SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 4, 2003
STONEPATH GROUP, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-26929 65-0867684
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(State or Other Jurisdic- (Commission File Number) (IRS Employer
tion of Incorporation) Identification No.)
1600 Market Street, Suite 1515, Philadelphia, PA 19103
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code 215-979-8370
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Two Penn Center Plaza, Suite 605
Philadelphia, PA 19102
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(Former Name or Former Address, if Changed Since Last Report)
INFORMATION TO BE INCLUDED IN REPORT
The information in this Current Report on Form 8-K is furnished
pursuant to Item 9 and shall not be deemed "filed" for the purposes of Section
18 of the Securities Exchange Act of 1934 or otherwise subject to the
liabilities under that Section. Furthermore, the information in this Current
Report on Form 8-K shall not be deemed to be incorporated by reference into the
filings of Stonepath Group, Inc. under the Securities Act of 1933.
Item 9. Regulation FD Disclosure
On Tuesday, February 4, 2003, members of our senior management are
scheduled to participate in a conference call with certain institutional
investors in connection with a proposed private placement of our common stock.
During the call, our senior management intends to provide the following
information.
For 2002, we expect to report net earnings in the range of $3 million
to $3.5 million on revenues in excess of $135 million. We are scheduled to
release our 2002 earnings on March 5, 2003 with a conference call on March 6,
2003. We should emphasize our auditors are still doing their fieldwork and will
not start reviewing our consolidated results in Philadelphia until next week.
Although we do not expect material audit adjustments, there is no assurance that
such adjustments will not be required.
For 2003, we confirm our net earnings target in the $7 million range on
revenues estimated in the $180 million range. This estimate was developed
assuming an effective tax rate of 8% along with a number of other assumptions
detailed in our Form 10-Q for the third quarter of 2002 and excludes the impact
of any additional acquisitions.
The three transactions referred to in our January 13, 2003 press
release are in varying stages of due diligence but are progressing nicely. Under
the terms of the letters of intent for these transactions, the aggregate base
purchase price of these three transactions totals $30 million with initial
payments of as much as $12 million payable in a combination of cash and stock.
Future earn-out payments would be tied to an aggregate pre-tax earnings target
of approximately $5 million. Additional purchase price of up to $11 million
could be payable should the future financial performance of the acquired
companies materially exceed the cumulative earnings targets during the various
earn-out periods.
It is premature to estimate the impact these transactions will have on
our 2003 calendar year because:
o We have yet to complete our due diligence and confirm the
reliability of financial data provided by these companies.
o We have yet to determine when during the course of the year each of
these companies would become members of our consolidated group.
o We have yet to quantify any costs associated with the integration of
these companies into the Stonepath platform.
With all that said, pending the resolution of issues that might arise
during due diligence, we remain optimistic that we will be able to close these
transactions over the next several months and that they will be significant
contributors to the organization.
This item includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, regarding future results, levels of
activity, events, trends or plans. We have based these forward-looking
statements on our current expectations and projections about such future
results, levels of activity, events, trends or plans. These forward-looking
statements are not guarantees and are subject to known and unknown risks,
uncertainties and assumptions about us that may cause our actual results, levels
of activity, events, trends or plans to be materially different from any future
results, levels of activity, events, trends or plans expressed or implied by
such forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "could", "would",
"expect", "plan", "anticipate", "believe", "estimate", "continue", or the
negative of such terms or other similar expressions. While it is impossible to
identify all of the factors that may cause our actual results, levels of
activity, events, trends or plans to differ materially from those set forth in
such forward-looking statements, such factors include the inherent risks
associated with: (i) our ability to sustain an annual growth rate in revenues
consistent with recent results, (ii) our ability to sustain our recent
profitability by maintaining overall operating margins, (iii) our ability to
identify, acquire, integrate and manage additional businesses in a manner which
does not dilute our earnings per share; (iv) our ability to obtain the capital
necessary to make additional acquisitions, (v) the uncertainty of future trading
prices of our common stock and the impact such trading prices may have upon our
ability to utilize common stock to facilitate our acquisition strategy, (vi) the
uncertain effect on the future trading price of our common stock associated with
the dilution upon the conversion or exercise of outstanding convertible
securities, (vii) our dependence on certain large customers, (viii) our
dependence upon certain key personnel, (ix) an unexpected adverse result in any
legal proceeding, (x) the scarcity and competition for the operating companies
we need to acquire to implement our business strategy, (xi) competition in the
freight forwarding, logistics and supply chain management industry, (xii) the
impact of current and future laws affecting the Company's operations, (xiii)
adverse changes in general economic conditions as well as economic conditions
affecting the specific industries and customers we serve, (xiv) regional
disruptions in transportation, such as those recently experienced on the West
Coast of the United States, and (xv) other factors which are or may be
identified from time to time in our Securities and Exchange Commission filings
and other public announcements, including our Annual Report on Form 10-K filed
on March 29, 2002 and our Registration Statement on Form S-3 (Registration No.
333-91240). We have assumed, for the purpose of our 2003 forward-looking
statements, that each of our operating companies will achieve, on a stand-alone
basis, that level of net income necessary to fully achieve the earn-out payments
under its acquisition agreement. There can be no assurance that these and other
factors will not affect the accuracy of such forward-looking statements. Readers
are cautioned not to place undue reliance on forward-looking statements, which
speak only as of the date made. We undertake no obligation to publicly release
the result of any revision of these forward-looking statements to reflect events
or circumstances after the date they are made or to reflect the occurrence of
unanticipated events.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
STONEPATH GROUP, INC.
Date: February 4, 2003 By: /s/ Dennis L. Pelino
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Name: Dennis L. Pelino
Title: Chairman and Chief Executive
Officer