As filed with the Securities and Exchange Commission on December 11, 2003
                                                     Registration No. 333-109633


================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                 AMENDMENT NO. 1
                                       TO
                                    FORM S-3
                             REGISTRATION STATEMENT
                        UNDER THE SECURITIES ACT OF 1933
                            -------------------------


                            WEBFINANCIAL CORPORATION
             (Exact name of registrant as specified in its charter)

             Delaware                                            56-2043000
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                          Identification Number)

                               590 Madison Avenue
                                   32nd Floor
                            New York, New York 10022
                                 (212) 758-3232
               (Address, including zip code, and telephone number,
        including area code, of registrant's principal executive offices)
                          ----------------------------


                             Warren G. Lichtenstein
                      Chairman and Chief Executive Officer
                               590 Madison Avenue
                                   32nd Floor
                            New York, New York 10022
                                 (212) 758-3232
            (Name, address, including zip code, and telephone number,
             including area code, of agent for service of process)



                                   Copies to:
                               Adam Finerman, Esq.
                 Olshan Grundman Frome Rosenzweig & Wolosky LLP
                                 505 Park Avenue
                            New York, New York 10022
                                 (212) 753-7200
                         ------------------------------

        Approximate date of commencement of proposed sale to the public:
 As soon as practicable after the effective date of this registration statement.
                            -------------------------






            If the only  securities  being  registered  on this  Form are  being
offered pursuant to dividend or interest  reinvestment  plans,  please check the
following box. |_|

            If any of the  securities  being  registered  on this Form are to be
offered  on a  delayed  or  continuous  basis  pursuant  to Rule 415  under  the
Securities Act of 1933,  other than  securities  offered only in connection with
dividend or interest reinvestment plans, please check the following box. |X|

            If this  Form is  filed to  register  additional  securities  for an
offering  pursuant to Rule 462(b)  under the  Securities  Act,  please check the
following box and list the Securities Act  registration  statement number of the
earlier effective registration statement for the same offering. |_|

            If this Form is a  post-effective  amendment  filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act  registration   statement  number  of  the  earlier  effective  registration
statement for the same offering. |_|

            If delivery  of the  prospectus  is expected to be made  pursuant to
Rule 434, please check the following box. |_|


                         CALCULATION OF REGISTRATION FEE

========================================================================================
                                            Proposed Maximum
                                            Aggregate Offering          Amount Of
     Title of Shares to be Registered             Price(1)           Registration Fee
----------------------------------------------------------------------------------------
Common Stock, par value $.001 per share,      $10,000,000(2)              $809.00
issuable upon exercise of nontransferable
Rights...................................
========================================================================================


(1)  Estimated  solely for the purpose of calculating  the  registration  fee in
     accordance with Rule 457(o) under the Securities Act of 1933, as amended.
(2)  Represents   the  gross   proceeds   from  the  assumed   exercise  of  all
     nontransferable rights issued.
(3)  The  registration  fee was  previously  paid with the filing on October 10,
     2003.


            THE  REGISTRANT  HEREBY AMENDS THIS  REGISTRATION  STATEMENT ON SUCH
DATE OR  DATES AS MAY BE  NECESSARY  TO  DELAY  ITS  EFFECTIVE  DATE  UNTIL  THE
REGISTRANT SHALL FILE A FURTHER  AMENDMENT WHICH  SPECIFICALLY  STATES THAT THIS
REGISTRATION  STATEMENT  SHALL  THEREAFTER  BECOME  EFFECTIVE IN ACCORDANCE WITH
SECTION  8(A)  OF  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED,  OR  UNTIL  THE
REGISTRATION  STATEMENT  SHALL BECOME  EFFECTIVE ON SUCH DATE AS THE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.






            THE  INFORMATION  IN  THIS  PROSPECTUS  IS NOT  COMPLETE  AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE  SECURITIES  AND IS NOT  SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.


                 SUBJECT TO COMPLETION, DATED DECEMBER 11, 2003


PROSPECTUS
                            WEBFINANCIAL CORPORATION
                         ________ SHARES OF COMMON STOCK


            Our Board of Directors declared a dividend of rights to purchase our
common  stock  to  holders  of  record  as of  __________,  2003.  Through  this
prospectus,  we are offering the shares of common stock that rights  holders may
purchase upon exercising such subscription rights.

            You  received  one right for each share of common stock you owned on
the record  date of  _________,  2003.  Each right will  entitle you to purchase
_____ shares of our common stock at a subscription price of $______ per share.


            The rights are currently exercisable and will expire if they are not
exercised  by 5:00 p.m.,  New York City time,  on  _____________,  2003.  We may
extend the period for  exercising the rights in our sole  discretion,  but in no
event more than 30 additional  days.  If you want to exercise  your rights,  you
must submit your subscription documents to us before the expiration date. Rights
that are not  exercised  by the  expiration  date will  expire  and will have no
value.


            The  proceeds  from the  exercise of rights will be used for working
capital and general corporate purposes.


            Shares of our common stock are listed on the Nasdaq  Stock  Market's
SmallCap Market under the symbol "WEFN." On December __, 2003, the last reported
sales price for our common stock was $___ per share.


            AN  INVESTMENT  IN OUR  COMMON  STOCK  IS  VERY  RISKY.  YOU  SHOULD
CAREFULLY  CONSIDER  THE RISK  FACTORS  BEGINNING  ON PAGE 6 OF THIS  PROSPECTUS
BEFORE EXERCISING YOUR SUBSCRIPTION RIGHTS.

            NEITHER  THE  SECURITIES  AND  EXCHANGE  COMMISSION  NOR  ANY  STATE
SECURITIES  COMMISSION  HAS  APPROVED  OR  DISAPPROVED  OF THESE  SECURITIES  OR
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

                             -----------------------

               The date of this prospectus is ____________, 2003.






                                TABLE OF CONTENTS


                                                                            Page
                                                                            ----


Questions and Answers about this Offering......................................1

Risk Factors...................................................................6

Our Company...................................................................10

Use of Proceeds...............................................................11

Capitalization................................................................11

Price Range of Common Stock...................................................12

The Offering..................................................................12

Material United States Federal Income Tax Consequences........................20

Plan of Distribution..........................................................21

Legal Matters.................................................................22

Experts.......................................................................22

Where You Can Find More Information...........................................22

Forward-Looking Statements....................................................23

                                       i




            You should rely only on the  information in this  prospectus and the
additional  information  described  under the  heading  "Where You Can Find More
Information."  We have not  authorized  any  other  person to  provide  you with
different  information.  If anyone  provides you with different or  inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any  jurisdiction  where the offer or sale is not  permitted.  You
should  assume  that  the  information  in this  prospectus  and the  additional
information  described  under the heading "Where You Can Find More  Information"
were  accurate  on the date on the  front  cover  of the  prospectus  only.  Our
business,  financial  condition,  results of  operations  and prospects may have
changed since that date.

                   QUESTIONS AND ANSWERS ABOUT THIS OFFERING

            This  section   highlights   information   contained   elsewhere  or
incorporated by reference in this prospectus.  This section does not contain all
of the important  information  that you should consider  before  exercising your
subscription  rights and  investing  in our common  stock.  You should read this
entire prospectus carefully.

Q:    WHAT ARE WE OFFERING IN THIS PROSPECTUS?

A:    Our  Board  of  Directors  has  declared  a  dividend  of  nontransferable
      subscription  rights to purchase shares of our common stock to each of our
      stockholders of record on _____________, 2003. Through this prospectus, we
      are  offering  the  shares of common  stock  that  holders  of rights  may
      purchase upon exercise of their rights.

Q:    WHO MAY PARTICIPATE IN THIS OFFERING?

A:    Only  holders of record of our common  stock as of  ___________,  2003 are
      entitled to participate  in this  offering.  Any attempt to participate in
      this  offering  by anyone  that was not a holder  of record of our  common
      stock on such date will be null and void.

Q:    WHAT IS A SUBSCRIPTION RIGHT?

A:    Each subscription  right is a right to purchase _____ shares of our common
      stock  and  carries  with  it  a  basic  subscription   privilege  and  an
      over-subscription privilege.

Q:    WHAT IS THE BASIC SUBSCRIPTION PRIVILEGE?

A:    The basic  subscription  privilege of each right  entitles you to purchase
      _____  shares of our common  stock at a  subscription  price of $_____ per
      share. You may exercise any number of your subscription rights, or you may
      choose not to exercise any subscription rights. We will not distribute any
      fractional shares or pay cash in place of fractional  shares,  but we will
      round down the  aggregate  number of shares you are entitled to receive to
      the nearest whole number.

Q:    WHAT IS THE OVER-SUBSCRIPTION PRIVILEGE?

A:    We do not expect that all of our  stockholders  will exercise all of their
      basic subscription  rights. By extending  over-subscription  privileges to
      our stockholders, we are providing stockholders that exercise all of their
      basic  subscription  privileges  with the  opportunity  to purchase  those
      shares that are not purchased by other stockholders. The over-subscription
      privilege of each right  entitles  you, if you fully  exercise  your basic
      subscription  privilege,  to subscribe for additional shares of our common
      stock  unclaimed by other holders of rights in this offering,  at the same
      subscription price per share.

Q:    WILL I ALWAYS RECEIVE THE FULL NUMBER OF SHARES THAT I OVER-SUBSCRIBE FOR?

A:    If an  insufficient  number of shares is  available  to fully  satisfy all
      over-subscription   privilege  requests,  the  available  shares  will  be
      distributed  proportionately  among  rights  holders who  exercised  their
      over-subscription  privilege  based on the  number of shares  each  rights
      holder subscribed for under the basic subscription privilege.

      Also,  pursuant  to the terms of our  charter,  you will not be allowed to
      subscribe for a number of shares that would increase your ownership of our
      shares of common stock to 4.9% or above of our then outstanding  shares of







      common  stock,  unless you already owned at least 5.0% of our common stock
      on the date such restriction became effective.

      The  subscription  agent will return any excess  payments by mail  without
      interest or deduction  promptly after the  expiration of the  subscription
      period.

Q:    HOW LONG WILL THE SUBSCRIPTION PERIOD LAST?


A:    You  will be able to  exercise  your  subscription  rights  only  during a
      limited  period.  If you do not exercise your  subscription  rights before
      5:00 p.m., New York City time, on  _____________,  2003, your subscription
      rights will expire. We may, in our sole discretion,  decide to extend this
      offering  until some later time,  but in no event more than 30  additional
      days.  If we extend  the  expiration  date,  we will give oral or  written
      notice  to the  subscription  agent on or  before  such  expiration  date,
      followed by a press  release no later than 9:00 a.m.,  New York City time,
      on the next business day after the previously scheduled expiration date.


Q:    AM I REQUIRED TO SUBSCRIBE IN THIS OFFERING?

A:    No.

Q:    WHAT HAPPENS IF I CHOOSE NOT TO EXERCISE MY SUBSCRIPTION RIGHTS?

A:    You will retain your current  number of shares of common stock even if you
      do not exercise your  subscription  rights.  If you choose not to exercise
      your subscription rights, then the percentage of our common stock that you
      own may  decrease.  The  magnitude  of the  reduction  of your  percentage
      ownership  will  depend  upon  the  extent  to  which  you and  the  other
      stockholders exercise your rights.

Q:    HOW DO I EXERCISE MY SUBSCRIPTION RIGHTS?

A:    You may  exercise  your  subscription  rights by properly  completing  and
      signing your  subscription  certificate,  and delivering it and the rights
      certificate,  with full payment of the  subscription  price for the shares
      you  are   subscribing   (including   any   amounts   in  respect  of  the
      over-subscription privilege), to the subscription agent on or prior to the
      expiration  date. If you use the mail, we recommend  that you use insured,
      registered  mail,  return  receipt  requested.  If you cannot deliver your
      rights  certificate to the subscription  agent on time, you may follow the
      guaranteed delivery procedures  described under "The Offering - Guaranteed
      Delivery Procedures."

Q:    WHAT  SHOULD I DO IF I WANT TO  EXERCISE  MY  SUBSCRIPTION  RIGHTS  BUT MY
      SHARES ARE HELD IN THE NAME OF MY BROKER, CUSTODIAN BANK OR OTHER NOMINEE?

A:    If you hold shares of our common stock through a broker, custodian bank or
      other nominee, we will ask your broker, custodian bank or other nominee to
      notify you of this  offering.  If you wish to exercise  your  subscription
      rights, you will need to have your broker, custodian bank or other nominee
      act for you. To indicate your decision,  you should complete and return to
      your broker, custodian bank or other nominee the form entitled "Beneficial
      Owner  Election  Form." You  should  receive  this form from your  broker,
      custodian  bank or other nominee with the other  offering  materials.  You
      should contact your broker, custodian bank or other nominee if you believe
      you are entitled to participate in this offering but you have not received
      this form.

Q:    WHAT SHOULD I DO IF I WANT TO EXERCISE MY  SUBSCRIPTION  RIGHTS AND I AM A
      STOCKHOLDER IN A FOREIGN COUNTRY OR IN THE ARMED SERVICES?

A:    The subscription  agent will mail subscription  certificates to you if you
      are a rights  holder whose  address is outside the United States or if you
      have an Army Post Office or a Fleet Post Office address.  To exercise your
      rights,  you must notify the subscription  agent on or prior to 5:00 p.m.,
      New York City time, on ____________,  2003, and take all other steps which
      are necessary to exercise your rights, on or prior to that time. If you do
      not follow these procedures prior to the expiration date, your rights will
      expire.

                                       2





Q:    WILL  I BE  CHARGED  A  SALES  COMMISSION  OR A FEE BY  WEBFINANCIAL  IF I
      EXERCISE MY SUBSCRIPTION RIGHTS?

A:    No. We will not charge a brokerage  commission or a fee to rights  holders
      for exercising their subscription  rights.  However,  if you exercise your
      subscription  rights through a broker or nominee,  you will be responsible
      for any fees charged by your broker or nominee.

Q:    WHAT ARE THE UNITED STATES FEDERAL INCOME TAX  CONSEQUENCES  OF EXERCISING
      MY SUBSCRIPTION RIGHTS AS A HOLDER OF COMMON STOCK?

A:    A holder of common stock  generally will not recognize  income or loss for
      federal income tax purposes in connection  with the receipt or exercise of
      subscription  rights.  We urge you to consult  your own tax  advisor  with
      respect to the  particular tax  consequences  of this offering to you. See
      "Material United States Federal Income Tax Consequences."

Q:     HOW MANY SHARES MAY I PURCHASE?

A:     You will receive one nontransferable subscription right for each share of
       common stock that you owned at the close of business on __________, 2003,
       the record date. Each right contains the basic subscription privilege and
       the  over-subscription   privilege.  Each  basic  subscription  privilege
       entitles  you to purchase  _____  shares of our common stock for $___ per
       share.  Fractional  shares  will  be  eliminated  by  rounding  down  the
       aggregate  number of shares you are  entitled  to receive to the  nearest
       whole  number.  See  "The  Offering  -  Subscription  Privileges  - Basic
       Subscription Privilege." The over-subscription  privilege entitles you to
       subscribe  for  additional  shares  of  our  common  stock  at  the  same
       subscription  price per share on a pro-rata basis to the number of shares
       you purchased under your basic subscription privilege, provided you fully
       exercise  your  basic   subscription   privilege.   "Pro-rata"  means  in
       proportion  to the number of shares of our common  stock that you and the
       other  rights  holders  electing  to  exercise  their   over-subscription
       privileges have purchased by exercising the basic subscription privileges
       on their  holdings  of common  stock.  See "The  Offering -  Subscription
       Privileges - Over-Subscription Privilege." However, pursuant to the terms
       of our  charter,  you will not be  allowed to  subscribe  for a number of
       shares that would  increase your  ownership of our shares of common stock
       to 4.9% or above of our then outstanding  shares of common stock,  unless
       you  already  owned at least  5.0% of our  common  stock on the date such
       restriction became effective.

Q:     WHEN  WILL I  RECEIVE  CERTIFICATES  FOR  THE  SHARES  PURCHASED  IN THIS
       OFFERING?

A:     We will issue certificates representing shares purchased in this offering
       to you or to the Depository Trust Company on your behalf, as the case may
       be, as soon as  practicable  after  the  expiration  of the  subscription
       period  and  after all pro rata  allocations  and  adjustments  have been
       completed.  We will not be able to  calculate  the number of shares to be
       issued to each exercising  holder until 5:00 p.m., New York City time, on
       the third  business day after the  expiration  date,  which is the latest
       time by which  subscription  rights  certificates may be delivered to the
       subscription  agent under the guaranteed  delivery  procedures  described
       under "The Offering - Guaranteed Delivery Procedures."

Q:     IF THIS  OFFERING  IS NOT  COMPLETED,  WILL MY  SUBSCRIPTION  PAYMENT  BE
       REFUNDED TO ME?

A:     Yes.  The  subscription  agent will hold all funds it  receives in escrow
       until completion of this offering. If this offering is not completed, the
       subscription   agent  will  return  promptly,   without   interest,   all
       subscription payments.

Q:     HOW WAS THE SUBSCRIPTION PRICE ESTABLISHED?


A:     The subscription price was established by our board of directors based on
       the  recommendation  of a special  committee  of  independent  directors,
       comprised of Howard  Mileaf,  Joseph L. Mullen and Mark E.  Schwarz.  The
       committee  was   established   September  3,  2003  for  the  purpose  of
       considering  potential financing  transactions for us, such as the rights
       offering.  The factors considered  included the historic and then current
       market price of our common stock, our business prospects,  our recent and
       anticipated  operating  results,  general  conditions  in the  securities
       markets, our need for capital,  alternatives  available to us for raising
       capital,   the  amount  of  proceeds  desired,  the  pricing  of  similar
       transactions, the liquidity of our common stock, and the level of risk to
       our investors.


                                       3





Q:     ARE THERE RISKS IN EXERCISING MY SUBSCRIPTION RIGHTS?

A:     Yes. The exercise of your rights involves  risks.  Exercising your rights
       means  buying  additional  shares  of our  common  stock  and  should  be
       considered as carefully as you would consider any other equity investment
       in our company.  Among other things,  you should  carefully  consider the
       risks described under the heading "Risk Factors," beginning on page 6.

Q:     AFTER I EXERCISE MY SUBSCRIPTION  RIGHTS, CAN I CHANGE MY MIND AND CANCEL
       MY PURCHASE?

A:     No. Once you send in your subscription certificate and payment you cannot
       revoke the exercise of your subscription  rights, even if you later learn
       information  about us that you consider to be unfavorable and even if the
       market price of our common  stock is below the  subscription  price.  You
       should not exercise your subscription  rights unless you are certain that
       you  wish to  purchase  additional  shares  of our  common  stock  at the
       subscription price. See "The Offering - No Revocation."

Q:     MAY I TRANSFER MY  SUBSCRIPTION  RIGHTS IF I DO NOT WANT TO PURCHASE  ANY
       SHARES?

A:     No. Should you choose not to exercise your subscription  rights,  you may
       not  sell,  give  away  or  otherwise  transfer  your  rights.   However,
       subscription  rights  will  be  transferable  by  operation  of law  (for
       example, upon death of the recipient).

Q:     WHY IS WEBFINANCIAL ENGAGING IN THIS OFFERING?

A:     We are making this offering in order to raise approximately $10.0 million
       (less offering  expenses) in new capital to be used as additional working
       capital for our business and general corporate purposes.

       Our board of  directors  believes  that  this  offering  will  ultimately
       strengthen our financial condition through generating additional cash and
       increasing our stockholders'  equity. We want to give you the opportunity
       to  participate  in this fund raising  effort and to purchase  additional
       shares of our common stock.

Q:     WHAT IS THE BOARD OF DIRECTORS' RECOMMENDATION REGARDING THIS OFFERING?

A:     Our board of directors is not making any recommendation as to whether you
       should  exercise  your  subscription  rights.  You are urged to make your
       decision based on your own assessment of this offering and our company.

Q:     HOW MANY  SHARES OF OUR  COMMON  STOCK  WILL BE  OUTSTANDING  AFTER  THIS
       OFFERING?

A:     As of September 2, 2003, we had  4,366,866  shares of common stock issued
       and outstanding.  We expect to issue up to an additional _________ shares
       in this offering.  After this offering,  we anticipate  that we will have
       _________ shares of common stock outstanding.  Depending on the number of
       subscriptions we receive from stockholders, this offering could result in
       Steel  Partners  II,  L.P. ownership  increasing  to over 50%.  See "Risk
       Factors" beginning on page 6.

Q:     WILL THE NEW  SHARES BE  INITIALLY  LISTED ON THE NASDAQ  STOCK  MARKET'S
       SMALLCAP MARKET AND TREATED LIKE OTHER SHARES?

A:     Yes.  Our common stock is listed on the Nasdaq  Stock  Market's  SmallCap
       Market under the symbol "WEFN." We expect that the shares of common stock
       issued in this offering will also be listed on the Nasdaq Stock  Market's
       SmallCap Market under the same symbol.

Q:     HOW WILL THIS  OFFERING  AFFECT STEEL  PARTNERS'  OWNERSHIP OF OUR COMMON
       STOCK?

A:     Steel Partners II, L.P.  beneficially owns 1,737,345 shares of our common
       stock,  representing  approximately 39.8% of our outstanding common stock
       and of the voting power of our outstanding voting securities.

       If no holders of subscription  rights other than Steel Partners  exercise
       their rights in this  offering,  Steel  Partners  may, as a result of its
       over-subscription privilege, own _____ shares, representing approximately
       ____% of our  outstanding  common  stock and of the  voting  power of our
       outstanding voting securities. If all rights holders exercise their basic
       subscription  privileges  in full,  then Steel  Partners will continue to
       beneficially  own  approximately  39.8% of our  common  stock  and of the
       voting power of our outstanding voting securities.

                                       4






       Warren Lichtenstein, our Chairman and Chief Executive Officer, owns 2,500
       shares of our common stock. Mr. Lichtenstein, as the sole managing member
       of the general  partner of Steel  Partners  II,  L.P.,  is deemed to also
       beneficially  own the shares of common stock owned by Steel  Partners II,
       L.P.  Mr.  Lichtenstein  has  indicated  to us his present  intention  to
       exercise the rights both Steel Partners II, L.P. and he receive. However,
       there is no written  commitment to exercise  such rights and,  therefore,
       there can be no assurance that such rights will be exercised.


Q:     CAN THE BOARD OF DIRECTORS WITHDRAW THIS OFFERING?

A:     Yes. Our board of directors  may decide to withdraw  this offering at any
       time for any reason.  If we withdraw this  offering,  any money  received
       from  subscribing   stockholders  will  be  refunded  promptly,   without
       interest. See "The Offering - Withdrawal and Amendment."

Q:     WHAT SHOULD I DO IF I HAVE OTHER QUESTIONS OR NEED ASSISTANCE?

A:     If you have questions or need assistance, please contact _______________,
       the information agent, or  ____________________,  the subscription agent,
       for this offering, at the following addresses and telephone numbers:


                             The Information Agent:
                             _______________________
                             _______________________
                             _______________________

                                       or


                             The Subscription Agent:
                             _______________________
                             _______________________
                             _______________________


      For a more  complete  description  of this  offering,  see "The  Offering"
      beginning on page 12.

                                       5




                                  RISK FACTORS

            THE  EXERCISE OF YOUR  SUBSCRIPTION  RIGHTS FOR SHARES OF OUR COMMON
STOCK  INVOLVES  A HIGH  DEGREE  OF RISK.  YOU  SHOULD  CAREFULLY  CONSIDER  THE
FOLLOWING FACTORS AND OTHER  INFORMATION  PRESENTED OR INCORPORATED BY REFERENCE
IN THIS  PROSPECTUS  BEFORE DECIDING TO INVEST IN OUR COMMON STOCK. IF WE DO NOT
SUCCESSFULLY  ADDRESS ANY ONE OR MORE OF THE RISKS DESCRIBED BELOW,  THERE COULD
BE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL  CONDITION,  OPERATING RESULTS AND
BUSINESS. WE CANNOT ASSURE YOU THAT WE WILL SUCCESSFULLY ADDRESS THESE RISKS.


RISKS RELATING TO THIS OFFERING:

THE  SUBSCRIPTION  PRICE PER SHARE IS NOT AN INDICATION OF OUR VALUE AND YOU MAY
NOT BE ABLE TO SELL SHARES  PURCHASED  UPON THE  EXERCISE  OF YOUR  SUBSCRIPTION
RIGHTS AT A PRICE EQUAL TO OR GREATER THAN THE SUBSCRIPTION PRICE.

            The  subscription  price per  share  does not  necessarily  bear any
relationship to the book value of our assets, operations,  cash flows, earnings,
financial  condition or any other  established  criteria for value. As a result,
you should not consider the  subscription  price as an indication of the current
value of our company or our common stock.  We cannot assure you that you will be
able to sell shares  purchased  in this  offering at a price equal to or greater
than the subscription price.

[IF PRICED AT A DISCOUNT]  THIS OFFERING MAY CAUSE THE PRICE OF OUR COMMON STOCK
TO DECREASE IMMEDIATELY, AND THIS DECREASE MAY CONTINUE.

            The  subscription  price per share equals ___% of the current market
price of our common  stock  determined  by  averaging  the closing  price of our
common  stock on Nasdaq for the ____  preceding  trading days ending on _______,
2003.  This  discount,  along  with the number of shares we propose to issue and
ultimately will issue if this offering is completed,  may result in an immediate
decrease in the market  value of our common  stock.  This  decrease may continue
after the completion of this offering.

AS A HOLDER  OF  COMMON  STOCK,  YOU MAY  SUFFER  SIGNIFICANT  DILUTION  OF YOUR
PERCENTAGE OWNERSHIP OF OUR COMMON STOCK.

            If you do not  exercise  your  subscription  rights  and  shares are
purchased by other stockholders in this offering,  your proportionate voting and
ownership  interest will be reduced and the percentage that your original shares
represent of our expanded equity after exercise of the subscription  rights will
be diluted.  For example,  if you own 200,000  shares of our common stock before
this offering,  or approximately  4.58% of our outstanding common stock, and you
exercise none of your subscription  rights while all other  subscription  rights
are exercised by other  stockholders,  then your  percentage  ownership would be
reduced  to  approximately  ____%.  The  magnitude  of  the  reduction  of  your
percentage  ownership  will  depend upon the extent to which you  exercise  your
subscription rights.

ONCE YOU EXERCISE  YOUR  SUBSCRIPTION  RIGHTS,  YOU MAY NOT REVOKE SUCH EXERCISE
EVEN IF THERE IS A DECLINE IN OUR COMMON STOCK PRICE.

            The public  trading  market  price of our common  stock may  decline
after you elect to exercise your subscription  rights. If that occurs,  you will
have  committed  to buy shares of common  stock at a price above the  prevailing
market price and you will have an immediate unrealized loss. Moreover, we cannot
assure you that following the exercise of  subscription  rights you will be able
to sell your  shares of common  stock at a price  equal to or  greater  than the
subscription price.

YOU MAY NOT REVOKE THE  EXERCISE  OF YOUR RIGHTS EVEN IF WE DECIDE TO EXTEND THE
EXPIRATION DATE OF THE SUBSCRIPTION PERIOD.

            We may, in our sole  discretion,  extend the expiration  date of the
subscription  period,  but in no event more than 30 additional days.  During any
potential  extension  of time,  our common  stock  price may  decline  below the
subscription  price and result in a loss on your investment upon the exercise of
rights to acquire shares of our common stock. If the expiration date is extended
after you send in your subscription forms and payment,  you still may not revoke
or change your exercise of rights.


                                       6






YOU WILL NOT RECEIVE INTEREST ON SUBSCRIPTION FUNDS RETURNED TO YOU.

            If we cancel this offering,  neither we nor the  subscription  agent
will have any  obligation  with  respect to the  subscription  rights  except to
return, without interest, any subscription payments to you.

THE  SUBSCRIPTION  RIGHTS  ARE NOT  TRANSFERABLE  AND THERE IS NO MARKET FOR THE
SUBSCRIPTION RIGHTS.

            You may not sell, give away or otherwise  transfer your subscription
rights.  The  subscription  rights are only  transferable  by  operation of law.
Because  the  subscription  rights are  non-transferable,  there is no market or
other  means  for  you  to  directly  realize  any  value  associated  with  the
subscription  rights.  You must  exercise  the  subscription  rights and acquire
additional shares of our common stock to realize any value.

YOUR  PARTICIPATION  IN THE OFFERING IS NOT ASSURED SINCE WE MAY TERMINATE  THIS
OFFERING.

            Once you exercise your subscription  rights,  you may not revoke the
exercise for any reason unless we amend this offering. If we decide to terminate
the offering,  we will not have any obligation with respect to the  subscription
rights except to return any subscription payments, without interest.

YOU NEED TO ACT PROMPTLY AND FOLLOW  SUBSCRIPTION  INSTRUCTIONS,  OTHERWISE YOUR
SUBSCRIPTION MAY BE REJECTED.

            Stockholders who desire to purchase shares in this offering must act
promptly to ensure that all required forms and payments are actually received by
the subscription agent prior to 5:00 p.m., New York City time, on the expiration
date. If you fail to complete and sign the required  subscription forms, send an
incorrect   payment  amount,  or  otherwise  fail  to  follow  the  subscription
procedures that apply to your desired  transaction,  the subscription agent may,
depending on the  circumstances,  reject your  subscription  or accept it to the
extent of the payment received. Neither we nor our subscription agent undertakes
to contact you  concerning,  or attempt to correct,  an  incomplete or incorrect
subscription form or payment. We have the sole discretion to determine whether a
subscription exercise properly follows the subscription procedures.

YOU MAY NOT RECEIVE ALL OF THE SHARES YOU SUBSCRIBE OR OVER-SUBSCRIBE FOR.

            If an  insufficient  number of shares is available to fully  satisfy
all  over-subscription   privilege  requests,   the  available  shares  will  be
distributed   proportionately   among  rights   holders  who   exercised   their
over-subscription  privilege  based on the number of shares each  rights  holder
subscribed for under the basic  subscription  privilege.  Also,  pursuant to the
terms of our  charter,  you will not be  allowed  to  subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.


RISKS RELATING TO OUR BUSINESS:

CHANGES IN INTEREST RATES COULD HAVE A NEGATIVE EFFECT ON OUR OPERATING RESULTS.

            Our earnings depend substantially on "rate differentials," which are
the differences between the rates we earn on loans, securities and other earning
assets,  and the interest rates we pay on deposits and other  borrowings.  These
rates are  highly  sensitive  to many  factors  which are  beyond  our  control,
including general economic  conditions and the policies of various  governmental
and regulatory authorities. Changes in interest rates impact the level of loans,
deposits  and  investments,  the credit  profile of  existing  loans,  the rates
received on loans and securities and the rates paid on deposits and  borrowings.
Significant  fluctuations  in interest rates may adversely  affect our financial
condition and results of operations.

SIGNIFICANT  NEW LAWS OR CHANGES IN EXISTING LAWS OR MONETARY  POLICY  AFFECTING
THE  BANKING  INDUSTRY  COULD HAVE A MATERIAL  ADVERSE  AFFECT ON OUR RESULTS OF
OPERATIONS.


            Our banking subsidiary,  WebBank, is subject to extensive government
regulation  and  supervision  under various  state and federal  laws,  rules and
regulations, primarily under the rules and regulations of the FDIC and the State
of Utah  Department of Financial  Institutions.  These laws and  regulations are
designed primarily to protect depositors, borrowers, and the Bank Insurance Fund
of the FDIC.  WebBank's  regulators  maintain  significant  authority  to impose
requirements  on  WebBank's  operations,  such as  limiting  its  activities  or
mandating  that it hold increased  capital.  For example,  WebBank's  regulators
recently required WebBank to obtain the prior non-objection of the FDIC and Utah
Department of Financial  Institutions before developing new lines of activity or
expanding  existing  lines of activity,  as well as before making changes to its
board of directors or senior executive  officers.  Objections to WebBank's lines
of business,  enactment of  significant  new laws,  changes in existing  laws or
repeals of existing laws may cause WebBank's  results to change  materially.  In
addition,  federal  monetary  policy,  particularly  as implemented  through the
Federal  Reserve  System,  such as  changes  in  interest  rates,  could  affect
WebBank's financial  condition.  Changes in interest rates can affect the number

                                       7





of loans  WebBank  originates,  as well as the  value  of its  loans  and  other
interest-earning  assets and the  ability to realize  gains on the sale of those
assets and  liabilities.  Prevailing  interest  rates also  affect the extent to
which  borrowers  prepay loans owned by WebBank.  When interest rates  increase,
borrowers  are less likely to prepay  their loans,  and vice versa.  WebBank may
then be  required  to  invest  funds  generated  by  those  prepayments  at less
favorable interest rates.  Increases in interest rates could hurt the ability of
borrowers who have loans with floating  interest  rates to meet their  increased
payment  obligations.  If those  borrowers were not able to make their payments,
then  WebBank  could suffer  losses,  and its level of  performing  assets would
decline.


WE  FACE  SUBSTANTIAL  COMPETITION  IN OUR  INDUSTRY  SECTOR  FROM  BANKING  AND
FINANCIAL  INSTITUTIONS  THAT HAVE LARGER AND GREATER  FINANCIAL  AND  MARKETING
CAPABILITIES, WHICH MAY HINDER OUR ABILITY TO COMPETE SUCCESSFULLY.

            The  banking  and  financial  services  businesses  in our  lines of
business are highly competitive.  The increasingly  competitive environment is a
result of changes in  regulation,  changes in  technology  and product  delivery
systems,  and the accelerating  pace of consolidation  among financial  services
providers.  We compete with many different  banking and financial  institutions,
including:

            o   commercial and savings banks and savings and loan associations;
            o   credit unions;
            o   finance companies;
            o   brokerage and investment banking firms; and
            o   asset-based non-bank lenders.

            All of these  entities are branches or  subsidiaries  of much larger
organizations affiliated with statewide, regional or national banking companies,
and as a result may have greater resources and lower cost of funds. There can be
no assurance that we will be able to compete effectively in the future.

WE COULD  SUSTAIN  LOSSES  IF WE  INCORRECTLY  ASSESS  THE  CREDITWORTHINESS  OF
BORROWERS, GUARANTORS OR RELATED PARTIES.

            Our earnings are  significantly  affected by our ability to properly
originate,  underwrite  and  service  loans.  We  could  sustain  losses  if our
borrowers,  guarantors or related parties fail to perform in accordance with the
terms of  their  loans.  We have  adopted  underwriting  and  credit  monitoring
procedures and credit policies,  including the  establishment  and review of the
allowance  for credit  losses,  that  management  believes  are  appropriate  to
minimize this risk by assessing the likelihood of nonperformance,  tracking loan
performance  and   diversifying  our  credit   portfolio.   These  policies  and
procedures,  however,  may not  prevent  unexpected  losses  that could hurt our
business and financial condition.

WE ARE  SUBJECT  TO  CREDIT  AND  INTEREST  RATE  RISK IN  EXCESS  OF AN  AMOUNT
RECOGNIZED ON OUR BALANCE SHEET.

            We are a party to financial instruments with off-balance sheet risk.
In  the  normal  course  of  business,   these  financial   instruments  include
commitments to extend credit in the form of loans or through  letters of credit.
Those instruments  involve, to varying degrees,  elements of credit and interest
rate risk in excess of the amount  recognized on the balance sheet. Our exposure
to  credit  loss in the  event  of  nonperformance  by the  other  party  to the
financial  instrument  for  commitments  to extend credit is  represented by the
contractual  amount  of those  instruments.  Commitments  to extend  credit  are
agreements  to  lend  to a  customer,  provided  there  is no  violation  of any
condition  established  in  the  contract.   Commitments  generally  have  fixed
expiration dates or other termination  clauses and may require payment of a fee.
Since  certain of the  commitments  are expected to expire  without  being drawn
upon, the total  commitment  amounts do not  necessarily  represent  future cash
requirements.   We  use  the  same  credit  policy  in  making  commitments  and

                                       8





conditional  obligations as we do for on-balance sheet instruments.  We evaluate
each  customer's  credit  worthiness  on a  case-by-case  basis.  The  amount of
collateral  obtained,  if deemed necessary upon extension of credit, is based on
management's  credit evaluation of the borrower.  At December 31, 2002 and 2001,
our  undisbursed  commercial  loan  commitments  totaled  approximately  $0  and
$600,000,  respectively.  For the same periods,  our undisbursed consumer credit
card loan commitments totaled approximately $0 and $2,876,000, respectively. For
the same periods,  our undisbursed  accounts  receivable  factoring  commitments
totaled approximately $6,382,000 and $0, respectively.

WE MAY EXPAND INTO NEW  NON-BANKING  ACTIVITIES,  WHICH WOULD EXPOSE US TO RISKS
ASSOCIATED WITH NEW BUSINESSES.


            We  continue   to  consider   new   business   opportunities,   both
bank-related and otherwise. We believe that an acquisition can help create value
for shareholders through increased growth, as well as the utilization of our net
operating losses. Accordingly, we may expand our operations into new non-banking
activities in the future.  Although we have experience in providing bank-related
services,  this  expertise  may not  assist  us in  expansion  into  non-banking
activities.  As a  result,  we may be  exposed  to  risks  associated  with  new
businesses,  such as (1) a lack of market and product  knowledge or awareness of
other  industry  related  matters  and (2) an  inability  to attract  and retain
qualified employees with experience in these non-banking activities.


OUR BUSINESS COULD BE HARMED IF THERE IS A NON-FAVORABLE RESOLUTION TO THE LEGAL
PROCEEDING COMMENCED AGAINST US BY ANDREW WINOKUR.

            In January 2000, Mr. Winokur, a former executive  officer,  director
and stockholder of Praxis  Investment  Advisors,  Inc., one of our subsidiaries,
filed a lawsuit  in the  Superior  Court of the State of  California,  County of
Napa. The lawsuit alleges that Praxis breached its employment agreement with Mr.
Winokur.  The lawsuit also asserts  claims for  interference  with  contract and
unjust enrichment based upon his alleged wrongful termination. The lawsuit seeks
damages of an unspecified  amount and compliance by Praxis with the  termination
pay-out provisions in Mr. Winokur's employment agreement.


            On March 4, 2002, the lawsuit was submitted to binding  arbitration.
The panel found no breach of contract and no intentional  interference  with Mr.
Winokur's  contractual  rights.  However,  the panel found that Mr.  Winokur was
entitled to the termination pay-out provision in his employment agreement. Under
this  provision,  Mr. Winokur could  potentially be entitled to receive  certain
compensation based on (i) an investment bank valuation of WebBank,  if we accept
such  valuation,  or (ii) the  proceeds of a sale of WebBank,  if we reject such
valuation.  While Mr. Winokur would not be entitled to receive any  compensation
in the event that the sale does not exceed a predetermined amount as provided in
the  employment  agreement,  which  amount is  defined  as the amount of capital
invested by the  stockholders  of Praxis and WebBank in such  companies,  plus a

                                       9





cumulative  annual rate of return of ten percent as of the date of sale,  we may
be forced to sell WebBank if the sale price exceeds such  predetermined  amount,
even if we do not  want to sell  WebBank.  In  addition,  if the  sale  price of
WebBank  exceeds the  predetermined  amount but is less than the investment bank
valuation of WebBank, we may be required to sell WebBank at less than its value.


            At the present time,  Mr.  Winokur has ceased to  participate in the
process of valuing WebBank and the matter appears to be closed.  We believe that
a  valuation  or  proceeds   from  a  sale  of  WebBank  would  not  exceed  the
predetermined amount as provided in the employment agreement. Therefore, we also
believe  that we will not be  required  to put  WebBank up for sale and that Mr.
Winokur will not be entitled to any  termination  pay-out under the terms of his
employment  agreement.  However, the valuation process may proceed in the future
and if we are required to make a payment, our business could be harmed.


WARREN G. LICHTENSTEIN,  OUR CHAIRMAN AND CHIEF EXECUTIVE  OFFICER,  THROUGH HIS
AFFILIATION  WITH STEEL PARTNERS II, L.P., HAS THE ABILITY TO EXERT  SIGNIFICANT
INFLUENCE  OVER OUR  OPERATIONS AND MAY HAVE INTERESTS THAT DIFFER FROM THOSE OF
OUR OTHER STOCKHOLDERS.

            Prior to this  offering,  Warren G.  Lichtenstein,  our Chairman and
Chief  Executive   Officer,   owns  2,500  shares  of  our  common  stock.   Mr.
Lichtenstein,  as the sole  managing  member  of the  general  partner  of Steel
Partners II, L.P., is deemed to also  beneficially  own the shares of our common
stock owned by Steel Partners II, L.P. Steel Partners II, L.P. beneficially owns
1,737,345 shares of our common stock,  representing  approximately  39.8% of our
outstanding  common stock prior to this offering.  If no stockholders other than
Steel Partners II, L.P. exercise their subscription  rights,  Steel Partners II,
L.P. will purchase all of the shares in this  offering,  thereby  increasing its
ownership to approximately ____%. Mr.  Lichtenstein,  as sole managing member of
the general  partner of Steel Partners II, L.P., has sole  investment and voting
control over the shares  beneficially  owned by Steel Partners II, L.P. and thus
has the ability to exert  significant  influence  over our policies and affairs,
including  the election of our board of directors and the approval of any action
requiring   stockholder   vote,   such  as  amendments  to  our  Certificate  of
Incorporation and approving mergers or sales of substantially all of our assets,
as well as matters where the interests of Mr.  Lichtenstein  and Steel  Partners
II,  L.P.  may  differ  from the  interests  of our other  stockholders  in some
respects.

STEEL PARTNERS II, L.P.  RECENTLY FILED CERTAIN  REQUIRED  NOTICES WITH THE FDIC
AND THE UTAH DEPARTMENT OF FINANCIAL INSTITUTIONS RELATING TO STEEL PARTNERS II,
L.P.'S  OWNERSHIP  INTEREST IN US AND OUR  ACQUISITION  OF WEBBANK IN 1998,  AND
THERE CAN BE NO ASSURANCE AS TO WHAT ACTION THE FDIC OR THE UTAH  DEPARTMENT  OF
FINANCIAL INSTITUTIONS MAY TAKE.

            Steel  Partners  II, L.P. has advised us that it, and certain of its
affiliates,  have  recently  filed  certain  required  notices  with the Federal
Deposit  Insurance  Corporation  (FDIC) under the federal Change in Bank Control
Act,  as well  as with  the  Utah  Department  of  Financial  Institutions.  The
obligation to file these notices  arises in connection  with Steel  Partners II,
L.P.'s  ownership  interest in us and our acquisition of WebBank in 1998.  These
notices are being  reviewed  by the FDIC and the Utah  Department  of  Financial
Institutions.  Steel Partners II, L.P. believes that the filing of these notices
is not expected to have any direct effect on us, or WebBank, but relates to bank
holding company requirements  resulting from Steel Partners II, L.P.'s ownership
interest in us. There can be no assurance,  however,  as to what, if any, action
the FDIC or the Utah  Department  of  Financial  Institutions  may  take,  which
actions may include requiring Steel Partners II, L.P. to sell some or all of its
holdings of our shares.


                                       10





                                   OUR COMPANY


            We operate,  through our  subsidiaries,  in niche  banking  markets.
WebBank,  a Utah  industrial loan  corporation,  of which we indirectly own 93%,
provides  commercial and consumer  specialty  finance  transactions.  WebBank is
authorized by the Federal Deposit  Insurance Act to charge  interest  (including
periodic rates, late fees and prepayment fees) allowed by Utah law on loans made
to borrowers  who reside  anywhere in the country.  Any  inconsistent  state law
limits are  preempted by federal law,  except for loans made in states that have
opted out of the preemption  (i.e.,  Iowa and Puerto Rico).  WebBank is a small,
business  oriented   institution   insured  by  the  Federal  Deposit  Insurance
Corporation  (FDIC) and examined and regulated by the FDIC and the State of Utah
Department of Financial Institutions.


            Part of the business  plan of WebBank  represents a  non-traditional
approach to generating growth within the context of the regulatory  standards of
safety and soundness. Prudent business goals and protection of WebBank's charter
are the key  elements of our business  strategy  for  WebBank.  Pursuant to this
strategy, WebBank has focused on several lines of business as described below:

            o    ACCOUNTS   RECEIVABLE   FACTORING.    This   is   a   form   of
                 collateral-based  commercial  lending in which  companies  sell
                 their  receivables  to a lender,  principally to secure working
                 capital.  The  receivables  are repaid  directly to the lender.
                 WebBank is engaged in accounts receivable factoring utilizing a
                 sourcing and servicing  company.  The owner of the sourcing and
                 servicing company is also an employee of WebBank.

            o    PRIVATE  LABEL  STUDENT  LENDING.  This  is an  alternative  to
                 federally  subsidized  student  loan  programs.  A third  party
                 sourcing  company  is engaged to source  these  loans.  WebBank
                 provides  funding  to the  students  and sells the loans to the
                 third party shortly after origination of each loan.

            o    ELECTIVE MEDICAL AND DENTAL TREATMENT  LENDING.  This is a form
                 of unsecured  consumer lending that allows customers to finance
                 elective   surgery  or  other   treatments  not  covered  under
                 traditional  health  insurance  plans. A third party company is
                 engaged to source these loans.  WebBank provides funding to the
                 patients and sells the loans to the third party  shortly  after
                 origination of each loan.

            o    USDA BUSINESS AND INDUSTRY (B&I) Lending.  This is a commercial
                 loan  product  of which  70% to 90% is  guaranteed  by the full
                 faith and credit of the Federal government. The loan program is
                 administered by the United States  Department of Agriculture to
                 assist   businesses   located  in  rural  areas  (under  50,000
                 population)  to  promote   industrial   modernization  and  job
                 creation.  Originations  of new B&I loans were  discontinued by
                 WebBank in 2001. However, WebBank continues to service loans in
                 its existing portfolio and for several other investors.


            We continue to evaluate our  different  business  lines and consider
various  alternatives  to maximize the  aggregate  value of our  businesses  and
increase  stockholder  value,   including  seeking  acquisitions  and/or  merger
transactions, as well as product line extensions, additions and/or divestitures.
No firm  commitments  have been  realized and no binding  letters of intent have
been  signed at this  time.  There can be no  assurance  that we will be able to
accomplish any of these alternatives and be profitable.


            Our principal  executive  offices are located at 590 Madison Avenue,
32nd  Floor,  New  York,  New York  10022,  and our  telephone  number  is (212)
758-3232.


                                 USE OF PROCEEDS


            The gross proceeds from the exercise of the  subscription  rights in
this offering will be  approximately  $10.0 million,  if all of the subscription
rights  are  exercised.  If  only  10% or 50% of  the  subscription  rights  are
exercised,  then the gross  proceeds in this  offering  will be $1.0 million and
$5.0  million,  respectively.  We will use the  proceeds  of this  offering  for
working capital and general corporate purposes.


                                       11





                                 CAPITALIZATION


            The following table sets forth our summary capitalization as of June
30,  2003 on an  historical  basis and  should be read in  conjunction  with our
financial  statements  and notes  thereto  incorporated  by reference  into this
prospectus.  The table also  includes  our  capitalization  on a pro forma basis
assuming the completion of 10%, 50% and 100% of this offering.


                                                                                          Pro Forma      Pro Forma     Pro Forma
                                                                               Actual       for 10%       for 50%      for 100%
                                                                               ------     ---------      --------      ---------
                                                                         (in thousands) (in thousands) (in thousands) (in thousands)

Total debt
Short-term debt .........................................................       6,295       6,295            6,295            6,295
Long-term debt ..........................................................       7,114       7,114            7,114            7,114

            Total debt ..................................................      13,409      13,409           13,409           13,409
                                                                              -------      ------           ------           ------

Stockholders' equity:
      Common stock, $.001 par value, authorized 50,000,000 shares, issued
      4,366,866 .........................................................           4          --               --               --
      Paid-in capital ...................................................      36,606      _____            _____            _____
      Accumulated deficit ...............................................     (24,305)     _____            _____            _____
      Accumulated other comprehensive income
      (loss) ............................................................        (102)     _____            _____            _____

            Total Stockholders' equity ..................................      12,203      _____            _____            _____
                                                                              -------      ------           ------           ------

Total capitalization ....................................................      25,612      _____            _____            _____
                                                                              =======

                                       12





                           PRICE RANGE OF COMMON STOCK

            Our  common  stock has been  listed  on the  Nasdaq  Stock  Market's
SmallCap Market under the symbol "WEFN" since November 15, 1996. On October ___,
2003,  the closing price of our common stock was $____ per share.  The following
table  shows the  common  stock's  high and low sales  prices on Nasdaq  for the
periods indicated.

            Period                         High Sale             Low Sale

            2001:
            First Quarter                  $   3.63              $   2.63
            Second Quarter                     3.26                  2.66
            Third Quarter                      3.05                  2.52
            Fourth Quarter                     2.99                  2.20

            2002:
            First Quarter                  $   2.67              $   2.05
            Second Quarter                     2.37                  1.34
            Third Quarter                      2.28                  1.45
            Fourth Quarter                     2.71                  1.56

            2003:
            First Quarter                  $   2.70              $   1.73
            Second Quarter                     2.63                  1.70
            Third Quarter                      2.75                  2.10
            Fourth Quarter
            (through October 7, 2003)          2.25                  2.18

            On September 2, 2003 there were  approximately 547 record holders of
            our common stock.


            We have not paid cash dividends on our common stock in 2003, 2002 or
2001. We intend to retain any future  earnings for working  capital needs and to
finance potential future  acquisitions,  and presently do not intend to pay cash
dividends on our common stock for the foreseeable future.


                                  THE OFFERING

            Our Board of Directors  has proposed that we attempt to raise equity
capital through this offering to all of our stockholders and to use the proceeds
from the  subscription of such rights for working capital and general  corporate
purposes.  The Board  declared a dividend of rights to purchase our common stock
to holders of record as of __________,  2003.  Through this  prospectus,  we are
offering  the shares of common  stock that  rights  holders  may  purchase  upon
exercising such subscription rights.

REASONS FOR THIS OFFERING


            In  approving  this  offering,  our  Board  of  Directors  carefully
considered  our need for  additional  capital  and several  alternative  capital
raising methods,  including a credit facility and a private  placement of equity
securities.  A credit  facility was determined not to be feasible  because we do
not  believe  it was  available  to us, and a private  placement  was deemed too
costly.  The Board  also  considered  that as a result of this  offering,  Steel
Partners'  ownership of our common stock could increase from approximately 39.8%
to over 50%, as well as the potential  dilution of the  ownership  percentage of
our current common  stockholders  caused by this  offering.  While the ownership
percentage of our current common stockholders may decrease, the Board considered
that the magnitude of this dilution would be subject to, and dependent upon, the
decision  of each common  stockholder  whether to  exercise  their  subscription
rights for additional shares of our common stock in this offering.

            After  weighing the factors  discussed  above and the effect of this
offering of generating approximately $10.0 million (less expenses related to the
offering) in additional  capital for us,  assuming that all of the  subscription

                                       13





rights are exercised,  the board of directors believes that this offering is the
best alternative for capital raising and is in the best interests of our company
and our  stockholders.  As described in "Use of Proceeds,"  the proceeds of this
offering are intended to be used for additional working capital for our business
and other general corporate purposes.


            Our Board of Directors  believes that this offering will  ultimately
strengthen  our  financial  condition  through  generating  additional  cash and
increasing our stockholders' equity. See "Use of Proceeds" and "Capitalization".
However,  our board of directors is not making any  recommendation as to whether
you should exercise your subscription rights.

SUBSCRIPTION RIGHTS

            BASIC  SUBSCRIPTION  PRIVILEGE.  We  distributed  to the  holders of
record of our common stock, at the close of business on ________________,  2003,
at no  charge,  one  nontransferable  subscription  right for each  share of our
common  stock they own.  The  subscription  rights will be  evidenced  by rights
certificates.  Each subscription right will entitle the holder to purchase _____
shares of our common stock.  You are not required to exercise any or all of your
subscription rights.

            If,  pursuant to your  exercise  of your  subscription  rights,  the
number of shares of common  stock you are  entitled to receive  would  result in
your receipt of fractional  shares, the aggregate number of shares issued to you
will be rounded down to the nearest whole  number.  You will not receive cash in
lieu of fractional shares.

            OVER-SUBSCRIPTION  PRIVILEGE.  Subject to the  allocation  described
below,  each subscription  right also grants each subscription  rights holder an
over-subscription  privilege to purchase  additional  shares of our common stock
that are not  purchased  by other  rights  holders  pursuant to the other rights
holders'  basic  subscription  privileges.  You are  entitled to  exercise  your
over-subscription  privilege  only  if  you  exercise  your  basic  subscription
privilege in full.

            If you wish to exercise your over-subscription privilege, you should
indicate the number of additional  shares that you would like to purchase in the
space  provided  on  your  subscription  certificate.  When  you  send  in  your
subscription  certificate,  you must also send the full  purchase  price for the
number of additional  shares that you have requested to purchase (in addition to
the payment due for shares purchased through your basic subscription privilege).
If the number of shares  remaining after the exercise of all basic  subscription
privileges  is not  sufficient  to satisfy all requests  for shares  pursuant to
over-subscription  privileges,  you will be allocated additional shares pro-rata
(subject to elimination of fractional shares), based on the number of shares you
purchased  through the basic  subscription  privilege in proportion to the total
number of  shares  that you and other  over-subscribing  stockholders  purchased
through the basic subscription  privilege.  However, if your pro-rata allocation
exceeds the number of shares you  requested  on your  subscription  certificate,
then you will  receive  only the number of shares  that you  requested,  and the
remaining  shares  from your  pro-rata  allocation  will be divided  among other
rights holders exercising their over-subscription  privileges. Also, pursuant to
the terms of our charter,  you will not be allowed to subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.

            As soon as practicable after the expiration date,  ________________,
acting as our subscription  agent, will determine the number of shares of common
stock that you may purchase  pursuant to the  over-subscription  privilege.  You
will receive certificates representing these shares as soon as practicable after
the  expiration  date and  after  all  pro-rations  and  adjustments  have  been
effected.  If you request and pay for more shares than are  allocated to you, we
will refund that overpayment,  without interest. In connection with the exercise
of the over-subscription  privilege, banks, brokers and other nominee holders of
subscription  rights who act on behalf of beneficial  owners will be required to
certify  to us and to the  subscription  agent  as to the  aggregate  number  of
subscription rights that have been exercised, and the number of shares of common
stock that are being requested through the over-subscription  privilege, by each
beneficial owner on whose behalf the nominee holder is acting.

SUBSCRIPTION PRICE

            The subscription price for a subscription right is $_____ per share.
The per share price equals ___% of the current  market price of our common stock
determined  by averaging the closing price of our common stock on Nasdaq for the
______ preceding  trading days ending on ______,  2003. The  subscription  price
does not  necessarily  bear any  relationship  to our  past or  expected  future
results of operations,  cash flows,  current financial  condition,  or any other
established  criteria for value. No change will be made to the cash subscription
price by reason of changes in the trading price of our common stock prior to the
closing of this offering.

                                       14





DETERMINATION OF SUBSCRIPTION PRICE

            Our board of directors  set all of the terms and  conditions of this
offering,   including   the   subscription   price,   which  was  based  on  the
recommendation  of a special  committee of directors,  excluding those directors
affiliated  with Steel  Partners who did not  participate  (in their capacity as
directors)  in the  consideration  or voting with respect to these  matters.  In
establishing  the  subscription  price,  our board of directors  considered  the
following factors:

            o    strategic alternatives for capital raising,

            o    the market price of our common stock,

            o    the pricing of similar transactions,

            o    the amount of proceeds desired,

            o    our business prospects,

            o    our recent and anticipated operating results, and

            o    general conditions in the securities markets.

            We determined  the ___%  [premium][discount]  to our current  market
price after taking into account the preceding factors. We did not seek or obtain
any opinion of financial  advisors or  investment  bankers in  establishing  the
subscription  price for the offering.  You should not consider the  subscription
price as an  indication  of the value of our  company  or our common  stock.  We
cannot  assure you that you will be able to sell  shares  purchased  during this
offering at a price equal to or greater than the subscription  price. On October
__, 2003, the closing sale price of our common stock was $_______ per share.

EXPIRATION DATE, EXTENSIONS AND TERMINATION


            You may  exercise  your  subscription  right at any time before 5:00
p.m.,  New York  City  time,  on  ______,  2003,  the  expiration  date for this
offering.  However,  we may  extend the  offering  period  for  exercising  your
subscription  rights from time to time in our sole  discretion,  but in no event
more than 30 additional  days. If you do not exercise your  subscription  rights
before the expiration  date, your unexercised  subscription  rights will be null
and void. We will not be obligated to honor your exercise of subscription rights
if the subscription agent receives the documents relating to your exercise after
the expiration  date,  regardless of when you transmitted the documents,  unless
you  have  timely  transmitted  the  documents  under  the  guaranteed  delivery
procedures described below.


            We have the sole  discretion to extend the expiration date from time
to time by giving oral or written notice to the subscription  agent on or before
the  scheduled  expiration  date.  If we elect to extend the  expiration of this
offering,  we will issue a press release  announcing the extension no later than
9:00 a.m.,  New York City time, on the next business day after the most recently
announced expiration date.

WITHDRAWAL AND AMENDMENT

            We reserve the right to withdraw or terminate  this  offering at any
time for any reason. In the event that this offering is withdrawn or terminated,
all funds received from subscriptions by stockholders will be returned. Interest
will not be payable on any returned funds.

            We reserve the right to amend the terms of this offering. If we make
an amendment that we consider significant, we will:

            o    mail notice of the amendment to all  stockholders  of record as
                 of the record date;

            o    extend the expiration date by at least 10 days; and

            o    offer  all  subscribers  no less  than 10  days to  revoke  any
                 subscription already submitted.

            The extension of the expiration date will not, in and of itself,  be
treated as a significant amendment for these purposes.

                                       15





METHOD OF SUBSCRIPTION - EXERCISE OF SUBSCRIPTION RIGHTS

            You  may  exercise  your  subscription   rights  by  delivering  the
following to the  subscription  agent,  at or prior to 5:00 p.m.,  New York City
time, on ______________, 2003, the date on which the rights expire:

            o    your properly  completed and executed rights  certificate  with
                 any  required   signature   guarantees  or  other  supplemental
                 documentation; and

            o    your full subscription  price payment for each share subscribed
                 for  under  your   basic   subscription   privilege   and  your
                 over-subscription privilege.

You should read and follow the instructions accompanying the rights certificate
carefully.

SIGNATURE GUARANTEE MAY BE REQUIRED

            Your signature on each rights  certificate  must be guaranteed by an
eligible  institution such as a member firm of a registered  national securities
exchange or a member of the National Association of Securities Dealers, Inc., or
from a commercial bank or trust company having an office or correspondent in the
United States,  subject to standards and procedures  adopted by the subscription
agent, unless:

            o    your  rights  certificate   provides  that  shares  are  to  be
                 delivered to you as record holder of those subscription rights;
                 or

            o    you are an eligible institution.

DELIVERY OF SUBSCRIPTION MATERIALS AND PAYMENT

            You  should  deliver  your  rights  certificate  and  payment of the
subscription  price or, if  applicable,  notice of guaranteed  delivery,  to the
subscription   agent   by   mail,   by  hand  or  by   overnight   courier   to:
____________________ at  ____________________________________.  The subscription
agent's telephone number is __________________.

            You are  responsible  for the  method  of  delivery  of your  rights
certificate(s)  with your subscription price payment to the subscription  agent.
If you send your rights  certificate(s)  and subscription price payment by mail,
we recommend  that you send them by  registered  mail,  properly  insured,  with
return receipt requested. You should allow a sufficient number of days to ensure
delivery to the subscription agent prior to the time this offering expires.

            Do not  send  your  rights  certificate(s)  and  subscription  price
payment to us.  Your  delivery  to an address  other than the  address set forth
above will not constitute valid delivery.

METHOD OF PAYMENT

            Your payment of the subscription  price must be made in U.S. dollars
for  the  full  number  of  shares  of  common  stock  you are  subscribing  (or
over-subscribing) for by either:

            o    check or bank draft (cashier's check) drawn upon a U.S. bank or
                 money order payable to the subscription agent; or

            o    wire  transfer  of   immediately   available   funds,   to  the
                 subscription  account  maintained by the subscription  agent at
                 ______________________________________________________________.


RECEIPT OF PAYMENT

            Your payment will be considered  received by the subscription  agent
only upon:

            o    receipt and clearance of any uncertified check,

            o    receipt by the  subscription  agent of any  certified  check or
                 bank draft drawn upon a United States bank,  any money order or
                 any funds transferred by wire transfers, or

            o    receipt  of good  funds  in the  subscription  agent's  account
                 designated above.

            Please note that funds paid by  uncertified  personal check may take
at least five business days to clear.  Accordingly,  if you wish to pay by means
of an uncertified  personal check,  we urge you to make payment  sufficiently in
advance of the expiration  date to ensure that the  subscription  agent receives
cleared funds before that date. We also urge you to consider payment by means of
a certified or cashier's check or money order.

                                       16





CALCULATION OF SUBSCRIPTION RIGHTS EXERCISED

            If you do not  indicate  the  number of  subscription  rights  being
exercised,  or do not forward full payment of the total  subscription  price for
the number of subscription  rights that you indicate are being  exercised,  then
you will be deemed to have  exercised  your basic  subscription  privilege  with
respect to the maximum number of rights that may be exercised with the aggregate
subscription price payment you delivered to the subscription agent.

YOUR FUNDS WILL BE HELD BY THE  SUBSCRIPTION  AGENT UNTIL SHARES OF COMMON STOCK
ARE ISSUED

            The  subscription  agent will hold your payment of the  subscription
price payment in a segregated  account with other  payments  received from other
rights  holders  until we issue  your  shares to you.  If this  offering  is not
completed,  or we do not apply  your full  subscription  price  payment  to your
purchase  of shares of our common  stock,  the  subscription  agent will  return
promptly, without interest, all excess subscription payments.

NO REVOCATION

            Once you have exercised your  subscription  privileges,  you may not
revoke your exercise.  Subscription rights not exercised prior to the expiration
date of this offering will expire.

NON-TRANSFERABILITY OF THE SUBSCRIPTION RIGHTS

            Except in the limited  circumstances  described below,  only you may
exercise the basic subscription  privilege and the over-subscription  privilege.
You may not  sell,  give  away or  otherwise  transfer  the  basic  subscription
privilege or the over-subscription privilege.

            Notwithstanding  the  foregoing,  your rights may be  transferred by
operation  of law;  for  example,  a  transfer  of rights  to the  estate of the
recipient upon the death of the recipient would be permitted.  If the rights are
transferred  as  permitted,  evidence  satisfactory  to us that the transfer was
proper must be received by us prior to the expiration date of this offering.

ISSUANCE OF STOCK CERTIFICATES

            Stock  certificates  for shares  purchased in this  offering will be
issued as soon as practicable after the expiration date. Our subscription  agent
will  deliver  subscription  payments  to us  only  after  consummation  of this
offering  and the  issuance  of  stock  certificates  to our  stockholders  that
exercised rights. Unless you instruct otherwise in your subscription certificate
form, shares purchased by the exercise of subscription rights will be registered
in the name of the person exercising the rights.

GUARANTEED DELIVERY PROCEDURES

            If you wish to exercise  your  subscription  rights,  but you do not
have sufficient time to deliver the rights certificate evidencing your rights to
the subscription  agent on or before the time your  subscription  rights expire,
you may exercise your subscription  rights by the following  guaranteed delivery
procedures:

            o    deliver your subscription  price payment in full for each share
                 you  subscribed for under your  subscription  privileges in the
                 manner set forth in "- Method of Payment"  to the  subscription
                 agent on or prior to the expiration date;

            o    deliver  the form  entitled  "Notice of  Guaranteed  Delivery,"
                 substantially in the form provided with the "Instructions as to
                 Use  of  Rights  Certificates"  distributed  with  your  rights
                 certificates, at or prior to the expiration date; and

            o    deliver the properly  completed rights  certificate  evidencing
                 your rights  being  exercised  and the related  nominee  holder
                 certification,  if  applicable,  with any  required  signatures
                 guaranteed,  to the  subscription  agent within three  business
                 days following the date of your Notice of Guaranteed Delivery.

            Your  Notice  of   Guaranteed   Delivery   must  be   delivered   in
substantially  the same form provided with the  Instructions as to Use of Rights
Certificates,  which will be  distributed  to you with your rights  certificate.
Your Notice of Guaranteed  Delivery must come from an eligible  institution,  or
other eligible guarantee  institutions which are members of, or participants in,
a signature guarantee program acceptable to the subscription agent.

            In your Notice of Guaranteed Delivery, you must state:

            o    your name;

                                       17





            o    the number of  subscription  rights  represented by your rights
                 certificates  and the number of shares of our common  stock you
                 are subscribing (and over-subscribing) for; and

            o    your guarantee that you will deliver to the subscription  agent
                 any rights certificates  evidencing the subscription rights you
                 are  exercising  within three  business days following the date
                 the  subscription  agent  receives  your  Notice of  Guaranteed
                 Delivery.

            You  may  deliver  your  Notice  of   Guaranteed   Delivery  to  the
subscription agent in the same manner as your rights certificates at the address
set forth above  under " - Delivery  of  Subscription  Materials  and  Payment."
Alternatively,  you may  transmit  your  Notice of  Guaranteed  Delivery  to the
subscription    agent    by    facsimile     transmission     (Facsimile    No.:
______________________.   To  confirm   facsimile   deliveries,   you  may  call
______________________.

            Please call the information  agent to request any additional  copies
of the form of Notice of Guaranteed Delivery you may need.

DETERMINATIONS REGARDING THE EXERCISE OF YOUR SUBSCRIPTION RIGHTS


            We will decide all questions  concerning the  timeliness,  validity,
form and  eligibility  of your  exercise  of your  subscription  rights  and our
determinations will be final and binding. We, in our sole discretion,  may waive
any defect or  irregularity,  or permit a defect or irregularity to be corrected
within such time as we may determine. In such event, we will treat any identical
defects or irregularities  the same way for all shareholders.  We may reject the
exercise  of  any  of  your  subscription   rights  because  of  any  defect  or
irregularity.  We  will  not  receive  or  accept  any  subscription  until  all
irregularities  have been  waived by us or cured by you  within  such time as we
decide, in our sole discretion.


            Neither  we nor the  subscription  agent  will be under  any duty to
notify you of any defect or  irregularity  in connection with your submission of
rights  certificates  and we will not be liable for failure to notify you of any
defect  or  irregularity.  We  reserve  the  right to reject  your  exercise  of
subscription rights if your exercise is not in accordance with the terms of this
offering or in proper form.  We will also not accept your  exercise of rights if
our issuance of shares of our common stock to you could be deemed unlawful under
applicable law or is materially burdensome to us.

            If you are given notice of a defect in your  subscription,  you will
have five  business days after the giving of notice to correct it. You will not,
however, be allowed to cure any defect later than 5:00 p.m., New York City time,
on _______,  2003. We will not consider an exercise to be made until all defects
have been cured or waived.

NOTICE TO BANKERS, TRUSTEES OR OTHER DEPOSITARIES

            If you are a broker,  a trustee or a depositary  for  securities who
holds  shares  of our  common  stock for the  account  of others at the close of
business on the record date, you should notify the respective  beneficial owners
of such shares of this offering as soon as possible to find out their intentions
with  respect  to  exercising  their  subscription  rights.  You  should  obtain
instructions from the beneficial owners with respect to the subscription rights,
as set forth in the  instructions we have provided to you for your  distribution
to beneficial owners. If the beneficial owner so instructs,  you should complete
the appropriate  rights  certificates and submit them to the subscription  agent
with the proper payment. If you hold shares of our common stock for the accounts
of more than one beneficial  owner,  you may exercise the number of subscription
rights to which all such beneficial owners in the aggregate otherwise would have
been  entitled  had they been direct  record  holders of our common stock on the
record  date,  provided  that you,  as a nominee  record  holder,  make a proper
showing to the  subscription  agent by  submitting  the form  entitled  "Nominee
Holder Certification" which we will provide to you with your offering materials.

NOTICE TO BENEFICIAL OWNERS

            If you are a beneficial  owner of shares of our common stock or will
receive  your  subscription  rights  through a broker,  custodian  bank or other
nominee, we will ask your broker,  custodian bank or other nominee to notify you
of this offering.  If you wish to exercise your  subscription  rights,  you will
need to have your broker,  custodian  bank or other  nominee act for you. If you
hold  certificates  of our common  stock  directly and would prefer to have your
broker,  custodian bank or other nominee exercise your subscription  rights, you
should contact your nominee and request it to effect the transaction for you. To
indicate  your  decision with respect to your  subscription  rights,  you should
complete and return to your  broker,  custodian  bank or other  nominee the form
entitled  "Beneficial  Owner  Election  Form." You should receive this form from

                                       18





your broker,  custodian bank or other nominee with the other offering materials.
If you wish to obtain a separate  rights  certificate,  you should  contact  the
nominee as soon as possible and request that a separate  rights  certificate  be
issued to you.

SHARES OF COMMON STOCK OUTSTANDING AFTER THIS OFFERING


            Upon the  issuance  of the  shares of common  stock  offered in this
offering  (assuming  that  all  of  the  subscription   rights  are  exercised),
___________  shares of common stock will be issued and  outstanding.  This would
represent an approximate  ___% increase in the number of  outstanding  shares of
common stock. If only 10% or 50% of the subscription rights are exercised,  then
_____  and  _____  shares  of  common  stock  will be  issued  and  outstanding,
respectively,  which  represents  an  approximate  ___% and ___% increase in the
number of outstanding shares of common stock, respectively.


EFFECTS OF OFFERING ON OUR STOCK OPTION PLANS AND OTHER PLANS

            As of October 7, 2003,  there were  outstanding  options to purchase
111,408 shares of our common stock issued or committed to be issued  pursuant to
stock options granted by us. None of the outstanding  options have anti-dilution
or other  provisions  for adjustment to exercise price or number of shares which
will  be  automatically   triggered  by  this  offering.  Each  outstanding  and
unexercised  option will remain  unchanged and will be exercisable  for the same
number of shares of common stock and at the same  exercise  price as before this
offering.

RELATIONSHIP WITH STEEL PARTNERS

            Pursuant to the terms of a  management  agreement,  Steel  Partners,
Ltd.  provides  us with  office  space and certain  management,  consulting  and
advisory  services.  The management  agreement is automatically  renewable on an
annual basis unless terminated by either party, for any reason, upon at least 60
days written notice.  The agreement also provides that we will  indemnify,  save
and hold  Steel  Partners,  Ltd.  harmless  from  and  against  any  obligation,
liability,  cost or damage  resulting  from its actions  under the terms of such
agreement,  except to the  extent  occasioned  by gross  negligence  or  willful
misconduct of its officers, directors or employees.

            In addition, Jim Henderson,  an employee of Steel Partners, Ltd. and
an  executive  officer  of  ours,  performs  services  for  us in  the  area  of
management,  accounting and finances,  and such other services as are reasonably
requested by WebBank.  This agreement will continue in force until terminated by
either  of the  parties  upon 30 days  written  notice.  Glen  Kassan,  our Vice
President and Chief  Financial  Officer,  is also an employee of Steel Partners,
Ltd.

            In  consideration  of the  services  rendered  under the  management
agreement, Steel Partners, Ltd. charges us a fixed monthly fee totaling $310,000
per annum,  adjustable annually upon our agreement with Steel Partners,  Ltd. In
consideration of the services  provided by Mr. Henderson,  Steel Partners,  Ltd.
charges WebBank  $100,000 per annum. The fees payable by WebBank are included in
the fees payable by us under the management agreement.  We believe that the cost
of obtaining the type and quality of services  rendered by Steel Partners,  Ltd.
under  these  agreements  is no less  favorable  than the cost at which we could
obtain such services from unaffiliated entities.


            Warren Lichtenstein, our Chairman and Chief Executive Officer, is an
affiliate of Steel  Partners,  Ltd.  based on his  ownership of shares of common
stock of Steel Partners, Ltd., directly and through Steel Partners II, L.P., and
by virtue of his positions as Chairman, President and Chief Executive Officer of
Steel  Partners,  Ltd.  Mr.  Lichtenstein  and Steel  Partners  II, L.P.  own an
aggregate of approximately 49.2% of Steel Partners, Ltd. Mr. Lichtenstein is the
sole  managing  member of the general  partner of Steel  Partners  II, L.P.  Mr.
Lichtenstein  disclaims  beneficial  ownership  of the shares of common stock of
Steel Partners,  Ltd. owned by Steel Partners II, L.P.  (except to the extent of
his  pecuniary  interest  in such  shares  of common  stock).  None of our other
executive  officers or directors are 5% owners of Steel Partners,  Ltd. or Steel
Partners II, L.P.


            Steel Partners II, L.P. also currently owns 1,737,345  shares of our
common stock, which is equal to approximately 39.8% of our outstanding shares of
common stock. Warren Lichtenstein, who owns 2,500 shares of our common stock, is
deemed to also  beneficially  own all of the shares owned by Steel  Partners II,
L.P. due to his affiliation therewith.  Steel Partners II, L.P. has been offered
its pro rata portion of the  subscription  rights  (including  over-subscription
privilege). If our other stockholders purchase all of the shares offered to them
for sale,  Steel  Partners II, L.P.  will purchase its pro rata amount and would
continue  to  beneficially   own   approximately   39.8%  of  our  common  stock
outstanding.  If no  stockholders  other than Steel  Partners II, L.P.  exercise
their subscription rights, Steel Partners II, L.P. will purchase up to _________
shares in the  offering.  In that case,  Steel  Partners  II,  L.P.'s  ownership
interest could be approximately  ____%, and the aggregate  ownership interest of

                                       19





the other outstanding  stockholders could decrease to approximately  ____%. Even
if some  stockholders  other than Steel Partners II, L.P. exercise their rights,
Steel  Partners  II,  L.P.  could  still  obtain a majority  ownership  interest
pursuant to its subscription  rights.  As a result,  Steel Partners II, L.P. may
have the voting power to control the election of our board of directors  and the
approval of other matters presented for consideration by the stockholders, which
could  include  mergers,  acquisitions,  amendments  to our  charter and various
corporate governance actions.

            In  addition,  Steel  Partners  II, L.P. has advised us that it, and
certain of its affiliates, have recently filed certain required notices with the
Federal Deposit  Insurance  Corporation  (FDIC) under the federal Change in Bank
Control Act, as well as with the Utah Department of Financial Institutions.  The
obligation to file these notices  arises in connection  with Steel  Partners II,
L.P.'s ownership interest in the Company and our acquisition of WebBank in 1998.
These  notices  are  being  reviewed  by the  FDIC and the  Utah  Department  of
Financial  Institutions.  Steel  Partners II, L.P.  believes  that the filing of
these notices is not expected to have any effect on the Company, or WebBank, but
relates to bank holding company  requirements  resulting from Steel Partners II,
L.P.'s ownership interest in the Company. There can be no assurance, however, as
to  what,  if  any,  action  the  FDIC  or  the  Utah  Department  of  Financial
Institutions may take.

SUBSCRIPTION AGENT

            We have appointed ________________________ as subscription agent for
this  offering.  We will pay the fees and certain  expenses of the  subscription
agent, which we estimate will total approximately $_____________.  Under certain
circumstances,  we may indemnify the subscription agent from certain liabilities
that may arise in connection with this offering.

INFORMATION AGENT

            We have appointed  ________________________ as information agent for
this  offering.  We will pay the fees and certain  expenses  of the  information
agent, which we estimate will total approximately $_____________.  Under certain
circumstances,  we may indemnify the information agent from certain  liabilities
that may arise in connection with this offering.

FEES AND EXPENSES

            Other  than  for  fees  charged  by the  information  agent  and the
subscription agent, you are responsible for paying any other commissions,  fees,
taxes or  other  expenses  incurred  in  connection  with  the  exercise  of the
subscription  rights.  Neither us, the  information  agent nor the  subscription
agent will pay such expenses.

OTHER MATTERS

            We are not making this  offering in any state or other  jurisdiction
in which it is unlawful to do so, nor are we selling or accepting  any offers to
purchase any shares of our common stock from rights holders who are residents of
those  states or other  jurisdictions.  We may delay  the  commencement  of this
offering  in those  states or other  jurisdictions,  or change the terms of this
offering,  in order to comply  with the  securities  law  requirements  of those
states or other jurisdictions. We may decline to make modifications to the terms
of this  offering  requested  by those states or other  jurisdictions,  in which
case,  if you are a resident in those states or  jurisdictions,  you will not be
eligible to participate in this offering.

            We will not be  required  to issue to you  shares  of  common  stock
pursuant to this  offering if, in our  opinion,  you would be required to obtain
prior  clearance or approval from any state or federal  regulatory  authority to
own or control such shares if, at the time the subscription  rights expire,  you
have not obtained such clearance or approval.

NO BOARD RECOMMENDATION

            An investment  in shares of our common stock must be made  according
to each investor's evaluation of its own best interests.  Accordingly, our board
of directors makes no  recommendation  to rights holders  regarding whether they
should exercise their subscription rights.

IF YOU HAVE QUESTIONS ABOUT EXERCISING RIGHTS

            If you have  questions or need  assistance  concerning the procedure
for exercising  subscription  rights,  or if you would like additional copies of
this prospectus, the Instructions as to Use of Rights Certificates or the Notice

                                       20





of  Guaranteed  Delivery,  you  should  contact  the  information  agent  or the
subscription agent at the following addresses and telephone numbers:

                             The Information Agent:

                              ____________________
                              ____________________
                              ____________________

                                       or

                             The Subscription Agent:

                              ____________________
                              ____________________
                              ____________________

             MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

            The following  discussion is a summary of the material U.S.  federal
income tax  consequences  of (i) the  dividend by us of  subscription  rights to
holders  of common  stock that hold such  stock as a capital  asset for  federal
income tax purposes,  and (ii) the exercise of such rights.  This  discussion is
based on laws, regulations,  rulings and decisions in effect on the date of this
prospectus,  all of which are  subject  to  change  (possibly  with  retroactive
effect)  and to  differing  interpretations.  This  discussion  applies  only to
holders that are U.S. persons,  which is defined as a citizen or resident of the
United States, a domestic partnership, a domestic corporation, any estate (other
than a foreign  estate),  and any  trust so long as a court  within  the  United
States is able to exercise primary  supervision over the  administration  of the
trust and one or more U.S. persons have the authority to control all substantial
decisions of the trust. Generally,  for federal income tax purposes an estate is
classified as a "foreign estate" based on the location of the estate assets, the
country of the estate's  domiciliary  administration,  and the  nationality  and
residency of the domiciliary's personal representative.

            This  discussion  does not  address  all  aspects of federal  income
taxation  that  may  be  relevant  to  holders  in  light  of  their  particular
circumstances  or to holders who may be subject to special tax  treatment  under
the Internal Revenue Code of 1986, as amended,  including  holders of options or
warrants,  holders who are dealers in  securities or foreign  currency,  foreign
persons (defined as all persons other than U.S. persons),  insurance  companies,
tax-exempt organizations, banks, financial institutions, broker-dealers, holders
who hold common  stock as part of a hedge,  straddle,  conversion  or other risk
reduction transaction,  or who acquired common stock pursuant to the exercise of
compensatory stock options or warrants or otherwise as compensation.

            We have not  sought,  and will not seek,  an opinion of counsel or a
ruling from the  Internal  Revenue  Service  regarding  the  federal  income tax
consequences  of the  distribution  of the rights or the related share issuance.
The following  summary does not address the tax consequences of the distribution
of the rights or the related share issuance under foreign,  state,  or local tax
laws.  ACCORDINGLY,  EACH  HOLDER OF COMMON  STOCK  SHOULD  CONSULT  ITS OWN TAX
ADVISOR WITH RESPECT TO THE PARTICULAR TAX  CONSEQUENCES OF THE  DISTRIBUTION OF
THE RIGHTS OR THE RELATED SHARE ISSUANCE TO SUCH HOLDER.

            The federal income tax  consequences for a holder of common stock on
the  receipt of  subscription  rights  and the  exercise  of such  rights are as
follows:

            o    A holder will not recognize  taxable  income for federal income
                 tax  purposes in  connection  with the receipt of  subscription
                 rights.

            o    Except as provided in the following sentence,  the tax basis of
                 the  subscription  rights received by a holder will be zero. If
                 either (i) the fair market value of the subscription  rights on
                 the date such  subscription  rights are distributed is equal to
                 at least  15% of the  fair  market  value  on such  date of the
                 common stock with respect to which the subscription  rights are
                 received or (ii) the holder irrevocably  elects, by attaching a

                                       21





                 statement to its federal income tax return for the taxable year
                 in which the subscription rights are received, to allocate part
                 of the tax  basis  of such  common  stock  to the  subscription
                 rights,  then upon  exercise of the  subscription  rights,  the
                 holder's  tax  basis  in the  common  stock  will be  allocated
                 between  the  common  stock  and  the  subscription  rights  in
                 proportion to their  respective  fair market values on the date
                 the  subscription  rights are  distributed.  A holder's holding
                 period for the  subscription  rights  received will include the
                 holder's  holding  period for the common  stock with respect to
                 which the  subscription  rights were received.  We believe that
                 the fair  market  value  of the  subscription  rights  will not
                 exceed  15% of the fair  market  value of the  common  stock to
                 which the subscription rights relate.

            o    A holder that allows the subscription rights received to expire
                 will not recognize  any gain or loss,  and the tax basis of the
                 common  stock owned by such  holder with  respect to which such
                 subscription  rights were  distributed will be equal to the tax
                 basis of such common  stock  immediately  before the receipt of
                 the subscription rights.

            o    A holder will not  recognize any gain or loss upon the exercise
                 of the subscription rights.

            o    The tax basis of the common stock acquired  through exercise of
                 the subscription  rights will equal the sum of the subscription
                 price for the common stock and the holder's tax basis,  if any,
                 in the subscription rights as described above.

            o    The  holding  period  for the  common  stock  acquired  through
                 exercise of the subscription  rights will begin on the date the
                 subscription rights are exercised.


                              PLAN OF DISTRIBUTION

            We are offering the shares of our common stock underlying the rights
directly to you. We have not employed any brokers,  dealers or  underwriters  in
connection  with the  solicitation  or exercise of  subscription  rights in this
offering and no  commissions,  fees or discounts will be paid in connection with
this  offering.  ______________________________  is acting  as our  subscription
agent to effect the  exercise of the rights and the  issuance of the  underlying
shares  of  common  stock.  Therefore,  we  anticipate  that our  officers'  and
employees' role will be limited to:

            o    Responding to inquiries of potential  purchasers,  provided the
                 response   is  limited   to   information   contained   in  the
                 registration statement of which this prospectus is a part; and

            o    Ministerial   and   clerical   work   involved   in   effecting
                 transactions  pertaining  to  the  sale  of  the  common  stock
                 underlying the rights.

            We intend to  distribute  and deliver this  prospectus by hand or by
mail  only,  and not by  electronic  delivery.  Also,  we intend to use  printed
prospectuses only, and not any other forms of prospectus.

            We have distributed to the holders of record of our common stock, at
the close of business on  __________,  2003, at no charge,  one  nontransferable
subscription   right  for  each  share  of  our  common  stock  they  own.  Each
subscription  right is a right to purchase  _____ shares of our common stock and
carries  with  it  a  basic  subscription  privilege  and  an  over-subscription
privilege.  The basic  subscription  privilege  of each  right  entitles  you to
purchase _____ shares of our common stock at a subscription  price of $_____ per
share.  You may  exercise  any number of your  subscription  rights,  or you may
choose not to exercise  any  subscription  rights.  We will not  distribute  any
fractional shares or pay cash in lieu of fractional  shares, but will round down
the aggregate  number of shares you are entitled to receive to the nearest whole
number.

            We do not expect that all of our  stockholders  will exercise all of
their basic subscription privileges. By extending  over-subscription  privileges
to our  stockholders,  we are providing  stockholders that exercise all of their
basic subscription privileges with the opportunity to purchase those shares that
are not purchased by other stockholders.

            If you wish to exercise your over-subscription privilege, you should
indicate the number of additional  shares that you would like to purchase in the
space  provided  on  your  subscription  certificate.  When  you  send  in  your

                                       22





subscription  certificate,  you must also send the full  purchase  price for the
number of additional  shares that you have requested to purchase (in addition to
the payment due for shares purchased through your basic subscription privilege).
If the number of shares  remaining after the exercise of all basic  subscription
privileges  is not  sufficient  to satisfy all requests  for shares  pursuant to
over-subscription  privileges,  you will be allocated additional shares pro-rata
(subject to elimination of fractional shares), based on the number of shares you
purchased  through the basic  subscription  privilege in proportion to the total
number of  shares  that you and other  over-subscribing  stockholders  purchased
through the basic subscription  privilege.  However, if your pro-rata allocation
exceeds the number of shares you  requested  on your  subscription  certificate,
then you will  receive  only the number of shares  that you  requested,  and the
remaining  shares  from your  pro-rata  allocation  will be divided  among other
rights holders exercising their over-subscription  privileges. Also, pursuant to
the terms of our charter,  you will not be allowed to subscribe  for a number of
shares that would  increase your ownership of our shares of common stock to 4.9%
or above of our then  outstanding  shares of common  stock,  unless you  already
owned at least  5.0% of our  common  stock on the date such  restriction  became
effective.

            As   soon   as    practicable    after    the    expiration    date,
___________________________,  acting  as our  subscription  agent,  and we  will
determine the number of shares of common stock that you may purchase pursuant to
the  over-subscription  privilege.  You will receive  certificates  representing
these shares as soon as practicable  after the  expiration  date. If you request
and  pay for  more  shares  than  are  allocated  to you,  we will  refund  that
overpayment,   without  interest.   In  connection  with  the  exercise  of  the
over-subscription  privilege,  banks,  brokers  and  other  nominee  holders  of
subscription  rights who act on behalf of beneficial  owners will be required to
certify  to us and to the  subscription  agent  as to the  aggregate  number  of
subscription rights that have been exercised, and the number of shares of common
stock that are being requested through the over-subscription  privilege, by each
beneficial owner on whose behalf the nominee holder is acting.

            We will pay  __________________,  the  information  agent,  a fee of
$______  plus  expenses,  and  __________,  the  subscription  agent,  a fee  of
approximately  $_____ plus expenses,  for their services in connection with this
offering.  We also have agreed to  indemnify  under  certain  circumstances  the
information agent and the subscription  agent from any liability it may incur in
connection with this offering.

            We expect that shares of our common  stock  issued upon the exercise
of  subscription  rights will be listed on the Nasdaq  Stock  Market's  SmallCap
Market under the symbol "WEFN," the same symbol our currently outstanding shares
of common stock now trade.


                                  LEGAL MATTERS

            The validity of the shares of common stock offered  hereby,  and the
description in this  prospectus of the U.S.  federal income tax  consequences of
this offering,  will be passed upon for us by Olshan Grundman Frome Rosenzweig &
Wolosky LLP, New York, New York.


                                     EXPERTS

            The consolidated financial statements of WebFinancial Corporation at
December  31,  2002 and 2001,  and for the years then  ended,  appearing  in our
annual  report  on Form  10-K for the year  ended  December  31,  2002 have been
audited by Grant Thornton LLP,  independent  accountants,  as set forth in their
report thereon included  therein.  Such  consolidated  financial  statements are
incorporated  herein by  reference  in reliance  upon such  report  incorporated
therein  by  reference  given  on the  authority  of  such  firm as  experts  in
accounting and auditing.


                       WHERE YOU CAN FIND MORE INFORMATION

            We are subject to the  informational  requirements of the Securities
Exchange Act of 1934.  Accordingly,  we file reports, proxy statements and other
information  with the SEC. You may read and copy any materials that we file with
the  SEC  at  the  SEC's  Public  Reference  Room  at 450  Fifth  Street,  N.W.,
Washington,  D.C.  20549 upon  payment of the  prescribed  fees.  You may obtain

                                       23





information on the operation of the Public  Reference Room by calling the SEC at
1-800-SEC-0330.  The SEC also maintains an Internet site that contains  reports,
proxy and information  statements and other materials that are filed through the
SEC's Electronic Data Gathering,  Analysis, and Retrieval, or EDGAR, system. You
can access this web site at HTTP://WWW.SEC.GOV.  We also post our SEC filings on
our web  site at  HTTP://WWW.WEBFINANCIALCORPORATION.COM.  Our  common  stock is
listed on the Nasdaq Stock Market's SmallCap Market.

            The SEC allows us to  "incorporate  by reference" the information we
file with the SEC. This permits us to disclose  important  information to you by
referencing  these  filed  documents.  Any  information  referenced  this way is
considered part of this prospectus, and any information filed with the SEC after
the date on the cover of this prospectus will  automatically be deemed to update
and supercede this information. We incorporate by reference the documents listed
below and any future filings made by us with the SEC file number 000-00631 under
Sections  13(a),  13(c),  14 or 15(d) of the Exchange  Act of 1934,  as amended,
until all of the securities described in this prospectus are sold:

            o    our annual report on Form 10-K for the year ended  December 31,
                 2002,

            o    our quarterly  report on Form 10-QSB for the period ended March
                 31, 2003,

            o    our  quarterly  report on Form 10-QSB for the period ended June
                 30, 2003, and


            o    the   description   of  our  common  stock   contained  in  our
                 registration  statement on Form 8-A filed with the SEC on March
                 27, 1995 (Registration Statement No. _________).


            This  prospectus is part of a registration  statement filed with the
SEC.  This  prospectus  does not contain all the  information  contained  in the
registration statement. The full registration statement can be obtained from the
SEC.  This  prospectus  contains a general  description  of our  company and the
securities being offered for sale. You should read this prospectus together with
the additional information incorporated by reference.

            You can request a copy of any document  incorporated by reference in
this prospectus, at no cost, by writing or telephoning us at the following:

                            WebFinancial Corporation
                         590 Madison Avenue, 32nd Floor
                            New York, New York 10022
                        Attention: Warren G. Lichtenstein
                            Telephone: (212) 758-3232


                           FORWARD-LOOKING STATEMENTS

            We believe that certain  statements  contained  or  incorporated  by
reference in this prospectus are "forward-looking statements" within the meaning
of the  Private  Securities  Litigation  Reform  Act of 1995 and are  considered
prospective.  The following  statements  are or may  constitute  forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995:

            o    statements before,  after or including the words "may," "will,"
                 "could," "should," "believe," "expect," "future,"  "potential,"
                 "anticipate," "intend," "plan," "estimate" or "continue" or the
                 negative or other variations of these words, and

            o    other statements about matters that are not historical facts.

            We may be  unable to  achieve  the  future  results  covered  by the
forward-looking  statements.  The statements are subject to risks, uncertainties
and other factors that could cause actual results to differ  materially from the
future results that the statements  express or imply. See "Risk Factors" on page
6. Please do not put undue reliance on these forward-looking  statements,  which
speak only as of the date of this prospectus.

                                       24





                                     PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14.    OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

            The following is an itemization  of all expenses  (subject to future
contingencies)  incurred or to be incurred by us in connection with the issuance
and distribution of the securities being offered.  All items below are estimates
other than the  Securities  and  Exchange  Commission  registration  fee and the
Nasdaq listing fee. WebFinancial will pay all of such expenses.


            Securities and Exchange Commission registration fee          $809.00
            Nasdaq listing fee.................................              *
            Printing and engraving expenses....................              *
            Accounting fees and expenses.......................              *
            Legal fees and expenses............................              *
            Subscription Agent fees and expenses...............              *
            Information Agent fees and expenses................              *
            Miscellaneous......................................              *
                                                                        --------
                        Total......................................     $    *
                                                                        ========

* To be completed by amendment.

ITEM 15.       INDEMNIFICATION OF DIRECTORS AND OFFICERS.

            Article Tenth of the Registrant's  Amended and Restated  Certificate
of Incorporation  and Section 5 of Article VIII of the Registrant's  Amended and
Restated Bylaws state as follows:

            (a) The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative  (other than an action by or in the right of the  corporation)  by
reason of the fact that he is or was a director,  officer,  employee or agent of
the  corporation,  or is or was serving at the request of the  corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other  enterprise,  against  expenses  (including  attorneys'
fees),  judgments,  fines and amounts paid in settlement actually and reasonably
incurred by him in connection  with such action,  suit or proceeding if he acted
in good faith and in a manner he reasonably  believed to be in or not opposed to
the best interests of the corporation,  and, with respect to any criminal action
or proceeding,  had no reasonable cause to believe his conduct was unlawful. The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best interest
of the corporation,  and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

            (b) The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action or suit by or in the right of the  corporation  to procure a judgment  in
its favor by reason of the fact that he is or was a director,  officer, employee
or  agent  of the  corporation,  or is or was  serving  at  the  request  of the
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,   joint  venture,  trust  or  other  enterprise,  against  expenses
(including   attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interest of the  corporation  and except that no  indemnification  shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or  suit  was  brought  shall  determine  upon  application  that,  despite  the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and  reasonably  entitled to indemnity for such expenses  which
the court of Chancery or such other court shall deem proper.

                                      II-1





            (c) To the extent that a director, officer, employee or agent of the
corporation  has been  successful  on the merits or  otherwise in defense of any
action,  suit  or  proceeding  referred  to in  paragraphs  (a)  and (b) of this
Section,  or in defense of any claim,  issue or matter  therein,  including  the
dismissal  of an action  without  prejudice,  he  shall,  without  limiting  the
provisions of paragraph (a) above, be indemnified  against  expenses  (including
attorneys'  fees)  actually  and  reasonably   incurred  by  him  in  connection
therewith.

            (d) Any indemnification under paragraphs (a) and (b) of this Section
(unless ordered by a court) shall be made by the corporation  only as authorized
in the specific case upon a determination that  indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable  standard  of  conduct  set forth in  paragraphs  (a) and (b) of this
Section.  Such  determination  shall be made (i) by the board of  directors by a
majority  vote of a quorum  consisting of directors who were not parties to such
action,  suit or proceedings,  or (ii) if such a quorum is not  obtainable,  or,
even  if  obtainable  a  quorum  of  disinterested   directors  so  directs,  by
independent legal counsel in a written opinion, or (iii) by the stockholders.

            (e) Expenses  (including  attorneys' fees) incurred by an officer or
director in  defending  any civil,  criminal,  administrative  or  investigative
action,  suit or proceeding  shall be paid by the  corporation in advance of the
final  disposition  of  such  action,  suit or  proceeding  upon  receipt  of an
undertaking  by or on behalf of such director or officer to repay such amount if
it shall  ultimately be determined  that he is not entitled to be indemnified by
the corporation pursuant to this Section or as otherwise authorized by law. Such
expenses (including  attorneys' fees) incurred by other employees and agents may
be so paid upon such terms and  conditions,  if any,  as the board of  directors
deems appropriate.

            (f) The  indemnification and advancement of expenses provided by, or
granted  pursuant to, the other  paragraphs  of this Section shall not be deemed
exclusive  of any  other  rights  to  which  those  seeking  indemnification  or
advancement  of expenses may be entitled  under any by-law,  agreement,  vote of
stockholders or disinterested  directors or otherwise,  both as to action in his
official  capacity  and as to action in  another  capacity  while  holding  such
office.

            (g) The  corporation,  at its  expense,  may  purchase  and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture,  trust or other enterprise against any liability asserted against
him and  incurred by him in any such  capacity,  or arising out of his status as
such,  whether  or not the  corporation  would have the power to  indemnify  him
against  such  liability  under  the  provisions  of this  Section  or under the
provisions of the General Corporation Law of the State of Delaware.

            (h) The  indemnification and advancement of expenses provided by, or
granted  pursuant to, this Section shall  continue as to a person who has ceased
to be a director,  officer,  employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such person.

            (i) All rights to indemnification  and advancement of expenses under
this Section shall be deemed to be provided by contract  between the corporation
and the director,  officer, employee or agent who serves in such capacity at any
time while the by-laws and/or  certificate of  incorporation  and other relevant
provisions  of the General  Corporation  Law of the State of Delaware  and other
applicable law, if any, are in effect.

            (j) Any repeal or  modification  of the foregoing  paragraphs by the
stockholders  of the  corporation  shall  not  adversely  affect  any  right  or
protection of a director, officer, employee or agent of the corporation existing
at the time of such repeal or modification.

            (k) If the  General  Corporation  Law of the  State of  Delaware  is
amended to authorize  corporate  action  permitting  the  corporation to further
indemnify or advance expenses to directors,  officers, employees or agents, then
such  person,  in addition to the  circumstances  in which he is now entitled to
indemnification and advancement of expenses, shall be entitled to be indemnified
and have  expenses  advanced  to the  fullest  extent  permitted  by the General
Corporation Law of the State of Delaware, as so amended.

                                      II-2





            (l) For purposes of this Section,  references  to "the  corporation"
shall  include,  in  addition  to the  resulting  corporation,  any  constituent
corporation   (including  any  constituent  of  a  constituent)  absorbed  in  a
consolidation  or merger which, if its separate  existence had continued,  would
have had power and authority to indemnify its directors,  officers, employees or
agents, so that any person who is or was a director,  officer, employee or agent
of such  constituent  corporation,  or is or was  serving at the request of such
constituent  corporation  as a director,  officer,  employee or agent of another
corporation,  partnership, joint venture, trust or other enterprise, shall stand
in the same  position  under the  provisions of this Section with respect to the
resulting  or  surviving  corporation  as he would  have  with  respect  to such
constituent corporation if its separate existence had continued.

            (m) For purposes of this Section,  references to "other enterprises"
shall include  employee  benefit plans;  references to "fines" shall include any
excise taxes assessed on a person with respect to an employee  benefit plan; and
references  to  "serving at the request of the  corporation"  shall  include any
service as a  director,  officer,  employee  or agent by the  corporation  which
imposes duties on, or involves services by, such director,  officer, employee or
agent  with  respect  to  an  employee  benefit  plan,  its   participants,   or
beneficiaries;  and a  person  who  acted  in  good  faith  and in a  manner  he
reasonably  believed to be in the interest of the participants and beneficiaries
of an  employee  benefit  plan  shall be deemed to have  acted in a manner  "not
opposed  to the best  interests  of the  corporation,"  as  referred  to in this
Section.

            (n) If this Section or any portion  thereof shall be  invalidated on
any ground by any court of competent  jurisdiction,  then the corporation  shall
nevertheless  indemnify each person as provided above as to expenses  (including
attorneys' fees),  judgments,  fines and amounts paid in settlement with respect
to any action, suit or proceeding,  whether civil,  criminal,  administrative or
investigative,   including  a  grand  jury  proceeding  and  an  action  by  the
corporation,  to the fullest extent permitted by any applicable  portion of this
Section that shall not have been invalidated or by any other applicable law.


ITEM 16.       EXHIBITS.

Exhibit #      Description

3.1*           Amended  and  Restated   Certificate  of   Incorporation  of  the
               Registrant, filed on March 19, 1999.

3.2*           Certificate of Amendment of Certificate of  Incorporation  of the
               Registrant, filed on July 8, 1999.

3.3            By-Laws of the Registrant (incorporated by reference from Exhibit
               I-5 to the  Registration  Statement  on Form 8-A filed  March 27,
               1995).

4.1            Specimen  certificate  for Common Stock,  $.001 par value, of the
               Registrant  (incorporated  by  reference  to  Exhibit  I-1 to the
               Registration Statement on Form 8-A filed March 27, 1995).

4.2*           Form of Subscription Rights Certificate.

5.1**          Opinion of Olshan Grundman Frome Rosenzweig & Wolosky LLP.

23.1           Consent of Grant Thornton LLP.

23.2**         Consent  of  Olshan  Grundman  Frome  Rosenzweig  &  Wolosky  LLP
               (included in opinion filed as Exhibit 5.1).

24.1*          Power of Attorney (included on signature page hereto).

99.1*          Form of Instructions as to Use of Rights Certificates.

99.2*          Form of Notice of Guaranteed Delivery for Rights Certificates.

99.3*          Form of Letter to Security Holders Who Are Record Holders.

                                      II-3





99.4*          Form of Letter to Securities  Dealers,  Commercial  Banks,  Trust
               Companies and Other Nominees.

99.5*          Form of Letter to Clients of Security  Holders Who Are Beneficial
               Holders.

99.6*          Form of Nominee Holder Certification Form.

99.7*          Beneficial Owner Election Form.

99.8*          Substitute Form W-9 (including  Guidelines for  Certification  of
               Taxpayer Identification Number on Substitute Form W-9).

99.9**         Form  of  Subscription  Agency  Agreement  between   WebFinancial
               Corporation and ___________.

99.10**        Form  of  Information   Agent  Agreement   between   WebFinancial
               Corporation and _____________.

----------------

*        Previously filed
**       To be filed by amendment


ITEM 17.       UNDERTAKINGS.

            (a) The undersigned Registrant hereby undertakes:

                        (1) To file,  during any period in which offers or sales
            are being made,  a  post-effective  amendment  to this  Registration
            Statement  to include any material  information  with respect to the
            plan of distribution  not previously  disclosed in the  Registration
            Statement  or  any  material  change  to  such  information  in  the
            Registration Statement;

                        (2) That, for the purpose of  determining  any liability
            under the  Securities  Act of 1933,  each  post-effective  amendment
            shall be deemed to be a new registration  statement  relating to the
            securities  offered therein,  and the offering of such securities at
            that  time  shall be  deemed to be the  initial  bona fide  offering
            thereof; and

                        (3)  To  remove   from   registration   by  means  of  a
            post-effective  amendment  any of the  securities  being  registered
            which remain unsold at the termination of the offering.

            (b) The undersigned  registrant hereby undertakes that, for purposes
of determining  any liability  under the Securities Act of 1933,  each filing of
the  registrant's  annual  report  pursuant  to  Section  13(a)  or 15(d) of the
Securities  Exchange  Act of 1934  (and,  where  applicable,  each  filing of an
employee  benefit  plan's  annual  report  pursuant  to  Section  15(d)  of  the
Securities  Exchange  Act of 1934) that is  incorporated  by  reference  in this
Registration  Statement  shall  be  deemed  to be a new  registration  statement
relating to the securities offered therein,  and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

            (c) Insofar as  indemnification  for  liabilities  arising under the
Securities Act of 1933 may be permitted to directors,  officers and  controlling
persons of the Registrant  pursuant to the foregoing  provisions,  or otherwise,
the  Registrant  has been  advised  that in the  opinion of the  Securities  and
Exchange  Commission such  indemnification is against public policy as expressed
in the Act and is,  therefore,  unenforceable.  In the  event  that a claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
Registrant of expenses  incurred or paid by a director,  officer or  controlling
person  of the  Registrant  in the  successful  defense  of an  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.

                                      II-4





                                   SIGNATURES


            Pursuant to the  requirements  of the  Securities  Act of 1933,  the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement  to be  signed  on its  behalf  by  the  undersigned,  thereunto  duly
authorized,  in the  City of New  York,  State of New  York,  on the 11th day of
December, 2003.



                                     WEBFINANCIAL CORPORATION


                                     By: /s/ Warren G. Lichtenstein
                                         ---------------------------------------
                                         Warren G. Lichtenstein
                                         Chairman and Chief Executive Officer

            Pursuant to the  requirements  of the Securities  Act of 1933,  this
Registration  Statement  has  been  signed  by  the  following  persons  in  the
capacities and on the dates indicated:


Signature                        Title                                          Date
---------                        -----                                          ----

/s/ Warren G. Lichtenstein       Chairman, Chief Executive Officer and         December 11 2003
--------------------------       Director (principal executive officer)
Warren G. Lichtenstein

        *                        Vice President and Chief Financial Officer     December 11, 2003
--------------------------       (principal financial and accounting officer)
Glen M. Kassan


       *                         Director                                       December 11, 2003
--------------------------
Jack L. Howard



       *                         Director                                       December 11, 2003
--------------------------
Howard Mileaf


       *                         Director                                       December 11, 2003
--------------------------
Joseph L. Mullen


       *                         Director                                       December 11, 2003
--------------------------
Mark E. Schwarz

*Signed by Warren G. Lichtenstein as attorney-in-fact.

                                      II-5