UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10QSB
(mark one)
(x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 for the transition period from
STERLING WORLDWIDE CORPORATION
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(Exact name of registrant as specified in its charter)
NEVADA
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(State or other jurisdiction of incorporation or organization )
33-55254-29 87-0438649
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SEC FILE NUMBER IRS EMPLOYER I.D. NO.
1800E Sahara Suite 107, Las Vegas, Nevada 89104
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(Registered Agents office)
153 St Johns Road Tunbridge Wells Kent TN4 9UP United Kingdom
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(Executive Office)
011 44 1892 541-747
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(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filled by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 month (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 X Yes No
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APPLICATION ONLY TO ISSUER INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS
Indicate by check mark the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirm by a court.
N/A
Registrant has 82,307,326 shares of common stock outstanding as of
April 17, 1998.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Registrant required to be
filed with this 10-QSB Quarterly Report were prepared by the management of the
Company and commence on the following page, together with related Notes. In the
opinion of management, the Consolidated Financial Statements present fairly the
financial condition of the Registrant.
<PAGE>
NOTE 9. COMMITMENTS AND CONTINGENCIES
On January 1, 1998 the Company entered into an employment agreement
with its president for a period of five years. The agreement provides for annual
compensation of $250,000 with annual increases of $10,000. The Company president
has elected to postpone payment of salary until the Company has obtained
sufficient operational funding. Accordingly, four months of salary with no
accrual has been reflected in the Consolidated Financial Statements. In
addition, the Company president shall receive an annual bonus equal to one
percent of earnings before income taxes, depreciation and amortization. As part
of the agreement, the Company president has been granted stock options to
acquire 500,000 of the Company's common stock at par value, as well as other
customary employment benefits.
Effective January 1, 1998 the Company entered into an Employment
Agreement with its Corporate Secretary for a period of two years. The Agreement
provides for annual compensation of $24,000 with annual increases of $3,000 per
annum. The Corporate Secretary has elected to defer payment of her salary until
the Company has obtained sufficient operational funding. Accordingly, no accrual
of the Corporate Secretary's salary has been reflected in the Consolidated
Financial Statements. As part of the agreement, the Company secretary has been
granted an annual stock option to acquire 50,000 of the Company's common stock
at par value. In addition, the board approved 15,000 shares of registered stock
pursuant to the S-8 Registration Statement. As of the date hereof the shares
have not been issued.
As of October 28, 1997 in connection with the Sterling Worldwide
Corporation Stock Plan and the filing of the related registration statements
(see Note 10), the Company entered into various consulting agreements with a
number of professional individuals, to provide services to the Company for a
period of one year, with their sole source of compensation being shares of the
Company's common stock
On January 7, 1998 the Company entered into an amended consulting
contract with Richard Gladstone, acknowledging the additional 100,000 shares
which had been granted to him in 1997 and 500,000 shares for the second year of
his consulting services, in full satisfaction of the fees due to Gladstone for
the second year and 50,000 shares for the third and final year of consulting
services. Richard Gladstone has loaned and advanced the sum of US$25,000 to the
Company's subsidiary Fort Thomas Development Company. This is an unsecured loan
and may be converted against the purchase of a condominium at the Fort Thomas
Hotel and Resort at Gladstone's option. Gladstone has loaned and advanced
approximately $65,000 on behalf of the Company for working capital, legal
expenses, telephone bills, salary, wages and travel expenses. The Company has
offset an amount of US$23,000 paid to Richard Gladstone on account of a stock
repurchase agreement that was never completed. The Company may have further
offsets relating to prior loans or advances to Richard Gladstone and or his
related companies. The amount of such offsets, if any, has not yet been
established. Any sums due to Richard Gladstone are unsecured loans and will bear
interest at 10% per annum. No repayment date has been set.
<PAGE>
On January 10, 1998 the Company confirmed that it had agreed to
underwrite the value of 300,000 shares of common stock held by Regency Trading
at a minimum trading price of US$3.00 per share, as of September 30, 1998. In
the event that the price of the Company's common stock is less than $3.00 per
share, as of September 30, 1998 the Company is obligated to issue additional
shares to make up the difference in value. The issuance of the additional shares
will create a dilution of common stock.
On January 10, the Company confirmed that it had agreed to underwrite
the value of 1,300,000 shares of common stock held by Champion Success Group, at
a minimum price of US$10.00 per share, as of September 30, 1998. In the event
that the price of the Company's common stock is less than $10.00 per share, as
of September 30, 1998 the Company is obligated to issue additional shares to
make up the difference in value. The issuance of the additional shares would
create a dilution in the value of common stock.
On April 3, 1998 the Company entered into an agreement with Jerald
Ritter to acquire 50% of International Property List Inc., a Florida
Corporation, and publisher of Caribbean Property List - a publication of real
estate for sale in the Caribbean and the publisher of the website Caribbean
Property List (Http://www.caribpro.com). The purchase consideration for the
acquisition is $120,000 payable in common stock as of April 3, 1998 at a value
of US$0.19 per share. The closing date for this transaction is July 3, 1998. In
addition, the Company is required to purchase Lots EN1,2 and 3 Bahamia North,
located on the 16th green and fairway, of the Princess Ruby Golf Course -
Freeport, Grand Bahama, for a purchase price of $150,000 payable in cash at
closing on July 3, 1998. The two transactions are contingent on the other
closing simultaneously. The Company has agreed that if the total value of the
shares sold and owned by Ritter, as of April 3, 1999, is less than $120,000, the
Company is obligated to pay the difference in cash to Ritter.
NOTE 10 COMMON STOCK
In October 29,1997, the Company filed a Form S-8 Registration
Statement under the Securities Act of 1933 relating to the "Sterling Worldwide
Corporation Stock Plan." This plan provides for the issuance of 3,000,000 shares
of common stock as options, grants or awards to individuals who perform special
or extraordinary services on behalf of the Company. From October, 1997 to date,
the Company has not issued any shares to its officers and directors. Pursuant to
the plan, 200,000 shares in options have been issued, 720,000 shares to
consultants and 450,000 shares for legal services. These share transactions will
be reflected in the consolidated financial statements as of December 31, 1997
and March 31, 1998, based on contemplated concurrent cash stock transactions.
All said shares were registered pursuant to Form S-8.
On January 1, 1998 the board approved an additional 15,000 shares of
registered stock, pursuant to the S-8 Registration Statement to Mary Duncan for
past services during 1997. As of the date hereof these shares have not been
issued.
<PAGE>
During this period, the Company issued 1,250,000 shares of restricted
common stock to consultants for services currently being performed and to be
performed in the future; 1,000,000 shares of Series B. Preferred for graphic
design, art work, design and print production of corporate logo's brochures, and
stationary for the Company and its subsidiary.
On March 11, 1998 the Company approved issuance of shares to the
executives of Platinum Investment Company, Ltd., pursuant to the Platinum
Investment Company, Ltd., acquisition agreement, to Neil Bains for 2,000,000
shares of Series B Preferred. Neal Jackson and Martyn Hudson, were issued
1,000,000 shares each, of Series B Preferred.
NOTE 11 COMMON STOCK OPTIONS
The Company's president was granted the option to purchase 500,000
shares of the Company's common stock, at par value, as part of a related
employment agreement. To date these stock options have not been exercised.
The Corporate secretary was granted the option to purchase 50,000
shares of the Company's common stock, at par value, as part of a related
employment agreement. To date these stock options have not been exercised.
On January 4, 1998 the Company granted Vanguard Communication Group,
Ltd., the option to purchase 400,000 shares of common stock of the Company,
200,000 of said shares at $0.75 per share and 200,000 shares of $1.00 per share,
exerciseable on or before February 27, 1999. All said were registered pursuant
to Form S-8.
In February, the Company granted an option to Robert Hubbard, to
acquire 400,000 shares of common stock at an option price of $0.50 per share and
400,000 shares at a option price of $1.00 per share. Robert Hubbard is a
Canadian Citizen and may exercise this option pursuant to Regulation "S". In
addition, the Company granted Chris Brule 200,000 shares of common stock at a
option price of $1.00 per share. The option was amended to 200,000 shares at a
option price of $1.00 per share. Chris Brule is a Canadian Citizen and may
exercise this option pursuant to Regulation "S" with an expiration date of
December 31, 1998.
NOTE 12 SUBSEQUENT EVENTS
On March 25, 1998 the Company accepted the Assignment in perpetuity,
free and clear of any and all liens, claims or encumbrances $35,000,000 of Net*
Gold ore from the claim "The Conjego Mine #112, Legal Description NW4NE4,
Section 15, Township 20 South, 17 NMPM. The Purchase consideration for the
Assignment was paid the issuance of 3,500,000 shares of common stock of the
Company to Rama Development, Inc. A finder's fee of 350,000 shares of restricted
stock was paid to Growth Fund Partnership Inc., for the transaction and a
consulting fee of 150,000 shares of restricted stock was paid to Valtec, Inc.
Rama Developments Inc., and their associates irrevocably commit to pay the
annual fee necessary to keep the related claim in full legal status. If, for any
reason, Rama is unable to make payments related to the claim, the Company has
the right to make the payments to keep the claim in good standing. Rama has
estimated that annual cost of keeping the claim in good standing will not exceed
$1,000 per annum. The Company will record the assignment in the appropriate deed
office in the State of New Mexico.
<PAGE>
On April 3, 1998 the Company entered into an agreement with Jerald
Ritter to acquire 50% of International Property List Inc., a Florida
Corporation, and publisher of Caribbean Property List - a publication of real
estate for sale in the Caribbean and the publisher of the web site Caribbean
Property List (Http://www.caribpro.com). The purchase consideration for the
acquisition is $120,000 payable in common stock as of April 3, 1998 at a value
of US$0.19 per share. The closing date for this transaction is July 3, 1998. In
addition the Company is required to purchase Lots EN1,2 and 3 Bahamia North
located on the 16th green and fairway, of the Princess Ruby Golf Course -
Freeport, Grand Bahama, for a purchase price of $150,000 payable in cash at
closing on July 3, 1998. The two transactions are contingent on the other
closing simultaneously. The Company has agreed that if the total value of the
shares sold and owned by Ritter, as of April 3, 1999, is less than $120,000 the
Company is obligated to pay the difference in cash to Ritter.
On April 18, 1998 the board authorized the issuance of 1,000,000 shares
of common stock to be issued to the attorney Thomas Conjaero Guillen, Attorney
at Law, Avendia De La Liberstad, 2nd Floor 2E Torrevieja Alicante 03180, to
secure the option pending the completion of the purchase of the property know as
La Valle Grand, a site located in Torrevieja, near Alicante Spain. This
transaction is scheduled to be completed within 60 days of signing the option
agreement, subject to the Company obtaining financing in the form of an
acquisition and development loan on the land to be acquired.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULT
OF OPERATIONS.
PLAN OF OPERATION.
The Company had no substantial revenues from operations for the quarter
ended September 30, 1998 and anticipates receiving limited revenues from
operations during the remainder of the current fiscal year. All funds required
to bring the Company's plan to fruition are derived from investments by existing
or new stockholders, or from loans the Company can obtain.
The Company is a development-stage Company, in the process of
restructuring itself as a diverse global company seeking acquisitions. The
Company is in the business of acquiring equity positions in operating companies
in businesses ranging from joint ventures of infrastructure projects in Mainland
China, hotel and resort operations in St. Kitts, West Indies, timber concessions
in Venezuela, South America, oil and gas, mineral exploration, information
technology, real estate development in North Carolina, resort development in
Spain and the Bahamas.
The Company has in the past, and in the future will use Mr. Leslie
Greyling, the husband of the President, to render consulting services and
negotiated acquisition on behalf of the Company or on behalf of La Salle Group
Ltd. - the majority stockholder of the Company. Mr. Leslie Greyling, as of this
date, has not required or received any form of compensation from the Company.
Leslie S. Greyling entered into a consent decree with the United States
Securities and Exchange Commission in 1991 not to violate the Securities Law.
<PAGE>
Leslie S. Greyling pleaded guilty in 1996 to a charge of false
statements on a visa application in the United States District Court for the
Southern District of Florida, Palm Beach Division (Case Number 95-8022CR Hurley)
In addition, Leslie S. Greyling pleaded guilty in 1997, in connection
with a plea agreement to Securities Fraud in the United States District Court
for the Middle District of Florida, Orlando Division. He was ordered deported
from the United States and may not reenter the United States of America without
the permission of the Attorney General. (Case Number # 96-35 CR-ORL-22)
The following is a summary of the Company's current and past projects.
NATURAL PARK COMPANIES
On August 15, 1997, in exchange for 10,000,000 shares of Series A.
Preferred stock, $1.00 par value, and 50,000,000 shares of common stock, the
Company acquired, from LaSalle Group, Ltd., the principal stockholder of the
Company, 100% of the outstanding stock of LY Transportation Construction Ltd., a
British West Indies company and the rights to four corporate entities in
formation known as Natural Park Bahamas, Ltd., Natural Park S.A. Inc., Natural
Park Alaska, Inc., and Natural Park USA, Inc. It is intended that these entities
will be engaged in real estate investment and development business. The four
corporate entities have been incorporated in the State of Florida and are wholly
owned subsidiaries of the Company. The Company's plans to raise $100,000,000 for
the purpose of investing in the Natural Park Public Company of Thailand Ltd., or
acquiring real estate in Bangkok from the portfolio of property developed by
Natural Park. Natural Park Public Company has been derailed by the financial
crisis brought about by the devaluation of the Thai currency. The Company
continues to seek an alternative source of financing for this transaction. The
Company believes that the continuing decline in financial and banking conditions
in Thailand, coupled with the devaluation of Thailand currency, has resulted in
a lack of interest from investors and financial institutions. Reduced investing
in Thailand has also bought about a potential buyers market, and therefore the
Company believes that it could obtain control of Natural Park Public Company
Ltd., of Thailand for substantially less than was originally contemplated. There
can be no assurance that the Company will be successful in arranging either
equity of debt financing in the amount required to conclude an agreement with
Natural Park Public Company Ltd.
On March 24, 1998 the Company authorized the amendment to the par value
of the 10,000,000 shares of Series A. Preferred stock from $1.00 par value to
$0.01 par value. The 10,000,000 shares of Series A. Preferred stock will retain
the priority voting rights of 100,0000 votes per share, thus enabling the holder
of the preferred shares, to elect the majority of the board of directors and
control the Company notwithstanding the amount of common share issued.
<PAGE>
LY TRANSPORTATION CONSTRUCTION LTD.
On August 15, 1997 in a related party transaction, the Company acquired
100% of L.Y. Transportation Construction Ltd., which was organized to engage in
three joint ventures in the Guangdong Province, China. The Company's plan to
raise $330,000,000 have not materialized, resulting in a failure to fund the
joint venture, despite a good faith effort on the Company's behalf, which have
included presentations and applications for loans made by management to major
European Banks. These presentations and applications for loans, which were
initially well received, were subsequently declined as the currency devaluation
and ensuing financial crisis spread throughout Southeast Asia, and finally to
Hong Kong, causing declines in excess of 50% in currency markets and stock
exchange indexes. Thus, the worst economic crisis ever experienced in Asia, has
necessitated tens of billions of dollars in emergency loans by the World Bank
and financial aid packages by the I.M.F. to Southeast Asian member countries.
These adverse economic factors could not have been foreseen by the Company, and
are beyond the Company's control. Nor were these factors anticipated by the
World Bank, the I.M.F. or the international financial community at large. The
economic turmoil that has engulfed Southeast Asia has inflicted large financial
losses, and has removed many financial institutions and institutional investors
from the bond markets and private equity placements envisaged by the Company for
this undertaking. The Chinese currency has not devalued and economic growth in
mainland China remains strong particularly in the Guangdong Province. The
Chinese officials have communicated their frustrations at the delays experienced
by the Company's subsidiary, L.Y. Transportation Construction Ltd., in obtaining
the financing. The Company's subsidiary has provided explanations for the delay
and requested additional time in which to obtain alternative sources of
financing. However, there can be no assurance that the P.R.C. officials will
grant additional time, nor assurances that they will not elect to terminate the
joint venture contract with L.Y. Transportation Construction Ltd., as a result
of the failure to fund as required by the terms of the joint venture agreement.
FORT THOMAS HOTEL AND RESORT
On August 19, 1997 the Company acquired the Fort Thomas Hotel Resort in
St. Kitts, in exchange for the issue of 1,027,828 shares of common stock to be
valued at $10,000,000. The acquisition agreement provides for the Seller to
retire an outstanding obligation to the Government of St. Kitts of $851,007.52.
The Seller defaulted on its obligations to satisfy certain mortgage liens
against the property, and as a consequence, the Company has been compelled to
assume the liability. The Company offered to purchase the mortgage from the
Government of St. Kitts, who have agreed to sell the mortgage as of February 28,
1998, for the sum of $891,027,.300, together with interest thereon. After a
title search, the Company's legal counsel in St. Kitts, found that there were
additional liens totaling $3,600,000, which the Seller failed to disclosed or
satisfy. The Company has instructed its legal counsel to verify the authenticity
of these liens. Until such time as these liens are settled or removed, the
Company will reflect the lien amounts as a liability on its financial
statements. Further to the acquisition agreement date (August 19, 1997), the
price per share was determined at closing, as reported on the NASDAQ bid price.
The purchase price of $10,000,000 was satisfied by the issuance of the
Company's common stock. The Company warranted that at the expiration of the term
of one year, if the price per share has declined in excess of 10% of the closing
bid price, additional shares shall be issued to the Seller in the same ratio, as
set forth above, to restore the original selling price on the closing date. The
issuance of additional common stock to the sellers may result in a significant
dilution of net tangible book value per share, as held by current shareholders
of the Company.
<PAGE>
FINDEX PROPOSED ACQUISITION
The Company has recognized the importance of the Internet and
information technology-related business, as an area with potential for
substantial future growth. The Company had agreed to acquire, subject to
completion of due diligence, "FINdex.com". After a lengthy negotiation, the
Company has not reached final agreement on the terms and conditions of the
proposed acquisition. However, the management of FINdex is currently preparing a
acquisition proposal that will be on terms and conditions considered favorable
to the Company. The Company will endeavor to finalize this acquisition in the
next quarter.
TRAVEL NET INTERNATIONAL CORPORATION
On August 7, 1997, the Company agreed to dispose of the Company's
majority owned operating subsidiary, Travel Net International Corporation, and
its wholly subsidiary Sterling AKG Corp., in exchange for the common stock owned
by its majority shareholder, Laurie Doll Gladstone. The shares are being held in
escrow until finalization of the transaction. Laurie Doll Gladstone received an
irrevocable three year put option, which requires the Company to purchase
Gladstone's 584,400 shares in Travel Net for $2,000,000 in fully registered
shares of the corporation. If the corporation did not show $10,000,000 in net
assets on its certified financial statements for the quarter ended September
30th 1997, on or prior to October 1, 1997, then the corporation must return to
Mrs. Gladstone any such number of shares of the corporation, which would provide
her with 80% of the outstanding securities (on a fully diluted basis) of the
corporation. The transaction is being held in escrow until all differences can
be reconciled.
LICENSING AGREEMENT WITH TRAVELNET INTERNATIONAL CORPORATION
The Company acquired the right to develop an international network of
independent travel agencies that will operate under the name of STERLING
WORLDWIDE TRAVEL. The Company has entered into a licensing agreement with
Travelnet International Inc. ("Travelnet"), a Boca Raton, Florida-based travel
and marketing group. Under this license agreement, the Company will have the
right to develop the Travelnet brand name, to market a wide variety of
travel-related products and services, including discounted air fares, cruises,
hotels, vacation packages, time shares and car rentals. Marketing will be via a
network of international agencies and a marketing force of independent travel
consultants, who have purchased the right to operate as independent travel
consultants on behalf of Travelnet. The Company is currently negotiating with
First Premium Alliance Holding Ltd., to handle the marketing of Travelnet travel
products in Europe.
INVESTMENTS PROPERTY INTERNATIONAL CORPORATION
The Company has acquired Investment Property International, a
commercial real estate investment and brokering business. The Company intends to
expand its commercial real estate brokerage operation internationally, by
establishing offices in South Africa, United Kingdom, the Bahamas, the Dominican
Republic, Brazil, Bangkok and Thailand. As of date hereof, the Company has not
started operating with this corporation. The Company has authorized the issuance
of the shares required, but as of this date, the shares have not been issued.
Company management believes that it will take a substantial additional
investment, to provide the capital necessary to pay the cost and expenses of the
Company's proposed expansion plans and to fund the corporate overhead, legal,
and general working capital requirements. As of yet, no such funds are
available, and no assurances can be given that the Company will be able to
procure sufficient funds to carry out its business plan.
<PAGE>
RESORT MARKETING.
The Company has also acquired a Florida-based company, which
specializes in the marketing of resort condominiums and resort-related
properties. This company is preparing to market resort condominiums property in
Orlando, Florida, Las Vegas, Nevada, South Africa, the Dominican Republic, and
the Caribbean. As of this date, the Company has not started operating because
shares have not been issued. Company management believes that it will take
substantial additional investment, to provide the capital necessary to pay the
cost and expenses of the Company's proposed expansion plans and to fund the
corporate overhead, legal, and general working capital requirements. As of yet,
no such funds are available, and no assurances can be given that the Company
will be able to procure sufficient funds to carry out its business plan.
VENEZUELAN TIMBER CONCESSIONS
On November 25,1997, the Company approved a resolution to acquire
certain timber concessions in the Country of Venezuela, in exchange for the
issuance of 2,250,000 shares of common stock to be valued at $10.00 per share.
The Company agreed on November 30, 1997 to convert the shares, pursuant to
Regulation "S", provided that it could obtain confirmation from the SEC; that
issuance of the shares to a foreign seller in exchange for assets located in a
foreign country would meet the requirements of Regulation "S". The Company's
legal counsel, Mr. John Frohling, has advised the Company that he is unable to
render an opinion qualifying the stock issuance under Regulation "S"; therefore
the Company has issued the restricted common shares to the Assignor Brasmex SA,
a Panama Corporation. The Company received an assignment of certain timber
concessions covering 144,680 hectares, and shall be entitled to a royalty from
operations thereon, for the term of the lease and any extensions thereof equal
to 25% of the after expense profits.
On November 25, 1997, the Company approved a resolution to enter into
an operating lease agreement granting the rights to Champion Success Ltd., to
harvest the timber as provided for in the concessions granted by the Government
of Venezuela. In exchange for the issue of 1,350,000 shares of common stock, to
be valued at $10 per share, Champion Success Ltd., agreed to operate the
concessions and to provide all necessary logging equipment, personnel and
financing to operate the concession. The Company agreed on November 30, 1997 to
convert the shares issued to Champion Success Group, pursuant to Regulation "S",
provided that it could obtain confirmation from the SEC that issuance of the
shares to a foreign seller in exchange for assets located in a foreign country
would meet the requirements of Regulation "S". The Company's legal counsel, Mr.
John Frohling, has advised the Company that he is unable to render an opinion
qualifying the stock issuance under Regulation "S". Therefore, the Company has
issued the restricted common shares to Champion Success Ltd., a Nevis
Corporation. The Company entered into a operating lease agreement, and will be
entitled to a royalty from operations thereon, for the term of the lease
agreement, thereof equal to 25% of the after expense net revenue from
operations. As of the date hereof, the Company has not received any royalty
payments and the Company has requested a detailed statement of operations and
expenses from the management company. On January 10, 1998 the Company agreed to
that in the event that the share price is less than $10 per share in September
1998, the Company will issue additional shares to Champion Success Ltd. The
issuance of additional common stock to the sellers may result in a significant
dilution of net tangible book value per share, as held by current shareholders
of the Company.
<PAGE>
GROWTH FUND STOCK INVESTMENT
Growth Fund Partnership Inc., a Florida corporation, is a diversified
asset based company with interest in gold mining claims located in Grant County,
New Mexico USA and Kitts County, State of Washington. Growth Fund Partnership
Inc., owns a 1,171 acre land tract located in Swain County, North Carolina and
approximately 3,500,000 acres of land in the State of Para, United States of
Brazil. Growth Fund Partnership Inc., also holds a $30,000,000 interest in a
financial services company known as International Mercantile Corporation, which
has been a publicly traded company for over 20 years. The Company's business
focus has been life insurance and mortgage operations. Home America Mortgage
Company is a mortgage brokerage network, that has been in business for over 10
ten years. During which time, it has closed over $500,000,000 in mortgage loans.
Sterling Worldwide has acquired 715,000 shares of unregistered common
stock of Growth Fund Partnership Inc., from Rama Development Inc., in exchange
for $28,600,000, which was satisfied by the issuance of 2,600,000 shares of
restricted common stock of the Company's treasury stock. The Company intends to
hold these shares as a long term investment and may seek to acquire addition
shares of Growth Fund Partnership Inc., in the future.
PARKERSBURG WEST VIRGINIA - 50 OIL AND GAS WELLS
On December 13, 1997, the Company approved a resolution to acquire a
25% working interest in 50 oil/gas wells located within the state of West
Virginia, in exchange of 638,000 shares of common stock to be valued at $
7,000,000. The Company issued the shares to Mountaineer Gas Transmission, Inc.
On January 19, 1998 the Company agreed to increase the number of shares by
1,800,000 shares for a total of 2,483,000 shares of common stock to satisfy the
$ 7,000,000 purchase price. Mountaineer Gas Transmission will operate and manage
the wells for Sterling pursuant to an operating and management agreement.
Operating costs to the Company will be deferred until such time as the wells
have been re-engineered. The re-engineering process will be carried out by
Mountaineer Gas Transmission Inc. It is estimated that it will take
approximately 24 months to complete the re-engineering work on all 50 wells in
order to bring them to full production capacity. The Company will be filing the
assignment of the 25% of the working interest in the 50 oil/gas wells with the
state of West Virginia.
<PAGE>
PLATINUM INVESTMENT CORPORATION LIMITED
On December 21, 1997, the Company approved a resolution to acquire 80%
of the shares of common stock of Platinum Investment Company Inc., (a Bahamian
Corporation) in exchange for 4,900,000 shares of common stock. Due to the
decline in the price of the Company's common stock in February 1998, the Company
agreed to issue an additional 25,000,000 of Series of B preferred stock to
satisfy the $33,000,000 agreed purchase price.
On February 24, 1998 the Company approved a resolution for the issuance
of 7,500,000 shares of common stock and 15,000,000 Series B Preferred stock as
partial payment for the purchase of 1640 acres of land located on Cat Island in
the Bahamas. The purchase price of $45,000,000 is to be satisfied as to
$30,000,000 by the issuance of the stock and balance of $15,000,000 is payable
in cash at closing from the proceeds of a new first mortgage which the Company
is seeking to obtain on behalf of Platinum Investment Corporation, Ltd. Platinum
will take title to the property and be responsible for the development thereof.
The balance of $15,000,000 is due 90 days from the February 18, 1998.
On March 11, 1998 the Board approved the acquisition by Platinum
Investment Company Ltd. of a tract of land known as Sierra Pelada, (1,150,000
square meters ) in the Province of Malaga, Spain. The Company will issue
3,544,000 shares of restricted common stock to the sellers of the land. The
purchase price of $7,544,000 is to be satisfied as to 3,544,000 by the issuance
of the stock, and the balance of $3,000,000 is payable in cash at closing.
Limited, who will take title to the property, will be responsible for the
development of the property. The $3,000,000 balance of purchase price is payable
at closing within 60 days of March 11, 1998.
On April 18, 1998 the board authorized the issuance of 1,000,000 shares
of common stock to be issued to Thomas Conjaero Guillen, Attorney at Law,
Avendia De La Liberstad, 2nd Floor 2E Torrevieja Alicante 03180, to secure the
option pending the completion of the purchase of the property know as La Valle
Grand, a site located in Torrevieja, near Alicante Spain. This transaction is
scheduled to be completed within 60 days of signing the option agreement,
subject to the Company obtaining financing in the form of an acquisition and
development loan on the land to be acquired.
RUSSIAN TRANSPORT INSURANCE CO
On February 18, 1998 the Company agreed to acquire 10% of Russian
Transport Insurance Co., in exchange for 3,000,000 shares of the common stock
and 97,000,000 Series C Preferred Shares. As part of the agreement, 350,000
shares common stock of the Company is to be issued to Growth Fund Partnership,
Inc., for arranging the transaction. Growth Fund Partnership, Inc., will receive
50% of all consideration received by Sterling Worldwide Corporation from RTIC in
terms of the agreement. This agreement is subject to the approval of the RTIC
board of directors within 45 days from March 9, 1998.
SWAIN COUNTY, NORTH CAROLINA
On March 7, 1998 in a related party transaction, the board approved of
a 50% joint venture together with LaSalle Group, Ltd., in terms of which the
Company and LaSalle Group Ltd., will jointly acquire and develop a 1717 acre
land tract, located in Swain County, North Carolina. The agreement provides for
a 50/50 joint venture ownership and operation of the property. In exchange for
the 50% ownership interest in the property, the Company will issue of 8,000,000
<PAGE>
shares of Series D. Preferred stock of the Company. LaSalle Group, Ltd., will
contribute US$8,000,000 toward the acquisition of the land, by issuing a
promissory note in favor of the seller of the land. Natural Park USA, Inc., a
wholly owned subsidiary of the Company ,will hold title and be responsible for
the development of the property.
BUENA VISTA LODGE AND HOTEL - GUANACASTE, COSTA RICA
On March 11, 1998 the Company entered into an agreement with First
Premium Alliance Holding, Ltd., to issue 5,000,000 shares of the Company's
Series B preferred stock to First Premium Alliance Holdings, Ltd.. Premium
Alliance Holdings, Ltd., will utilize the stock as collateral to obtain working
capital and secure a deposit for a leasehold interest in a resort property known
as Buena Vista Lodge and Hotel in Guanacaste, Costa Rica. The Company entered
into a 50% interest in a joint venture agreement with First Premium Alliance
Holdings, Ltd., to acquire, operate, manage, develop and market the property as
a multi-ownership vacation resort. As of the date hereof, the joint venture
partners continue to negotiate the terms of the acquisition of the Buena Vista
Lodge.
INTERNATIONAL PROPERTY LIST, INC.
On April 3, 1998 the Company entered into an agreement with Jerald
Ritter to acquire 50% of International Property List Inc., a Florida
corporation, the publisher of Caribbean Property List (publication of real
estate for sale in the Caribbean), and Caribbean Property List (publisher of the
web site Http://www.caribpro.com). The purchase consideration for the
acquisition is $120,000, payable in common stock as at April 3, 1998 at a value
of US$0.19 per share. The closing date for this transaction is July 3, 1998. In
addition, the Company is required to purchase Lots EN1,2 and 3 Bahamia North,
located on the 16th green and fairway of the Princess Ruby Golf Course, Freeport
- - Grand Bahama, for a purchase price of $150,000 payable in cash at closing on
July 3, 1998. The two transactions are contingent on the other closing
simultaneously. The Company has agreed that if the total value of the shares
sold and owned by Ritter as of April 3, 1999 is less than $120,000, the Company
is obligated to pay the difference in cash to Ritter.
CARMELITA RESOURCES, LTD.
In March, the Company made an unsolicited offer to acquire Carmelita
Resource, Ltd., a Vancouver Stock Exchange CFHV, for USD$70,000,000 in a new
class convertible preferred shares. Each preferred share will be convertible
into ten(10) shares of common stock and accompanied by 10 warrants exercisable
at USD$1.00 per share. The issue price of the convertible preferred stock will
be USD$7.00 per convertible preferred share. Both companies are currently
completing their due-diligence on each other, before finalizing any agreement.
The Company can not predict the outcome of its offer at this time.
<PAGE>
PART 11 - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
On Jan 20, 1998 the Company and John Frohling, as escrow agent for
Sterling Worldwide Corporation, filed a law suit in the Superior Court of New
Jersey Chancery Division - Essex County Docket No C17-98 against Alan Berkun,
Lexington Capital Corporation, Interra Clearing Services Inc., for the
collection of $708,000 due and outstanding to Sterling Worldwide Corporation in
respect of stock options exercised by Alan Berkun.
Further, to the knowledge of management, no director or executive
officer is party to any action in which there would be any adverse interest in
the Company.
ITEM 2. CHANGES IN SECURITIES
On July 10, 1997, the Company authorized an amendment to its Articles
of Incorporation. The authorized share capital shall be increased from 100,000
shares of common stock to 500,000,000 shares of common stock at $.001 par value.
The Company shall have 10,000,00 shares of Class A Preferred Stock of $0.01 per
share par value. The Class A Preferred Stock shall have super priority voting
votes rights equal to 100,000 votes per share. Furthermore, the holders of the
Class A shares have the right to elect the majority of the directors to the
Board of the Company. Finally, the Company shall have 490,000,000 shares of
Class B Preferred stock which shares shall be non-voting and have a par value of
$.001 per share, which shall be convertible into one share of common stock at a
conversion rate of ten shares of common stock for each Preferred share
surrendered.
On March 24, 1998 the Company authorized an amendment to its Article of
Incorporation to reduce the par value of the Series A. Preferred from $1.00 to
$0.01 per share. Further, the Company authorized the 100,000,000 shares of
Series C Preferred Stock which shares shall be convertible in 1/10 of a common
share and have a par value of $1.000 per share. In addition, the Company
authorized 8,000,000 shares of Series D Preferred Stock, which shares shall be
non-assessable, unregistered common stock and 5 warrants convertible into 5
fully paid, non-assessable, registered common stock at a warrant exercise.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (SECTION 24.308 OF THIS
CHAPTER).
(a) Exhibits
None.
(b) Reports on Form 8-K
None.
THIS SPACE INTENTIONALLY LEFT BANK
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STERLING WORLDWIDE CORPORATION
Date: April 17, 1998 By /s/ Abbe NE Greyling
------------------------------------
Anne ME Greyling, President
Date: April 17, 1998 By /s/ Mary Duncan
------------------------------------
Mary Duncan, Secretary
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Statement of Operations
As of September 30, 1997
(Unaudited)
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Statement of Operations
As of September 30, 1997
(Unaudited)
Index
Page
----
Accountants' Unaudited Report 1
Financial Statements
Balance Sheet 2
Statement of Operations 3
Statement of Stockholders' Equity 4
Statement of Cash Flows 5
Notes to Financial Statements 6-11
-i-
<PAGE>
To the Board of Directors and Stockholders
Sterling Worldwide Corp. and Subsidiaries
The accompanying consolidated balance sheets of Sterling Worldwide Corp. and
Subsidiaries as of September 30, 1997, and the related statements of operations
and cash flows for the three and nine months then ended were not audited by us
and, accordingly, we do not express an opinion on them.
/s/ Berkovits & Company, P.A.
- -----------------------------
Berkovits & Company, P.A.
Plantation, Florida
February 17, 1998
-1-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Balance Sheet
(Unaudited)
Assets
<TABLE>
<CAPTION>
9/30/97 12/31/96
Unaudited Audited
----------- -----------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 27,111 $ 93,888
Investments-other 60,000 --
Officer receivable -- 58,469
Net current assets of discontinued operations -- 382,329
----------- -----------
Total current assets 37,111 534,686
Property and equipment, net 8,084,001 1,249
Net property and equipment of discontinued operations -- 4,501
Intangible assets, net 1,918,490 2,948
Net intangible assets of discontinued operations -- 15,833
Net other assets of discontinued operations -- 1,500
----------- -----------
Total assets $10,089,602 $ 560,717
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 432,260 $ --
Net current liabilities of discontinued operations -- 67,302
----------- -----------
Total current liabilities 432,260 67,302
Long Term Liabilities
Note payable-Bank 61,842
Mortgage notes payable 4,554,455 --
Minority interest in discontinued operations of subsidiary -- 46,049
----------- -----------
Total liabilities 5,048,557 113,351
----------- -----------
Stockholders' Equity
Preferred stock, Class A, $.001 par value, 10,000,000
shares authorized, issued and outstanding 10,000 --
Preferred stock, Class B, $.001 par value, 490,000,000
shares authorized, no shares issued and outstanding
Common stock; $.001 par value; 500,000,000 shares
authorized; 51,045,326 and 16,375 shares issued and
outstanding 51,046 16
Additional paid in capital 5,194,050 467,796
Accumulated (deficit) (214,051) (20,446)
----------- -----------
Total Stockholders' Equity 5,041,045 467,796
----------- -----------
Total Liabilities and Stockholders' Equity $10,089,602 $ 560,717
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
-2-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Sales and commissions $ 34,258 $ $ 34,258 $
Other income 1,475 0 1,475
------------ ------------ ------------ ------------
Total Revenues 35,733 35,733
------------ ------------ ------------ ------------
Costs and Expenses
Costs of goods sold 13,827 13,827
General and administrative 66,348 415 137,165 415
------------ ------------ ------------ ------------
Total Costs and Expenses 80,175 415 150,992 415
------------ ------------ ------------ ------------
Consolidated net(loss) from continuing
operations (44,442) (415) (115,259) (415)
(Loss) form discontinued operations (4,461) (67,691)
------------ ------------ ------------ ------------
Consolidated net (loss) $ (48,903) $ (415) $ (182,950) $ (415)
============ ============ ============ ============
Net (loss) per common share $ (.002) $ (0.15) $ (.02) $ (0.15)
============ ============ ============ ============
Weighted average number of shares
outstanding 26,573,070 2,734 8,965,884 1,831
============ ============ ============ ============
The accompanying notes are an integral part of these financial statements
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Statement of Changes in Stockholders' Equity
(Unaudited)
Preferred Stock Common Stock
====================== =====================
Par Value $0.001 Par Value $0.001 Additional
====================== ===================== Paid in Accumulated
Shares Amount Shares Amount Capital (Deficit) Total
====================== ===================== ========== =========== ===========
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance- December 31,1995 1,375 $ 1 $ 51,999 $ (2,000) $ 50,000
Issuance of common stock
(Regulation S) for cash at $ 50 per
share on October 29,1996 2,500 3 124,997 125,000
Issuance of common stock
(restricted) on December 24,1996
for net assets of Travelnet
International Corp. 12,500 12 290,800 290,812
Net loss for the year (18,446) (18,446)
---------- -------- ---------- -------- ---------- --------- -----------
Balance- December 31,1996 16,375 16 467,796 (20,446) 447,366
Issuance of common stock
and preferred stock (restricted) on
August 13,1997 for 100% of common
stock of LY Transportation
Construction, LTD. 10,000,000 10,000 50,000,000 50,000 60,000
Issuance of common stock
(restricted) on August 17,1997 for
net assets of Fort Thomas
Development Co. LTD., Fort Thomas
Management Co. LTD. and Limekiln
Development ,LTD. 1,027,828 1,028 4,676,254 4,677,282
Issuance of fractional shares 1,123 2 2
Net loss for the period ended
September 30, 1997 (182,950) (182,950)
---------- -------- ---------- -------- ---------- --------- -----------
Balance-September 30, 1997 10,000,000 $ 10,000 51,045,326 $ 50,000 $5,144,050 $(203,396) $ 5,001,700
========== ======== ========== ======== ========== ========= ===========
The accompanying notes are an integral part of these financial statements
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Sterling Worldwide Corporation and Subsidiaries
Consolidated Statement of Cash Flows
(Unaudited)
For the three months For the nine months
ended September 30, ended September 30,
1997 1996 1997 1996
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (48,903) $ (415) $ (182,950) $ (415)
Adjustments to reconcile net loss to
net cash used in operating activities
Depreciation and amortization 176 620
(Increase) in organizational costs (3,050) (3,050)
Increase in accounts payable 61,291 63,728
Discontinued operations-non cash charges
and changes in assets and liabilities (78,740) 54,875
---------- ---------- ---------- ---------
Net cash from (used in) in operating activities (69,226) (415) (66,777) (415)
---------- ---------- ---------- ---------
Cash flows provided by financing activities:
Borrowings from officer 2,000 2,000
---------- ---------- ---------- ---------
Net cash provided by financing activities 2,000 2,000
---------- ---------- ---------- ---------
Net increase (decrease) in cash and cash equivalents (69,226) 1,585 (66,777) 1,585
Cash and cash equivalents, beginning of period 96,337 50,000 93,888 50,000
----------
Cash and cash equivalents, end of period $ 27,111 $ 51,585 $ 27,111 $ 51,585
========== ========== ========== =========
The accompanying notes are an integral part of these financial statements
</TABLE>
-5-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
Note 1 ORGANIZATION
The Company was incorporated under the laws of the State of Utah on May
2, 1986 as Koala Capital Corporation and was in the development stage
since incorporation until December 24, 1996. On December 30, 1993, the
Company was dissolved as a Utah corporation and reincorporated as a
Nevada corporation. On October 28, 1996, the name was changed to
Sterling Worldwide Corporation.
Note 2 SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
PRINCIPLES OF CONSOLIDATION- The consolidated financial statements
include the accounts of Sterling Worldwide Corporation and its wholly
owned subsidiaries Fort Thomas Development Company Ltd., Fort Thomas
Management Co. Ltd.. and Limekiln Development Ltd. All significant
intercompany transactions have been eliminated.
ACCOUNTING METHODS- The Company recognizes income and expenses based on
the accrual method of accounting in accordance with generally accepted
accounting principles.
DIVIDEND POLICY- The Company has not yet adopted any policy regarding
payment of dividends.
ORGANIZATION COSTS- The Company amortizes its organization costs over a
five year period.
INCOME TAXES- The Company records the income tax effect of transactions
in the same year that the transactions enter into the determination of
income, regardless of when the transactions are recognized for tax
purposes. Tax credits are recorded in the year realized. Since the
Company has not yet realized significant income as of the date of this
report, no provision for income taxes has been made.
The Company utilizes the liability method of accounting for income
taxes as set forth in Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (SFAS 109). Under the liability
method, deferred taxes are determined based on the difference between
the financial statement and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are
expected to reverse. An allowance against deferred tax assets is
recorded when it is more likely than not that such tax benefits will
not be realized.
CASH AND CASH EQUIVALENTS-For financial statement purposes, the Company
considers all highly liquid investments with an original maturity of
three months or less when purchased to be cash equivalents. The Company
maintains its cash in financial institutions, which are federally
insured up to a limit of $100,000.
INTANGIBLES- Intangible Assets consist of goodwill and organization
costs and are being amortized on a straight -line basis.
LOSS PER SHARE- Loss per share is calculated by dividing net loss by
the weighted average common stock and common stock equivalents
outstanding during the period, adjusted to give effect to a 1 for 4
reverse stock split in April 1997 and a 1 for 200 reverse split in July
1997.
-6-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
PROPERTY AND EQUIPMENT- Property and equipment are recorded at cost.
The Company follows the practice of charging expenditures for additions
or major replacements to the asset accounts. When assets are retired or
otherwise dispose of, the cost or other basis thereof, and the related
accumulated depreciation is eliminated from the respective accounts
with any gain or loss being recognized in that period. The Company
provides for depreciation using the straight-line method over the
estimated useful lives of the assets as follows:
Years
-----
Buildings 30
Equipment, Furniture and Improvements 5
Note 3 LONG-TERM LIABILITIES
The bank note payable is payable in monthly installments of
$2,995. Payments are due until August 31, 1999. Interest on
the note is 11% and it is secured by a second mortgage on the
company's property in St. Kitts-Nevis. $ 61,842
----------
The loan due the government of St. Kitts-Nevis became due
October 31, 1992. Interest at the rate of 11.5% is computed
and compounded annually. The liability is secured by a
mortgage in favor if the government of St. Kitts-Nevis. $ 864,455
Note payable dated January 1, 1997, interest at 6% mortgage
secured by land. 2,000,000
Note payable dated January 1, 1997, interest at 6% mortgage
secured by land. 1,690,000
----------
$4,554,455
==========
The mortgages registered against the property in the amount of $
3,690,000 due to Equitable Holding Ltd., a company incorporated under
the Laws of the Federation of St. Christopher and Nevis. The mortgages
accrues interest at the rate of 6% p.a. starting on Januaray 01, 1997.
The company has initiated legal proceedings to have the mortgages
removed.
In addition, the Registrar of the Supreme Court of St. Kitts-Nevis has
by letters dated January 12, 1998 advised the company that two caveats
have been filed by separate non-resident parties, forbidding any
dealings in the said lands of the company.
At this point, the directors are uncertain as to the outcome of these
caveats. However, the liabilities have been recorded as mortgages
payable.
Note 4 SUPPLEMENTAL CASH FLOW INFORMATION
For the period ended September 30, 1997:
1). In connection with the acquisition of the assets and assumption of
certain liabilities of the Fort Thomas Hotel Resort in St. Kitts,
the Company issued 1,027,828 shares of stock which it Valued at
$10,000,000. The assets acquired totaled $10,000,000 and assumed
liabilities of $5,006,808. The assets exceed liabilities by
$4,993,192.
2). The company issued 50,000,000 common shares ,.001 par value or
$50,000 and 10,000,000 preferred shares, .001 par value or $
10,000 for 100% of the common stock of LY Transportation. The
asset acquired is being carried on the balance sheet at $60,000.
-7-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
Note 5 MINORITY INTERESTS
On December 24, 1996, Sterling Worldwide Corporation acquired 86.4% of
the outstanding stock of Travelnet International Corporation. Total
assets of $424,452 were acquired with liabilities assumed of $87,591.
For financial reporting purposes the assets and liabilities are
included in Sterling Worldwide Corporation consolidated financial
statements and the outside investors interest in Travelnet
International Corporation is reflected as a minority interest.
Note 6 DISCONTINUED OPERATIONS
On December 24, 1996 Sterling Worldwide Corporation acquired 585,000
shares of Travelnet International Corporation or 86.4% of its
outstanding stock by transferring 12,500 shares of common restricted
shares of its common stock.
The acquisition was accounted for as a purchase with the results of
operations of Travelnet International and its wholly subsidiary
Sterling AKG Corp. included from the acquisition date.
On August 7, 1997, the Company agreed to dispose of the Company's
majority owned operating subsidiary, Travelnet International
Corporation and its wholly subsidiary Sterling AKG Corp. in exchange
for the common stock owned by its majority shareholder, Laurie Doll
Gladstone. The shares are being held in escrow until finalization of
the transaction. Gladstone received an irrevocable three year put
option which requires the corporation to purchase Gladstone's 584,400
shares in Travelnet for $2,000,000 in fully registered shares of the
corporation. If the corporation did not show $10,000,000 in net assets
on its certified financial statements for the quarter ended September
30, 1997 on or prior to October 1, 1997, then the corporation must
return to Ms. Gladstone any such number of shares of the corporation
which would provide her with 80% of the outstanding securities (on a
fully diluted basis) of the corporation. The transaction is being held
in escrow until all differences can be reconciled.
Summarized results of operations for Travelnet for the period ended
August 1997 are as follows:
1997
----------
Net Sales $4,011,201
----------
Operating Loss $ (67,691)
==========
Loss from discontinued
operations $ (67,691)
==========
Note 7 COMMON STOCK TRANSACTIONS
On July 2, 1997, the Company reverse split its common stock on a 1 for
200 basis. The number of shares outstanding prior the split was
3,275,000. The number of shares outstanding after this split is 16,375.
All references to common stock retroactively reflect the stock splits.
On July 11, 1997, the Company amended its Articles of Incorporation and
Bylaws to provide for the following amended capital structure:
1. Authorized share capital be increased from 100,000,000 total
shares of common stock to 500,000,000 shares of $.001 par value.
-8-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
2. Authorized a series of 10,000,000 shares of Class A Preferred
Stock of $.001 per share par value. The Class A Preferred Shares
shall have superpriority voting rights of 100,000 per share and
that the holders of the Class A shares shall have the right to
elect majority of the directors to the Board of the Company, and
3. Authorized 490,000,000 shares of Class B referred Stock which
shares shall be non-voting and have a par value of $.001 per share
and shall be convertible into one share of common stock at a
conversion rate of ten shares of common stock for each Preferred
Share surrounded.
On July 11, 1997, the Board of Directors adopted a stock grant for key
employees, consultants and attorneys. The maximum number of shares
available for issuance under the plan is 1,000,000 shares of common
stock.
On August 13, 1997, the Board approved the acquisition by the Company
of International Property Investments Corporation, a licensed Florida
real estate brokerage engaged in the real estate brokering business of
commercial real estate, in exchange for 150,000 shares of restricted
common stock of the Company.
On August 13, 1997 the Company agreed to acquire Resort Marketing Group
Inc., a Florida company specializing in the marketing of Resort
condominium and resort-related properties in exchange for 150,000
shares of restricted common stock.
On August 13, 1997 in a related party transaction, the Board approved
the acquisition from LaSalle Group, Ltd. of 100% of the issued and
outstanding stock of LY Transportation Construction Ltd., a BVI company
and four corporate entities to be known as Natural Park Bahamas, Ltd.,
Natural Park S.A. Ltd., Natural Park Alaska, Inc. and Natural Park
U.S.A, Inc. in exchange for the issuance of 10,000,000 shares of Class
A Preferred of $.001 par value and 50,000,000 shares of newly issued
restricted common stock of the Company. The total of $60,000 is being
reflected as investments other, on the company's balance sheet.
On August 19, 1997, the Company approved a Resolution to acquire the
Fort Thomas Resort in St. Kitts in exchange for the issue of 1,027,828
shares of common stock to be valued at $10.00 per share in exchange for
the real property commonly known as the Fort Thomas Resort. The Company
has issued 1,027,828 shares of common stock to be held in escrow
pending the closing of these transactions.
Note 8 SUBSEQUENT EVENTS
On November 25,1997 the Company approved a resolution to acquire
certain timber concessions in the Country of Venezuela in exchange for
the issue of 2,250,000 shares of common stock to be valued at $10.00
per share. The Company agreed on November 30, 1997 to convert the
shares pursuant to Regulation "S" provided that it could obtain
confirmation from the SEC that issuance of the shares to a foreign
seller in exchange for assets located in a foreign country would meet
the requirements of Regulation "S". The Company Legal Counsel Mr. John
Frohling has advised that he is unable to render an opinion qualifying
the stock issuance under Regulation "S" and therefore the Company has
issued the restricted common shares to the Assignor Brasmex SA, a
Panama Corporation. The Company received an Assignment of certain
timber concessions covering 144,680 hectares and shall be entitled to a
royalty from operations thereon for the term of the lease and any
extensions thereof equal to 25% of the after expense profits.
-9-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
On November 25, 1997 the Company approved a resolution to enter into an
operating lease agreement granting the rights to Champion Success Ltd.
to harvest the timber as provided for in the concessions granted by the
Government of Venezuela. In exchange for the issue of 1,350,000 shares
of common stock to be valued at $10 per share Champion Success Ltd.
agreed to operate the concessions and to provide all necessary logging
equipment, personnel and financing to operate the concession. The
Company agreed on November 30, 1997 to convert the shares issued to
Champion Success Group pursuant to Regulation "S" provided that it
could obtain confirmation from the SEC that issuance of the shares to a
foreign seller in exchange for assets located in a foreign country
would meet the requirements of Regulation "S". The Company Legal
Counsel Mr. John Frohling has advised that he is unable to render an
opinion qualifying the stock issuance under Regulation "S" and
therefore the Company has issued the restricted common shares to
Champion Success Limited, a Nevis Corporation. The Company entered into
an Operating Lease Agreement and will be entitled to a royalty from
operations thereon for the term of the lease agreement thereof equal to
25% of the after expense net revenue from operations. As of the date
hereof the company has not received any royalty payments and the
company has requested a detailed statement of operations and expenses
from the Management Company. On January 10, 1998 the company agreed to
that in the event that the share price is less than $10 per share in
September 1998 the company will issue additional shares to Champion
Success Limited.
On November 11, 1997 the Company to acquired 715,000 shares of common
shares of Growth Fund partnership Ltd. a Florida Corporation in
exchange for 2,600,000 shares of common stock of the Company valued at
$10.00 per share.
On December 13, 1997 the Company approved a resolution to acquire a 25%
working interest in 50 oil/gas wells located with in the State of West
Virginia in exchange for of 638,000 share of common stock to be valued
at $7,000,000. The Company issued the Shares to Mountaineer Gas
Transmission, Inc. On January 19, 1998 the company agreed to increase
the number of shares by 1,800,000 shares for a total of 2,483,000
shares of common stock to satisfy the $7,000,000 purchase price.
On December 21, 1997 the company approved a resolution to acquire 80%
of the shares of common stock of Platinum Investment Company Inc. (a
Bahamian Corporation) in exchange for 4,900,000 shares of common stock
due to the decline in the price of the Companies common stock. In
February 1998, the Company agreed to issue an additional 25,000,000 of
Series of B preferred stock to satisfy the $33,000,000 agreed purchase
price.
On January 6, 1998 the Company approved a resolution for the issuance
of 50,000,000 shares of common stock to LaSalle Group, Ltd. to be used
as collateral for a loan of $2,500,000 which was to be arranged by
Atlantic Holdings Limited with in 30 days. On February 7, 1998 the
shares were returned to treasury of the Company as Atlantic Holding
Limited were unable to procure the loan within the 30 day period.
On February 24, 1998, the Company approved a resolution for the
issuance of 7,500,000 shares of common stock and 15,000,000 Series B
Preferred stock as partial payment for the purchase of 1640 acres of
land located on Cat Island in the Bahamas. The purchase price of
$45,000,000 is to be satisfied as to $30,000,000 by the issuance of the
stock and balance of $15,000,000 is payable in cash at closing from the
proceeds of a new first mortgage which the company is seeking to obtain
on behalf of Platinum Investment Corporation. Limited. Platinum will
take title to the property and responsible for the development of the
property the $15,000,000 is due 90 days from the February 18, 1998.
-10-
<PAGE>
Sterling Worldwide Corporation and Subsidiaries
Notes to Financial Statements
On February 18, the company agreed to acquire 10% of Russian Transport
Insurance Co in exchange for 3,000,000 shares of the common stock and
97,000,000 Series C Preferred Shares. As part of the agreement 350,000
shares common stock of the company is to be issued to Growth Fund
Partnership Inc. For arranging the transaction. Growth fund will
receive 50% of the all consideration received by Sterling Worldwide
Corporation from RTIC in terms of the agreement. This agreement is
subject to the approval of the RTIC board of directors with in 45 days
from March 9, 1998.
On March 4, 1998, the Company authorized an amendment to its Articles
of Incorporation and Bylaws to provide for the following amended
capital structure:
Authorized 97,0000 shares of Series C. Preferred stock. at $1.00 par
value.
Authorized 8,000,000 shares of Series D. Preferred Stock which shares
shall be non-assessable convertible preferred stock par value of $5.00
per share and convertible into 5 units, a unit consisting of 5 shares
of fully paid, non-assessable, unregistered common stock and 5 warrants
convertible into 5 fully paid, non-assessable, unregistered common
stock at a warrant exercise price of $2.00 per share with an expiration
date for said warrants two (2) years following the date of the issuance
of the warrants.
On March 7, 1998 in a related party transaction, the board approved of
a 50% Joint Venture together with LaSalle Group, Ltd. in terms of which
the company and LaSalle Group Ltd. will jointly acquire and develop a
1717 acre land tract, located in Swain County North Carolina. The
agreement provides for a 50/50 Joint Venture ownership and operation of
the Property. In exchange for the 50% ownership interest in the
property the company will issue of 8,000,000 shares of Series D.
Preferred stock of the Company. LaSalle Group, Ltd. will contribute
$8,000,000 towards the acquisition of the land by issuing a promissory
note in favor of the seller of the land. Natural Park USA Inc. a wholly
owned subsidiary of the Company will hold title and be responsible for
the development of the property.
On March 11, 1998 the company entered into an Agreement with First
Premium Alliance Holding Limited to issue 5,000,000 shares of Series B
preferred stock to First Premium Alliance Holdings Limited. who will
utilize the stock as collateral to obtain working capital and secure a
deposit for a leasehold interest in a resort property known as Buena
Vista Lodge and Hotel in Guanacaste, Costa Rica. The company entered
into a 50% interest in a Joint Venture Agreement with First Premium
Alliance Holdings Limited to acquire, operate, manage, develop and
market the property as a Multi-ownership vacation resort.
On March 11, 1998 the Board approved the acquisition by Platinum
Investment Company Ltd. of a tract of land known as Sierra Pelada,
(1,150,000 square meters ) in the Province of Malaga, Spain. The
company will issue 3,544,000 shares of restricted common stock to the
sellers of the land. The purchase price of $7,544,000, is to be
satisfied as to 3,544,000 by the issuance of the stock and balance of
$3,000,000 is payable in cash at closing Limited who will take title to
the property and responsible for the development of the property. The
$3,000,000 balance of purchase price is payable at closing within 60
days of March 11, 1998
On March 24, 1998, the Company authorized an amendment to its Articles
of Incorporation and Bylaws to provide for the following amended
capital structure:
Authorized 100,000,000 shares of Series C. Preferred stock, at $1.00
par value. The stock is convertible into 1/10 of a share of common
stock.
Authorized 8,000,000 shares of Series D. Preferred Stock which shares
shall be non-assessable convertible preferred stock stated value of
$5.00 per share and convertible into 5 units; a unit consisting of 5
shares of fully paid, non-asessable, unregistered common stock and 5
warrants convertible into 5 fully paid, non-assessable, registered
common stock at a warrant exercise price of $2.00 per share with an
expiration date for said warrants two (2) years following the date of
the issuance of the warrants.
The par value of the Preferred Stock, Class A. has been changed to
$.001 per share.
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STERLING
WORLDWIDE CORPORATION (A DEVELOPMENT STAGE CO.) CONSOLIDATED FINANCIAL
STATEMENTS, JULY 30, 1997 AND SEPTEMBER 31, 1997 AND IS QUALIFIED IN IT ENTIRETY
BY REFERENCE TO SUCH 10QSB.
</LEGEND>
<CIK> 0000894539
<NAME> Sterling Worldwide Corporation
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<CASH> 27,111
<SECURITIES> 0
<RECEIVABLES> 60,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 37,111
<PP&E> 80,840,001
<DEPRECIATION> 0
<TOTAL-ASSETS> 10,089,602
<CURRENT-LIABILITIES> 432,260
<BONDS> 4,554,455
51,046
0
<COMMON> 10,000
<OTHER-SE> 5,194,050
<TOTAL-LIABILITY-AND-EQUITY> 10,089,602
<SALES> 34,258
<TOTAL-REVENUES> 35,733
<CGS> 13,827
<TOTAL-COSTS> 150,992
<OTHER-EXPENSES> (67,691)
<LOSS-PROVISION> 0
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<INCOME-PRETAX> (115,259)
<INCOME-TAX> 0
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<DISCONTINUED> (67,691)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (182,950)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
