<PAGE>
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, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission file number 0-17117
WSF CORPORATION dba Wall Street Financial Corporation
(Exact name of Small Business Issuer as specified in its charter)
Delaware 99-0240826
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
745 Bishop St., Amfac Ctr, Hawaii Tower Suite 700, Honolulu, HI. 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
asof December 31, 1998. The aggregate market value was computed by using the
closing price on the NASD Bulletin Board on December 31, 1998 of $.115 per
share.
State issuers revenues for its most recent fiscal year $2,536,699
Common Shares, Par Value $0.01 Per Share $19,920,788
State the aggregate market value of the voting and non-voting common equity
held by non-affiliates, computed by reference at which the common equity was
sold, or the average bid and asked price of such common equity on December
31, 1998 of $0.115 $2,290,891
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 December 31,1998
Common Shares $0.01 Par Value 19,920,788
PART I.
ITEM 1. BUSINESS
(a) General Development
The Registrant (also referred to as the Company or WSF ) was incorporated
under the laws of the State of Delaware in March 1987. Its primary
operations are Trust Services and Special Asset Management. Its shares are
traded on the OTC BB: Symbol WSFI.
WSF Trust Corporation of Belize Limited, (hereinafter the Trust Company ).
The Trust Company is a wholly-owned subsidiary of the Company. It is a full
service trust corporation pursuant to the Trust Corporation Act of the Laws
of Belize, Central America. Belize is located south of Cancun on the Yucatan
Peninsula. It is the only English speaking Country in Central America and it
is a Member of the British Commonwealth. By the establishment of the Trust
Company and with its appointment as sole trustee and asset manager of one of
the largest private estates in Belize, the Mayan Plantation, WSF has assumed
an active role in the economic development of the Country of Belize.
Compradore Limited, a Hawaii Corporation (the Land Owner)
The Company owns twenty-three and 62/100 percent (23.62%) of the common stock
of Compradore Limited, a Hawaii corporation and has received a one-year
option to purchase an additional twenty seven and 1/2 percent (27.5%)
currently owned by the family trust of an officer and director. Compradore
Limited is the registered owner of a real estate property and holds the
Transfer Certificate of Title (TCT), dated December 19, 1973, registered in
the Land Titles Register Volume 8, Folio 300 at the Belize General Registry.
The TCT encompasses 38,677-acres of land (referred to as the Mayan - Salt
Creek Estate or the Plantation ). Due to subsequent transfers the property
was reduced to 31,423.45-acres in 1989. The property is very strategically
located in the Belize City District, just north of the Belize International
Airport along the Caribbean Ocean, with areas that are ideal for residential,
commercial and resort development. The property is held free and clear of
any liens or other obligations; please see below. Among the major attractions
on this property is a large number of historical Mayan archaeological sites.
The Company has an option to acquire the controlling interest of Compradore
Limited at fair market value.
In order to remove any possible cloud on its ownership and title and to enjoy
quiet title, prior to beginning the implementation of the Company s Master
Plan for the Plantation, Compradore Limited has litigated, obtained judgments
and is in continued litigation as more fully described in Section Part I,
Item 3.
Mayan Plantation Limited, a Belize Corporation (Mayan Plantation).
Mayan Plantation (formerly known as Mayan Plantation Hardwoods, Limited),
a wholly owned subsidiary of the Trust Company, formerly
known as Mayan Plantation Hardwoods Limited is the manager of the 31,423.45
acres, owned by Compradore Limited, an affiliate of the Company. The land is
being utilized as a forest range, cattle ranch and diversified crops
plantation.
On November 15, 1997, the Company acquired from Sandhill Enterprises, Ltd, a
Belizean company, whose shareholders are U.S. citizens, all assets and
operations, including 229-acres of land and all improvements thereon, a
sawmill, several buildings and equipment with the payment of $150,000 in
cash, a long-term Promissory Note, and a Settlement for a significant amount
of Timber removed and processed from the Company s timber resources without
authorization and/or payment. The Honolulu office of Davis Wright Tremaine,
acting as the escrow agent for both the Buyer and the Seller, closed
this transaction on December 28, 1997. In 1998, Mayan Plantation engaged
new management and started operation of the sawmill. The sawmill operation
was improved and Mayan Plantation acquired additional machinery and wood
processing equipment for the augmentation of the current sawmill operations
and for the establishment of a manufacturing plant for floors, doors,
windows, moldings, and other value added products. During the second and
third Quarters of 1998, Mayan Plantation planned and constructed a new Wood
Processing Plant for the implementation of a Value Added Wood Processing
operation. The fully operational Value Added Wood Processing plant was
designed to be capable of producing virtually all of the wood products and
mill work for planned residential, commercial and resort development projects
of the Company.
The Seller, however, has failed to deliver said free and clear title since
January 1998 as required pursuant to the terms of the Asset Purchase
Agreement. On October 23, 1998, the Company filed a Demand for Binding
Arbitration as required under the terms of the agreement, requesting specific
performance with a claim for damages as more fully explained in Part II, Item
1.
The Company will continue to utilize forest management consultants in
continuation of the Company s objectives in implementing and maintaining a
sustainable forestry management plan for its timber resources.
Mayan Resorts Limited, a Belize Corporation (referred to as Mayan Resorts).
Mayan Resorts, a wholly-owned subsidiary of the Trust Company, is engaged in
the development and management of small, world-class, ecologically sound
resort properties in Belize. The primary objective of Mayan Resorts is to
implement the development plan of a world-class destination, health and
wellness-resort on areas designated for resort development on the Mayan
Plantation. The Master Development Plans strives to utilize the plantation
operations as ecological attractions and the many Mayan sites on the property
as cultural attractions.
Mile 13 1/2 Limited, d.b.a. Salt Creek Club, a Belize Corporation,
A subsidiary of the Company, owned 70% by the Company and 30% by Mayan
Management International, LLP, acquired on March 23, 1998, a property,
registered in the Land Titles Register Volume 33, Folio 81 at the Belize
General Registry. Late 1998 and beginning 1999, the Company had difficulties
making payments on the interest of the mortgage. Although the Company
consistently did bring its mortgage payments current, the attorney of the
Company, who also is affiliated with the St. Paul s Building Society in
Belize, sold the property at the face value of the mortgage to one of his
affiliated entities. The Company plans now to build a Private Members Club
on the Salt Creek Estate.
Wall Street Internet Corporation, a Hawaii Corporation (referred to as WSI)
WSI is a wholly owned subsidiary of the Company, will serve as the
communications and marketing arm for all of the Company's operations. This
company remains a development stage company.
Registration of Copy Rights and Trade Marks
In addition to its corporate registrations in the Country of Belize and in
the State of Hawaii and previous trade mark registrations, the Company has
applied for the registration of the following trademarks (a) Mayan Resorts,
(b) Treasure the Experience, (c) Salt Creek Club and (d) Private Jewel of
Belize, and (e) Mayan Plantation.
Risk Factors
The Company's ability to implement the above-described plan of operations
will, to a large extent, be dependent upon management's ability to attract
qualified developers as joint venture partners for the various non-company
owned projects and to raise additional capital. While the Company is
confident in producing the required investment and working capital, there can
be no assurance that such capital will become available as required. The
Company therefore will continue to seek capital from private and/or
institutional investors. The Company plans to raise sufficient funds through
a placement of debt or equity instruments to develop the required
infrastructure for projects, including development of the golf course and the
pre-sale of lots, homes and villas.
The information set forth in this Plan of Operation is management's best
estimate based upon current plans. Actual expenditures will be greater or
lesser depending upon many factors including, but not limited to, available
capital, overall market conditions in the plantation management and resort
development, and the status of the commercial domestic and international
financial markets.
Due to possible economic or political factors that may affect the economic
viability of this project, there can be no assurance that the Company will be
able to raise the funds required for the implementation of all portions of
its plans.
Discontinued Operations
For strategic reasons, the Company exchanged its 100% interest in Belize
Transportation Agencies, Ltd., for 20.27% of Sandhill Enterprises, Ltd., a
sawmill adjacent to the Plantation. Michael Singh, the President of Belize
Transportation Agencies, Ltd. remains a director of the Registrant. The
effective date of the exchange was January 1, 1998.
Employees
The Company and its subsidiaries currently employ 4 persons on a full time
basis and numerous individuals on a part-time or advisory basis. It is
anticipated that the number of employees in Hawaii and in the Belize
operations may increase significantly as the implementation of the Plantation
Revitalization Plan and the Land Development Plan progresses.
None of the Company's employees are covered by a collective bargaining
agreement. The Company employs several Hawaii based international consulting
firms and consultants.
Inflation
The Company's business and operations have not been and are not expected to
be materially affected by inflation.
ITEM 2. PROPERTIES
The Registrant s principal and administrative office is located at 745 Fort
Street, Amfac Center, Hawaii Tower, Suite 700, Honolulu, Hawaii, 96813. Rent
for these premises is $2,200.00 per month.
In June 1986 the Registrant acquired an equitable interest in 5,010 acres of
the Plantation for 1,300,000 pre-split shares of the Company, located in the
northern part of the Belize District in Belize, Central America. On December
31,1995, the Registrant converted the equitable interest in the land into a
twenty three and 62/100 (23.62%) percent of the common stock of Compradore
Limited, fee simple, free and clear title holder of the 31,423.45 acres
private Estate. On May 11, 1995, the WSF Trust Corporation of Belize Limited
was appointed the sole trustee and asset manager of the entire 31,423.45 acre
Plantation.
ITEM 3. LEGAL PROCEEDINGS
At December 31, 1998, the Registrant was a party to several lawsuits as
plaintiff or defendant, none of which individually or in the aggregate is
considered material in relation to the Registrant's financial position or
results of operations, including:
WSF vs. JACKSON
Litigation resulted from the cancellation of shares. Pursuant to the terms
of an Agreement and Plan of Merger dated January 12, 1994, the Registrant
agreed to conditionally issue 6,000,000 shares to Ernest J. Jackson, owner of
Jackson Builders Corporation. During the agreed upon post-closing time, the
Board of Directors discovered that Jackson made material misrepresentations
to the Company and that Jackson did not provide the Company with the closing
schedules as required during the post-closing period. Therefore, Jackson did
not meet the conditions for the closing of the merger transaction and
forfeited his rights to these shares. The Company disclosed the material
facts in its 1994 8-K Filings. On September 28, 1994, the Company terminated
Mr. Jackson as President and Director effective immediately. On November 26,
1994, a Plan and Agreement of Rescission under which the parties agreed,
among other things, to rescind the Agreement and Plan of Merger dated January
12, 1994, and Mr. Jackson agreed to return all of the 6,000,000 shares for
cancellation. However, as the Company discovered after the termination of
Mr. Jackson, without knowledge or approval of the Company, Mr. Jackson
pledged portions of these conditionally issued and restricted shares to
personal creditors. Therefore in order to avoid legal action, Mr. Jackson
executed a stock power in the name of the Company, with Paine Webber
signature guarantee, and agreed to return the stock certificates on December
31, 1994. However, Mr. Jackson failed to deliver the stock certificates as
agreed upon. Based on the recission agreement, the stock power and a legal
opinion obtained from Wickwire Gavin, the Company canceled the 6,000,000
shares. In addition the Company holds Mr. Jackson personally accountable
for liabilities incurred while he was Chairman, and recognizes the potential
liability therein.
Although there is no assurance, Management believes it will prevail in the
recovery of these canceled certificates and the recovery of its claims.
EDWARDS vs. COMPRADORE
In 1997, Alfred Edwards, Jr. made a claim for conveyance of 18,000 acres of
the land owned by Compradore Limited, an affiliate of the Company and the
owner of the 31,000 acre-property in Belize. Mr. Edwards claimed he
purchased the land, but failed to pay for it. The land was never
transferred. WSF funded and Compradore defended the case. The Chief Justice,
Sir George Brown, of the Superior Court in Belize ruled in favor of
Compradore Limited. Mr Edwards was not satisfied with the outcome of this
case and filed an appeal. The highest court of Belize, the Appeals Court
heard the case and Compradore Limited has again prevailed.
COMPRADORE vs. HO, et al.
On July 31, 1997, Compradore Limited, an affiliate of the Company, and at the
instruction of the Company (WSF s ownership in Compradore is 23.6% of the
issued and outstanding capital stock, and WSF Trust Corporation of Belize
Limited is the sole trustee and asset manager of a 31,423.45 acres Compradore
Limited owns), filed a lawsuit against its first Chairman and Chief Executive
Officer, Raymond Y. Ho of the Company and his family, demanding specific
performance on an agreement entered into by the Company with Ho and his
family. This case was set for trial on October 4, 1999, but was postponed to
2000. A new trial date has been set for the first week of July 2000. However,
due to a substitution of legal counsel, the trial may be further delayed.
The Company is confidant that it will prevail in its efforts and that a
settlement or judgment at trial will resolve this case. The
Company has a claim for significant damages for attorneys fees, punitive
damages and payment of all Company's court costs and legal fees.
YNSON vs. WSF
In June 1996, Mr. Benjamin Ynson filed a claim for $100,000 plus interest
thereon against the Company in the State of California. This case was
dismissed.
In 1989/90, the Company sold three Convertible Promissory Notes, one to Mr. &
Mrs. Gerhart W. Walch for $277,000, one to Mr. Tse for $125,000, and one to
Mr. Ynson for $100,000, all in cash. In accordance with the conversion
provision, Mr. & Mrs. Walch and Mr. Tse converted their notes in stock of
WSF.
The conversion provision further provided that in the event 75% of the note
holders request the conversion of their notes, all note holders would agree
to convert their note at a price of $1.00 USD at the time of such conversion.
Mr Ynson did not comply with this requirement. Mr. Tse and Mr. Walch
converted their notes and interest thereon at $1.00 per share. Mr. Ynson re-
filed his claim in the State of Hawaii in the regular Court System and with
the Department of Corporations. Since this is an offshore offering, the
Department of Corporation declared that it has no jurisdiction over this
matter. An amount equal to the potential liability has been accounted for in
contingent liabilities. The Company may settle this claim out of court.
WSF CORPORATION vs. SANDHILL ENTERPRISES, GRIMME et al. (An American
Arbitration Association arbitration case and settlement is in process of
being re-filed)
An arbitration case filed in October 1998, settled on April 29, 1999,
resulted in a reduction of the purchase price of the Asset Purchase Agreement
for the 229-acre sawmill property. Pursuant to the Arbitration Settlement,
Sandhill was required to place the title certificate with Title Guaranty Escrow
Services, Inc. WSF was required to pay $30,000 by June 30, 1999, through
escrow and $315,000 by August 15, 1999. On August 13, 1999, two days before
closing of Escrow, the Company received an Order of the Supreme Court of Belize,
action #387, restraining Sandhill Enterprises from selling and transferring
the property to the Company. This order was never revoked. On August 26,
1999, Sandhill Enterprises obtained, from a different judge in Belize, Action
No 450, to repossess the property from the Company. The Company plans to re-
open and pursue the Arbitration Settlement case in the near future, whereby
it will claim damages for breach of Settlement Agreement and punitive damages
as well as recovery of legal fees and court costs.
ITEM 8. FINANCIAL STATEMENTS
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED FINANCIAL STATEMENTS
31st December 1998 and 1997
INDEX
Report of the auditor to the Board of Directors and Shareholders
for the Year ended December 31, 1998 and 1997
Consolidated balance sheets
for Years ended December 31, 1998 and 1997
Consolidated statement of operations
for Years ended December 31, 1998 and 1997
Consolidated statements of cash flows -
for Years ended December 31, 1998 and 1997
Consolidated statements of changes in stockholders' equity -
for Years ended December 31, 1998 and 1997
Notes to financial statements
Supplementary Information
Report of the auditor on supplementary information
Consolidated operating expenses
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 of 31st of December 1998 and 1997,
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 of December 1998 and
1997, 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
15th May 2000
Belize City,
Belize, C.A.
Member Firm of
SUMMIT INTERNATIONAL ASSOCIATES INC, (New York)
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
31st December 1998 and 1997
Notes 1998 1997
Assets
Currents Assets
Cash $4,792 $60,683
Accounts receivable-trade 38,062 24,687
Accounts receivable-related party 290,946 62,580
Prepayments 10,000 10,000
Interest receivable 82,436 12,414
Inventory 59,139 ---
------------ ------------
Total current assets 485,375 170,364
------------ ------------
Advances receivable-
Officers 9,813 ---
Others 22,340 17,768
------------ ------------
32,153 17,768
------------ ------------
Note receivable 100,000 100,000
------------ ------------
Property, plant and equipment 3
Land 1,042,960 229,000
Buildings 313,123 150,000
Furniture fixtures and equipment 578,317 527,932
Vehicle 16,600 16,600
------------ ------------
1,951,000 923,532
Less: accumulated depreciation (126,442) (7,405)
------------ ------------
Property, plant and equipment-net 1,824,558 916,127
------------ ------------
Other Assets --- 20,000
Deferred expenditures 5 475,213 1,785,030
Deposit 6 --- 202,055
Forest Resource 4 134,500,000 134,500,000
Organization Cost 226,989 28,024
Less: accumulated amortization (4,913) (2,457)
------------ ------------
222,076 25,567
Sinking Funds 7 1,210,938 804,688
Investment 12,631 12,631
------------ ------------
$138,862,944 $138,554,230
============ ============
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS (continued)
31st December 1998 and 1997
Notes 1998 1997
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt $41,037 $---
Convertible promissory notes payable 8 1,411,808 1,675,000
Accounts payable-trade 625,973 242,116
Accounts payable-officer 17,985 2,742
Accounts payable-others 174,593 174,593
Payroll taxes 9 5,434 9,654
----------- ------------
2.276,830 2,104,105
----------- ------------
Accrued liabilities
Interest payable-officers 134,560 77,063
Interest payable 323,296 120,737
Insurance payable --- 1,264
Net payroll payable 9,786 2,756
----------- ------------
467,642 201,820
----------- ------------
Other current liabilities
Litigation settlement 10 20,000 20,000
----------- -----------
Total current liabilities 2,764,472 2,325,925
Note Payable-St. Paul's 450,000
Notes Payable-Officers 12 814,286 551,818
Reserve 11 660,292 597,500
Notes Payable 4,13 9,963,825 51,963,825
----------- ------------
Total liabilities 14,652,875 55,439,068
----------- ------------
Deferred Revenue 4 65,125,000 67,250,000
Long-Term Debts 14 1,275,000 850,000
Shareholders' Equity
Common stock-authorized, 25,000,000 15
shares of $.01 par value; issued
and outstanding 19,920,778 shares
in 1998 and 15,880,039 shares in 1997 199,207 158,801
Common stock-subscribed, 14,721,803 shares
of $.01 par value in 1998 147,218 19,655
Additional paid-in capital 18,058,388 13,748,177
Additional paid-in capital-subscribed 39,249,776 858,201
Retained earnings 16,17 155,480 230,328
----------- ------------
57,810,069 15,015,162
----------- ------------
$138,862,944 138,544,320
============ ============
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended 31st December 1998 and 1997
Notes 1998 1997
Revenue
SCC Initiation Income $9,440 ---
Investment income 36,320 12,394
Operations-gross profit 19 2,232,636 304,326
Interest income 50,292 16,249
Other income 20 208,011 92,514
---------- -----------
2,536,699 425,483
----------- -----------
Expenses
Operating expenses 2,164,722 321,664
Interest expenses 325,332 51,475
Depreciation/amortization 121,493 5,522
----------- -----------
2,611,547 378,661
----------- -----------
(Loss)/Income from continuing operation (74,848) 46,822
Discontinued Operations
Loss on disposition of subsidiary --- (43,496)
----------- -----------
Net (Loss)/income from operations (74,848) $3,326
=========== ===========
Net income per share-continuing operation ($.0038) $.0030
(Loss) per share-discontinued operation --- (.0028)
------- -------
Net income per share from operation ($.0038) $.0002
======== =======
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended 31st December 1998 and 1997
1998 1997
Cash flows from operating activities:
Net (loss)/income from operations ($74,848) $3,326
Items not affecting working capital
earned income recorded as interest receivable --- (12,414)
depreciation/amortization 121,493 5,522
non-cash expenditures (1,518,437) 669,924
loss on disposition of subsidiary --- 43,496
investment income recognized --- (12,395)
accrued notes payable officer written off to
other income --- (12,000)
conversion of notes payable to sale of lot-
other income --- (40,000)
---------- -----------
(1,471,792) 645,459
Changes in assets and liabilities:
Increase(decrease)in accounts payable-trade 383,857 39,789
-officers 15,243 2,742
-others --- (82)
(Decrease) increase in payroll taxes (4,220) 9,654
Increase in interest payable-officers 57,497 54,644
Increase in interest payable 202,559 143,747
(Decrease) increase in insurance payable (1,264) 1,264
Increase in net payroll payable 7,030 2,756
(Increase) in accounts receivable-trade (13,375) (24,687)
-related party (228,366) (61,761)
(Increase) in prepayments --- (10,000)
(Increase) in advances receivable-others (14,385) (16,218)
(Increase) in inventory (59,139) ---
(Increase) in interest receivable (70,022) ---
---------- ----------
Net cash (used in)/provided by operating
activities 1,196,377 787,307
---------- ----------
Cash flows from investing activities:
Purchase of property plant and equipment (1,027,468) (259,243)
Disposal of property plant and equipment --- 12,771
Decrease to other assets 20,000 30,000
(Decrease) addition to deferred expenditures 1,309,817 (1,061,296)
Decrease (increase) in deposits 202,055 (202,055)
Organization cost (198,965) (28,024)
---------- -----------
Net cash provided by (used in) investing activities 305,439 (1,507,847)
----------- -----------
Cash flows from financing activities:
Increase (repayment) of short-term debt 41,037 (4,293)
Increase in notes payable-officers 262,468 30,351
Increase (decrease)in reserve 62,792 (2,500)
Proceeds from long-term debts 425,000 850,000
Proceeds from notes payable 450,000 650,997
Proceeds used to establish sinking funds (406,250) (750,000)
--------- ---------
Net cash provided by financial activities 835,047 774,555
--------- ---------
Net increase in cash (55,891) 54,015
Cash at beginning of year 60,683 6,668
---------- -----------
Cash at the end of the year $4,792 $60,683
========== ===========
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended 31st December 1998 and 1997
Summary of Non Cash Transactions
Debit Credit
1998
Convertible promissory notes $263,192
Notes payable 42,000,000
Deferred revenue 2,125,000
Common Stock $40,406
Common stock subscribed 127,563
Additional paid- in capital 4,310,211
Additional paid-in capital subscribed 38,391,575
Expenditures 1,518,437
1997
Expenditures $669,924
Accounts payable-trade 15,164
Deferred expenditures 376,454
Interest payable 158,749
interest receivable 12,414
Loss on disposal of subsidiary 43,496
Property plant and equipment 652,199
Accounts receivable-related party 819
Investment 236
Interest payable-officers 16,432
Long-term loans 54,688
Convertible promissory notes payable 450,997
Additional paid in capital $377,201
Common Stock 6,652
Other income 64,414
Treasury stock 12,000
Advance receivable-officers 47,543
Convertible notes payable-officers 311,145
Other assets 192,912
Shares subscribed 19,655
Additional paid in capital-subscribed 858,201
Accounts payable-others 95,000
Accounts receivable-trade 20,547
Prepayment 1,302
Notes payable 445,000
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended 31st December 1998 and 1997
Supplemental disclosure information:
1998
The Company issued 970,000 shares valued at $363,750 as compensation to
officers and directors.
The Company issued 1,895,862 shares valued at $697,369 as issuance of shares
via note conversions.
The Company issued 237,490 shares valued at $104,681 in connection with EB-5
financing transaction.
The Company issued 11,647 shares valued at $4076.45 as stock in lieu of
payable.
The Company issued 1,000,000 shares valued at $3,000,000 as portion of
Compradore Note Conversion.
The Company issued 300,000 shares valued at $60,000.00 in connection with
Jackson settlement.
The Company retired its 500,000 stock bonus plan valued at $5,000.00
1997
The Company issued 350,000 shares valued at $131,250 as compensation to
employees, officers and directors.
The Company issued 277,260 shares valued at $214,515 as settlement for
interest payable and the value of construction plans.
The Company issued 72,000 shares valued at $34,500 as compensation for
consulting services and other professional fees.
The Company issued 25,000 shares valued at $12,500 as partial settlement of a
note payable.
The Company retired its 60,000 treasury stock valued at $12,000.
The Company reclassified 1996 loss of $135,787 relating to the loss in value
of officer's shares held as collateral for a Company obligation from an
officer's account to deferred expenditures.
The notes on pages 16-20 form an integral part of these financial statements.
<TABLE>
Wall Street Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended 31st December 1998 and 1997
<CAPTION>
Retained Other
Common stock Additional Earnings
Stockholders'
Number paid-in (Accumulated equity
of shares Amount capital deficit) accounts
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at 1st January 1997 15,214,879 $152,149 $13,370,976 $227,002 ($12,000)
Shares issued as compensation to
employees/officers/directors 350,000 3,500 127,750
Shares issued for other professional
services 12,000 120 4,380
Shares issued for accounts payable 900 9 306
Shares issued for deferred expenditures
and interest payable 277,260 2,773 214,515
Shares issued for notes payable 25,000 250 12,250
Shares issued for consulting services 60,000 600 29,400
Treasury stock retired (60,000) (600) (11,400) 12,000
Net income from operations 3,326
-------------------------------------------------------------
Balance at 1st January 1998 15,880,039 $158,801 $13,748,177 $230,328 $ ---
Shares issued as compensation to
officers/directors 970,000 9,700 354,050
Shares issued for note conversion 1,895,862 18,959 678,410
Shares issued for EB-5 financing 237,490 2,375 102,306
Shares issued for stock in lieu of
payable 11,647 116 3,960
Shares issued for Compracore Note
conversion 1,000,000 10,000 2,990,000
Shares issued for Jackson settlement 300,000 3,000 57,000
Shares issued for accounts payable 125,740 1,257 124,483
Stock bonus retired (500,000) (5,000)
Net loss from operations (74,848)
-------------------------------------------------------------
Balance at 31st December 1998 19,920,778 199,208 18,058,386 155,840 $ ---
=============================================================
</TABLE>
The notes on pages 16-20 form an integral part of these financial statements.
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended 31st December 1998 and 1997
1. STATUS
The Company was incorporated under the laws of the State of Delaware in 1987.
The Company invested in a California-based national bank and developed a
franchise system whereby member banks were supported by various financial
products and services.
Unable to achieve profitability the Company discontinued its franchise
efforts. During 1991, 1992, 1993, and 1994, the Company focused on finding a
new business direction that would provide the basis for building a growth and
added value group of operations. In 1995, under the guidance of a new Board
of Directors, the Company began actively promoting its property interest in
a 31,000-acre piece of prime Belizean real estate.
As a result of the pursuit of the equity and later a shareholder interest in
the property in Belize, through its subsidiaries and affiliates the Company
is engaged in the development of a master plan for a mixed-use destination
residential and resort development, a Belizean mahogany and hardwood timber
and wood processing operation, the development and sales of residential lots,
condominiums, a members club, a world-class destination resort, and a variety
of other related ventures.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include only the accounts of Wall
Street Financial Corp. (the Company) and its wholly owned subsidiaries WSF
Trust Corporation of Belize Limited, Mayan Resorts Limited, Mayan Plantation
Hardwoods Limited, Wall Street Internet Corp, it's majority interest in Mile
13 1/2 Corporation and a minority interest in Compradore Limited. Belize
Transportation Agencies Limited was disposed of on 1st January 1998.
All significant intercompany accounts and transactions have been eliminated
in consolidation. With the exception of Mayan Resorts Limited and the Trust
Corporation, the Company's subsidiaries were inactive.
3. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost. Renewals and major
improvements are capitalized; minor replacements, repairs and maintenance are
expended when incurred.
Depreciation is calculated on the historical cost using the straight-line
method based on estimated useful lives. The following are the depreciation
rates:
Buildings 3%
Furniture, fixtures and equipment 20%
Vehicle 20%
4. RELATED PARTIES TRANSACTIONS
The Company owns 23.62% of Compradore Limited, a Hawaii 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.
page 16
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended 31st December 1998 and 1997
The Company owns 100% of WSF Trust Corporation of Belize Limited. 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. In 1998 that balance
of deferred income is $65,125,000.
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 executed a
promissory note which WSFC has recorded as note receivable and income earned
of $15,891,175. In 1998 $42,000,000 of the Note Payable due to Compradore
Limited was converted into shares of WSF.
5. DEFERRED EXPENDITURES
These represent capitalized costs relating to pre-operation expenses for the
Company'9s Belize subsidiaries, primarily Mayan Resorts Limited and Mayan
Plantation Hardwoods, which were not operational until early 1998.
6. DEPOSIT
This represents cash payments relating to the transaction to acquire property
pending at December 31, 1998.
7. SINKING FUNDS
The Company has established sinking funds to retire long-term obligations
relating to Investor Visa Category investments made with one of the
subsidiaries
the Company (see note 14).
8. CONVERTIBLE PROMISSORY NOTES PAYABLE
1998 1997
Convertible promissory notes payable consist
of the following:
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.
Richard Hinkle - principal 50,000 ---
Unsecured: 10% note issued 02/04/98
Due date 30/06/98. There are no conversion features
page 17
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended 31st December 1998 and 1997
Antoine Y. Gedeon - principal $36,808 ---
Unsecured: 10% note issued 31/08/98
Conversion of monies through WSF Accounts Payable
James Schuler - principal 1,100,000 1,100,000
Original amount of loan: $2,000,000;
10% note issued 28/6/96. Secured: 10% of
gross timber revenues. Due date: 31/12/96.
The Company has obtained oral extension
for this note.
NISSIM TSE - principal 125,000 125,000
Unsecured: 8% note issued 8/11/96. Due date:
31/12/96. The Company has obtained oral
extension for this note.
Richard G. Hinkle Trust - principal --- 100,000
Secured: 10% of gross timber profits
issued 2/9/97. Due date: 31/12/99.
Richard G. Hinkle Trust - principal --- 250,000
Secured: 10% of gross timber profits
issued 27/9/97. Due date: 31/12/99.
---------- ----------
$1,411,808 1,675,000
========== ==========
9. 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
liabilitymethod of accounting for income taxes.
10. LITIGATION
The Company is a party to several 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.
11. RESERVE
Reserve represents transfers from notes payable, $450,000, and from
litigation payable, $150,000. at 31/12/96, net of 1998 disbursements related
threto.
12. NOTES PAYABLE-OFFICERS
Notes payable-officers consist of the following accounts:
1998 1997
MT/Merica $58,000 58,000
GK/GRII 189,394 125,645
(continued on next page)
page 18
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended 31st December 1998 and 1997
continued from previous page)
MT/Sypex 16,000 16,000
Adaniya-non-officer in 1996 1,000 85,000
Gerhart W. Walch 549,892 267,173
-------- -------
$814,286 $551,818
======== =======
13. NOTES PAYABLE
Notes payable consist of the following accounts:
1998 1996
Compradore note payable $160,000 $160,000
WSFC note payable (note 6) 92,500,000 134,500,000
WSFC note receivable (note 6) (67,250,000) (67,250,000)
WSFC note receivable (note 6) (15,891,175) (15,891,175)
Sandhill Enterprises, Ltd. 445,000 445,000
----------- -----------
$9,963,825 51,963,825
=========== ===========
14. LONG-TERM DEBTS
In October 1997 the Company became a participant in an approved immigrant
entrepreneur investment program (Investor Visa Category of the Immigration
Act of 1990), in which the Company received proceeds for hotel/resort
development. The long-term debt relates to transactions which have five year
maturity dates. The Company has established sinking funds to provide for the
retirement of these debts (see note 7).
15. 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 19,920,778 outstanding shares of Common Stock as of 31st December
1998, approximately 2,833,280 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.
16. RETAINED EARNINGS/<ACCUMULATED DEFICITS>
1998 1997
Balance at the beginning of the year $230,328 $227,002
Profit for the year (74,848) 3,326
Prior year adjustment (note 17)
-------- --------
$155,480 $230,328
======== ========
page 19
Wall Street Financial Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the years ended 31st December 1998 and 1997
17. INCOME TAX
As of 31st December 1998, the Company has accumulated net earnings of
approximately $155,480. The Company is preparing its federal income tax
returns for filing from 1990 through 1998. The Company's income tax returns
which are not closed for examination by statutes have not been examined by
the taxing authorities. No provision for corporate income taxes payable are
reflected in these statements.
18. NET PROFIT PER SHARE
Net profit (loss) per share is based on weighted average number of shares
outstanding of 17,803,287 for 1998 and 15,479,319 for 1997.
19. GROSS PROFIT FROM OPERATIONS
1998 1997
From revenue-lot sales $2,233,750 $554,326
Direct expenses (1,114) (250,000)
---------- --------
$2,232,636 $304,326
========== ========
20. OTHER INCOME
1998 1997
Sale of logs $408,099 $133,717
Other 8,839 16,175
Direct expenses (208,927) (57,378)
-------- --------
$208,011 $92,514
======== ========
page 20
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 1998 and 1997,
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
12th May 2000
Belize City
Belize, C.A.
Member Firm of
SUMMIT INTERNATIONAL ASSOCIATES INC. (New York)
Wall Street Financial Corporation and Subsidiaries
OPERATING EXPENSES
Years Ended 31st December 1998 and 1997
1998 1997
---- ----
Administrative Fee $1,306,418 ---
Salaries, wages and compensation 249,715 128,206
Auto 4,110 950
Employee benefits (20) 1,980
Employee parking 4,149 1,139
Rent 10,219 5,475
Utilities 15,350 7,003
Bank charges 632 307
Delivery and postage 3,477 706
Insurance 1,117 1,255
Licenses and fees 2,441 753
Office expenses 2,333 1,613
Office supplies 1,015 1,917
Printing 18,621 1,823
Repairs and maintenance 5,903 741
Donation 17 ---
Supplies - other 1,611 146
Accounting 19,000 2,250
Legal 239,164 7,337
Outside services 16,123 16,880
Other professional services 117,780 116,559
Meals and entertainment 10,101 3,583
Travel and transportation 31,744 11,342
Advertising and promotion 11,850 1,383
Public relations 6,940 162
Dues, subscriptions and memberships 1,247 44
Other operating expenses 7,000 75
Bad debts 1,313 ---
Taxes-other 109 151
Recruiting costs --- 1,250
Shareholders/investor expenses 13,906 4,511
Loss on currency exchange 680 63
Payroll taxes 1,336 1,992
Trash/refuse --- 37
Books and other research materials 20 51
Online services 31 (20)
Equipment rental 115 ---
Investor relations 56,731 ---
Plant supplies 1,047 ---
SC club expense 1,293 ---
Contract labor 84 ---
---------- --------
$2,164,722 $321,664
========== ========
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
None
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 annualmeeting of shareholders or until their successors are elected or
appointed and qualified, are set forth below:
Gerhart W. Walch: 51, Mr. Walch has been the Chairman of the Board, President
and Chief Executive Officer of WSF and all its subsidiaries from 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 and
President of Compradore Limited, WSF's affiliated land holding company. Mr.
Walch served as Chief Financial Officer, Chief Executive Officer and/or
Managing Director or Director in private or public companies since 1974.
Richard G. MacMillan, Esq.: 58, 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.: 53, 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: 33, 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"), FEDEX agent for Belize, 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. Until recently he was the Chairman of the
Board of the Air Traffic Licensing Authority of Belize.
Gordon E. Rapozo: 64, 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.
Ambassador Nigel Miguel: 37, Amb. Miguel is a member of the Board of
Directors. He is President of R&M Charitables and the Belize Forever
Foundation. Mr. Miguel is actively involved in economic, cultural and sports
development programs in Belize and was appointed Goodwill Ambassador in 1996
by the Country of Belize.
George S. Berean: 53, Mr. Berean is a member of the Board of Directors. He
is a Senior Vice President of Wimberly Allison Tong & Goo, Architects,
Planners and Consultants. He is actively involved in the design and
management of new projects including hotels, resorts, condominiums, marinas,
golf clubhouses, retail, renovation and mixed use projects. Mr. Berean is a
licensed architect in California, Hawaii with NCARB Certifications. He has
won numerous international, national and regional awards and is a member of
the International Hotel Association and the American Institute of Architects.
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
injunctions 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 $100,000:
(None).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Long Term Compensation
-------------------------------
Annual Compensation Awards Payout
-------------------- -------------------- ---------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Other
Name Annual Restricted
and Compen- Stock LTIP All Other
Principal Salary Bonus sation Award(s) Options/ Payouts Compensa-
Position Year ($) ($) ($) ($) SARs (#) ($) tion ($)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
<C>
Gerhart Walch 1998 0 0 0 $112,500 <F2> 0 0 0
President,CEO 1997 0 0 0 $15,625 <F1> 0 0 0
Chairman 1996 0 0 0 0 0 0 0
<FN>
<F1>
(1) In 1996, the Company awarded Mr. Walch 50,000 shares of common stock in
recognition of services as a Director. 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 $15,625. The
shares were issued in 1997.
<F2>
(2) In 1998, the Company awarded Mr. Walch 500,000 shares at $0.20 per share
in recognition for services performed in prior years, and 50,000 shares at
$.25 per share for services rendered as an officer and director. Therefore,
for the purposes of the Summary Compensation Table the dollar value of such
restricted stock award was $112,500. The shares were issued in 1998.
</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 years
ending December 31, 1998 and 1997. As of December 31, 1998, 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 $500 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 vesting 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, 1998, with the residual shares being vested at December
31, 1998, unless an acceleration of vesting occurs. The Company will
reimburse for reasonable and approved expenses.
Employment Agreements
Effective January 1, 1999, 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 $12,000 per month, and 200,000 shares of common stock and a
performance based incentive bonus compensation package, consisting of cash
and stock bonuses, relating to the three year business plan, subject to the
recommendation of the Compensation Committee of the Board of Directors. This
compensation was deferred by Gerhart W. Walch.
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, 1998, 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) 4,935,729 24.8%
4057 Black Point Road
Honolulu, HI 96816
Gordon E. Rapozo (1) 489,258 2.5%
187 Nawiliwili Street
Honolulu, HI 96825
Dr. Gail Kitaji, Ph. D. (1,3) 313,000 1.5%
1325 Wilder Avenue, 21 Makai
Honolulu, HI 96822
Richard MacMillan, Esq. (1) 296,750 1.5%
7016 Kamilo Street
Honolulu, HI 96820
Michael Singh (1) 130,000 .7%
South Street
Belize City, Belize, C.A.
Nigel Miguel (1) 25,000 .1%
12531 Chanute Street
Pacoima, CA 91331
All Officers and Directors 6,164,737 31.0%
as a Group (7 persons)
Total Shares Issued and 19,920,778 100.0%
Outstanding
(1) These individuals are the officers and/or directors of the Company.
(2) Mr. Walch is the CEO and director of the Company.
iii. each person known by the Company to beneficially own 5 percent or more
of the outstanding shares of the Company's common stock. None.
(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 1998, the Company issued a total of_325,000 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
Roy S. Adaniya 50,000 1998
Antoine Y. Gedeon 50,000 1998
Richard G. MacMillan, Esq. 25,000 1998
Gordon Rapozo 50,000 1998
Michael Singh 50,000 1998
Gerhart W. Walch RL Trust 100,000 1998
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
July 9, 1998 Other Events
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 May 19, 2000
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 19, 2000
and Director
Principal Executive Officer
/s/ George S. Berean Director May 19, 2000
/s/ Nigel Miguel Director May 19, 2000
/s/ Gordon E. Rapozo Director May 19, 2000
Chairman Audit Committee
and Chairman Compensation
Committee
/s/ Michael Singh Director May 19, 2000
[ARTICLE] 5
[MULTIPLIER] 1
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] DEC-31-1998
[CASH] 4792
[SECURITIES] 0
[RECEIVABLES] 411444
[ALLOWANCES] 0
[INVENTORY] 59139
[CURRENT-ASSETS] 485375
[PP&E] 1951000
[DEPRECIATION] (126442)
[TOTAL-ASSETS] 138862944
[CURRENT-LIABILITIES] 2764472
[BONDS] 0
[COMMON] 199207
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 0
[TOTAL-LIABILITY-AND-EQUITY] 138862944
[SALES] 0
[TOTAL-REVENUES] 2536699
[CGS] 0
[TOTAL-COSTS] 2611547
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 325332
[INCOME-PRETAX] (74848)
[INCOME-TAX] 0
[INCOME-CONTINUING] (74848)
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] (74848)
[EPS-BASIC] (.0038)
[EPS-DILUTED] (.0038)
</TABLE>
