x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934 FOR FISCAL YEAR ENDED DECEMBER 31, 2004 |
o | TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Nevada |
03-7392107 |
(State
or other jurisdiction
of |
(I.R.S.
Employer |
incorporation
or organization) |
Identification
No.) |
WORLDTEQ
GROUP INTERNATIONAL, INC. | |
FORM
10-KSB/A | |
Page | |
PART
I |
|
| |
Item
1. Description of Business |
3 |
| |
Item
2. Legal Proceedings. |
12 |
| |
12 | |
| |
PART
II |
|
| |
12 | |
| |
14 | |
| |
Item
6. Financial Statements. |
16 |
| |
16 | |
16 | |
| |
PART
III |
|
| |
16 | |
| |
Item
10. Executive Compensation |
19 |
| |
20 | |
| |
21 | |
| |
Item
13. Exhibits and Reports |
22 |
25 |
HIGH |
LOW | |
2003 |
|
|
1st
Quarter |
0.090
|
0.040 |
2nd
Quarter |
0.090
|
0.020 |
3rd
Quarter |
0.110
|
0.010 |
4th
Quarter |
0.130
|
0.050 |
|
| |
2004 |
|
|
1st
Quarter |
0.280
|
0.100 |
2nd
Quarter |
0.360
|
0.130 |
3rd
Quarter |
0.200
|
0.080 |
4th
Quarter |
0.140
|
0.090 |
WORLDTEQ
GROUP INTERNATIONAL, INC. | ||||
CONSOLIDATED
BALANCE SHEET | ||||
DECEMBER
31, 2004 | ||||
ASSETS |
||||
CURRENT
ASSETS: |
||||
Trade
accounts receivable, net of allowance for |
$ |
35,914 |
||
doubtful
accounts of $0 |
||||
Other
current assets |
848 |
|||
Total
current assets |
36,762 |
|||
Equipment,
net of $83,630 accumulated depreciation |
7,185 |
|||
Customer
base, net of $11,458 amortization |
38,542 |
|||
Total
assets |
$ |
82,489 |
||
LIABILITIES
AND STOCKHOLDERS' DEFICIT |
||||
CURRENT
LIABILITIES: |
||||
Convertible
notes payable to stockholder |
$ |
187,432 |
||
Notes
payable |
3,000 |
|||
Accounts
payable |
318,292 |
|||
Accrued
expenses |
70,438 |
|||
Total
current liabilities |
579,162 |
|||
COMMITMENTS
AND CONTINGENCIES |
- |
|||
STOCKHOLDERS'
DEFICIT: |
||||
Series
A convertible preferred stock, $.001 par; |
||||
$4,749,989
liquidation value 5,000,000 shares |
||||
authorized;
911,553 shares issued and outstanding |
911 |
|||
Common
stock, $.001 par; 100,000,000 shares authorized; |
||||
1,290,206
shares issued and outstanding |
1,290 |
|||
Additional
paid-in capital |
22,564,785 |
|||
Accumulated
deficit |
(23,005,159 |
) | ||
Shareholder
receivable |
(58,500 |
) | ||
Total
stockholders' deficit |
(496,673 |
) | ||
Total
liabilities and stockholders' deficit |
$ |
82,489 |
WORLDTEQ
GROUP INTERNATIONAL, INC. | |||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS | |||||||
YEARS
ENDED DECEMBER 31, 2004 and 2003 | |||||||
2004 |
2003 |
||||||
|
|
||||||
Sales |
$ |
341,199 |
$ |
820,933 |
|||
Cost
of sales |
292,138 |
483,519 |
|||||
Selling,
general and administrative |
1,839,824 |
697,164 |
|||||
Depreciation |
12,690 |
37,091 |
|||||
Amortization |
11,458 |
- |
|||||
Bad
debts |
- |
24,920 |
|||||
Total
operating expenses |
2,156,110 |
1,189,813 |
|||||
Loss
from operations |
(1,814,911 |
) |
(421,761 |
) | |||
OTHER
INCOME (EXPENSE) |
|||||||
|
|||||||
Other
Income |
1,049 |
1,481 |
|||||
Forgiveness
of debt |
- |
81,088 |
|||||
Interest
expense |
(22,911 |
) |
(12,107 |
) | |||
NET
INCOME (LOSS) |
$ |
(1,836,773 |
) |
$ |
(351,299 |
) | |
Basic and
Diluted loss per share: |
$ |
(1.65 |
) |
$ |
(0.45 |
) | |
Weighted
average shares outstanding |
1,115,605 |
787,098 |
WORLDTEQ
GROUP INTERNATIONAL, INC. | |||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT | |||||||||||||
YEARS
ENDED DECEMBER 31, 2004 and 2003 | |||||||||||||
Preferred
Stock |
Common
Stock |
||||||||||||
Shares |
Amount |
Shares |
Amount |
||||||||||
Balances, |
|||||||||||||
December
31, 2002 |
1,055,553 |
$ |
1,055 |
721,000 |
$ |
721 |
|||||||
Sale
of Networld |
- |
- |
- |
- |
|||||||||
Issuance
of options to consultants |
- |
- |
- |
- |
|||||||||
Shares
issued for debt |
- |
- |
197,725 |
198 |
|||||||||
Exercise
of consultants options |
- |
- |
66,667 |
67 |
|||||||||
Net
loss |
- |
- |
- |
- |
|||||||||
Balances, |
|||||||||||||
December
31, 2003 |
1,055,553 |
1,055 |
985,392 |
965 |
|||||||||
Exercise
of consultants warrants |
- |
300,000 |
300 |
||||||||||
Warrants
to consultants |
- |
- |
- |
- |
|||||||||
Conversion
of preferred shares into common
shares |
|
|
(144,000 |
) |
144 |
4,815 |
|||||||
Net
loss |
- |
- |
- |
- |
|||||||||
Balances, |
|||||||||||||
December
31, 2004 |
911,553 |
$ |
911 |
1,290,206 |
$ |
1,290 |
WORLDTEQ
GROUP INTERNATIONAL, INC. | |||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS' DEFICIT | |||||||||||||
YEARS
ENDED DECEMBER 31, 2004 and 2003 | |||||||||||||
Paid-In |
Accumulated |
Shareholder |
|||||||||||
Capital |
Deficit |
Receivable |
Total |
||||||||||
Balances, |
|||||||||||||
December
31, 2002 |
$ |
20,109,925 |
$ |
(20,817,087 |
) |
$ |
- |
$ |
(705,386 |
) | |||
Sale
of Networld |
352,458 |
- |
- |
352,458 |
|||||||||
Issuance
of options to consultants |
53,000 |
- |
- |
53,000 |
|||||||||
Shares
issued for debt |
149,802 |
- |
- |
150,000 |
|||||||||
Exercise
of consultants options |
99,933 |
- |
- |
100,000 |
|||||||||
Net
loss |
- |
(351,299 |
) |
- |
(351,299 |
) | |||||||
Balances, |
|||||||||||||
December
31, 2003 |
20,765,119 |
(21,168,386 |
) |
- |
(401,227 |
) | |||||||
Exercise
of consultants warrants |
479,700 |
(58,500 |
) |
421,500 |
|||||||||
Warrants
to consultants |
1,319,827 |
- |
- |
1,319,827 |
|||||||||
Conversion
of preferred shares into common
shares |
|
139 |
- |
- |
|||||||||
Net
loss |
- |
(1,836,773 |
) |
- |
(1,836,773 |
) | |||||||
Balances, |
|||||||||||||
December
31, 2004 |
$ |
22,564,785 |
$ |
(23,005,159 |
) |
$ |
(58,500 |
) |
$ |
(496,673 |
) |
WORLDTEQ
GROUP INTERNATIONAL, INC. | |||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS | |||||||
FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003 | |||||||
2004 |
2003 |
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|||||||
Net
loss |
$ |
(1,836,773 |
) |
$ |
(351,299 |
) | |
Adjustments
to reconcile net loss to net cash used in |
|||||||
operating
activities: |
|||||||
Non-cash
stock and option compensation |
1,319,827 |
53,000 |
|||||
Depreciation
and amortization |
24,148 |
37,091 |
|||||
Bad
debt |
- |
24,920 |
|||||
Change
in assets and liabilities: |
|||||||
Accounts
payable |
74,342 |
(49,856 |
) | ||||
Accrued
expenses |
24,379 |
52,559 |
|||||
Deferred
revenue |
- |
(51,616 |
) | ||||
Trade
accounts receivable |
(3,685 |
) |
21,825 |
||||
Other
current assets |
(848 |
) |
12,574 |
||||
Net
cash used in operating activities |
(398,610 |
) |
(250,802 |
) | |||
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|||||||
Purchases
of equipment |
(54,609 |
) |
- |
||||
Net
cash used in investing activities |
(54,609 |
) |
- |
||||
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|||||||
Proceeds
from exercise of options |
421,500 |
100,000 |
|||||
Proceeds
from notes payable |
3,000 |
- |
|||||
Proceeds
from shareholder note payable, net |
- |
97,609 |
|||||
Capital
contribution |
- |
- |
|||||
Payments
on notes payable |
(3,088 |
) | |||||
Net
cash provided by financing activities |
421,412 |
197,609 |
|||||
CHANGE
IN CASH |
(31,807 |
) |
(53,193 |
) | |||
CASH
AND CASH EQUIVALENTS, beginning of year |
31,807 |
85,000 |
|||||
CASH
AND CASH EQUIVALENTS, end of year |
$ |
- |
$ |
31,807 |
|||
|
|||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION: |
|||||||
Payment
of interest |
$ |
- |
$ |
- |
|||
NON-CASH
FINANCING ACTIVITIES: |
|||||||
Stock
issued notes payable |
$ |
- |
$ |
150,000 |
|||
Net
liabilities assumed by Networld acquirer |
- |
352,458 |
|||||
Exchange of preferred stock to common
stock |
(144 | ) | - |
For
the year ended |
|||||||
December
31, |
|||||||
2004
|
2003 |
||||||
Net
loss available to common |
$ |
(1,836,773 |
) |
$ |
(351,299 |
) | |
stockholders,
as reported |
|||||||
Less:
stock based compensation |
|||||||
determined
under fair value |
|||||||
based
method |
(281,771 |
) |
-
|
||||
Pro
forma net loss |
$ |
(2,118,544 |
) |
$ |
(351,299 |
) | |
Basic
and diluted net loss per share |
|||||||
As
reported |
$ |
(1.65 |
) |
$ |
(0.45 |
) | |
Pro
forma |
$ |
(1.89 |
) |
$ |
(0.45 |
) |
Weighted |
Weighted |
||||||||||||
Average |
average |
||||||||||||
Options |
Share
Price |
Warrants |
Share
Price |
||||||||||
Year
ended December 31, 2003: |
|||||||||||||
Granted |
- |
-
|
2,000,000
|
.10 |
|||||||||
Excercised |
-
|
-
|
(2,000,000 |
) |
- |
||||||||
Outstanding
at |
|||||||||||||
December
31, 2003 |
1,232,000
$ |
.29 |
4,036,650 |
$ |
.66 |
||||||||
Year
ended December 31, 2004: |
|||||||||||||
|
|||||||||||||
Granted
|
2,350,000
|
.13
|
9,000,000 |
.05 |
|||||||||
Excercised |
-
|
-
|
(9,000,000 |
) |
.05 |
||||||||
Expired |
-
|
-
|
(886,650 |
) |
2.45 |
||||||||
Outstanding
at |
|||||||||||||
December
31, 2004 |
3,582,000 |
$ |
.19 |
3,150,000
|
$ |
.16 |
Options
outstanding and exercisable as of December 31, 2004: |
||||||||||
Outstanding
|
Exercisable |
|||||||||
Number |
Remaining |
Number |
||||||||
Exercise
Price |
of
Shares |
life |
of
Shares |
|||||||
$.29
|
87,000
|
1
years |
87,000 |
|||||||
.29
|
145,000
|
2
years |
145,000 |
|||||||
.29
|
600,000
|
3
years |
600,000 |
|||||||
.29
|
400,000
|
4
years |
400,000 |
|||||||
.13
|
2,350,000
|
10
years |
271,991 |
|||||||
3,582,000
|
1,503,991 |
|||||||||
Warrants
outstanding and exercisable as of December 31, 2004: |
||||||||||
|
Outstanding |
Exercisable |
||||||||
|
Number |
Remaining
|
Number |
|||||||
Exercise
Price |
of
Shares |
life
|
of
Shares |
|||||||
$2.75
|
150,000
|
2
years |
150,000 |
|||||||
|
||||||||||
.03 |
3,000,000
|
2
years |
3,000,000 |
|||||||
3,150,000 |
3,150,000 |
ASSETS |
Previously |
Increase |
||||||||
CURRENT
ASSETS: |
Stated |
(Decrease) |
Restated |
|||||||
Trade
accounts receivable |
35,914 |
35,914 |
||||||||
Other
current assets |
848 |
848 |
||||||||
Total
current assets
|
36,762
|
36,762
|
||||||||
EQUIPMENT,
net |
7,185 |
7,185 |
||||||||
Customer
base, net
|
38,542
|
38,542
|
||||||||
Total
assets
|
$
|
82,849
|
$
|
82,849
|
||||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
|
||||||||||
CURRENT
LIABILITIES: |
||||||||||
Notes
payable |
$ |
- |
$ |
3,000 |
$ |
3,000 |
||||
Note
payable stockholder |
187,432 |
187,432 |
||||||||
Accounts
payable |
327,272 |
(8,980 |
) |
318,292 |
||||||
Accrued
expenses |
4,800 |
65,638 |
70,438 |
|||||||
Payroll
liabilities and taxes |
45,727 |
(45,727 |
) |
- |
||||||
Total current liabilities
|
567,031
|
12,131
|
579,162
|
|||||||
COMMITMENTS
AND CONTINGENCIES |
||||||||||
STOCKHOLDERS’
DEFICIT: |
||||||||||
Series
A convertible preferred |
911 |
911 |
||||||||
Common
stock |
38,706 |
(37,416 |
) |
1,290 |
||||||
Additional
paid-in capital |
22,104,807 |
459,978 |
22,564,785 |
|||||||
Accumulated
deficit |
(22,262,299 |
) |
(742,860 |
) |
(23,005,159 |
) | ||||
Total
stockholders’ deficit
|
(117,875
|
)
|
(378,798
|
)
|
(496,673
|
)
| ||||
Total
liabilities and stockholders’ deficit
|
$
|
449,156
|
$
|
(366,667
|
)
|
$
|
82,489
|
Previously |
Increase |
|||||||||
CURRENT
ASSETS: |
Stated |
(Decrease) |
Restated |
|||||||
Sales
|
$
|
341,199
|
$ |
- |
$
|
341,199
|
||||
Cost
of sales
|
299,618
|
(7,480
|
)
|
292,138
|
||||||
Selling,
general and administrative
|
817,332
|
1,022,492 |
1,839,824
|
|||||||
Bad
debts
|
-
|
-
|
||||||||
Depreciation
|
12,690
|
12,690
|
||||||||
Amortization
|
-
|
11,458
|
11,458
|
|||||||
Operating
expenses
|
1,129,640
|
1,026,470 |
2,156,110
|
|||||||
Loss
from operations
|
(788,441
|
)
|
(1,026,470 |
) |
(1,814,911
|
)
| ||||
OTHER
INCOME (EXPENSE)
|
||||||||||
Other
|
(301,171
|
)
|
300,122 |
1,049
|
||||||
Interest
expense
|
(5,350
|
)
|
(17,561
|
)
|
(22,911
|
)
| ||||
NET
LOSS |
$ |
(1,093,913 |
) |
$ |
(742,860 |
) |
$ |
(1,836,773 |
) | |
BASIC
AND DILUTED LOSS PER COMMON SHARE:
|
$
|
(0.019
|
)
|
$
|
(1.65
|
)
| ||||
Weighted
Average Common Shares Outstanding
|
35,106,190
|
1,115,605
|
Name |
Age |
Position |
Since |
Jeff
Lieberman |
36 |
President,
Treasurer and
Chairman of the Board
of Directors |
February
2003 |
|
|||
Brian
Rosinski |
29
|
Secretary
and Director |
April
2003 |
|
|||
Timothy
Carnahan |
36 |
Director,
and Chairman Of
the Compensation Committee |
October
2003 |
KEY
CONSULTANTS | |
The
following lists the key consultants to WorldTeq as of March 5,
2004: | |
Name |
Field |
|
|
XCL
Partners |
Investment
Banking Consultant |
|
|
Chesapeake |
Investor
Relations Consultant |
|
|
There
are no other officers or significant
employees. |
Annual
Compensation |
Long
Term Compensation |
|||||||
Name
and Principal Position |
Year |
Salary
($) |
Bonus
($) |
Other
Annual Compensation ($) |
Restricted
Stock
Award(s) ($) |
Securities
Underlying
Options
(#) |
LTIP
Payouts ($) |
Other
($) |
|
|
|||||||
Jeff
Lieberman,
CEO,
President,
Treasurer
and
Chairman
of the
Board |
2003
2004
|
51,321
72,000
|
50,000
50,000
|
N/A
N/A
|
||||
|
|
|
|
|||||
Brian
Rosinski, (1)
Secretary
and
Director |
2002
2003 |
30,113
36,113
|
|
N/A
N/A |
||||
|
|
|
|
|||||
Tim
Carnahan, (2)
Director |
2002
2003 |
|
N/A
0 |
N/A
N/A |
Option/SAR
Grants in Last Fiscal Year |
||||
Individual
Grants |
||||
%
of Total |
||||
Number
of Securities |
Options/SARs |
|||
Underlying |
Granted
to |
Exercise
or |
||
Options/SARs |
Employees
in |
Base
Price |
Expiration | |
Name |
Granted
(#) |
Fiscal
Year |
($/Sh) |
Date |
Jeff
Lieberman, |
||||
CEO,
President, Treasurer and |
||||
Chairman
of the Board |
0 |
2,000,000 |
||
|
||||
Brian
Rosinski, |
|
|
||
Secretary
and Director |
0 |
350,000 |
||
Tim
Carnahan, (2) |
|
|
||
Director
|
0 |
0 |
Range
of Exercise prices |
Number |
Outstanding
Remaining Contractual Life |
|
| |
$
.05 |
3,000,000
|
2006 |
$
.05 |
2,000,000
|
N/A |
$
.27 |
850,000
|
2006 |
$
.10 |
1,000,000
|
N/A |
TITLE
OF CLASS |
NAME
AND ADDRESS |
Number
of |
%
OF |
|
|
|
|
Common |
Jeff
Lieberman |
171,000(1) |
0.83 |
|
5225
Pooks Hill Road, Apt A18S |
|
|
|
Bethesda,
MD 20814 |
|
|
|
|
|
|
Common |
Bruce
Bertman |
12,357,511 |
36.7% |
|
10101
Johns Drive |
|
|
|
Damascus,
MD 20872 |
|
|
|
|
|
|
|
|
|
|
Common |
All
Executive officers and |
|
|
|
Directors
and affiliates as a group |
266,000(2) |
34.57 |