Control
By formal Agreement dated as of September 23, 1996, the Company
agreed to acquire 100% of the capital
stock of Concorde Management, Ltd. (formerly Concorde Strategies
Group, Ltd. "CML"), a Delaware
corporation formed in February 1996. This acquisition was
concluded as of July 1, 1997. Under the terms
of this Agreement, the Company acquired CML and its wholly owned
subsidiary, L'Abbigliamento, Ltd. See
Part I, Item 1 and Note 8 to Consolidated Financial Statements
contained in this Report. Reference is also
made to Form 8-K Report and Exhibit filed on November 15, 1996
and Form 8-K Report filed on July 2,
1997.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements:
For the Year Ended December 31, 1997:
Reference
Report of Janet Loss, C.P.A., P.C.,
Independent Certified Public Accountant F-11
Report of Jay Fox, C.P.A. F-12
Independent Certified Public Accountant
Consolidated Financial Statements:
Balance Sheet F-13, 14
Statement of Operations F-15
Statement of Cash Flows F-16
Statement of Stockholder's
Equity (Deficit) F-17, 18
Notes to Financial Statements F-19, 20,
21, 22, 23
<PAGE>
Janet Loss, C.P.A., P.C.
Certified Public Accountant
3525 S. Tamarac Drive, Suite 125
Denver, Colorado 80237
Board of Directors
Concorde Strategies Group, Inc. and Subsidiary
444 Madison Avenue, Suite 1710
New York, New York 10022
I have audited the accompanying consolidated balance sheet of
Concorde
Strategies Group, Inc. and subsidiary as of December 31, 1997
and the
related consolidated statements of income, changes in
stockholders'
equity and cash flows for the year ended December 31, 1997. I
have also
audited the balance sheet of Concorde Strategies Group, Inc. as
of
December 31, 1996, and the related statements of income, changes
in
stockholders' equity and cash flows for the year ended December
31,
1996. The above-mentioned financial statements are the
responsibility
of the Company's management. My responsibility is to express an
opinion
on the consolidated financial statements at December 31, 1997 and
the
financial statements at December 31, 1996 based on my audits. I
did not
audit the subsidiary's statement of financial condition as of
December
31, 1997 nor the subsidiary's related statement of income,
changes in
stockholders' equity and cash flows for the year ended December
31,
1997. The subsidiary's statements reflect total assets of
$3,368,406.00
as of December 31, 1997 and total revenues of $1,827,502.00 for
the six
month period ended December 31, 1997. The subsidiary's financial
statements are included in the consolidated financial statements
of
Concorde Strategies Group, Inc. The subsidiary's financial
statements
were audited by other auditors whose report has been furnished to
me,
and my opinion in so far as it relates to the comments of the
subsidiary
is based solely on the report of such other auditors.
I conducted my audits in accordance with generally accepted
accounting
standards. These 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
used 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, based upon my audit and the report of other
auditors, the
consolidated financial statements at December 31, 1997 and
financial
statements at December 31, 1996 referred to above present fairly,
in all
material respects, the financial position of Concorde Strategies
Group,
Inc. and subsidiary as of December 31, 1997 and the financial
position
of Concorde Strategies Group, Inc. as of December 31, 1996, and
the
results of their operations and their cash flows for the years
ended
December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.
/s/Janet Loss
Janet Loss, C.P.A., P.C.
April 9, 1998 <PAGE>
JAY FOX, C.P.A.
4315 AUSTIN BLVD.
ISLAND PARK, NY 11558
April 7, 1998
To the Board of Directors and Shareholders
L'Abbigliamento, Ltd. and Vista International Ltd.:
We have audited the accompanying consolidated balance sheet
of
L'Abbigliamento, Ltd. and Vista International ltd. as of
December 31,
1997, and the related consolidated statements of income and
retained
earnings and cash flows for the six months then ended. These
financial
statements are the responsibility of the Company's management.
Our
responsibility is to express an opinion on the 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 aspects, the financial position of
L'Abbigliamento, Ltd. and Vista International Ltd. as of
December 31,
1997, and the results of its operations and its cash flows for
the six
months then ended in conformity with generally accepted
accounting
principles.
/s/ Jay Fox
Jay Fox, C.P.A.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET AND BALANCE SHEET
DECEMBER 31, 1997 AND 1996
CONSOLIDATED
BALANCE SHEET BALANCE
SHEET
1997 1996
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 133,606 $
- -
Accounts receivable 1,374,546 -
Inventory (as submitted) 1,819,695 -
Prepaid Expenses 13,435
- -
TOTAL CURRENT ASSETS: $3,341,282 $
- -
Fixed assets, net of accumulated
depreciation of $20,907 $ - $
- -
Leasehold improvements net of
accumulated amortization of $999 58,852 -
Security Deposits 40,500
- -
TOTAL ASSETS $3,440,634 $ 0
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
1997 1996
CURRENT LIABILITIES:
Accounts payable $1,408,676 $
26,668
Due to Factor 361,098 -
Bank and other loans payable
(current) 73,130 -
Corporate income taxes payable 13,000 -
Due to Ameristar
Capital Corporation $ 89,383 $
78,875
TOTAL CURRENT LIABILITIES $1,945,287 $
105,543
LONG TERM LIABILITIES:
Bank and other loans $ 252,414 $
- -
TOTAL LIABILITIES: $2,197,701 $ 105,543
STOCKHOLDERS' EQUITY (DEFICIT):
Preferred stock, no par value,
100,000,000 shares authorized.
Series A Convertible, redeemable,
1,000 shares issued and out-
standing.
Series B Convertible,non-dividend
bearing, 450,000 shares issued
and outstanding, sold at a price
of $.3125 per share for gross
proceeds of $140,625 less
offering costs of $9,992 $ 130,633 $ -
Common stock, no par value,
500,000,000 shares authorized,
3,300,000 and 1,200,000 shares
issued and outstanding as of
December 31, 1997 and 1996 $ 166,839 $ 136,839
Additional paid-in-capital 977,875 1,875
Retained earnings(Deficit) (32,414) (244,257)
TOTAL STOCKHOLDERS' EQUITY 1,242,933 (105,543)
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,440 634 $
0
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS AND
STATEMENT OF OPERATIONS
For the Years Ended December 31, 1997 and 1996
December 31, 1997 December 31, 1996
REVENUES
Sales $ 1,827,502 $
0
COST OF GOODS SOLD 1,419,701 0
GROSS PROFIT: 407,801 $
0
OPERATING EXPENSES:
Transfer and filing fees 884 $ 3,836
Insurance 23,067
-
Payroll and payroll taxes 117,941
- -
Rent 42,486
- -
Utilities and telephone 13,598
424
Commissions 23,626
- -
Auto and travel 9,940
443
Entertainment 4,886
-
Bank charges and interest 31,935
- -
Advertising 22,003
-
Office Expenses 10,954
415
Repairs and maintenance 4,177
-
Consulting 79,150
118,000
Professional Fees 25,462
26,425
Depreciation and amortization 4,288 -
Printing expenses 2,015
-
TOTAL OPERATING EXPENSES 416,412 149,543
NET (LOSS) BEFORE PROVISION
FOR INCOME TAXES (8,611)
(149,543)
ESTIMATED PROVISION FOR
INCOME TAXES 13,000
- -
NET (LOSS) $ (21,611) $
(149,543)
NET (LOSS PER SHARE) $ (.01) $
(.15)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 1,825,000 *975,000
* shares reflect a 1 for 10 reverse split
The accompanying notes are an integral part of these financial
statements.
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
CONSOLIDATED CASH FLOW STATEMENT AND CASH FLOW STATEMENT
For the Years Ended December 31, 1997 and 1996
Consolidated Cash Cash
Flow Statement
Flow Statement 1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (21,611) $ (149,543)
Adjustments to reconcile
net loss to net cash flow
from operating activities:
Depreciation and amortization 4,288 -
(Increase)in accounts receivable (197,931) -
(Increase)in inventory (393,915) -
(Increase)in prepaid expenses (1,081) -
Increase in payables 567,316
104,543
(Decrease)in corporate income
taxes payable $ (3,773) $
- -
Cash Used by Operating Activities $ (46,707) $ 45,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in fixed assets (3,082) -
Increase in leasehold improvements (11,217) -
Net Cash used in investing
activities (14,299)
- -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance
of preferred stock 130,633
- -
Proceeds from issuance of stock 30,000
45,000
Paydowns of amounts due to factor (13,902)
- -
Net Cash Provided by
Financing Activities $ 146,731 $
45,000
Net Increase in Cash $ 85,725 $ 0
CASH, BEGINNING OF THE PERIOD $ 47,881 $ 0
CASH, END OF THE PERIOD $ 133,606 $ 0
Supplemental cash flow information
Cash flow data:
Interest paid $26,270
Income taxes paid $ -
The accompanying notes are an integral part of these financial
statements.
CONCORDE STRATEGIES GROUP, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
(DEFICIT)
For the Year Ended December 31, 1996
and
Consolidated Statement of Stockholders'
Equity
for the Year Ended December 31,
1997
Preferred
Stock Non-
Deficit
Dividend
Accumulated Total
Bearing Common Stock
Additional during the Stockholders'
Series B Number of Common Stock
Paid-in Development Equity
Convertible Shares Amount
Capital Stage (Deficit)
Balance,
January 1, 1996 3,000,000 $91,839 $1,875
$(94,714) $(1,000)
April 1996,
9,000,000 shares 9,000,000 $45,000 --
-- $45,000
issued at no par
value at an
effective price
of $0.00
April 1996,
1-for-10 reverse
split (10,800,000) -- --
-- --
Net (loss) for
the Year Ended
December 31, 1996 -- -- --
(149,543) (149,543)
Balance,
December 31, 1996 1,200,000 136,839 1,875
(244,257) (105,543)
300,000 shares
issued for services,
June 13, 1997 300,000 30,000 --
-- 30,000
Shares issued for
acquisition
effective July 1,
1997 1,800,000 -- 976,000
233,454 1,209,464
450,000 shares
of Preferred
Stock, Non-
Dividend 130,633 -- -- --
-- 130,633
Bearing Series
B Convertible
Net (loss) for
the year ended
December 31, 1997 -- -- -- --
(21,611) (21,611)
Balance, December
31, 1997 $130,633 3,300,000 $166,839
$977,875 $(32,414) $1,242,933
The accompanying notes are an integral part of these financial
statements.
<PAGE>
CONCORDE STRATEGIES GROUP, INC. AND SUBSIDIARY
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND
FINANCIAL STATEMENTS FOR YEAR ENDED DECEMBER 31, 1996
Note 1 - ORGANIZATION AND HISTORY
The Company is a Colorado corporation and the Company had been in
the
development stage since its formation on February 12, 1988. The
Company
was formed to seek potential business acquisitions and its
activities
since inception are primarily related to its initial public
offering and
merger activities.
Upon the completion of the acquisition of Concorde Management,
Ltd. and
its wholly owned subsidiary, L'Abbigliamento, Ltd., the Company
has
ceased from being a development stage company. This acquisition
was
effective July 1, 1997.
L'Abbigliamento, Ltd. is a New York State corporation which was
incorporated in New York State in March of 1992.
L'Abbigliamento, Ltd.
commenced operations in August of 1992 as an importer of fine
men's
clothing. In October of 1995 Vista International Ltd.,
incorporated in
the Cayman Islands, was organized to acquire raw material and to
sell
finished goods to areas outside the United States. Effective
July 1,
1997 L'Abbigliamento, Ltd. and Vista International Ltd. were
acquired
through an exchange of stock by Concorde Strategies Group, Inc.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Method
The Company records income and expenses on the accrual method.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, cash on deposit
and
highly liquid investments with maturities generally of three
months or
less to L'Abbigliamento, Ltd. At December 31, 1997, there were
no cash
equivalents.
Organization Costs
Costs incurred in organizing the Company are being amortized over
a
sixty-month period.
Deferred Offering Costs
Costs associated with the Company's private offerings have been
charged
to the proceeds of the offering. If the offerings are
unsuccessful, the
costs will be charged to operations.
Sales and expenses
Sales and expenses are recorded using the accrual basis of
accounting.
Inventory shipped on consignment is recorded as a sale when it is
sold
by the customer.
Inventory
Inventory is stated at the lower of first-in first-out; cost or
market
and is based upon physical counts taken by management at December
31,
1997.
Fixed assets and accumulated depreciation
Fixed assets consist of a computer system and are stated at cost
less
accumulated depreciation which is provided for by charges to
operations
over the estimated useful lives of the assets. The assets are
depreciated over five years utilizing Internal Revenue Code
Section 179 expense
deduction of $17,500 annually with the remaining basis, when
applicable,
being depreciated using an accelerated cost revenue method.
Leasehold improvements and accumulated amortization
Leasehold improvements are stated at cost less accumulated
amortization
which is provided for by charges to operations over 31.5 years
using a
straight line method.
Use of estimates
The preparation of financial statements in conformity with
generally
accepted accounting principles requires management to make
estimates and
assumptions that affect the reported amounts of assets and
liabilities
and disclosure of contingent assets and liabilities at the date
of the
financial statements and revenues and expenses during the
reporting
period. Actual results could differ from those estimates.
Note 3 - AGING OF ACCOUNTS RECEIVABLE AND PAYABLE
The percentage aging of trade accounts receivable and accounts
payable
at December 31, 1997 is as follows:
Accounts Receivable Accounts Payable
Current 25% 100%
30-60 days 25%
over 60 days 50%
100%
Note 4 - INVENTORY
Inventory at December 31, 1997 was as follows:
Raw material (fabric) $ 761,552
Finished goods 679,850
Consignment 378,293
Total $1,819,695
Effective October 1, 1997, L'Abbigliamento, Ltd. entered into
consignment sales arrangement with two mass merchandisers of
men's clothing.
During the first quarter of 1998, L'Abbigliamento, Ltd. added two
additional consignment customers. Management believes that this
newly
instituted marketing strategy will improve sales, profit margins
and
collection cycles.
Note 5 - FACTORING OF ACCOUNTS RECEIVABLE
The subsidiary has entered into a non-recourse agreement with an
independent factor. The balances advanced by the factor bear a
one-time
fee of 5% of the invoice and is secured by post dated checks
issued by
the customer.
Note 6 - BANK LOAN
At December 31, 1997, the subsidiary had outstanding debt in the
amount
of $325,544 ($73,130 - current) with interest related thereto at
2% - 7%
over the prime rate. These obligations mature over the next five
years
with a remaining balloon payment of $40,000 due at that time. The
bank
loan is secured by inventory and accounts receivable.
Note 7 - CAPITALIZATION
In April 1996, the Company undertook a private placement of its
securities pursuant to the provisions of Rule 504 under
Regulation D
under the Securities Act of 1933, as amended, whereby it issued
9,000,000 shares of its Common Stock in exchange for the
satisfaction of
$45,000 in debts owed by the Registrant. Also in April 1996, the
Company
effected a 1-for-10 reverse split of its common stock as the
result of
which the Company had, following the aforesaid private offering,
1,200,000 shares issued and outstanding. This reverse split was
effected
in anticipation of management's renewed efforts to find a
suitable
business opportunity for the Company.
In June, 1997 the Company issued 300,000 shares of common stock
to
certain parties who had performed services on behalf of the
Company.
The shares were issued in consideration for the cancellation of
payments
owed by the Company at the agreed upon rate of $.10 per share and
were
sold through a Private Placement pursuant to the exemption
provided by
Rule 504 of Regulation D under the Securities Act of 1933, as
amended.
On October 24, 1997, the Company completed a Private Placement
Offering
of 450,000 non dividend bearing, no par value, Series B
Convertible
Preferred Shares. All of the shares were sold by the Company and
no
Placement Agent was involved in this Offering. The shares were
sold at
a purchase price of $.3125 per share and the Company realized
proceeds
of $130,633 from the Offering, net of offering expenses in the
amount of
$9,992. The shares were sold through a Private Placement
pursuant to
the exemption provided by Rule 504 of Regulation D under the
Securities
Act of 1933, as amended. Each Preferred Share is convertible
into one
and one quarter (1.25) shares of the Company's Common Stock, no
par
value, at the election of the Preferred Shareholder at any time
after
thirteen months from the date of issuance thereof and for a
period of
four years thereafter.
Note 8 - MERGER ACTIVITIES
Pursuant to the Agreement and Plan of Reorganization entered into
with
Concorde Management, Ltd. (formerly, Concorde Strategies Group,
Ltd.) on
September 23, 1996, and in anticipation of receiving audited
financial
statements the Company has completed the acquisition of Concorde
Management, Ltd. and its wholly owned subsidiary,
L'Abbigliamento, Ltd.
The Agreement and Plan of Reorganization was filed as an Exhibit
to Form
8-K dated November 15, 1996.
The acquisition, effective as of July 1, 1997, was completed
through a
tax-free exchange of securities by the Company's issuance of
1,800,000
shares of its common stock in exchange for all of the issued and
outstanding common shares of Concorde Management, Ltd.
Note 9 - PROVISION FOR TAXES ON INCOME
The difference between the recorded income tax provision and the
expected tax provision based on the statutory federal and state
income
tax rated is as follows:
Computed federal and state tax at
statutory rates $29,829
Tax effect of permanent book-tax
differences (entertainment) 891
Benefit from combining operations
with the Company's parent (17,720)
$13,000
Note 10 - LEASES AND OTHER COMMITMENTS
The parent company leases its premises from Ameristar, an
affiliated
company, for the following annual rent expenses.
(eleven months) November 1, 1997 thru September 30, 1998
$41,173
October 1, 1998 thru September 30, 1999
46,152
October 1, 1999 thru September 30, 2000
47,424
October 1, 2000 thru September 30, 2001
48,732
Total Rent Commitment
$183,481
The subsidiary leases it premises from a company whose owner is
related
to a shareholder of Concorde Strategies Group, Inc. at an annual
rent
of $84,000, for each of the next five years with annual
adjustment for
real estate taxes.
The subsidiary has an employment agreement with its key executive
officer for five years at base compensation, of $200,000 per
year. The
contract also provides for additional incentives based upon
performance
standards and annual adjustments to the base for changes in the
consumer
price index.
Note 11 - RELATED PARTY TRANSACTIONS
The Company has received advances of monies for its operating
expenses
from an affiliated company, Ameristar Group Incorporated. That
company
("Ameristar") also serves as a consultant to Concorde. Concorde
Strategies Group, Inc. is leasing office space from Ameristar on
a
monthly rental, commencing on November 1, 1997 for a term of
three years
and eleven (11) months. (see note 10)
The Company has incurred consulting fees of $96,000 to its
President,
$45,000 to "Ameristar" (an affiliate corporation), and $30,000 to
a 5%
stockholder of the Company, since the beginning of 1996.
The Company has also issued 200,000 shares of common stock to two
related privately owned companies in consideration of $.10 per
share for
consulting services performed on behalf of the Company. (See
Note 7. -
Capitalization)
As discussed in note 10, the subsidiary leases it facilities from
a
company whose owner is related to a shareholder of Concorde
Strategies
Group, Inc. Rent paid under this lease is believed by management
to be
at arm's length rates. Additionally, L'Abbigliamento, Ltd.
received
advances from its parent, Concorde Strategies Group, Inc. which
bear
interest at market rate.
Note 12 - CONSOLIDATION OF FINANCIAL INFORMATION
The consolidated financial statements of the Company for the year
ended
December 31, 1997 include the results of the acquisition of
Concorde
Management, Ltd. and its wholly owned subsidiary,
L'Abbigliamento, Ltd.
only from the date of acquisition on July 1, 1997. The financial
statements for the year ended December 31, 1996 include the
results of
operations for the parent company only.
All material intercompany accounts and transactions have been
eliminated.
Note 13 - SUBSEQUENT EVENTS
On January 7, 1998, the Company issued 315,000 shares of Series B
Convertible Preferred shares to certain parties who had performed
services on behalf of the Company, including two companies which
are
principally owned by two Directors of the Company. The shares
were
issued by the Company in consideration for the cancellation of
payments
owed by the Company at the agreed upon rate of $.25 per share and
were
sold through a Private Placement pursuant to the exemption
provided by
Rule 504 of Regulation D under the Securities Act of 1933, as
amended.
In 1998, the Company commenced a private placement of 750,000
Series B
Convertible Preferred Stock Purchase Warrants at a purchase price
of
$1.00 per Warrant. The Company will realize proceeds of $138,000
from
the Offering net of offering expenses of $12,000, if the minimum
number
of 150,000 Warrants are sold. The Company will realize proceeds
of
$738,000 from the Offering, net of offering expenses in the
amount of
$12,000, if the maximum number of Warrants are sold. Each
warrant
entitles the holder thereof to purchase one Series B Convertible
Preferred Share at a price of $3.00 per share during the period
commencing thirteen months after the date of the issuance thereof
and
continuing thirty (30) months thereafter. The warrants are
redeemable
by the Company at any time after thirteen months after their
issuance
and prior to their expiration at a price of $0.05 per warrant,
upon 30
days prior written notice, provided that the closing sale price
of the
shares as reported on the NASD Electronic Bulletin Board shall
have been
at least $4.80 (160% of the exercise price of the warrants) on
each of
the 20 consecutive trading days ending on the tenth day prior to
the day
on which the notice of redemption is given. As of March 31,
1998, the
company has sold 150,000 warrants.
<PAGE>
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers and directors of the Company are as
follows:
NAME Age POSITION(S) HELD
Robert Gordon 62 President, Director
Gera Laun 33 Secretary
Joseph J. Messina 43 Director
Martin I. Saposnick 51 Director
David A. Vigor 60 Director
William C. Hayde 38 Director
Profiles of the directors and officers of the Company are
set forth below. All directors hold office
until the next annual shareholders meeting or until their death,
resignation, retirement, removal,
disqualification or until their successors have been elected and
qualified. Vacancies in the Board may be
filled by majority vote of the remaining directors. Officers of
the Company serve at the will of the Board
of Directors. There is no Executive Committee or other committee
of the Board of Directors. Election
to the Board of Directors is for a period of one year or until
the next shareholder's meeting and elections
are ordinarily held at the Company's Annual Meeting of
Shareholders. There are no family relationships
between officers and directors.
Profiles of Officers and Directors
ROBERT GORDON is President. Mr. Gordon was previously
Executive Vice President of Contex,
Inc., an investment banking and consulting firm in Naples,
Florida. Prior to Contex, Mr. Gordon was
Managing Director of an apparel company, President and Chief
Operating officer of a public company
that manufactures precision parts and conducted research and
development, a management consultant,
Executive Vice President of a financial services company, and
Director of MIS for Kinney Shoe
Corporation. Mr. Gordon has a B.A. degree in Economics from
Union College.
GERA LAUN is Secretary. Ms. Laun is also Secretary and
Treasurer of Ameristar Capital
Corporation, an equipment leasing company. Previously, Ms. Laun
was Manager, Processing
Department of Vendor Funding Co., Inc. an equipment leasing and
asset based lending company. Also,
Ms. Laun was Manager, Mail Order Catalog/Retail for La Shack,
Inc.
JOSEPH J. MESSINA is a Director. He is also Chairman and
CEO of both Ameristar Capital
Corporation, a lease financing and asset based lender and
Ameristar Group Incorporated, an investment
banking and financial consulting firm specializing in "small cap"
companies. Mr. Messina was previously
President and Chief Operating Officer of Vendor Funding Co.,
Inc., a subsidiary of the Bank of Ireland
First Holdings. Vendor Funding, a national middle market lessor
and asset based lender, was co-founded
by Mr. Messina and subsequently sold to First NH Banks of
Manchester, New Hampshire. Mr. Messina
is a Director of Credit America Venture Capital, an entity formed
to acquire the manufacturing and
distribution network of Mako Marine International, Inc. He is
also a Director of Mako Marine
International, Inc., a publicly held corporation, and past
President of the Eastern Association of
Equipment Lessors.
MARTIN I. SAPOSNICK is a Director, and is also President of
Ameristar Group Incorporated, an
investment banking and financial consulting firm specializing in
"small cap" companies. Previously Mr.
Saposnick was President of Remsen Group, an independent
investment banking and financial consulting
services company. Prior to Remsen Group, Mr. Saposnick was
Chairman of the Board and President of
Marsan Securities Co., Inc., a financial services firm, which was
a wholly owned subsidiary of Marsan
Capital Corporation, a publicly held company. Mr. Saposnick was
also Chairman of the Board and
President of Marsan Capital Corporation. Previously, Mr.
Saposnick was Vice President of Chestman
Securities, Co., Inc. and had been Assistant Manager of
Specialist Surveillance Division of the New York
Stock Exchange. Mr. Saposnick is a graduate of Hunter College
and completed graduate studies in
Finance and Investments at Baruch College.
DAVID A. VIGOR is a Director and is also Executive Vice
President, Chief Financial Officer and
a Director of Phytomed, Inc. an early stage biopharmaceutical
company. Previously, Mr. Vigor was
Vice President, Finance and Chief Financial Officer of Ohmeda, an
international manufacturer of
pharmaceuticals and medical devices, which is a Division of BOC
Group. In other executive positions
with the BOC Group, Mr. Vigor was Vice President, Finance and
Information Systems of Gases Western
Hemisphere and Vice President, Finance of Ohmeda (A Division of
BOC Health Care). Mr. Vigor was
also Vice President, Finance for Millipore Corporation, a
"Fortune 1000" manufacturer of membrane
filters and liquid chromatographs and Vice President, Corporate
Information Resources for the Foxboro
Company, and Finance Director for foreign subsidiaries of
Westinghouse Electric Corporation. Mr.
Vigor was an Audit Supervisor for Barton, Mahew & Co. (Ernst &
Young). His education includes the
Institute of Chartered Accounts in England and Wales and the
Executive MBA program at Suffolk
University in Boston.
WILLIAM C. HAYDE is a Director. Mr. Hayde is also an
investment banker and co-owner of
Brockington Securities, a broker-dealer specializing in wholesale
and institutional trading, mergers and
acquisitions, and equity and debt financings. Mr. Hayde is also
President of B.R. Equities, which owns and
operates an electronic trading room, as well as Chairman of the
Board of The Paris Group, Ltd. a venture
capital and consulting company. Mr. Hayde, who has been active
in the brokerage business since 1983, was
previously Director of Corporate Finance for Aegis Capital. He
has a Bachelor's degree in Psychology from
Stonybrook University.
ITEM 11. EXECUTIVE COMPENSATION
Robert Gordon, President and a Director of the Company,
currently receives $1,000 per week. Since
1996, payments were advanced by Ameristar, on behalf of the
Company. The total advanced as of
December 31, 1997 is $41,000. During 1997, the payment
obligation was assumed by the Company.
As of December 31, 1997, the Company has an accrued obligation
for payments to Mr. Gordon of
$48,000.
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth at the date of this
Prospectus the stock ownership of each person known
by the Company to be a beneficial owner of five (5%) per cent or
more of the Company's Common Stock
and by all officers and directors, individually and as a group:
Number Percentage
of Shares of
Owned(1) Class(1)
Name ______________ ___________
Robert Gordon* 110,000 3.33%
Gera Laun* 3,000 0.09%
Dunhill Limited*(2) 100,000 3.03%
Remsen Group, Ltd.*(3) 228,500 6.92%
Wilmont Holdings Corp.*(4) 228,500 6.92%
David A. Vigor* 25,000 0.75%
FNB Nominee FBO*(5) 25,000 0.75%
David Vigor IRA
Ameristar Group Incorporated(6)* 675,000 20.45%
Paolo Vista(7) 125,000 3.78%
Officers and Directors as a 1,395,000 42.27%
group (5 persons)
*Officer and/or Director
(1) Assumes a total number of shares outstanding of 3,300,000
shares
(2) Dunhill Limited is a privately held corporation principally
owned and controlled by Joseph J. Messina
and Martin I. Saposnick, directors of the Company.
(3) Remsen Group, Ltd. is a privately held corporation
principally owned and controlled by Mr. Martin
I. Saposnick, a director of the Company.
(4) Wilmont Holdings Corp. is a privately held corporation
principally owned and controlled by Mr.
Joseph J. Messina, a director of the Company.
(5) FNB Nominee is trustee for IRA account of Mr. David A.
Vigor, a director of the Company.
(6) Ameristar Group Incorporated is a privately held corporation
principally owned and controlled by
Joseph J. Messina and Martin I. Saposnick , directors of
the Company.
(7) Paolo Vista is President of L'Abbigliamento, Ltd., the
Company's wholly owned subsidiary.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM
8-K
Financial Statements included in this Report:
Auditors Report of Janet Loss, C.P.A., P.C. dated April 9,
1998 together with;
Auditors Report of Jay Fox, C.P.A. dated April 7, 1998
Consolidated Balance Sheet as of December 31, 1997 and 1996;
Consolidated Statement of Income and Retained Earnings for
the years ended December 31, 1997 and
1996;
Consolidated Statement of Stockholders' Equity for the year
ended December 31, 1997;
Consolidated Statement of Cash Flows for the years ended
December 31, 1997 and 1996;
Notes to Consolidated Financial Statements.
(c) Form 8-K filings:
July 2, 1997 re: completion of Agreement and Plan of
Reorganization with Concorde
Management, Ltd.
January 13, 1998 re: increase in the number of directors,
and election of Mr. William C. Hayde to
serve as a Director.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly
authorized.
CONCORDE STRATEGIES GROUP, INC.
Dated: April 15, 1998 By: /s/ Robert Gordon
Robert Gordon
President & Principal
Executive Officer and
Principal Financial and
Accounting Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in
the capacities and on the dates
indicated.
Dated: April 15, 1998 By: /s/ Robert Gordon
Robert Gordon
President & Principal
Executive Officer and
Principal Financial and
Accounting Officer
Dated: April 15, 1998 By: /s/ Gera Laun
Gera Laun
Secretary
Dated: April 15, 1998 By: /s/ Joseph J.
Messina
Joseph J. Messina
Director
Dated: April 15, 1998 By: /s/ Martin I. Saposnick
Martin I. Saposnick
Director
Dated: April 15, 1998 By: /s/ David A. Vigor
David A. Vigor
Director
Dated: April 15, 1998 By: /s/ William C. Hayde
William C. Hayde
Director
