-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O4e0GNe7kn6gltotKIwkuj3oxlmX+PZE4Jxz53ZvUFEVhQYyCiDVXRVJaXEy3UPu n+3+AoDQYCEzmHOWhwBpIw== 0001094328-03-000152.txt : 20030515 0001094328-03-000152.hdr.sgml : 20030515 20030515120639 ACCESSION NUMBER: 0001094328-03-000152 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POINT GROUP HOLDINGS INCORP CENTRAL INDEX KEY: 0001099234 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 541838089 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-29113 FILM NUMBER: 03702367 BUSINESS ADDRESS: STREET 1: 2240 SHELTER ISLAND DRIVE #202 CITY: SAN DIEGO STATE: CA ZIP: 92106 BUSINESS PHONE: 6192263536 FORMER COMPANY: FORMER CONFORMED NAME: SYCONET COM INC DATE OF NAME CHANGE: 20000119 10QSB 1 pointgroup10qsb051503woex.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO ______________ COMMISSION FILE NUMBER: 0-29113 POINT GROUP HOLDINGS, INCORPORATED (Exact name of registrant as specified in its charter) Nevada 54-1838089 (State or jurisdiction of incorporation (I.R.S. Employer or organization) Identification No.) 2240 Shelter Island Drive, Suite 202 San Diego, California 92106 (Address of principal executive offices) (Zip Code) Registrant's telephone number: (619) 269-8692 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) been subject to such filing requirements for the past 90 days. Yes X No . As of March 31, 2003, the Registrant had 283,571,449 shares of common stock issued and outstanding. Transitional Small Business Disclosure Format (check one): Yes No X. TABLE OF CONTENTS PART I - FINANCIAL INFORMATION PAGE ITEM 1. FINANCIAL STATEMENTS INDEPENDENT ACCOUNTANTS' REVIEW REPORT 3 CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2003 4 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND MARCH 31, 2002 5 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2003 AND MARCH 31, 2002 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7 ITEM 2. PLAN OF OPERATION 9 ITEM 3. CONTROLS AND PROCEDURES 18 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS 19 ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 19 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 20 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 20 ITEM 5. OTHER INFORMATION 20 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 21 SIGNATURE 21 CERTIFICATION 21 PART I - FINANCIAL INFORMATION ITEM 1. FINANCAL STATEMENTS. Beckstead and Watts, LLP Certified Public Accountants 3340 Wynn Road, Suite B Las Vegas, NV 89102 702.257.1984 702.362.0540 fax INDEPENDENT ACCOUNTANTS' REVIEW REPORT Board of Directors Point Group Holdings, Incorporated San Diego, California We have reviewed the accompanying balance sheet of Point Group Holdings, Incorporated, a Nevada corporation ("Company"), as of March 31, 2003 and the related statements of operations for the three-months ended March 31, 2003 and 2002 and statements of cash flows for the three-months ended March 31, 2003 and 2002. These financial statements are the responsibility of the Company's management. We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, which will be performed for the full year with the objective of expressing an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on my reviews, we are not aware of any material modifications that should be made to the accompanying financial statements referred to above for them to be in conformity with generally accepted accounting principles in the United States of America. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has had limited operations and has not commenced planned principal operations. This raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Beckstead and Watts, LLP Beckstead and Watts, LLP Las Vegas, Nevada May 13, 2003 POINT GROUP HOLDINGS, INCORPORATED CONSOLIDATED BALANCE SHEET MARCH 31, 2003 (Unaudited) ASSETS Current assets: Cash and equivalents $ 15,125 Accounts receivable 11,579 Inventory 23,467 Total current assets 50,171 Fixed assets, net 6,324 Other assets 10,438 66,933 LIABILITIES AND STOCKHOLDERS' (DEFICIT) Current liabilities: Accounts payable and accrued expenses 950,900 Notes payable 287,882 Other liabilities 19,904 Total current liabilities 1,258,686 Stockholders' (deficit): Common stock, $0.001 par value, 500,000,000 shares authorized, 283,571,449 shares issued and outstanding 283,571 Additional paid-in capital 6,781,733 Accumulated deficit (8,257,057) (1,191,753) 66,933 See accompanying notes to consolidated financial statements POINT GROUP HOLDINGS, INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended 2003 2002 Revenue $ 148,461 $ - Cost of revenues 68,355 - 80,106 - Expenses Selling, general and administrative expenses 9,949 7,659 Consulting fees 8,786 - Professional fees 35,035 - 53,770 7,659 Net operating income (loss) 26,336 (7,659) Other income (expense): Other expenses - (1,018) Forgiveness of debt 268,132 - Net income (loss) 294,468 (8,677) Earnings per sharedata: Weighted average number of common shares outstanding - basic and fully diluted 283,571,449 48,563,293 Earnings (loss) per share - basic and fully diluted - - See accompanying notes to consolidated financial statements POINT GROUP HOLDINGS, INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) March 31 March 31 2003 2002 Cash flows from operating activities Net income (loss) $ 294,468 $ (8,677) Adjustments to reconcile net income (loss) to cash used by operating activities: Shares issued for consulting services - 5,500 Depreciation expense 2,785 - Amortization of intangible asset 1,170 - Changes in assets and liabilities: Increase in accounts receivable (3,442) - Increase in inventory (2,246) - Decrease in other assets 1,170 - Decrease in other liabilities (313,346) - Decrease in notes payable (4,126) - Increase in accounts payable and accrued expenses 18,364 3,177 Net cash used by operating activities (5,203) - Cash flows from investing activities Purchase of fixed assets (2,202) - Net cash used by investing activities (2,202) - Cash flows from financing activities Net cash provided by financing activities - - Net decrease in cash (7,405) - Cash and equivalents- beginning 22,530 - Cash and equivalents - ending 15,125 - Supplemental disclosures: Non-cash transactions: Shares issued for consulting services - 5,500 Interest paid - - Income taxes paid - - See accompanying notes to consolidated financial statements POINT GROUP HOLDINGS, INCORPORATED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 - BASIS OF PRESENTATION The consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and have been prepared by the Company, without an audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2002 and notes thereto included in the Company's Form 10-KSB. The Company follows the same accounting policies in the preparation of interim reports. Results of operations for the interim periods are not indicative of annual results. NOTE 2 - GOING CONCERN The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Company has been primarily engaged substantially in financing activities and developing its product line, incurring substantial costs and expenses. As a result, the Company has an accumulated deficit as of March 31, 2003 of $8,257,057. The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating results. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities. NOTE 3 - FORGIVENESS OF DEBT On January 1, 2003, noteholders forgave the Company's debts and interest accrued totaling $268,132. NOTE 4 - RELATED PARTY TRANSACTIONS The Company does not lease or rent any property. Office services are provided without charge by a director. Such costs are immaterial to the financial statements and, accordingly, have not been reflected therein. The officers and directors of the Company are involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such persons may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. ITEM 2. PLAN OF OPERATION. The following discussion should be read in conjunction with the financial statements of the Registrant and notes thereto contained elsewhere in this report. Financial Overview. Since inception through March 31, 2003 the Registrant has incurred losses resulting in an accumulated deficit at March 31, 2003 of approximately $8.3 million. It did, however, realize net income of $294,468 for the three months ended March 31, 2003 (largely due to a gain on forgiveness of debt in the amount of $268,132). Currently, the Registrant during the period of October 1, 2002 through March 31, 2003 has begun to implement its business model by acquiring Naturally Safe Technologies, Inc. and its wholly owned subsidiary Prima International, LLC. Liquidity and Capital Resources. As of March 31, 2003 and 2002, the Registrant's cash position was $15,125 and $0 respectively. The Registrant has made no provision for any current or deferred U.S. federal, state income tax or benefit for any of the periods presented. Although the Registrant did realize net income for the three months ended March 31, 2003, it cannot provide an assurance that this will continue. Therefore, the Registrant cannot predict when it can use all the net operating loss carry-forwards, if ever, which begin to expire in 2017, and which may be subject to certain limitations imposed under Section 382 of the Internal Revenue Code of 1986. Due to the uncertainty concerning the Registrant's ability to realize the related tax benefit, it has provided a full valuation allowance on the deferred tax asset, which consists primarily of net operating loss carry-forwards ("NOL"). Because of an ownership change, the NOL's will be substantially reduced. Net cash used in operations was $5,203 during the three months ended March 31, 2003 compared to $0 during the comparable period of 2002. Net cash used by investing activities was $2,202 during the three months ended March 31, 2003 and $0 for the same period of 2002. Net decrease in cash was $7,405 during the three months ended March 31, 2003 compared to $0 during the comparable period of 2002. The Registrant's accompanying financial statements have been prepared assuming that the Registrant will continue as a going concern, which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. Since its inception, the Registrant has been primarily engaged in financing activities and developing its product line, incurring substantial costs and expenses. As a result, the Registrant has incurred an accumulated deficit through March 31, 2003 of $8,257,057, a decrease from $8,557,563 at December 31, 2002 due to net income during the quarter. It is expected that with the addition of acquisitions during 2003 the Registrant will develop cash flow in 2003. Inflation. The Registrant's management does not believe that inflation has had or is likely to have any significant impact on the Registrant's operations. Twelve-Month Plan of Operation. (a) Business Summary. The Registrant intends to function as a holding company which through its subsidiaries (wholly owned and partially owned) to provide management services to businesses that have an operating history and can substantiate future performance in their respective industries. The Registrant participates in companies in various fields of business by providing executive-level managerial assistance as well as arranging for and contributing capital investment. Potential ventures are evaluated based on the ability of the business to be viable and reach significant milestones set forth in their business plans through strong intellectual property rights and experienced management. The Registrant also continually seeks out and evaluates investment opportunities that have the potential of earning reasonable returns. The Registrant also has plans to raise capital specifically for the purpose of permitting it to start new ventures and make investments in portfolio companies that it believes are attractive based upon its investment criterion (see below for more details). The Registrant consults in ventures have at least a two-year operating history and a need for experienced managerial assistance. Identifying and developing each new business opportunity may require the Registrant to dedicate certain amounts of financial resources, management attention, and personnel, with no assurance that these expenditures will be recouped. Similarly, the selection of companies and the determination of whether a company offers a viable business plan, an acceptable likelihood of success and future profitability involves inherent risk and uncertainty. (b) Business Segments. Management Services (Current). The Registrant's primary business segment is performing management consulting services for emerging companies and realizing a return on from those services through management fess paid and stock appreciation. The Registrant provides these services through its wholly owned subsidiary AmCorp Group, Inc., a Nevada corporation formed in June 2002. The services to be provided are most often geared towards marketing, distribution, accounting, and finance. These management fees will be the primary source of revenue for the Registrant and are negotiated based upon the level of participation and the complexity of the services. However, generally the monthly management fees range from $5,000 and $20,000 per company and the payments are often a combination of stock and cash. Since the Registrant will receive a portion of its revenue in the form of stock, the revenue derived from stock appreciation is realized when the shares of stock held by the Registrant are judiciously sold either in the open market or by private transaction. As the Registrant expands its client base, the turnover of stock will increase to a level whereby the Registrant will have a monthly revenue stream from the strategic depletion of its stock portfolio. Any dividends received from the investment portfolio companies is considered ancillary to the investment return and is not relied upon for the Registrant's operations. The Registrant plans to obtain least three clients per year starting in 2003. These companies will be selected by the Registrant's management based upon their qualifications, both qualitative and quantitative. They must satisfy, at minimum, the Registrant's client selection criterion as well as be considered an attractive investment given the economic and capital market conditions present at the time of evaluation. Each company selected will enter into a two-year consulting agreement with the Registrant for the management services to be provided. Acquisition of Operating Company (Current) In October 2002 the Registrant acquired its first operating company, Naturally Safe Technologies, Inc. and its wholly owned subsidiary Prima International, LLC; these subsidiaries had revenue of $148,816 for the year ended December 31, 2002. Both Naturally Safe Technologies, Inc. and Prima International, LLC intend to continue to grow their sales of their five current products and the development of new products with the added management and capital from the parent company during 2003. Small-business Lending (Proposed Activity). The Registrant plans to enter into the small-business lending market by acting as a broker/underwriter for loans qualified emerging companies for between $25,000 and $5,000,000. The loans are generally used for accounts receivable, inventory, real estate, purchase order financing, rediscount, SBA Loans, construction, and equipment. The interest rates on the loans will vary based upon the financial qualifications of the borrowing entity and amount borrowed. The Registrant will receive a commission on brokered loans and interest revenue on any directly financed loans. The Registrant projects an anticipated average of $6,000,000 of brokered transactions and $500,000 of direct finance loans per year once its fully operational (fiscal year 2005). The small-business lending is not only intended to produce recurring income for the Registrant, but it will also provide a steady flow of potential clients that the Registrant can evaluate for client selection. The Registrant has several lending institutions that it will use for its brokered deals, with the primary lender being Alliance Bank in Culver City, California. The funding for this venture will come from the accumulated earnings of the Registrant and/or from capital raised in a public offering of the Registrant's common stock. (c) Management Criteria The Registrant has a management team strategy that allows it to evaluate its potential portfolio companies independent from each other to determine their suitability. This strategy imposes the following criterion on potential portfolio companies: 1. An operating history of at least two complete fiscal years, or net income of greater than $200,000 for the previous fiscal year, or future potential revenue that management considers important, or net assets of $1,000,000 or greater; 2. A need for experienced managerial assistance to further its business plan; and 3. A desire to realize growth by use of higher outside management. Risk Factors Connected with Plan of Operation. (a) Limited Prior Operations, History of Operating Losses, and Accumulated Deficit May Affect Ability of Registrant to Survive. The Registrant has had limited prior operations to date. Since the Registrant's principal activities recently have been limited to organizational activities, and seeking new business ventures, it has no recent record of any revenue-producing operations. Consequently, there is only a limited operating history upon which to base an assumption that the Registrant will be able to achieve its business plans. In addition, the Registrant has only limited assets. As a result, there can be no assurance that the Registrant will generate significant revenues in the future; and there can be no assurance that the Registrant will operate at a profitable level. Accordingly, the Registrant's prospects must be considered in light of the risks, expenses and difficulties frequently encountered in connection with the establishment of a new business. The Registrant has incurred losses from operations: $646,939 for the year ended December 31, 2001, $885,163 for the year ended December 31, 2002, and net income of $294,468 for the three months ended March 31, 2003. At March 31, 2003, the Registrant had an accumulated deficit of $8,257,057. This raises substantial doubt about the Registrant's ability to continue as a going concern. (b) Need for Additional Financing May Affect Operations and Plan of Business. Current funds available to the Registrant will not be adequate for it to be competitive in the areas in which it intends to operate. The Registrant's continued operations, as well as the implementation of its business plan, therefore will depend upon its ability to raise additional funds through bank borrowings, equity or debt financing. The Registrant estimates that it will need to raise up to approximately $500,000 over the remainder of the current fiscal year for these purposes. There is no guarantee that these funding sources, or any others, will be available in the future, or that they will be available on favorable terms. In addition, this funding amount may not be adequate for the Registrant to fully implement its business plan. Thus, the ability of the Registrant to continue as a going concern is dependent on additional sources of capital and the success of the Registrant's business plan. Regardless of whether the Registrant's cash assets prove to be inadequate to meet the Registrant's operational needs, the Registrant might seek to compensate providers of services by issuance of stock in lieu of cash. If funding is insufficient at any time in the future, the Registrant may not be able to take advantage of business opportunities or respond to competitive pressures, any of which could have a negative impact on the business, operating results and financial condition. In addition, if additional shares were issued to obtain financing, current shareholders may suffer a dilutive effect on their percentage of stock ownership in the Registrant. (c) No Assurance of Protection of Proprietary Rights May Affect Ability to Manufacture Products. The Registrant's success and ability to compete will be dependent in part on the protection of its patents, trademarks, trade names, service marks and other proprietary rights. The Registrant intends to rely on trade secret and copyright laws to protect the intellectual property that it plans to develop, but there can be no assurance that such laws will provide sufficient protection to the Registrant, that others will not develop a service that are similar or superior to the Registrant's, or that third parties will not copy or otherwise obtain and use the Registrant's proprietary information without authorization. In addition, certain of the Registrant's know-how and proprietary technology may not be patentable. The Registrant may rely on certain intellectual property licensed from third parties, and may be required to license additional products or services in the future, for use in the general operations of its business plan. The Registrant currently has no licenses for the use of any specific products. There can be no assurance that these third party licenses will be available or will continue to be available to the Registrant on acceptable terms or at all. The inability to enter into and maintain any of these licenses could have a material adverse effect on the Registrant's business, financial condition or operating results. There is a risk that some of the Registrant's products may infringe the proprietary rights of third parties. In addition, whether or not the Registrant's products infringe on proprietary rights of third parties, infringement or invalidity claims may be asserted or prosecuted against it and it could incur significant expense in defending them. If any claims or actions are asserted against the Registrant, it may be required to modify its products or seek licenses for these intellectual property rights. The Registrant may not be able to modify its products or obtain licenses on commercially reasonable terms, in a timely manner or at all. The Registrant's failure to do so could have a negative affect our business and adversely our revenues. (d) Product Errors Could Affect Impact Business of the Registrant. The Registrant develops products that are complex, and the products it produces may contain undetected errors when first introduced or when new updated versions are released to the marketplace. Despite the Registrant's rigorous product testing procedures and testing by current and potential customers, it is possible that errors will be found in new products or upgrades after commencement of commercial shipments. The occurrence of product defects or errors could result in adverse publicity, delay in product introduction, diversion of resources to remedy defects, loss of or a delay in market acceptance, claims by customers against us, or could cause us to incur additional costs, any of which could adversely affect our business. (e) Dependence on Outsourced Manufacturing May Affect Ability to Bring Products to Market. The risks of association with outsourced manufacturers are related to aspects of these firms' operations, finances and suppliers. The Registrant may suffer losses if the outside manufacturer fails to perform its obligations to manufacture and ship the product manufactured. These manufacturers' financial affairs may also affect the Registrant's ability to obtain product from these firms in a timely fashion should they fail to continue to obtain sufficient financing during a period of incremental growth. The Registrant intends to maintains a strong relationship with these manufacturers to ensure that any issues they may face are dealt with in a timely manner (f) No Assurance of Market Acceptance May Affect Ability to Sell Products. There can be no assurance that any products successfully developed by the Registrant or its corporate collaborators, if approved for marketing, will ever achieve market acceptance. The Registrant's products, if successfully developed, may compete with a number of traditional products manufactured and marketed by major e- commerce and technology companies, as well as new products currently under development by such companies and others. The degree of market acceptance of any products developed by the Registrant or its corporate collaborators will depend on a number of factors, including the establishment and demonstration of the efficacy of the product candidates, their potential advantage over alternative methods and reimbursement policies of government and third party payors. There can be no assurance that the marketplace in general will accept and utilize any products that may be developed by the Registrant or its corporate collaborators. (g) Substantial Competition May Affect Ability to Sell Products. The Registrant may experience substantial competition in its efforts to locate and attract customers for its products. Some competitors in its industry have greater experience, resources, and managerial capabilities than the Registrant and may be in a better position than the Registrant to obtain access to attract customers. There are a number of larger companies that will directly compete with the Registrant. Such competition could have a material adverse effect on the Registrant's profitability or viability. The Registrant's current and future competitors may develop products or systems that may be comparable or superior to those developed by it or adapt more quickly than it to new technologies, evolving industry standards or customer requirements. Increased competition could result in price reductions, reduced margins and loss of market share, any or all of which could have a material adverse effect on our business, financial condition, results of operations and prospects. (h) Government Regulations May Affect the Ability of the Registrant to Operate. Because the Registrant intends to sell its products internationally, as well as domestically, it must comply with federal laws that relate to the export and applicable foreign government laws regulating the import of our products. However, the federal government may rescind these approvals at any time. Additionally, the Registrant may apply for export approval, on a specific case by case basis, for specific future products. It is possible that the Registrant will not receive approval to export future products on a timely basis, on the basis we request, or at all. As a result of government regulation of its products, the Registrant may be at a disadvantage when competing for international sales with foreign companies not subject to these restrictions. Various aspects of the Registrant's business are subject to governmental regulation in the United States and other countries in which it operates. Failure to comply with such regulation may, depending upon the nature of the noncompliance, result in the suspension or revocation of any license or registration at issue, the termination or loss of any contract at issue or the imposition of contractual damages, civil fines or criminal penalties. The Registrant has experienced no material difficulties in complying with the various laws and regulations affecting its business. (i) Other External Factors May Affect Viability of Registrant. The industry of the Registrant in general is a speculative venture necessarily involving some substantial risk. There is no certainty that the expenditures to be made by the Registrant will result in commercially profitable business. The marketability of its products will be affected by numerous factors beyond the control of the Registrant. These factors include market fluctuations, and the general state of the economy (including the rate of inflation, and local economic conditions), which can affect peoples' spending. Factors that leave less money in the hands of potential customers of the Registrant will likely have an adverse effect on the Registrant. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Registrant not receiving an adequate return on invested capital. (j) Control by Officers and Directors Over Affairs of the Registrant May Override Wishes of Other Stockholders. The Registrant's officers and directors beneficially own approximately 58% of the outstanding shares of the Registrant's common stock. As a result, such persons, acting together, have the ability to exercise significant influence over all matters requiring stockholder approval. In addition, all decisions with respect to the management of the Registrant will be made exclusively by the officers and directors of the Registrant. Investors will only have rights associated with stockholders to make decisions that affect the Registrant. Accordingly, it could be difficult for the investors hereunder to effectuate control over the affairs of the Registrant. Therefore, the success of the Registrant, to a large extent, will depend on the quality of the directors and officers of the Registrant. Accordingly, no person should invest in the Registrant unless he is willing to entrust all aspects of the management of the Registrant to the officers and directors. (k) Loss of Any of Current Management Could Have Adverse Impact on Business and Prospects for Registrant. The Registrant's success is dependent upon the hiring and retention of key personnel. None of the Registrant's officers and directors currently has employment or non-competition agreements with the Registrant. Therefore, there can be no assurance that these personnel will remain employed by the Registrant. Should any of these individuals cease to be affiliated with the Registrant for any reason before qualified replacements could be found, there could be material adverse effects on the Registrant's business and prospects. The Registrant's success will also be highly dependent on its ability to attract and retain qualified employees. (l) Limitations on Liability, and Indemnification, of Directors and Officers May Result in Expenditures by Registrant. The bylaws of the Registrant and the Nevada Revised Statutes generally provide for permissive indemnification of officers and directors and the Registrant may provide indemnification under such provisions. Any indemnification of directors, officer, or employees, could result in substantial expenditures being made by the Registrant in covering any liability of such persons or in indemnifying them. (m) Potential Conflicts of Interest May Affect Ability of Officers and Directors to Make Decisions in the Best Interests of Registrant. The officers and directors have other interests to which they devote time, either individually or through partnerships and corporations in which they have an interest, hold an office, or serve on boards of directors, and each will continue to do so notwithstanding the fact that management time may be necessary to the business of the Registrant. As a result, certain conflicts of interest may exist between the Registrant and its officers and/or directors that may not be susceptible to resolution. All of the potential conflicts of interest will be resolved only through exercise by the directors of such judgment as is consistent with their fiduciary duties to the Registrant. It is the intention of management, so as to minimize any potential conflicts of interest, to present first to the board of directors of the Registrant, any proposed investments for its evaluation. (n) Non-Cumulative Voting May Affect Ability of Shareholders to Influence Registrant Decisions. Holders of the shares are not entitled to accumulate their votes for the election of directors or otherwise. Accordingly, the holders of a majority of the shares present at a meeting of shareholders will be able to elect all of the directors of the Registrant, and the minority shareholders will not be able to elect a representative to the Registrant's board of directors. (o) Absence of Cash Dividends May Affect Investment Value of Registrant's Stock. The board of directors does not anticipate paying cash dividends on the shares for the foreseeable future and intends to retain any future earnings to finance the growth of the Registrant's business. Payment of dividends, if any, will depend, among other factors, on earnings, capital requirements, and the general operating and financial condition of the Registrant, and will be subject to legal limitations on the payment of dividends out of paid-in capital. (p) No Assurance of Continued Public Trading Market and Risk of Low Priced Securities May Affect Market Value of Registrant's Stock. There has been only a limited public market for the common stock of the Registrant. The common stock of the Registrant is not currently traded on any exchange. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the market value of the Registrant's securities. In addition, the common stock is subject to the low-priced security or so called "penny stock" rules that impose additional sales practice requirements on broker- dealers who sell such securities. The Securities Enforcement and Penny Stock Reform Act of 1990 requires additional disclosure in connection with any trades involving a stock defined as a penny stock (generally, according to recent regulations adopted by the U.S. Securities and Exchange Commission, any equity security that has a market price of less than $5.00 per share, subject to certain exceptions), including the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith. The regulations governing low-priced or penny stocks sometimes limit the ability of broker- dealers to sell the Registrant's common stock and thus, ultimately, the ability of the investors to sell their securities in the secondary market. (q) Shares Eligible For Future Sale. Approximately 165,000,000 shares of common stock that are controlled directly or indirectly by affiliates of the Registrant have been issued in reliance on the private placement exemption under the Securities Act of 1933. Such shares will not be available for sale in the open market without separate registration except in reliance upon Rule 144 under the Securities Act of 1933. In general, under Rule 144 a person (or persons whose shares are aggregated) who has beneficially owned shares acquired in a non-public transaction for at least one year, including persons who may be deemed affiliates of the Registrant (as that term is defined under that rule) would be entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then outstanding shares of common stock, or the average weekly reported trading volume during the four calendar weeks preceding such sale, provided that certain current public information is then available. If a substantial number of the shares owned by these shareholders were sold pursuant to Rule 144 or a registered offering, the market price of the common stock could be adversely affected. Forward Looking Statements. The foregoing Plan of Operation contains "forward looking statements" within the meaning of Rule 175 of the Securities Act of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934, as amended, including statements regarding, among other items, the Registrant's business strategies, continued growth in the Registrant's markets, projections, and anticipated trends in the Registrant's business and the industry in which it operates. The words "believe," "expect," "anticipate," "intends," "forecast," "project," and similar expressions identify forward-looking statements. These forward- looking statements are based largely on the Registrant's expectations and are subject to a number of risks and uncertainties, certain of which are beyond the Registrant's control. The Registrant cautions that these statements are further qualified by important factors that could cause actual results to differ materially from those in the forward looking statements, including, among others, the following: reduced or lack of increase in demand for the Registrant's products, competitive pricing pressures, changes in the market price of ingredients used in the Registrant's products and the level of expenses incurred in the Registrant's operations. In light of these risks and uncertainties, there can be no assurance that the forward- looking information contained herein will in fact transpire or prove to be accurate. The Registrant disclaims any intent or obligation to update "forward looking statements." ITEM 3. CONTROLS AND PROCEDURES. Controls and Procedures. (a) Evaluation of disclosure controls and procedures. Within the 90 days prior to March 31, 2003, the Registrant carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 ("Exchange Act"). This evaluation was done under the supervision and with the participation of the Registrant's President. Based upon that evaluation, they concluded that the Registrant's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to satisfy the Registrant's disclosure obligations under the Exchange Act. (b) Changes in internal controls. There were no significant changes in the Registrant's internal controls or in its factors that could significantly affect those controls since the most recent evaluation of such controls. Critical Accounting Policies. The Securities and Exchange Commission recently issued Financial Reporting release No. 60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, the Registrant's most critical accounting policies include: non-cash compensation valuation that affects the total expenses reported in the current period. The methods, estimates and judgments the Registrant uses in applying these most critical accounting policies have a significant impact on the results the Registrant reports in its financial statements. PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Registrant is not a party to any material pending legal proceedings and, to the best of its knowledge, no such action by or against the Registrant has been threatened. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. The Registrant made the following sales of unregistered securities during the quarter ended on March 31, 2003: (a) The Registrant reported in its Form 10-KSB filed on April 15, 2003 that on December 10, 2002, the Registrant issued a total of 27,889,801 shares of common stock to a total of 64 individuals and companies (a majority of which are accredited investors in connection with the acquisition of all the issued and outstanding common stock of Naturally Safe Technologies, Inc. under an acquisition agreement dated October 31, 2002. The Registrant has subsequently determined that the actual issuance date of these shares was during the quarter ended March 31, 2003 (although they were accrued during the fiscal year ended December 31, 2002 since this transaction closed during that year). (b) The Registrant issued a total of 102,000,000 shares of common stock to the three directors of the company for services rendered during the fiscal year ended December 31, 2002, as follows: John Fleming (100,000,000); Matt Sawaqed (1,000,000); and Mark Crist (1,000,000). These shares were accrued on the financial statements of the Registrant for the fiscal year ended December 31, 2002 since the services were rendered during that year. No commissions were paid in connection with these sales. These sales were undertaken under Rule 506 of Regulation D under the Securities Act of 1933, as amended ("Act"), by the fact that: - the sales were made to sophisticated investors as defined in Rule 502; - the Registrant gave each purchaser the opportunity to ask questions and receive answers concerning the terms and conditions of the offering and to obtain any additional information which the Registrant possessed or could acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished; - at a reasonable time prior to the sale of securities, the Registrant advised each purchaser of the limitations on resale in the manner contained in Rule 502(d)2 of this section; - neither the Registrant nor any person acting on its behalf sold the securities by any form of general solicitation or general advertising; and - the Registrant exercised reasonable care to assure that each purchaser of the securities are not underwriters within the meaning of Section 2(11) of the Act in compliance with Rule 502(d). ITEM 3. DEFAULTS UPON SENIOR SECURITIES. Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 5. OTHER INFORMATION. In the balance sheets of the Registrant for the fiscal year ended December 31, 2002, as well as for the quarters ended June 30, 2002 and September 2002, it was reported that the company has shares of preferred stock authorized. However, since the Registrant redomicilied to the State of Nevada on April 12, 2002 it does not have any preferred stock authorized after that date. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. Exhibits. Exhibits included or incorporated by reference herein are set forth in the Exhibit Index. Reports on Form 8-K. The following reports on Form 8-K were filed during the first quarter of the fiscal year covered by this Form 10-QSB: (a) A Form 8-K filed on February 24, 2003 to report the resignation of the former certifying accountant for the Registrant. (b) An amended Form 8-K filed on March 18, 2003 to report that a new certifying accountant has been retained by the Registrant as of March 12, 2003. SIGNATURE Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Point Group Holdings, Incorporated Dated: May 14, 2003 By: /s/ John Fleming John Fleming, President CERTIFICATION I, John Fleming, certify that: 1. I have reviewed this quarterly report on Form 10-QSB of Point Group Holdings, Incorporated; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this quarterly report; 4. I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this quarterly report is being prepared; (b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and (c) presented in this quarterly report my conclusions about the effectiveness of the disclosure controls and procedures based on my evaluation as of the Evaluation Date; 5. I have disclosed, based on my most recent evaluation, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; 6. I have indicated in this quarterly report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Dated: May 14, 2003 /s/ John Fleming John Fleming, President EXHIBIT INDEX Number Description 2.1 Agreement and Plan of Merger between the Registrant and Syconet.com, Inc., a Delaware corporation, dated December 1, 2001 (incorporated by reference to Exhibit 2.1 of the Form 10-KSB filed on April 15, 2003). 2.2 Acquisition Agreement between the Registrant and shareholders of AmCorp Group, Inc., dated September 13, 2002 (incorporated by reference to Exhibit 2 of the Form 8-K filed on September 23, 2002). 2.3 Acquisition Agreement between the Registrant and shareholders of Naturally Safe Technologies, Inc., dated October 31, 2002 (incorporated by reference to Exhibit 2 of the Form 8-K filed on November 13, 2002). 3.1 Articles of Incorporation, dated December 19, 2001 (incorporated by reference to Exhibit 3.1 of the Form 10-KSB filed on April 15, 2003). 3.2 Certificate of Amendment to Articles of Incorporation, dated November 21, 2002 (incorporated by reference to Exhibit 3.2 of the Form 10-KSB filed on April 15, 2003). 3.3 Certificate of Amendment to Articles of Incorporation, dated March 5, 2003 (incorporated by reference to Exhibit 3.3 of the Form 10-KSB filed on April 15, 2003). 3.4 Bylaws (incorporated by reference to Exhibit 3.2 of the Form 10-SB filed on January 25, 2000). 4.1 Specimen Common Stock Certificate (incorporated by reference to Exhibit 4 of the Form 10-SB/A filed on March 21, 2000). 4.2 1997 Incentive Compensation Program, as amended (incorporated by reference to Exhibit 10.1 of the Form SB-2 POS filed on August 28, 2000). 4.3 Common Stock Purchase Warrant issued to Alliance Equities, Inc., dated May 21, 2000 (incorporated by reference to Exhibit 4.1 to the Form SB-2 filed on June 2, 2000). 4.4 Form of Redeemable Common Stock Purchase Warrant to be issued to investors in the private placement offering, dated January 27, 2000 (incorporated by reference to Exhibit 4.2 to the Form SB-2/A filed on June 27, 2000). 4.5 Redeemable Common Stock Purchase Warrant issued to Diversified Leasing Inc., dated May 1, 2000 (incorporated by reference to Exhibit 4.3 of the Form SB-2/A filed on June 27, 2000). 4.6 Redeemable Common Stock Purchase Warrant issued to John P. Kelly, dated August 14, 2000 (incorporated by reference to Exhibit 4.4 of the Form SB-2 POS filed on August 28, 2000). 4.7 Redeemable Common Stock Purchase Warrant for Frank N. Jenkins, dated August 14, 2000 (incorporated by reference to Exhibit 4.5 of the Form SB-2 POS filed on August 28, 2000). 4.8 Redeemable Common Stock Purchase Warrant for Ronald Jenkins, dated August 14, 2000 (incorporated by reference to Exhibit 4.6 of the Form SB-2 POS filed on August 28, 2000). 4.9 Non-Employee Directors and Consultants Retainer Stock Plan, dated July 1, 2001 (incorporated by reference to Exhibit 4.1 of the Form S-8 filed on February 6, 2002). 4.10 Consulting Services Agreement between the Registrant and Richard Nuthmann, dated July 11, 2001 (incorporated by reference to Exhibit 4.2 of the Form S-8 filed on February 6, 2002). 4.11 Consulting Services Agreement between the Registrant and Gary Borglund, dated July 11, 2001 (incorporated by reference to Exhibit 4.3 of the Form S-8 filed on February 6, 2002). 4.12 Consulting Services Agreement between the Registrant and Richard Epstein, dated July 11, 2001 (incorporated by reference to Exhibit 4.4 of the Form S-8 filed on February 6, 2002). 4.13 Amended and Restated Non-Employee Directors and Consultants Retainer Stock Plan, dated July 1, 2002 (incorporated by reference to Exhibit 2 of the Form S-8 filed on July 30, 2002). 10.1 Funding Agreement between the Registrant and Alliance Equities, Inc., dated December 16, 1999 (incorporated by reference to Exhibit 10.1 of the Form 10-SB filed on January 25, 2000). 10.2 Addendum to the between the Registrant and Alliance Equities, Inc., dated August 4, 2000 (incorporated by reference to Exhibit 10.6 of the Form SB-2 POS filed on August 28, 2000). 16.1 Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on August 24, 2001). 16.2 Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on March 7, 2002). 16.3 Letter on Change in Certifying Accountant (incorporated by reference to Exhibit 16 of the Form 8-K/A filed on April 29, 2003). 21 Subsidiaries of the Registrant (see below). 99.1 Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) (see below). 99.2 Patent issued to Donald V. Duffy, Jr., dated October 17, 2000 (incorporated by reference to Exhibit 99.2 of the Form 10-KSB filed on April 15, 2003). 99.3 Patent issued to Dennis A. Ferber, dated February 19, 1997 (incorporated by reference to Exhibit 99.3 of the Form 10- KSB filed on April 15, 2003). 99.4 Patent issued to Dennis Ferber, dated December 1, 1992 (incorporated by reference to Exhibit 99.4 of the Form 10- KSB filed on April 15, 2003). 99.5 Patent issued to Dennis A. Ferber, dated July 26, 1996 (incorporated by reference to Exhibit 99.5 of the Form 10- KSB filed on April 15, 2003). EX-21 3 pointex21051503.txt EX-21 SUBSIDIARIES OF THE REGISTRANT SUBSIDIARIES OF THE REGISTRANT AmCorp Group, Inc., a Nevada corporation Naturally Safe Technologies, Inc., a Nevada corporation EX-99.1 4 pointex991051503.txt EX-99.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES- OXLEY ACT OF 2002 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350) In connection with the Quarterly Report of Point Group Holdings, Incorporated ("Company") on Form 10-QSB for the quarter ended March 31, 2003 as filed with the Securities and Exchange Commission ("Report"), the undersigned, in the capacity and on the date indicated below, hereby certifies pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that to his knowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. Dated: May 14, 2003 /s/ John Fleming John Fleming, President -----END PRIVACY-ENHANCED MESSAGE-----