U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10- QSB
(Mark One)
[ X] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF
THE EXCHANGE ACT
For the transition period from ___________ to ___________.
Commission File No. 0-17117
WSF CORPORATION
(d.b.a. Wall Street Financial)
(Exact name of Small Business Issuer as specified in its Charter)
Incorporated under the laws of
the State of Delaware 99-0240826
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
745 Fort Street Mall, Suite 700
Honolulu, HI 96813
(Address of principal executive offices)
(808) 526-3999
Issuer's telephone number
Check whether the issuer (1) 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 No X
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:
Class of Common Stock Outstanding at September 30, 2000
$.01 par value 44,807,997
Transitional Small Business Disclosure Format (Check one) Yes No X
FORM 10- QSB
FINANCIAL STATEMENTS AND SCHEDULES
WSF CORPORATION
For the Quarter ended September 30, 2000
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 2000 and
December 31, 1999 .....3
Statement of Operations - Nine months
ended September 30, 2000 and 1999 .....5
Statements of Cash Flows - Nine months
ended September 30, 2000 and 1999 .....6
Notes to Financial Statements .....7
Item 2. Management Discussion and Analysis of
Financial Condition and Results of Operations .....8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ....15
Item 2. Changes in Securities ....15
Item 3. Defaults Upon Senior Securities ....16
Item 4. Submission of Matter to a Vote of Security Holders ....16
Item 5. Other Information ....16
Item 6.(a) Exhibits ....16
Item 6.(b) Reports on Form 8-K ....16
WSF CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999
note (unaudited) (audited)
Assets
Current Assets
Cash $ --- $2,822
Accounts receivable-trade 65,195 70,000
Accounts receivable-related parties 17,090 374,445
Prepayment 156,800 156,800
Interest receivable 232,208 166,004
Work in process 145,720 ---
------------ ------------
Total current assets 617,013 770,071
------------ ------------
Note receivable 624,800 100,000
Property, plant and equipment
Furniture, fixtures and equipment 77,897 32,769
Vehicle 26,180 11,600
Building 126,750 ---
------------ ------------
230,827 44,369
Less: accumulated depreciation (50,915) (20,055)
------------ ------------
Property plant and equipment-net 179,912 24,314
------------ ------------
Deferred Expenditure 1,722,794 1,707,975
Forest Resource 134,500,000 134,500,000
Organization cost 24,567 24,567
Less: accumulated depreciation (9,213) (7,370)
------------ ------------
15,354 17,197
Sinking funds 1 1,210,938 1,210,938
Investment 12,631 12,631
------------ ------------
$138,883,442 $138,343,126
============ ============
The notes on page 7 form an integral part of these financial statements
-3-
WSF CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2000 1999
note (unaudited) (audited)
Liabilities and Shareholders' Equity
Current Liabilities
Short-term debt $13,473 $42,505
Convertible promissory notes payable 1,483,808 1,726,961
Accounts payable-trade 174,405 349,740
Accounts payable-officers/directors 2 160,397 222,369
------------ ------------
1,832,083 2,341,575
------------ ------------
Accrued liabilities
Interest payable-officers 24,296 108,026
Interest payable-others 769,009 587,331
Notes payable-others 2,851 ---
------------ ------------
796,156 695,357
------------ ------------
Total current liabilities 2,628,239 3,036,932
Notes payable-officers/directors 229,016 903,904
Reserve 810,292 810,292
Notes payable-others 3 9,860,978 9,618,825
------------ ------------
Total liabilities 13,528,525 14,369,953
Deferred Revenue 63,025,000 63,925,000
Long-term debts 4 2,105,910 1,275,000
Shareholders' Equity
Common stock-authorized, 100,000,000
shares of $.01 par value; issued
and outstanding 44,807,997 shares
at 09/30/00 and 35,473,248 at 1999 448,080 354,732
Common stock-subscribed, 850,000
shares of $.01 par value at 09/30/00
and 1,127,103 at 1999 8,500 11,271
Additional paid-in capital 55,660,448 57,349,774
Additional paid in capital-subscribed 160,674 165,074
Retained earnings 3,918,055 892,322
Minority shareholders' retained earnings 28,250 ---
------------ ------------
60,224,007 58,773,173
------------ ------------
$138,883,442 $138,343,126
============ ============
The notes on page 7 form an integral part of these financial statements.
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<TABLE>
WSF CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<CAPTION>
for Quarter ended for the nine months ended
Sep 30, Sep 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Revenue
Investment (loss)/gain --- 7,134 --- 6,780
Operating-gross profit 300,000 303,800 901,250 730,686
Interest income 22,415 21,053 66,203 13,030
Other 3,695,348 --- 3,695,348 ---
--------- --------- --------- ---------
4,017,763 331,987 4,662,801 750,496
--------- --------- --------- ---------
Expenses
Cost of sales 676,067 --- 676,067 ---
Operating expenses 452,291 64,786 821,669 365,181
Interest expense 93,984 103,677 284,219 331,497
Depreciation 8,381 30,262 10,934 90,786
Other expense --- 1,535 --- 1,535
--------- --------- --------- ---------
1,230,723 200,260 1,792,889 788,999
--------- --------- --------- ---------
Income/(loss) from operations 2,787,040 131,727 2,869,912 186,626
Less income/(loss) due to minority s/h 28,250 --- 28,250 ---
Net income $2,758,790 $131,727 $2,841,662 $186,626
========== ======== ========== ========
Net income/(loss) per share from operations $0.0616 $0.0004 $0.0634 $0.0005
======== ========= ======== ========
</TABLE>
The notes on page 7 form an integral part of these financial statements.
-5-
WSF CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Nine Months Ended September 30,
2000 1999
(unaudited) (unaudited)
Cash flows from operating activities:
Net income/(loss) from operations $2,841,662 $186,626
Items not affecting working capital
Depreciation 10,934 90,786
Changes in assets and liabilities:
(Decr)/incr in accounts payable-ofc/dir (61,972) 120,665
Decrease in interest payable-officers/directors (83,730) (35,047)
Increase in interest payable-others 181,678 268,307
(Incr)/decr in deferred expenditures (14,819) 10,000
Decrease in deferred revenues (900,000) (900,000)
Increase in interest receivable-other (66,204) (62,183)
Increase in related party receivables 357,355 (67,996)
(Dec)/inc in other assets & liabilities (891,029) (9,803)
---------- ---------
(1,373,875) (398,645)
---------- ---------
Cash flows from investing activities:
Purchase of furniture, fixtures, equipment (186,458) ---
---------- --------
Net cash used in investing activities (186,458) ---
---------- --------
Cash flows from financing activities:
Inc/(dec)notes payable-officers/directors (1,299,688) 64,943
Inc/(dec)in convertible notes payable 243,143 337,153
Proceeds from sale of shares 178,223 ---
Issuance of shares to convert debt to equity (304,746) ---
(Decrease) in shares to be issued (7,171) (8,423)
---------- ---------
(1,190,239) 393,673
---------- ---------
Net increase/decrease) in cash (2,822) (4,972)
Cash at beginning of year (2,822) 4,972
---------- ---------
Cash at end of period $--- $---
========== =========
Cash paid during the period for:
Interest $0 $0
The notes on pages 7 form an integral part of these financial statements.
-6-
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
of the Company and its subsidiaries have been prepared in accordance with
generally accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB and Article 10 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for completed financial
statements. In the opinion of management, all adjustments (consisting of
normal recurring accruals) considered necessary for a fair presentation have
been included. The results of operations for the nine months ended September
30, 1999, are not necessarily indicative of the results to be expected for
the entire year.
The 10-QSB filing condensed financial statements for the nine months ending
September 30, 2000, consists of the consolidated financial statements of WSF
Corporation (the "Company" or "WSF"). It includes its subsidiaries WSF Trust
Corporation of Belize Limited, Mayan Resorts Limited, Mayan Plantation
Hardwood Limited, Wall Street Internet Corporation, Mile 13 1/2 Limited and its
23.6% interest in Compradore Limited, 60% interest in AirCare Technologies, and
60% interest in Preferred Contractors, Inc.
Significant inter-company accounts and transactions have been eliminated in
consolidation. With the exception of Mayan Resorts Limited,the Trust
Corporation, AirCare Technologies, and Preferred Contractors, Inc., the
Company's subsidiaries were inactive.
1. 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 4).
2. Accounts payable-officers/directors
Increase from December 31, 1999, represents amounts from convertible notes
payable, accrued interest payable, accrued compensation, and conversion of
other accounts payable due to officers and directors exercising conversion
option for stock.
3. Notes payable-other
The increase in Notes payable-other to $9,860,978 at September 30, 2000 from
$9,618,825 at December 31, 1999 is due primarily to the conversion of
accounts payables to notes payable.
4. Long-term debt
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 1).
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
General
(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.
(i) 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 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. At this time, the Trust
Company provides its trust and asset management services only to the Company's
operations, however, in the near future, it plans to provide a broad range of
trust, asset management and financial services to clients in Belize and
worldwide.
(ii) 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. 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 strategically located along the Caribbean coastline in the Belize
City District, north of the Belize International Airport, thereby possessing
prime property 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 or all of the shares 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 execution of the Plantation
Revitalization and the Master Development Plan, the Trust Company as the sole
trustee and asset manager of the Plantation has litigated on Compradore's
behalf, obtaining a deed of release from the Belize Government for property
acquired but not paid, two (2) Superior Court and Appeals Court judgments and
is involved in a final litigation as more fully described in Section Part I,
Item 3.
-8-
(iii) 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 is the manager of the 31,423.45
acres Mayan - Salt Creek Estate or also referred to as Plantation.
(iv) 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
planning and the subsequent execution of the Master Development Plan. The
primary objective of Mayan Resorts is to execute the development plan for the
construction of a world-class, sustainable destination, health and wellness
resort and other recreational, residential and commercial projects in areas
designated for development on the Plantation. The Land Use Plan and Master
Development Plan strives to utilize the plantation operations as ecological
attractions and the many Mayan sites on the property as cultural attractions.
(v) Mile 13 1/2 Limited, d.b.a. Salt Creek Club, a Belize Corporation,
A subsidiary of the Company. An agreement dated March 19, 1999, between WSF
and MMI (Mayan Management International) provides for the sale of 30% of the
ownership interested by MMI, LLP. upon the satisfaction of certain investment
conditions including cash and service contributions. See section Discontinued
Operations.
(vi) 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. The
Company has one Web-site, which at this time is undergoing -major
re-construction and updates. http://www.wsf.com. This subsidiary remains a
development stage company.
LIQUIDITY AND CAPITAL RESOURCES
Assets
Total assets at September 30, 2000, were $138,883,442 as compared to
$138,343,126 at December 31, 1999. As of September 30, 2000, the Company had a
cash balance of $0, compared to December 31, 1999 cash balance of $2,822. On
September 30, 2000, current assets of the Company were $617,013 compared to
$770,071 at December 31, 1999.
Forest Resource
Forest Resource was $134,500,000 at June 30, 2000, and $134,500,000 at December
31, 1999, and consists of about 14,576 acres dense broad-leaf forest range. The
Company is in the process of establishing an ecologically sound Forestry
Management and Timber Processing Plan calling for the harvesting and processing
of timber from this combined with controlled harvesting from other forestry
concessions to be used for export and secondary wood-processing of value-added
products.
-9-
Land Resource
No value is reflected with regards to the 23.62% Company's ownership in
Compradore Ltd. or in the Company's interest as sole trustee and asset manager
of the 31,423.45-acre Mayan Salt Creek Estate in Belize City District, Belize,
Central America. The Company has an option to acquire the controlling interest
or all of the shares of Compradore Limited at fair market value
Liabilities
Liabilities for the Company were $13,528,525 at September 30, 2000, compared to
$14,369,953 at December 31, 1999. Of these liabilities, $9,518,825 is due to an
affiliate at September 30, 2000 and $9,518,825 at December 31, 1999. The
liability was substantially reduced during 1998 due to conversion of a portion
of the debt to equity.
Current liabilities
Current liabilities for the Company were $1,832,083 at September 30, 2000,
compared to $2,341,575 at December 31, 1999. The reduction in current
liabilities is a result of the Company's strategy to convert Notes Payable into
Equity and/or Land Ownership. The Company expects to continue to convert,
re-negotiate or pay all or a portion of the current liabilities during 2000 and
2001, however no assurance can be given to that effect.
Deferred Revenue
As the sole trustee and asset manager of the 31,423.45-acre Mayan Salt Creek
Estate, WSF Trust Corporation of Belize Limited receives fifty (50%) percent of
all revenues from the estate. This contract is similar to limited partnership
contracts, in which the general partner (in this case WSF Trust) receives a
share of the property's income. The original amount of deferred revenue of
$67,250,000 equals 50% of the revenue from the sale of the timber resources and
is recognized as revenue at the time the timber is processed and shipped. The
Company began harvesting (first quarter of 1997) and processing hardwood into
lumber (first quarter of 1998). A reduction in the rate of deferred revenue
recognition is reflected as a result of the temporary suspension of timber
processing.
Shareholders' Equity
The Company has shareholders' equity in the amount of $60,224,007 at September
30, 2000, compared to $58,773,173 at December 31, 1999.
RESULT OF OPERATIONS
Revenues
The Company had revenues of $4,017,763 for the three month period ending
September 30, 2000, as compared to $331,987 for the comparable quarter in 1999.
The Company expects its revenues to increase significantly as the implementation
of its plantation revitalization and resort development plans are successfully
executed.
-10-
Expenses
Expenses increased to $1,230,723 for the three months ending September 30, 2000,
compared to $200,260 for the comparable quarter in 1999. The increase in
expenses is due to the incorporation of the operations of AirCare Technologies
and Preferred Contractors, Inc. which were acquired by the Company during the
third quarter of the year. The Company owns a 60%, controlling interest in
these two companies.
Net Operating Income
There was a net operating profit of $2,758,790 for the Quarter ended September
30, 2000 compared to $131,727 for the comparable quarter in 1999.
PLAN OF OPERATIONS
(a) General
To achieve its economic objectives, the Company provides capital to its wholly
owned subsidiary, the WSF Trust Corporation of Belize, Ltd. ('the Trust
Company). which in turn makes investment in synergistic companies and/or enters
into joint ventures with qualified strategic partners.
The Company completed its Master Land Use Plan for the 31,423.45-acre Mayan
Plantation and its Phase I Development Plan. Subject to the successful
implementation of its funding strategy with its bankers, a leading international
banking house, the Company will be awarding contracts to its long-time design,
planning & architectural company, to a major international hotel management
company and to a subsidiary of a major European Construction company that will
engage local subcontractors.
The development and construction efforts will be directed by a Design/Build Team
under the leadership of the company's planners and architects, Wimberly Allison
Tong & Goo, a major international hotel management firm, and a major U.S.
construction firm as the General Contractor, who is responsible for the on-time
and on-budget for the Phase I -development projects more fully described herein.
(b) Operations
The Company's activities during 1999 and the first three quarters of 2000 were
focused on (i) implementing the Mayan Plantation revitalization plans, (ii) the
preparation of the various Phase I development plans, (iii) raising of working
capital and development financing and (iv) the generation of revenues from the
sale of plantation related products and services.
To accelerate the execution of its plans and to gain additional in-house
expertise, the Company plans to continue to acquire several smaller,
synergistic, successful U.S. companies. The Company has engaged merger and
acquisition advisors to assist the Company in its efforts and the Company has
entered into preliminary negotiations with suitable acquisition candidates.
The Company is in the preliminary planning stages for the following activities
and business undertakings. No equity or debt funding has yet been secured for
these activities.
-11-
(i) Mayan Plantation. The Mayan Plantation has a 300+ year history as a
timber farm, cattle ranch and diversified crops plantation. The completed Land
Use Plan for the 31,423.45-acre Mayan Plantation sets forth the appropriate land
uses. Approximately 37% of the total land base, or approximately 37% of the
total land base, or approximately 14,000-acres (5,901 hectares) is densely
covered by a hardwood forest containing stands of mahogany, cedar, pine, teak
and other tropical hardwoods and a wide variety of plants and abundant wildlife.
The first objective of the Company is to implement and maintain a sustainable
forestry, plant, wildlife and shoreline management plan for the entire
31,423.45-acre plantation, the five major lagoons and its many miles of
Caribbean shoreline.
Mayan Plantation plans to operate a sawmill, and wood processing plant,
producing high quality hardwood products for its own development uses as well as
for the export market. Mayan Plantation will be capable of producing virtually
all of the wood products and millwork for planned residential, commercial and
resort development projects. All forest operations will be based on sustained
yield management as recommended by the company's forest management consultants.
The Company owns these timber resources in perpetuity. The Company will
actively pursue the acquisition of an established U.S. based hardwood
manufacturing company to assist with the implementation of this plan.
Mayan Plantation's revitalization plan also focuses on the increase in the
current cattle and other livestock operations and on planting and harvesting
diversified crops, as well as plants and flowers, for landscape architecture
and the hospitality industry.
(ii) Mayan Resort Belize & Cultural Center. A 1,000-acre portion of the Estate
will be used on the shoreline for the development of the Mayan Resort. The
Company has assembled a highly qualified design/build team for the
implementation of the development plan and also has accepted a proposal for the
management of the Mayan Resort from a leading resort/hotel management company.
The resort property can be accessed both by land and by water, and it will offer
a wide variety of resort activities and amenities in the context of ecologically
sound, sustainable growth. Adjacent to the Mayan Resort, A Mayan Cultural Center
and Theme Park, on about 5,000-acres of land with miles of shoreline, will be
developed to become one of the major tourist attractions of Belize or even
Central America. The main attraction will be the well-known Mayan Temple at
Rocky Point. We believe this historical Mayan ruin is thousands of years old
and is located admits three picturesque lagoons.
(iii) Belize Science & Technology Center. An 800-acre portion of the Estate, at
its closest point to the North American Highway and the Belize International
Airport will be developed into the Belize Science and Technology Center and
incubator facility. It will be occupied primary be two types of enterprises,
namely software development houses and Internet Service providers. It is
designed as an advanced light industrial research and development complex,
carefully master planned to embrace the unique environmental wonders of Belize.
Large swats of existing jungle are preserved as "Nature (green) Corridors"
throughout the complex. Lakes are planned as wetland features to provide
habitat for native water birds and other fauna. The corridors also serve to
separate industrial lots into "Industry Clusters" to promote synergy between
similar disciplines in the field of high technology designs. The Park will be
self-intelligent with fiber optic cable connections to super computers and
-12-
satellite linkages. The master Plan will allow maximum site plan flexibility
and expansion to accommodate both small and large tenants. Belize's close
proximity to the U.S. and its pro-business attributes, such as aggressive
incentive programs including but not limited to tax holidays, will give
International companies the necessary incentive and a competitive edge.
(iv) The Belize Institute of Technology (BIT). At its core and as the first
anchor tenant, the Science and Technology Center will feature the Belize
Institute of Technology, a joint venture with a major U.S. university. The
Institute is envisioned as a web-based electronic campus composed of
sophisticated research and training facilities oriented to advanced information
technology and related services. The Institute will provide a unique framework
for teaching and delivering technological advancements and innovations in a
tropical -green -environment. By combining a range of the very best research and
teaching facilities with the most forward -thinking minds in the industry, the
Institute will become a hub for cross training, networking and collaboration.
The sharing of facilities at a single location will generate exciting synergy
for research and development between related disciplines. The Company has
secured a commitment from a major U.S. university to participate in the
development and management of the BIT.
Commercial administrative offices are envisioned for corporations to
headquarters their operations near the BIT and it's super computers. Situated
behind lush tropical landscape and water features near the entrance of the
Institute, the corporate architecture will serve to showcase the purpose of the
park as a venue for advance technological innovations.
Self-contained residential neighborhoods are located at the edge of the Park
near preservation open space and will include access to hiking trails and
equestrian facilities. Dormitory housed and serviced apartments are provided
for students and visitors alike. Longer term family housing enclaves will offer
quiet respite away from the core facilities of the Science and Technology Park,
while remaining in close proximity to public community support uses such as
recreation fields, convenience shopping, golf and other resort amenities of the
nearby Mayan Resort.
(v) Belize Equestrian Estates. A 2,000-acre portion of the estate will be used
on the shoreline for the development of a world-class equestrian community with
two hundred (200) 5-acre Equestrian Estates configured around generous open
space corridors that are linked by road and horse trail to a modern Equestrian
Center. It will consist of a clubhouse with guest suites, equestrian facilities,
Equestrian Center will be a private members club. There are currently 140
Charter membership subscriptions. Among those subscribing are several world
renown athletes and entertainers forming a solid foundation for the goal of
2,000 members, locally and internationally. The Company has secured the
participation of an Olympic Equistrian medal winner as an advisor for the
development and management of this equestrian center.
-13-
(c) Discontinued Operations.
The 14.42-acre Salt Creek Estate Club property and improvements thereon, owned
by Mile 13 1/2 Limited. d.b.a. Salt Creek Club, a 70% owned subsidiary of the
Company, were sold and the title to the property was transferred to Datapro
International Limited, a Belize Company. Reference is made to Form 8-K dated
March 24, 1999.
(d) 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 obtain the
necessary funding for the implementation of the Phase I -Development Projects.
The Company's success will also depend on raising or generating sufficient
working capital for administration and operations, including the implementation
of the Plantation's revitalization plan. 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 will continue
its efforts to raise sufficient funds through a placement of debt or equity
instruments to develop the required infrastructure for projects described above,
and for the 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.
(e) Inflation
The Company's business and operations have not been and are not expected to be
materially affected by inflation.
(f) Impact of Future Accounting Pronouncement
None
-14-
PART II -OTHER INFORMATION
Item 1. Legal Proceedings
At June 30, 2000, 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:
COMPRADORE vs. Raymond Y. C. Ho, Elizabeth Ho, Bucky Fong, et al.
On July 31, 1997, Compradore Limited, an affiliate of the Company, 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 Raymond Y.C. Ho, the former Chairman and Chief
Executive Officer of the Company, as well as of Compradore Limited, demanding
specific performance on a purchase agreement. This case was set for trial on
October 4, 1999, but was postponed to 2000 due to a hospitalization of Mr. Ho
and trial schedule reasons of the Company's counsel. A new trial date has been
set for the first week of July 2000. However, due to a new hospitalization of
Mr. Ho and substitution of legal counsel, the trial has been further delayed.
The Company is confident that Compradore Limited will prevail in its efforts and
that a settlement or judgment at trial will resolve this case to the
satisfaction of the Company. The Company has a claim for significant damages
for attorney's fees; punitive damages and payment of all Company's court costs
and legal fees.
WSF CORPORATION vs. SANDHILL ENTERPRISES, GRIMME et al. (An American
Arbitration Association arbitration case and settlement, which 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 2. Changes in Securities
None.
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Item 3. Default upon Senior Securities
None.
Item 4. Submission of Matter to a Vote of Security Holders
None.
Item 5. Other Information
(a) On September 26, 2000, the Company, through an exchange of stock, acquired
a 60% interest in AirCare Environmental Services, Inc., a privately held
company. AireCare Environmental Services, Inc. engages primarily in indoor air
quality (IAQ) management in tropical environments and has been providing a full
range of consulting, engineering and remediation services since 1989 with
offices in California and Hawaii. The acquisition was announced and additional
information is available in the press release dated October 30, 2000.
(b) On September 26, 2000, the Company, through an exchange of stock, acquired
a 60% interest in Preferred Contractors, Inc., a privately held company based in
Utah. Preferred Contractors, Inc. (formerly Conder Construction) is a general
contracting company building quality custom homes since 1995 and is currently
licensed to do large scale commercial and residential projects in the states of
Utah, Colorado and Idaho. The acquisition was announced and additional
information is available in the press release dated November 6, 2000.
Item 6. (a) Exhibits
No Exhibits are filed with this report
(b) Report on Form 8-K.
None
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant Certified that it has reasonable grounds to believe that it meets
all requirements for filing on Form 10-QSB, and has duly caused this
Disclosure Statement to be signed on its behalf by the undersigned.
Dated: November 16, 2000
WSF CORPORATION
/s/ Gerhart W. Walch
Chairman, President &
Chief Executive Officer
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