U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission file number 0-17117
WALL STREET FINANCIAL CORPORATION
(Exact name of Small Business Issuer as specified in its
charter)
Delaware 99-024086
(State or other jurisdiction of (I.R.S.
employer
incorporation or organization)
identification No.)
1088 Bishop Street, Suite 1104, Honolulu, HI, USA
96813
(Address of principal executive offices) (Zip
Code)
Registrant's telephone number, including area code: (808)
526-3999
________________________________________________________________
____________
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Title of each class Name of each exchange on which
registered
$.01 Par Value Par Common Shares NASD Bulletin
Board - WSFI
________________________________________________________________
_____________
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 by check mark if there is no disclosure of delinquent
filers in
response to Item 405 of Regulation S-B contained in this form,
and no disclosure
will be contained, to the best of Registrant's knowledge, in
definitive proxy
or information statements incorporated by reference in Part III
of this Form
10-KSB or any amendment to this Form 10-KSB. [ ]
State the aggregate market value of the voting stock held by
non-affiliates as
of December 31, 1995. The aggregate market value was computed
by using the
closing price on the NASD Bulletin Board on December 31, 1995
of $.25 per share.
Common Shares, Par Value $0.01 Per Share
$3,361,689.75
Indicate the number of shares outstanding of each of the
Registrant s classes
of common stock, as of the latest practicable date.
Class Outstanding as of May
15, 1996
Common Shares $0.01 Par Value 13,446,759
PART I.
ITEM 1. BUSINESS
(a) General Development
The Registrant was incorporated under the laws of the State of
Delaware in March
1987, succeeding a company established in 1986 as a holding
company. During
1995 significant changes occurred in the manner of conducting
the Registrant's
business.
WSF Trust Corporation of Belize, Ltd., a wholly owned
subsidiary of Registrant.
With the establishment of WSF Trust Corporation of Belize,
Ltd., (hereinafter
referred to as the Trust Company ), and the appointment of the
Trust Company
as the sole trustee and asset manager of one of the largest
private Estates in
Belize, the Registrant assumed an active and vital role in the
economic
development of the Country of Belize. The Trust Company s main
objective is to
implement a Plantation Revitalization Plan that includes
agriculture, forestry
and aquaculture projects in areas so designated and to prepare
and implement a
Master Development Plan for a mixed use, world class eco-resort
destination,
utilizing the plantation operations as ecological attractions
and the many Mayan
sites on the Estate as cultural attractions. To implement
these plans and to
achieve these objectives, the Trust Company has and will make
investments in
synergistic companies and/or enter into joint ventures with
qualified strategic
partners, more fully described in (b) Operations.
Wall Street Internet Corporation, a wholly owned subsidiary of
Registrant. This
company is Registrant s only U.S. based operation and will
serve as
communications and marketing tool for Registrant s operations.
(b) Operations
The Registrant s activities increased significantly during
1995, all focused on
utilizing its only real asset, an unencumbered, equitable
interest in 5,010
acres of the Salt Creek Estate in the Country of Belize. The
information set
forth below is a summary of the Company s activities during
1995 and is not
meant to be a complete discussion of the Company s activities
during such year.
Initially, Registrant engaged various consultants to evaluate
the highest and
best use and development potential for the Salt Creek Estate
and proceeded to
accumulate specific information concerning the natural
resources of the estate
and of the country of Belize during several site inspection
visits by officers
and directors of the Company. The studies included a review of
all industries,
economic trends, business practices, investment codes, fiscal
incentives laws
and taxation policies of Belize. The combined efforts resulted
in the
preparation of a trust and asset management proposal for the
entire Estate. The
Estate has an extensive history spanning over 300 years as a
citrus plantation,
cattle ranch and forest range. The proposal, which was subject
to the formation
of a Trust Company, was accepted by the owners of the Salt
Creek Estate.
The Company anticipates the ability to re-vitalize these
operations and to
achieve the highest and best utilization of the property via
the transfer of
technology in agriculture, aquaculture, resort destination
development, tourism
and shipping industries as successfully developed in the State
of Hawaii to
newly established subsidiary operations in Belize.
WSF Trust Corporation of Belize Limited. By order of the
Attorney General of
the Country of Belize, WSF Trust Corporation of Belize Ltd., a
wholly owned
subsidiary of Registrant, was declared a full service trust
corporation pursuant
to the Trust Corporation Act of the Laws of Belize.
Immediately thereafter,
WSF Trust Corporation of Belize, Ltd., (hereinafter referred to
as the Trust
Company), was appointed the sole trustee and asset manager of
the Salt Creek
Estate , one of Belize s largest, private Estates. One of the
first acts as the
Trustee and Asset Manager was to change the estate's name to
Mayan Salt Creek
Estate to reflect Belize s rich Mayan heritage.
The Mayan Salt Creek Estate. The Estate is located
approximately six miles
north of the Belize International Airport in the Belize City
District, Belize,
Central America. The Estate, pursuant to its Certificate of
Title consists of
31,423.45 acres, free and clear of any encumbrances. According
to a current
Assessment, the Estate is a diverse property containing
savannah, bush (forest),
pine ridge and open water. High bush - land holding dense
broadleaf forest
cover and tree species of commercial value - occupies approx.
14,576 acres
(5,901 hectares). This is equivalent to about 37% of the total
Estate land
base. The Estate operated 23 cattle pastures that were
connected by a fresh
water system and thousands of acres of agricultural areas that
were utilized for
specific crops. The Estate has fresh water wells throughout
the Estate
(between 20 feet and 40 feet deep), and according to local
sources, there is
no shortage of fresh and drinkable water. Certain utilities
are available from
Government services. For example, along the entire length of
the Estate runs
the National Water System and the National Electrical System.
The National
Water System will supplement the fresh water wells and fresh
water rivers, and
the National Electrical System can be accessed as needed. The
Estate features
rivers, ponds, small lakes and four mid-size and one very large
lagoon,
connected with natural or man-made rivers and with access to
the Caribbean Sea.
The Estate s archeological and historical value is significant
due to its Mayan
ruins and settlement sites. The Estate has miles of Caribbean
Seafront and
is bordered inland by the old North American Highway and, over
the entire
length, has many access roads into the Estate. However, the
Estate has been
idle (not utilized for productive purposes) for well over 30
years.
The Assessment of the Resources on the Estate. The Company
invited an
international trading company to prepare an Assessment of the
Forest Resources
on the Estate. The Assessment concluded that the Estate s
high bush land is
occupied with an estimated 60,000 mature and merchantable #1
and #2 grade
Honduras Mahogany trees and over 240,000 other mature and
merchantable hardwood
trees. The more mature Honduras Mahogany trees, located in the
center of the
Estate, are estimated to be between 40-50 years old with
diameters between 23-36
inches and a clear bole of 30-50 feet. There is a commercial
stocking density
of approximately 49 trees per hectare in this part of the
timber range. Younger
Honduras Mahogany trees, between 10-25 years in age, are
located around the
forest center. These trees have diameters of 12-24 inches, a
clear bole of
18-24 feet and have a commercial stocking density of 60 trees
per hectare in
this portion of the range. (One hectare = 2.47 acres). The
entire length of
the Estate is bordered inland by the North American Highway,
with established
access roads (1 to 7 miles) throughout the Estate.
The Timber Resources. On December 21, 1995, the Registrant
acquired these
timber resources from the Estate for One Hundred Thirty Four
Million Five
Hundred Thousand U.S. Dollars. The Company prepared a Request
for Proposal and
invited qualified companies to bid on several projects:: a)
An Agriculture
& Aquaculture Joint Venture; b) A Forestry Management Joint
Venture; c)
Development of an Eco-Resort with 4-6 Lodges of 50-100 Rooms
and one first class
250 Room resort hotel.
The Joint Venture Partner. The Company will form Joint
Ventures in Belize for
the Revitalization of the Estate (hereinafter referred to as
the Plantation
Revitalization Program ), including the implementation of a
Timber Project on
the Estate and in other timber ranges in Belize and the
Central American
Region. The Timber Project on the Estate is to include the
implementation of
a sustainable and ecologically sound Forestry Management
Program, re-planting
the timber resources and also clearing specific portions of the
land for
agriculture and other purposes as specified by the Estate s
Master Plan. The
timber processing plant will be located on 50 acres near Potts
Creek Road. The
transportation of timber to the processing plant on the Estate
and of processed
timber products to the Shipping Port are very convenient, as
the Estate is
bordered inland by the old North American Highway.
Conversion of Equitable Title into Equity and Control. On
December 31, 1995,
the Company and the Estate agreed to convert the equitable
title of 5,010 acres
of the Estate into 23.6% or 23,620 shares, fully paid and
non-assessable of
Compradore Limited, (hereinafter referred to as "the Estate").
Gerhart W.
Walch, the Chairman and President of the Registrant was also
named the
Chairman, President, Chief Executive Officer and a Trustee of
the Estate.
Belize Transportation Agencies, Ltd., d.b.a. Mayan Lines, a
wholly owned
subsidiary of the Company. Mayan Lines is a Shipping Agency and
the first
Belizean Shipping Company. The Line initially offers service
that replaces the
route abandoned by Tropical Shipping of Miami and it
anticipates gaining a fifty
percent (50%) market share in Belize. Mayan Lines is expected
to move a total
of approximately one hundred 20-foot containers per week
between Port
Everglades, Florida and Belize City, Belize with onward
connection to Puerto
Cortez, Honduras. In the near future, the company plans to
offer connecting
services from the Far East and Europe. With Mayan Lines, WSF
has positioned
itself as a major player in the shipping and transportation
industry in Belize.
Mayan Lines plans to increase its revenues and net income by
purchasing and/or
leasing its own vessels, containers and inland transportation
and by improving
its warehouse arrangements in Port Everglades, Florida.
Mayan Resorts Development Co., Ltd., a wholly owned subsidiary
of the Company.
Mayan Resorts plans to develop a world class mixed use major
eco-resort
destination on the 31,423.45 acre site, that will not only
cater to tourism
related facilities, but be equally inviting to commercial,
agricultural,
governmental, educational, sport and cultural enterprises as
well as to
residential communities. The Mayan Salt Creek Estate s
greatest assets are its
physical and environmental features with major historical Mayan
sites on and
around the property. The basic goal of the development is to
create an
environmentally harmonious, fully integrated community. This
means providing
not only facilities necessary for permanent and transient
residents, but also
providing facilities that meet the necessary infra-structure,
commercial,
governmental, leisure and shopping needs of a community
designed aesthetically
to its native environment. The perception of the community is
to be in harmony
with its natural surroundings, with building heights
complementing the natural
environment, a community that provides diverse and vast
opportunities to support
service businesses and as a result creates significant
employment opportunities
and financial stability for Belizeans. Sizable acreage will be
set aside for
donation to churches, schools, community centers, public
recreational facilities
and parks. Mayan Resorts is the owners representative and
will oversee the
implementation of the Master Development Plan. Currently, it
is responsible
for the completion of the Master Development Plan and of the
Plantation
Revitalization Plan of the Estate.
Wall Street Internet Corporation, a wholly owned subsidiary of
the Company.
This company is currently the only U.S. based subsidiary and
will serve in the
near future as communications and marketing tool for the
Company s operations.
This subsidiary plans to provide Internet services through the
operation of
World-Wide-Web server sites. It plans to offer WSF and its
clients their
presence on the electronic media, content publishing of their
advertising,
on-line marketing, secure commercial financial transactions and
virtual
community services, as well as additional customized Internet
services. On
March 21, 1996, the Company reported on Form 8-K, the
establishment of its
Internet Home Page: http:\\www.wsf.com.
(c) General
Discontinued Operations. Unable to support the continued
losses of TMH, the
agreement to acquire TMH Financial Corporation entered into by
Ernest C. Hickson
and the Company in September of 1994 was rescinded, when on
November 13, 1995
the Hickson Family Trust returned 2,764,204 shares of common
stock of Registrant
and the Company returned all of the TMH shares. Pursuant to
mutually agreed
upon recission agreement, TMH is required to provide services
to WSF on a joint
venture basis until all advances to TMH are repaid in full.
(d) Employees
The Company and its subsidiaries currently employ 4 persons on
a full time basis
and 3 persons on a part-time basis. None of the Company's
employees are covered
by a collective bargaining agreement. The Company employs
several consulting
firms and consultants.
ITEM 2. PROPERTIES
The Registrant s principal and administrative. office is
located at 1088 Bishop
Street, Suite 1104, Honolulu Hawaii for which it pays $1,630
per month. This
lease expires June 15, 1996, and the Company will relocate to
another suitable
office location. Currently there is a glut of office space in
Honolulu and the
Registrant believes that it will be able to obtain facilities
that are both
suitable and adequate for the planned growth of the Company, at
reasonable
terms.
The operational offices in Belize is located at Belcan Plaza
Building, Belize
City, Belize, Central America. The lease agreement includes an
one year option
to purchase the building. The option and the lease expires on
January 31, 1997.
It is the objective of the Company to acquire the building to
meet the office
requirements of its growing operations.
In June 1986 the Registrant acquired an equitable interest in
5,010 acres of the
Mayan Salt Creek Estate, located in the northern part of the
Belize District in
Belize City, Belize, Central America. In December 1995 the
Registrant converted
the equitable interest in land into a twenty three percent
(23.6%) of the common
stock of the 31,423.45 acres Estate. The Estate, which has a
300-year history
as a working plantation, pursuant to its Certificate of Title
consists of
31,423.45 acres, and is located less than ten minutes north of
the Belize
International Airport in Belize, has many miles of Caribbean
seafrontage and is
bordered inland by the old North American Highway. The Estate
has an extensive
history spanning over 300 years as a citrus plantation, cattle
ranch and forest
range.
ITEM 3. LEGAL PROCEEDINGS
At December 31, 1995, the Registrant was a party to several
lawsuits as
plaintiff or defendant that were incurred and reported
previously, none of which
individually or in the aggregate is considered material in
relation to the
Registrant s financial position or results of operations.
In July 1991, the Company reached a settlement agreement with a
computer vendor
for non-payment of services. The agreement totaled
approximately $100,000, and
the amount was payable in 1993. As of the date of this report
the settlement
payment remains outstanding.
In 1994, a former employee in settlement of an employment
contract dispute
returned 60,000 shares to the Company and the Company agreed
to sell these
shares and to return the proceeds in settlement of the contract
dispute. The
Company has been unable to sell these shares at a stipulated
price and therefore
the settlement agreement remains unsettled, although the
Company paid $10,000
towards that settlement. The Company is not aware of a legal
proceeding at this
time and intends to comply with the terms of the settlement
agreement.
In May 1994, a claim was filed against the Company for money
damages in the
amount of approximately $87,900 arising out of Pacific Wave
Technology's failure
to pay for computer equipment. The Company had planned to
acquire Pacific Wave
Technology, Inc., in 1993, however the transaction did not
close. Plaintiff
alleges that the Company had guaranteed such payments. The
outcome of this
proceedings and its effect, if any, cannot be determined at
this time. Currently
the Company is in settlement negotiations to resolve this
dispute.
The Company has filed an answer to a claim for payment of a
note in the amount
of $100,000, as described in Note 7, of the Financial
Statement incorporated
in this Report, although the term of the note had been orally
extended after
the claim was filed. The Company has answered said claim on
May 23, 1996, and
expects to settle this claim through payment of the Note prior
to December 31,
1996.
Although at this time there are no lawsuits pending, the
Company anticipates
that it could become a defendant for notes executed by Mr.
Jackson on behalf
of the Company, as described in Note 7 of this report, while
chairman. The
Company holds Ernest J. Jackson personally liable while
recognizing the
potential liability.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held no meetings of securities holders during 1995.
A shareholders
meeting is planned on September 5, 1996 in Honolulu.
ITEM 4a. EXECUTIVE OFFICERS OF REGISTRANT.
Other
Positions
Year Held
Last
Name Age Title Elected Five
Years
Gerhart W. Walch 47 Chairman of the Board 10/94
1990-1993
President & CEO
Chairman, CEO
and
Director WSF
1994
Director WSF
1995/96
Chairman, CEO
Compradore Ltd.
Gail Kitaji, Ph.D. 49 Treasurer and 1995
1990-1994
Chief Financial Officer
President & CEO
GRII
Consulting
Richard
MacMillan, Esq. 54 Secretary, 1986
1990-1996
General Counsel
Practicing Attorney
Antoine Y. Gedeon 48 Sr. Vice President 1995
1990-1996
and Director Self
employed
Hospitality Industry
Michael Singh 31 Director and President 1995
1990-1995
Belize Transportation
Country Manager
Agencies, Ltd.
Tropical Shipping
Company, Ltd.
Deni Leonard 50 Director 1996
1990-1996
Chairman Comp. Comm.
President & CEO
DLA
Financial
Gordon E. Rapozo 60 Director 1996
1990-1993
Chairman Audit Comm.
Treasurer,
Chief
Financial
Officer and
Director
1990-1996
Public Accountant
PART II
ITEM 5. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
(a) Market for Common Stock. The Company's common stock is
currently traded on
a very limited basis in the over-the-counter market and quoted
on the NASD's
Electronic Bulletin Board. The Company's common stock was
previously quoted
on NASDAQ. At such time as the Company meets the entry
requirements for NASDAQ
again, if ever, it intends to attempt to have its common stock
quoted thereon
or on another major Exchange.
Quarter 1995 1994
High Low High Low
1st Quarter .875 .125 2.75 .0625
2nd Quarter .53125 .0625 2.50 .625
3rd Quarter .5625 .0625 2.875 .8125
4th Quarter 2.0 .1875 1.90 .3125
(b) Holders. The number of shareholders of record of the
Company's common
stock as of May 15, 1996, was approximately 450. A substantial
number of shares
are held in the name of Brokerage houses, therefore the Company
believes that
the actual number of shareholders is significantly higher.
(c) Dividends. The Company has not paid any cash dividends to
date and does
not anticipate or contemplate paying dividends in the
foreseeable future. It
is thepresent intention of management to utilize all available
funds for the
development of the Company's business.
ITEM 6. SELECTED FINANCIAL DATA
1995
1994
Net Sales 15,969,824
118,733
Net Income (Loss) 14,762,214
(4,393,726)
Net Income (Loss) per Share 1.24
(.62)
Total Assets 134,997,918
346,631
Long term debt 67,250,000
- ---------------
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Management s Analysis of Results of Operations
The Registrant exhausted most of its working capital and
financial resources in
1994. The financial statements attached hereto and this
Management's Discussion
and Analysis Section address the Company's 1995 and 1994
Financial Condition and
Results of Operations. In spite of severely restricted
financial resources,
the Company was able to acquire the Belize Transportation
Agencies Limited,
incorporate the WSF Trust Corporation of Belize Limited and WSF
Internet Corp,
in order to provide for infrastructural support for the
development of the
Belize assets. Subsequent to December 31, 1994, the Company
attempted to
continue to reduce its liabilities, to raise additional capital
and to assist
TMH Financial Corporation to achieve positive operating results
on a
consolidated basis. However, the TMH Companies were unable to
produce the
desired results and the acquisition of TMH Financial
Corporation was rescinded
by mutual agreement in December 1995. By December 31, 1995,
the Company
terminated its California based business operations and
established the
foundation for operations in Belize beginning in 1996 by
securing the
trusteeship and asset management agreement between the WSF
Trust Corporation of
Belize and the owners of the Mayan Salt Creek Estate, by
acquiring the Belize
Transportation Agencies Limited and incorporating the Wall
Street Internet
Corporation. As a result of the beneficial interest in
Compradore Limited, WSF
recognized income from the sale of timber. Interested persons
should carefully
read the 1995 and 1994 financial statements in total, including
the footnotes
attached thereto.
Liquidity and Capital Resources
At December 31, 1995, the Company continued to have limited
liquid assets.
Total assets were $134,997,918 which consist mainly of standing
timber purchased
late in 1995 for operations planned in 1996. Total Liabilities
were
$55,509,695. and shareholders equity was $12,238,223. At
December 31, 1995, due
to its recent termination of the Company's operations in
California and the use
of its working capital (current assest) to implement the new
Corporate Strategic
Plan, the Company had a negative cash position and virtually
no current assets
as it had pledged its other current assets to secure a loan.
The Company's
current liabilities were $4,150,870. The Company's liabilities
included notes
payable to creditors, notes payable to management, payroll
taxes, wages,
litigation settlement, interest payable, notes to officers and
other
liabilities. The Company's ability to increase its working
capital is dependent
upon its ability to raise cash through the issuance of the
Company's securities
and/or on income from its Belizean operations. The Company
anticipates that it
will be able to secure sufficient working capital to enable it
to implement the
Company's new corporate strategic plan. However, the
Company's ability to grow
will, to a large extent, depend upon its ability to the
successful placement
of debt and/or equity securities and also to the the successful
implementation
of the Plantation Revitalization Plan.
The issuance of the Company's securities will have the
continued effect of
diluting the Company's current shareholders in their percent of
ownership in the
Company. As of December 31, 1995, there were 13,446,759 shares
of the Company's
common stock issued and outstanding.
There can be no assurance that the Company will continue to
operate profitably.
There can be no assurance that the Company will improve its
working capital
position required to implement the Company's new corporate
strategic plan.
Results of Operations
The Company had revenues of $15,969,824 in 1995 and $118,733 in
1994. Revenues
recognized in 1995 relates mainly to the sale of timber by the
owner of the
Mayan Salt Creek Estate. During the year ended December 31,
1995, the Company
had general and administrative expenses of $765,847 as
compared to general and
administrative expenses of $3,872,224 for the year ended
December 31, 1994.
During 1995 the Company's general and administrative expenses
included $269,380
for salaries, wages and compensation, bad debt expense of
$269,965, $78,262 for
outside services, $61,457 for legal services, and a variety of
other expenses.
For the year ended December 31, 1995, the Company had other
expenses of $1,399
compared to other expenses of $16,468 for the year ended
December 1994.
The Company's net profit after discontinued operations for the
year ended
December 31, 1995 was $14,633,493 compared to a net loss of
$4,393,726 for the
year ended December 31, 1994.
The Company had an accrued net stockholders' equity of
$12,238,223 as of
December 31, 1995 compared to an accrued deficit of $3,440,058
at December 31,
1994.
Impact of Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement
No. 109 regarding
accounting for income taxes. The statement requires an asset
and liability
approach to determining deferred income tax amounts and income
tax expense for
the period. The Company first applied this statement during
the fiscal year
ending December 31, 1995. In connection with the adoption of
SFAS 109, there
was no cumulative impact on the financial statements of the
Company and no
restatement of financial statements was required.
ITEM 8. FINANCIAL STATEMENTS
Index to Financial Statements
Financial Statements
Independent Accountants' Report
Year ended December 31, 1995
Balance Sheets -
December 31, 1995 and 1994
Statements of Operations
Years ended December 31, 1995 and 1994
Statements of Changes in Stockholders' Equity -
Years ended December 31, 1995 and 1994
Statements of Cash Flows -
Years ended December 31, 1995 and 1994
Notes to Financial Statements
INDEPENDENT AUDITORS REPORT ON FINANCIAL STATEMENTS AND
FINANCIAL STATEMENT
SCHEDULE
REPORT OF THE AUDITOR
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
WALL STREET FINANCIAL CORPORATION AND SUBSIDIARIES
We have audited the accompanying consolidated balance sheets of
Wall Street
Financial Corporation and Subsidiaries as at 31st December 1995
and 1994 and the
related consolidated statements of operations and statements of
cash flows for
the years then ended. 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 audits 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 audits provide a reasonable basis for our
opinion.
In our opinion, the consolidated balance sheets and related
financial statements
referred to above present fairly, in all material respects, the
consolidated
financial position of the company at 31st December 1995 and
1994 and the
consolidated results of their operations and their consolidated
cash flows for
the years then ended in conformity with generally accepted
accounting
principles.
The accompanying consolidated financial statements have been
prepared assuming
that the company will continue as a going concern. The Company
has a deficit
working capital that raises doubt about its ability to continue
as a going
concern. The consolidated financial statements do not include
any adjustments
that might result from the outcome of this uncertainty.
/s/ Mark C. Hulse
CHARTERED ACCOUNTANT
21st May 1996
Belize City,
Belize, C.A.
Representative Firm of KPMG
Klynveld Peat Marwick Goerdeler
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
31st December 1995 and 1994
Notes 1995
1994
Assets
Currents Assets
Cash
$3,074
- ------
Total current assets
3,074
Advances Receivable- 3
Other, less allowance of $3,106,854
in 1995 and $2,777,141 in 1994 $1,850
550
Marketable Equity Securities--at cost 4 125,000
127,022
Plant and Equipment 5
Furniture and fixtures 2,925
2,925
Equipment 6,602
6,602
------
- ------
9,527
9,527
Less: accumulated depreciation 2,412
507
------
- ------
Plant and equipment-net 7,115
9,020
Other Assets 165,209
35,065
Deferred Expenditure 26,844
Forest Resource 6 134,500,000
Shares Held as Collateral 171,900
171,900
------------
- --------
$134,997,918
$346,631
============
========
The notes on pages 18-23 form an integral part of these
financial statements.
Notes 1995
1994
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt
$10,939
Convertible promissory notes payable 7
2,775,000 $2,700,000
Accounts payable-trade
169,058 174,962
Advance payable-officers
6,610
Accrued liabilities
Payroll taxes 8
79,675 79,675
Interest payable-officers
8,326 305
Interest payable
483,650 161,237
- ------- -------
571,651 241,217
- ------- -------
Other current liabilities
Litigation settlement 9
215,000 215,000
Total current liabilities
3,741,648 3,337,789
Notes Payable-Officers
409,222 448,900
Notes Payable 6
51,358,825
- ---------- ---------
Total liabilities
55,509,695 3,786,689
- ---------- ---------
Deferred Revenue 6
67,250,000
Shareholders' Equity
Common stock-authorized, 25,000,000
shares of $.01 par value; issued
and outstanding 13,446,759 shares
in 1995 and 11,576,759 shares in 1994 10
134,468 115,768
Additional paid-in capital
12,699,898 12,082,293
Accumulated deficit
(561,143)(15,194,636)
- ------------ ----------
12,273,223 (2,996,575)
Less:
Reserve in land contract valuation
(13,000) (13,000)
Subscription receivable
(10,000) (10,000)
Stockholder notes receivable 11
(408,483)
Treasury stock
(12,000) (12,000)
- ---------- -----------
12,238,223 (3,440,058)
- ---------- -----------
$134,997,918 $346,631
============ ===========
The notes on pages 18-23 form an integral part of these
financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended 31st December 1995 and 1994
1995
1994
Revenue
Timber resource $15,891,175
Interest
$76,242
Other 78,649
42,491
-----------
- -------
15,969,824
118,733
-----------
- -------
Expenses
Start up expenses 250,000
Operating expenses 765,847
3,872,224
Interest expenses 8,458
176,508
Depreciation 1,906
507
Consulting 180,000
Other 1,399
16,468
---------
- ---------
1,207,610
4,065,707
---------
- ---------
Income/(loss) from continuing operation 14,762,214
(3,946,974)
Discontinued Operations
Loss on disposition of subsidiaries 128,721
446,752
-----------
- ------------
Net income/(loss) from operations $14,633,493
($4,393,726)
===========
============
Net income/(loss) per share-continuing operation 1.25
(.56)
(Loss) per share-discontinued operation (0.01)
(.06)
-----
- -----
Net income/(loss) per share from operation 1.24
(.62)
=====
=====
The notes on pages 18-23 form an integral part of these
financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended 31st December 1995 and 1994
1995
1994
Cash flows from operating activities:
Net income/(loss) from operations 14,633,493
($4,393,726)
Items not affecting working capital
earned income recorded as a receivable (15,891,175)
depreciation 1,905
507
non cash expenses (468,434)
651,514
provision for losses on accounts
receivable and other assets 329,713
2,400,000
loss on disposition of subsidiary 128,721
446,752
stock bonuses and commission 117,555
consulting and start-up expenses 400,000
shares issued-no consideration
16,467
------------
- -----------
(748,222)
(878,486)
Changes in assets and liabilities:
(Decrease) in accounts payable (5,904)
(166,377)
(Decrease) in accrued salaries-officers
(95,850)
(Decrease) in shareholders advance
(68,614)
(Decrease) in litigation settlement payable
(50,000)
(Decrease) in other current liability
(6,168)
Increase in interest payable 332,413
60,731
Increase in interest payable-officers 8,021
(Decrease) in advance payable-officers (6,610)
---------
- -----------
(420,302)
(1,204,764)
---------
- -----------
Cash flows from investing activities:
Purchase of plant and equipment
(9,527)
Addition to other receivables (1,300)
(550)
Addition to other assets (64,144)
(2,601,345)
Addition to deferred expenditure (2,094)
---------
- -----------
Net cash used in investing activities (67,538)
(2,611,422)
---------
- -----------
Cash flows from financing activities:
Proceeds from securities 2,022
Proceeds from short-term debt 10,939
Proceeds from notes payable 75,000
2,450,000
Proceeds from notes payable-officers 330,805
Shares sold 66,000
1,368,968
---------
- ----------
484,766
3,818,968
---------
- ----------
Net (decrease)/increase in cash (3,074)
2,782
Cash at beginning of year 3,074
292
--------
------
Cash at the end of the year -0-
$3,074
========
======
Cash paid during the year for:
Interest 10,000
115,776
The notes on pages 18-23 form an integral part of these
financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENT OF CASH FLOWS (continued)
Years ended 31st December 1995 and 1994
Supplemental disclosure information:
1995
The Company issued 665,500 shares valued at $142,305 in
compensation for bonus,
services rendered and compensation for performance.
The Company issued 1,100,000 shares valued at $446,000 in
settlement of
acquisition cost for subsidiaries and start-up costs.
The Company offset a stockholder notes receivable for $370,483
against notes
payable-officers.
The Company cancelled subscriptions receivable for $38,000
along with the
corresponding shares and applicable paid-in capital.
The Company recognized $134,500,000 in forest reserve and a
corresponding note
payable in a timber purchase and sale agreement executed with
the owner of lands
in Belize, Central America, a subsidiary of the company.
The Company recorded $15,891,175 in revenue and a corresponding
note
receivable-related party being the Company's proportionate
portion of gross
revenue recognized by the subsidiary upon recognition as
revenue the timber
resource on lands owned by the subsidiary.
The Company recognized deferred revenue and a note receivable
from a subsidiary
being the gross proceeds to that subsidiary for its services in
administering
the lands in Belize, Central America.
1994
The Company issued 1,900,000 shares of common stock in
connection with a
proposed acquisition.
The Company issued 1,764,200 shares on a note receivable.
The Company issued 1,464,807 shares in settlement of a note
payable.
The Company accepted 15,000 shares against an Employee Stock
Ownership Plan note
receivable.
The Company wrote off "shares issued, no consideration" for
$16,467.
The notes on pages 18-23 form an integral part of these
financial statements.
<TABLE>
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended 31st December 1995 and 1994
<CAPTION>
Other
Common stock
Additional stockholders'
Number
paid-in Accummulated equity
of shares Amount
capital deficit accounts
- -------------------------------------------------------------
<S> <C> <C>
<C> <C> <C>
Balance 1st January 1994 4,305,408 43,054
9,287,595 (10,800,910) (109,467)
Write off of "shares issued, no
consideration" 0 0
0 0 16,467
Issuance of restricted shares for
services rendered (acquisition
advisory team) 1,900,000 19,000
836,000 0 0
Sale of restricted common stock 2,157,340 21,574
1,347,394 0 0
Shares returned against Employee
Stock Ownership Plan note
receivable (15,000) (150)
(19,850) 0 20,000
Issuance of restricted shares to
stockholder on note rec 1,764,204 17,642
352,841 0 (370,483)
Issuance of restricted shares for
note payable 1,464,807 14,648
278,313 0 0
Net loss 0 0
0 (4,393,726) 0
- ----------------------------------------------------------
Balance at 31st December 1994 11,576,759 $115,768
$12,082,293 $(15,194,636) $(443,483)
Sale of restricted common stock 152,000 1,520
64,480 0 0
Shares issued in lieu of employee
bonus, compensation,
commission 553,000 5,530
112,025 0 0
Cancel subscription receivable (47,500) (475)
(37,525) 0 38,000
Shares issued for investment
services 112,500 1,125
23,625 0 0
Acquisition cost of subsidiaries 300,000 3,000
63,000 0 0
Shares in settlement of start-up
costs 800,000 8,000
392,000 0 0
Offset against notes payable-
officers 0 0
0 0 370,483
Net income 0 0
0 14,633,493 0
- ----------------------------------------------------------
Balance at 31st December 1995 13,446,759 $134,468
$12,699,898 $(561,143) $(35,000)
==========================================================
</TABLE>
The notes on pages 18-23 form an integral part of these
financial statements.
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
31st December 1995 and 1994
1. STATUS
The Company was incorporated in 1986 and reincorporated under
the laws of the
State of Delaware in 1987. The Company and its previously
wholly-owned
California-based subsidiaries, Wall Street Financial Centers,
Inc., TRAC
Systems, Inc. and Bankers Financial Network, Inc., collectively
known as WSF
Bankers Financial Network, developed a franchise system whereby
member banks
would be supported by various financial products and services.
During the second quarter of 1991, the management team of the
subsidiary,
without approval of the Company, took control of all assets of
WSF Bankers
Financial Network and started operations in direct competition
with the
Company's subsidiaries. The Company, unable to raise
additional capital, was
forced to cease its operations of the WSF Bankers Financial
Network, assumed
certain liabilities which were guaranteed by the Company, and
delisted its
shares from NASDAQ.
In 1992, the Company filed a claim for consequential damages
and recovery of all
assets. In February 1994, the Company and defendants entered
into a Mutual
Release and Settlement Agreement which released and forever
discharged each
party from all claims for relief.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements includes only the
accounts of Wall Street
Financial Corp. (the Company) and its wholly owned subsidiaries
WSF Trust
Corporation of Belize Limited and Belize Transportation
Agencies Limited.
All significant intercompany accounts and transactions have
been eliminated in
consolidation. The Company's subsidiaries were inactive.
3. ADVANCES RECEIVABLE
Advances receivable at 31st December 1995 consists of advances
to Ernest Jackson
and Jackson's companies for operating purposes in 1994 for
$2,729,443. The
amount is considered doubtful and is provided for.
4. MARKETABLE EQUITY SECURITIES
Marketable equity securities are carried at cost unless there
is a permanent
impairment in value, at which time the securities are valued at
market.
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in
Debt and Equity Securities" (SFAS 115), is effective for fiscal
years beginning
after 15th December 1993 and addresses the accounting and
reporting for
investment in equity securities having readily determinable
fair values and all
investment in debt securities. SFAS 115 requires such
investment to be
classified into three categories: securities held to maturity,
trading account
securities or securities available for sale.
The Company plans to adopt SFAS 115. Investments with a book
value of $125,000
shall be reported as securities available for sale at a fair
value of $206,000
and no securities shall be reported as trading account
securities. The
unrealized holding gain, net of tax effect, of approximately
$50,000 for
securities classified as available-for-sale shall be reported
as an adjustment
in a separate component of shareholders' equity.
5. PLANT AND EQUIPMENT
Plant and equipment are recorded at cost. Renewals and major
improvements are
capitalised; minor replacements, repairs and maintenance are
expended when
incurred.
Depreciation is calculated on the historical cost using the
straight line method
based on plant and equipment estimated useful lives. The
following are the
depreciation rates:
Furniture and fixtures 20%
Equipment 20%
6. RELATED PARTIES TRANSACTIONS
At 31st December 1995, the Company owned 23.63% of Compradore
Limited, a Hong
Kong Corporation which in turn owns 31,423.45 acres of fee
simple property in
Belize, Central America. Forest resource on the land is
estimated at
$134,500,000.
At 31st December 1995, the Company owned 100% of WSF Trust
Corporation of
Belize. WSF Trust was appointed by Compradore Limited as the
sole Trustee and
Asset Manager of the assets (land) of Compradore for a fee of
50% of the gross
proceeds derived from the projects. WSF Trust recorded a note
receivable from
Compradore Limited and deferred income of $67,250,000.
WSFC entered into a timber purchase and sale agreement with
Compradore Limited
through the Asset Manager WSF Trust. WSFC recorded forest
resource - asset and
a note payable to Compradore for $134,500,000. In turn,
Compradore Limited has
recognized WSFC earned portion of the remaining gross proceeds
of the forest
reserve being 23.63% of $67,250,000 and as such has executed a
promissory note
which WSFC has recorded as note receivable and income earned of
$15,891,175.
In consolidation, WSFC is reflecting forest resource as an
asset for
$134,500,000, deferred income of $67,250,000 being WSF Trust's
portion, earned
income of $15,891,175 and a consolidated note payable to
Compradore Limited for:
- WSFC note payable 134,500,000
- WSFC note receivable (67,250,000)
- WSFC note receivable (15,891,175)
------------
$51,358,825
============
7. CONVERTIBLE PROMISSORY NOTES PAYABLE
1995
1994
Convertible promissory notes payable consist
of the following:
NISSIM TSE - principal 150,000
150,000
Unsecured: 12.75% note issued 31/10/90.
Due date 31/10/93. The Company has obtained
oral extension for this date.
Benjamin Ynson / Phesco - principal 100,000
100,000
Unsecured: 12.75% note issued 31/10/90.
Due date 31/10/93. The Company has obtained
oral extension for this note.
Roy Adaniya - principal 50,000
Unsecured: 10% note issued 23/8/95.
Due date 30/9/97.
Paul Grab - principal 25,000
Unsecured: note issued 12/11/95.
Notes related to Jackson Builders Corporation
/Ernest J. Jackson:
notes executed by Ernest J. Jackson while
chairman but not properly authorised by the board.
The Company holds Ernest J. Jackson personally
liable while recognizing the potential liability. 2,450,000
2,450,000
----------
- ----------
$2,775,000
$2,700,000
==========
==========
8. PAYROLL TAXES
Effective 1st January 1993, the Company adopted the
requirements of Statement
of Financial Accounting Standards No. 109, "Accounting For
Income Taxes" (SFAS
109) which requires a change from the deferred method to the
asset and liability
method of accounting for income taxes.
As of 31st December 1995, the Company has estimated accumulated
net operating
losses of approximately $600,000. The Company is preparing its
federal income
tax returns for filing from 1990 through 1995. These losses
can be carried
forward and applied against future income of the Company for
federal and state
income tax purposes. The net operating losses will expire on
various dates
through 2010. The Company's income tax returns which are not
closed for
examination by statutes have not been examined by the taxing
authorities.
9. LITIGATION
In July 1991, the Company reached a settlement agreement with a
computer vendor
for non-payment of services. The agreement totaled
approximately $100,000,
payable in 1993. As of 31st December 1993, the entire
settlement payable is
outstanding. The Company is in the process of renegotiating
the settlement.
The settlement cost was provided for in 1991.
In May 1994, a claim was filed against the Company for money
damages in the
amount of approximately $87,900 arising out of Pacific Wave
Technology's failure
to pay for computer equipment. Plaintiff alleges that the
Company had
guaranteed such payments. The outcome of this proceeding and
its effect, if
any, cannot be determined at this time and thus no provision
for any liability
has been made in the financial statements.
The Company is a party to several other claims and legal
actions. In the
opinion of management, the ultimate disposition of these
matters will not have
a material adverse effect on the Company's operations or
financial condition.
Management has had extensive communications with the Holders
and of the
Convertible Notes of the Company described in Note No. 7 to
the Company's
Financial Statement. In the opinion of management, the
ultimate disposition
of these matters will not have a material adverse effect on the
Company's
operations or financial condition.
10. STOCKHOLDERS' EQUITY
On 24th November 1993, the Company's Board of Directors
authorized a reverse
stock split of four (4) shares of common stock for one (1) new
share of common
stock, effected for shareholders of record as of 13th December
1993. The total
outstanding shares at 31st December 1993 was reduced from
17,221,630 to
4,305,408 shares in connection with the reverse split. A total
of $129,162 was
reclassified to the Company's additional paid-in capital
account from the
Company's common stock account.
Of the 13,446,759 outstanding shares of Common Stock as of 31st
December 1995,
approximately 6,600,000 shares are restricted as to resale.
These shares may
not be traded publicly or otherwise transferred except as
permitted under
various exemptions contained in the Securities Exchange Act, or
upon
satisfaction of the registration and prospectus delivery
requirements of the
Securities Exchange Act.
11. STOCKHOLDER NOTES RECEIVABLE
In December 1992, the Company issued to a stockholder 500,000
shares of stock
for $33,000 cash and a note receivable of $67,000 payable in
two installments,
with the final installment due on 1st March 1993. As of 31st
December 1994,
$38,000 is still outstanding. An additional note for $370,483
is included in
this account during 1994. As of 31st December 1995, shares
representing the
$38,000 were cancelled and the $370,483 was transferred to
Notes Payable -
Officers.
12. EMPLOYEE STOCK OWNERSHIP PLAN
In 1989, the Company established an Employee Stock Ownership
Plan (ESOP)
covering substantially all employees of the Company and its
subsidiaries who
meet minimum length of service requirements. No contributions
were ever made
to the ESOP.
Effective 31st July 1994, the ESOP was formally terminated.
The Company has had
outside legal counsel review the ESOP and related documents for
the possiblity
of contingent liabilities to former or present employees and
potential liability
for ERISA, Department of Labor (DOL) and Internal Revenue
Service (IRS)
requirements. Based on the results of the findings, counsel
and management
believe the Company does have contingent liabilities to its
former and present
employees who qualified for participation in the ESOP.
However, the three
principal participants have waived any rights they may have
under the ESOP. The
Company also has potential liability for violations of ERISA,
DOL and IRS
requirements; however, the contingent liability is not
determinable at this
time, and resolution of any liabilities could not be achieved
without
significant expense to the Company.
13. NET PROFIT/(LOSS) PER SHARE
Net profit/(loss) per share is based on weighted average number
of shares
outstanding of 11,864,092 for 1995 and 7,117,186 for 1994.
Report of the Auditor on Supplementary Information
REPORT OF THE AUDITOR
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
WALL STREET FINANCIAL CORPORATION AND SUBSIDIARIES
Our audits were conducted for the purpose of forming an opinion
on the basic
financial statements taken as a whole of Wall Street Financial
Corporation and
subsidiaries as of and for the years ended 31st December 1995
and 1994, which
is in the preceding section of this report. The supplementary
information
presented hereinafter is presented for purposes of additional
analysis and is
not a required part of the basic financial statements. The
information has been
subjected to the auditing procedures applied in the audits of
the basic
financial statements and, in our opinion, such information is
fairly stated in
all material respects in relation to the basic financial
statements taken as a
whole.
/s/ Mark C. Hulse
Chartered Accountant
21st May 1996
Belize City
Belize, C.A.
Representative Firm of KPMG
Klynveld Peat Marwick Goerdeler
Wall Street Financial Corporation and Subsidiaries
OPERATING EXPENSES
Years Ended 31st December 1995 and 1994
1995 1994
---- ----
Parking 376
Salaries, wages and compensation 269,380 417,520
Auto 119 2,029
Employee benefits 6,479 372
Employee parking 4,381 2,125
Rent 19,184 14,138
Utilities 6,334 10,598
Bank charges 39 464
Delivery and postage 1,321 1,702
Equipment maintenance 1,336
Insurance 1,426 1,346
Licenses and fees 827 870
Office expenses 1,139 (3,133)
Office supplies 1,811 3,553
Printing 11,850 2,428
Repairs and maintenance 1,429 302
Reprography 838
Supplies-other 56
Accounting 5,888 90,198
Legal 61,457 241,693
Outside services 78,262 660,393
Other professional services (64,318)
Meals and entertainment 3,439 3,181
Travel and transportation 3,045 21,138
Advertising and promotion 10,156
Public relations 5,155 41,593
Dues, subscriptions and membership 531 141
Other operating expenses 2,468
Bad debt 269,965 2,408,717
Organizational expense 12,000
Taxes-other 330
-------- -----------
$765,847 $3,872,224
======== ===========
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
On September 1994, the Company's Board of Directors appointed
the firm of KPMG
Peat Marwick, Belize Office as the Company's independent
certifying accountant
due to the Company s focus on utilization of its Belize assets.
The Company's
previous accountant was the firm of Grant Thornton LLP and the
Company
anticipates to continue to utilize the services of Grant
Thornton LLP for other
accounting matters and/or consulting services. Additional
information about the
appointment of KPMG Peat Marwick, Belize Office as the
Company's certifying
accountants, is as follows:
A. The date of such appointment of KPMG Peat Marwick, Belize
Office as the
Company's independent certifying accountant was in September
1995.
B. There have been no disagreements with the previous
accountant of the Company
on any matter of accounting principles or practices, financial
statement
disclosure or auditing scope of procedure.
C. The accountants' reports on the financial statements of the
Company for the
last two years in which audits were prepared did not contain
adverse opinions
or disclaimer of opinions nor were such reports qualified as to
auditscope or
accounting principles.
D. The decision to change accountants was recommended by the
Company's Board
of Directors. William Dabney, Esq., served as the Chairman of
the Audit
Committee at the time KPMG Peat Marwick, Belize Office was
appointed the
Company's independent certifying accountant.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
A. Identification of Directors and Executive Officers. The
current directors
and executive officers of the Registrant who will serve until
the next annual
meeting of shareholders or until their successors are elected
or appointed and
qualified, are set forth below:
Gerhart W. Walch: 47, Chairman of the Board, President and
Chief Executive
Officer of WSF 10/94-Present; Mr. Walch is a Co-Founder of WSF
and has served
as a director or as an officer since its inception in 1987. He
is the Chairman
of the Board of Compradore Limited, d.b.a. Mayan Salt Creek
Estate. Mr. Walch
is also the International Managing Director of the Stockbrokers
Society.
Richard G. MacMillan, Esq.: 54, Mr. MacMillan has been the
Secretary of Wall
Street Financial Corporation and all its subsidiaries
1986-Present. Mr.
MacMillan is an attorney in private practice in Honolulu,
Hawaii. He has been
a lecturer in the areas of real estate, securities and tax and
also served as
a District Court Judge.
Gail Kitaji, Ph.D.: 49, Dr. Kitaji is Principal Financial
Officer and Treasurer
of the Company, 5/95 - Present. Dr. Kitaji has been Operations
Planning Manager
(Financial) for the Lanai Company 9/91 - 9/93; VP-Finance and
Controller of
Alaska General Alarm, Inc., 1987 - 1989.
Michael Singh: 31, Mr. Singh is a member of the Board of
Directors of WSF. He
is the President and Chief Operating Officer of Belize
Transportation Agencies
Limited ("BTAL") and its subsidiary Mayan Freight Lines, Inc.
since December
1995-Present. Between 1989 - 1995, Mr. Singh has held numerous
positions with
Tropical Shipping Company, Ltd., and was the Country Manager,
Belize. He is
the Chairman of the Board of the Air Traffic Licensing
Authority of Belize.
Antoine Y. Gedeon: 48, Mr. Gedeon is Senior Vice President and
a member of the
Board of Directors of WSF since November 1995-Present. He has
held financial,
managerial and top management positions in the hospitality
industry with Regent
Hotels since 1969. He is the founder/president of the Vanuatu
Hotel &
Restaurant Association, and an air-tour and ground
transportation operation in
Honolulu, Hawaii.
Gordon E. Rapozo: 60, Mr. Rapozo is a member of the Board of
Directors and
Chairman of the Audit Committee of WSF 4/96 - Present. He is a
co-founder of
WSF and has been the Treasurer, Chief Financial Officer of WSF
between 1987 -
2/94. Mr. Rapozo is a Public Accountant in private practice. He
previously
served as Senior Loan Officer and Treasurer of GECC Financial /
GE Capital
Hawaii, a General Electric Company.
Deni Leonard: 50, Mr. Leonard serves as a member of the Board
of Directors of
WSF beginning 4/96 - Present. Mr. Leonard is the Founder,
President and CEO of
DLA Financial, Inc., an American Indian Financial Advisory
Company located in
San Francisco, California. Mr. Leonard is a recognized
authority on Tribal
Sovereignty, and has worked for twenty five years to protect,
develop, and
innovate Tribal economic strategies. Previously, Mr. Leonard
served as CEO of
Alaska Pacific Forest Products and as a Consultant to the
international
Accounting firm Pannell, Kerr, Forester in Canada in the areas
of aqua culture
for Pacific Aqua Foods.
B. Significant Employees. None.
C. Family Relationships. None.
D. Other: Involvement in Certain Legal Proceedings. There
have been no events
under any bankruptcy act, no criminal proceedings and no
judgments or injuctions
material to the evaluation of the ability and integrity of any
director or
executive officer during the past five years.
E. Compliance with Section 16(a). None.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation
paid by the
Company for services rendered during the last three years to
the Company's Chief
Executive Officer and to the Company's most highly compensated
executive
officers other than the CEO whose annual salary and bonuses
exceeded $100,000:
(None).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term
Compensation
- -------------------------------
Annual Compensation Awards
Payouts
--------------------
- -------------------- ---------
(a) (b) (c) (d) (e) (f) (g)
(h) (i)
Other
Name Annual Restricted
and Compen- Stock
LTIP All Other
Principal Salary Bonus sation Award(s)
Options/ Payouts Compensa-
Position Year ($) ($) ($) ($) SARs
(#) ($) tion ($)
- ----------------------------------------------------------------
- -----------------------
<S> <C> <C> <C> <C> <C>
<C> <C> <C>
Gerhart Walch 1995 0 0 0 0 0
0 0
President,CEO 1994 0 0 0 $12,500 <F1> 0
0 0
Chairman
<FN>
<F1>
(1) In 1994, the Company awarded Mr. Walch 50,000 shares of
common stock for services rendered. On
the day of the grant, the closing market price was $.25.
Therefore, for purposes of the Summary
Compensation Table the dollar value of such restricted stock
award was $12,500.
</FN>
</TABLE>
No options, stock appreciation rights or long-terms incentive
plan awards were
issued or granted to the Company's management during the fiscal
year ending
December 31, 1995 and 1994. As of December 31, 1995, the
Company's management
owned no options or stock appreciation rights. Accordingly, no
tables relating
to such items have been included in this Item 10.
Compensation of Non-Employee Officers & Directors
The Company's non-employee directors are compensated $700 per
board meeting
attended in addition to 50,000 shares of common stock of the
Registrant. The
Company's non-employee officers, receive consulting fees and
50,000 shares of
the common stock of the Registrant. The shares will be issued
immediately in the
Director's or Officer's name, but will be held by the Secretary
of the
Corporation until vested is in full. The rate of vesting of
these shares will
occur at the rate of 8% per month, on the last day of each
month, beginning
January 1, 1996, with the residual shares being vested at
December 31, 1996,
unless an acceleration of vesting occurs. The Company will
reimburse for
reasonable and approved expenses.
Previous Compensation
In April 1990, the Company entered into an Employment Agreement
with Gerhart W.
Walch. The agreement was for a term of five years. The
Agreement provided for
a base salary of $12,850 per month. Mr. Walch was paid no cash
salary in 1993,
1994 and 1995 although he devoted substantially all of his
efforts to the
Company. In 1993, 1994 and 1995, Mr. Walch was issued a total
of 250,000 shares
of the Company s common stock as payment for services rendered.
The employment
agreement was superceded by a new agreement executed effective
January 1, 1996.
Employment Agreements
Effective January 1, 1996, a new employment agreement was
entered into with
Gerhart W. Walch for a minimum 3 (three) year term and provides
for a base
salary of $9,000 per month, 100,000 shares of common stock and
a performance
based incentive bonus compensation package relating to the
three year business
plan, subject to the recommendation of the Compensation
Committee of the Board
of Directors.
Effective January 1, 1996, employment agreements were entered
into with Dr. Gail
Kitaji, Ph.D., Michael Singh and Antoine Y. Gedeon which
provide for each
individual a base salary of $5,500 per month, 100,000 shares of
common stock and
a performance based incentive bonus compensation package
relating to the
implementation of the three year business plan, subject to the
recommendation
of the Compensation Committee of the Board of Directors.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners. The
following table sets
forth information regarding shares of the Company's common
stock beneficially
owned as of December 31, 1995 by: (1) each officer and director
of the Company;
(ii) all officers and directors as a group; and (iii) each
person known by the
Company to beneficially own 5 percent or more of the
outstanding shares of the
Company's common stock.
Number of
Shares
Name Owned (1)
Percent
Gerhart Walch (1)(2) 4,255,729 31.6%
4057 Black Point Road
Honolulu, HI 96816
Gordon E. Rapozo (1) 250,000 1.8%
187 Nawiliwili Street
Honolulu, HI 96825
Dr. Gail Kitaji, Ph. D. (1) 103,000 .7%
1325 Wilder Avenue, 21 Makai
Honolulu, HI 96822
Richard MacMillan, Esq. (1) 133,750 1.0%
7016 Kamilo Street
Honolulu, HI 96820
Antoine Y. Gedeon (3) 100,000 .7%
1016 Laukupu Way
Honolulu, HI 96825
Michael Singh (3) 100,000 .7%
#1 Buttonwood Bay
Belize City, Belize, C.A.
Deni Leonard (4)
122 World Trade Center
San Francisco, CA 94111
All Officers and Directors 4,942,479 36.7%
as a Group (7 persons)
Total Shares Issued and 13,446,759 100.0%
Outstanding
(1) These individuals are the officers and directors of the
Company.
(2) Mr. Walch is the CEO and director of the Company. All
shares indicated are
owned by the Gerhart Walch and Nancy Atmospera-Walch Revocable
Living Trust.
(3) 1996 directors. Shares issued pre-January 1996.
(4) No shares issued at December 31, 1995.
(b) Security Ownership of Management. See Item 12(a) above.
(c) Changes in Control. No changes in control of the Registrant
are
contemplated.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In May 1990, Gerhart W. Walch loaned the Company $277,000 at
12.75% interest.
In 1992, the note was exchanged for 375,000 (post-split) shares
of the Company's
common stock.
In February 22, 1994, the Company acquired Jackson Builders
Corporation from
Ernest Jackson in exchange for 6,000,000 shares of the
Company's common stock.
Mr. Jackson assumed the positions as the Chairman, President
and Chief Executive
Officer of the Company. Mr. Jackson did not provide the
Company with the
required closing schedules of Jackson Builders Corporation
during the after-
closing period as provided in the Agreement and Plan of Merger
between Jackson
Builders Corporation and WSF Properties, Inc., a subsidiary of
the Company. Mr.
Jackson refused to hold Board of Directors Meetings as
requested by
non-executive Board Members and kept the board uninformed on
material actions
taken by Management under his directon. On June 16, 1994,
against the objection
of its Chairman and then major stockholder, Mr. Jackson and
his legal counsel,
the law firm of Case & Lynch (now dissolved), the board
conducted the first
Board of Directors Meeting of the Company since February 22,
1994. The board
confirmed that Mr. Jackson was in non-compliance with and in
breach of material
representations and warranties of the Agreement and Plan of
Merger, as well as
most of the Covenants of the Loan Agreement and Convertible
Promissory Note
Agreement with Mr. Schuler.
On September 17, 1994, Mr. Walch replaced Mr. Jackson as
Chairman of the
Board, President and Chief Executive Officer of the Company.
Mr. Jackson
remained a director of the Company until the execution of the
Rescission
Agreement.
Subsequently, on December 8, 1994, the Jackson transaction was
rescinded by
mutual agreement. The Company returned all of the shares of
Jackson Builders
Corporation to Mr. Jackson and Mr. Jackson agreed to return all
the 6,000,000
shares to the Company. Mr. Jackson executed a stock power with
signature
guarantee, transferring all of the 6,000,000 shares of the
Company's stock to
the Company for cancellation. However he failed to deliver
those actual
certificates. Since Mr. Jackson failed to return the
certificates, based on the
rescission agreement, the stock power, and legal opinions,
the Company
cancelled the stock certificates. Subsequently, the Company
was informed that
Mr. Jackson had pledged 3,500,000 of those certificates to two
of his personal
creditors. The two creditors of Mr. Jackson were fully aware
that the rescission
would occur. It is the Company's position that those
certificates were
illegally pledged by Mr. Jackson and the respective creditors
of Mr. Jackson
were advised by the Company, that those particular
certificates have been
pledged illegally and have been cancelled.
Additionally, the Company issued 1,900,000 shares to certain
consultants
involved in the Jackson transaction, none of which were
affiliates of the
Company. The Company also agreed to issue 500,000 shares of
its common stock
to Gerhart W. Walch for services rendered in connection with
the acquisition and
in consideration of Mr. Walch cancelling an option to purchase
1,000,000 shares
of the Company's common stock. These 500,000 shares have not
been issued as of
December 31, 1995.
In 1994, the Company issued a total of 165,000 shares to
officers, directors,
employees and others in lieu of, or in addition to, cash
compensation. These
shares were issued to the following:
Number
Year
Name of Shares
Issued
William D. Dabney 50,000
1994
Richard MacMillan 65,000
1994
Gail Kitaji 25,000
1994
William Bousema 25,000
1994
On September 30, 1994, the Company acquired TMH Financial
Corporation ( TMHF )
from the Hickson Family Trust for 1,000,000 shares of the
Company s common
stock. Subsequently, this transaction was rescinded and the
1,000,000 shares
were returned to the Company for cancellation.
On March 10, 1994 Gerhart W. Walch, director only, of the
Company at that time,
who had made a loan to the Company in the amount of $500,000
on June 16,1993,
converted this $500,000 loan and promissory note into 500,000
shares of the
Company's common stock.
On January 25, 1995, the Hickson Family Trust converted a
$352,841 note into
1,764,204 shares of the Company s common stock. Subsequently,
transaction was
rescinded and the 1,764,204 shares were returned to the Company
for
cancellation.
In 1995, the Company issued a total of 262,000 shares to
officers, directors,
employees and others in lieu of, or in addition to, cash
compensation. These
shares were issued to the following:
Number Year
Name of Shares Issued
William D. Dabney 50,000 1995
Masahiro Tsuchiya 50,000 1995
Gerhart W. Walch 50,000 1995
Richard MacMillan 50,000 1995
Gail Kitaji 50,000 1995
Ernest C. Hickson 12,000 1995
On May 11, 1995, WSF Trust Corporation of Belize became the
sole trustee and
asset manager for the Mayan Salt Creek Estate, consisting of
31,423.45 acres of
ocean front property in Belize facing the Barrier reef.
On December 21, 1995, the Company executed a purchase agreement
to acquire the
timber resources on the Mayan Salt Creek Estate from Compradore
Limited, the
owner of title of the property with the asset manager serving
as agent.
On December 31, 1995, the Company converted its equitable
interest in 5,010
acres of the Mayan Salt Creek Estate into 23.63% of the issued
and outstanding
capital stock of Compradore Limited the title holder of the
Mayan Salt Creek
Estate. The shares are fully paid and non-assessable.
Parents of Company
The only parents of the Company, as defined in Rule 12b-2 of
the Exchange Act,
are the officers and directors of the Company. For information
regarding the
share holdings of the Company's officers and directors, see
Item 12.
ITEM 14. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits. No Exhibits are filed with this Report.
(b) Reports on Form 8-K. The Company filed the following
reports on Form 8-K
between the 1st Quarter of 1995 through the end of the first
Quarter of 1996.
February 29, 1996 Form 8-K. The Company announced Bid opening
and requests for
proposals for development projects for their Mayan Salt Creek
Estate property
in Belize, Central America, particularly as related to the
implementation of a
timber resource management plan.
March 20, 1996 Form 8-K. The Company reported the resignation
of Masahiro
Tsuchiya, Ph.D. from its board of directors and the contents of
its Web Pages
on the Internet under the access code www.wsf.com. The two
vacant seats on the
board of directors were filled by Gordon E. Rapozo and Deni
Leonard.
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.
WALL STREET FINANCIAL CORPORATION
By /s/ Gerhart W. Walch Dated:
May 28, 1996
Gerhart W. Walch
Chairman, President and
Chief Executive Officer
In accordance with the Exchange Act, this report has been
signed below by the
following persons on behalf of the Registrant and in the
capacities and on the
dates indicated.
Signature Title
Date
/s/ Gerhart W. Walch President/CEO
May 28, 1996
Gerhart W. Walch and Director
(Principal Executive Officer)
/s/ Gail Kitaji, Ph.D. Treasurer
May 28, 1996
Gail Kitaji, Ph.D. and Chief Financial Officer
(Principal Financial Officer)
/s/ Antoine Y. Gedeon Sr. Vice President
May 28, 1996
Antoine Y. Gedeon and Director
/s/ Deni Leonard Director
May 28, 1996
Deni Leonard Chairman
Compensation Committee
/s/ Michael Singh Subsidiary President
May 28, 1996
Michael Singh and Director
/s/ Gordon E. Rapozo Director
May 28, 1996
Gordon E. Rapozo Chairman Audit Committee
