FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2002
COMMISSION FILE NUMBER 000-28399
NORSTAR GROUP, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
UTAH 59-1643698
---- ----------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4101 RAVENSWOOD ROAD, SUITE 128, FORT LAUDERDALE, FLORIDA 33312
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (954) 772-0240
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT DURING THE PAST 12 MONTHS
(OR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS),
AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X] NO [ ]
AT, NOVEMBER 12, 2002 THERE WERE ISSUED AND OUTSTANDING
25,793,825 SHARES OF COMMON STOCK.
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet at September 30, 2002
(Unaudited) F-2
Condensed Consolidated Statements of Operations
Nine and Three Months Ended September 30, 2002 and 2001 (Unaudited) F-3
Condensed Statement of Changes in Stockholders' Equity (Deficiency)
Nine Months Ended September 30, 2002 (Unaudited) F-4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2002 and 2001 (Unaudited) F-5
Notes to Condensed Consolidated Financial Statements (Unaudited) F-6/9
Item 2 Managements discussion and analysis of Plans of Operation
Item 3 Controls and Procedures
Part II - Other Information
Item 1. Legal proceedings
Item 2. Changes in Securities
Item 3. Default in Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
NorStar Group, Inc. and Subsidiaries
Index to Unaudited Condensed Financial Statements
-------------------------------------------------
PAGE
------
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheet at September 30, 2002
(Unaudited) F-2
Condensed Consolidated Statements of Operations
Nine and Three Months Ended September 30, 2002 and 2001 (Unaudited) F-3
Condensed Statement of Changes in Stockholders' Equity (Deficiency)
Nine Months Ended September 30, 2002 (Unaudited) F-4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2002 and 2001 (Unaudited) F-5
Notes to Condensed Consolidated Financial Statements (Unaudited) F-6/9
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
September 30, 2002 (Unaudited)
Assets
------
Current assets - cash $ 4,210
Equipment, net of accumulated depreciation of $3,147 1,047
Capitalized web site development costs 238,391
Mineral rights, at estimated net realizable value -
------------
Total $ 243,648
============
Liabilities and Stockholders' Deficiency
----------------------------------------
Current liabilities:
Noninterest bearing demand notes payable to stockholders $ 225,444
Accounts payable and accrued expenses 36,008
------------
Total 261,452
------------
Commitments and contingencies
Stockholders' deficiency:
Class A convertible preferred stock, par value $10 per
share; 1,000,000 shares authorized; none issued -
Class B preferred stock, par value $10 per share;
1,000,000 shares authorized; none issued -
Common stock, par value $.01 per share; 150,000,000
shares authorized; 25,793,825 shares issued and outstanding 257,938
Additional paid-in capital 6,273,090
Accumulated deficit (6,465,454)
Unearned compensation (83,378)
------------
Total stockholders' deficiency (17,804)
------------
Total $ 243,648
============
See Notes to Condensed Consolidated Financial Statements.
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Nine and Three Months Ended September 30, 2002 and 2001
(Unaudited)
Nine Months Ended Three Months Ended
September 30, September 30,
-------------------------- --------------------------
2002 2001 2002 2001
------- ------- ------- -------
Revenues $ - $ - $ - $ -
------------ ------------ ------------ ------------
Operating expenses:
Selling 17,622 142,375 17,622 1,000
General and administrative 45,700 66,622 16,896 16,420
Research and development 4,641 47,799 15,000
------------ ------------ ------------ ------------
Totals 67,963 256,796 34,518 32,420
------------ ------------ ------------ ------------
Net loss $ (67,963) $ (256,796) $ (34,518) $ (32,420)
============ ============ ============ ============
Basic net loss per common share $ ( -) $ (.01) $ ( -) $ ( -)
============ ============ ============ ============
Basic weighted average common
shares outstanding 21,964,704 18,743,825 24,366,651 18,743,825
============ ============ ============ ============
See Notes to Condensed Consolidated Financial Statements.
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficiency)
Nine Months Ended September 30, 2002
(Unaudited)
Common Stock
----------------------- Additional
Number of Paid-in Accumulated Unearned
Shares Amount Capital Deficit Compensation Total
---------- --------- ---------- ------------ ------------ --------
Balance, January 1, 2002 20,743,825 $ 207,438 $6,222,590 $(6,397,491) $32,537
Issuance of shares of common
stock to consultants 5,050,000 50,500 50,500 $ (101,000)
Amortization of unearned
compensation 17,622 17,622
Net loss (67,963) (67,963)
---------- --------- ---------- ------------ ------------ ---------
Balance, September 30, 2002 25,793,825 257,938 $6,273,090 $(6,465,454) $ (83,378) $(17,804)
========== ========== ========== ============ =========== =========
See Notes to Condensed Consolidated Financial Statements.
NorStar Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2002 and 2001
(Unaudited)
2002 2001
--------- ----------
Operating activities:
Net loss $(67,963) $(256,796)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of unearned compensation 17,622 141,375
Depreciation 1,050 1,050
Changes in operating liabilities - accounts payable
and accrued expenses (10,485) 2,862
--------- ----------
Net cash used in operating activities (59,776) (111,509)
Financing activities - proceeds from issuance of notes
payable to stockholders 61,500 98,809
--------- ----------
Net increase (decrease) in cash 1,724 (12,700)
Cash, beginning of period 2,486 17,483
--------- ----------
Cash, end of period $ 4,210 $ 4,783
========= ==========
See Notes to Condensed Consolidated Financial Statements.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Business and basis of presentation:
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting of
normal recurring accruals, necessary to present fairly the financial
position of NorStar Group, Inc. and its subsidiaries (the "Company") as of
September 30, 2002, and the Company's results of operations for the nine
and three months ended September 30, 2002 and 2001, changes in
stockholders' equity (deficiency) for the nine months ended September 30,
2002 and cash flows for the nine months ended September 30, 2002 and 2001.
Pursuant to the rules and regulations of the United States Securities and
Exchange Commission (the "SEC"), certain information and disclosures
normally included in financial statements prepared in accordance with
accounting principles generally accepted in the United States of America
have been condensed in or omitted from these consolidated financial
statements unless significant changes have taken place since the end of the
most recent fiscal year. Accordingly, these unaudited condensed
consolidated financial statements should be read in conjunction with the
audited consolidated financial statements as of December 31, 2001 and for
the years ended December 31, 2001 and 2000 and the notes thereto (the
"Audited Financial Statements") and the other information included in the
Company's Annual Report on Form 10-KSB (the "Form 10-KSB") for the year
ended December 31, 2001.
The results of operations for the nine and three months ended September 30,
2002 are not necessarily indicative of the results to be expected for the
full year ending December 31, 2002.
The accompanying condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern.
However, the Company has not generated any significant revenues on a
sustained basis from its current operations.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
As shown in the accompanying condensed consolidated financial statements,
the Company incurred net losses of approximately $68,000 and $257,000 for
the nine months ended September 30, 2002 and 2001, respectively, although a
substantial portion of the loss in 2001 was attributable to non-cash
charges for the fair value of shares and stock options issued for services,
compensation and other expenses. As of September 30, 2002, the Company had
a cash balance of only $4,000, a working capital deficiency of $257,000 and
an accumulated deficit of $6,465,000. Management believes that the Company
will continue to incur net losses through at least September 30, 2003 and
that it will need additional equity and/or debt financing of at least
$2,000,000 to enable it to fully develop its web services and its
proprietary virtual reality products as initially planned and sustain its
operations until it can achieve profitability and generate cash flows from
its operating activities on a recurring basis. These matters raise
substantial doubt about the Company's ability to continue as a going
concern.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 1 - Business and basis of presentation (concluded):
Management is attempting to obtain additional financing for the Company
through the issuance of equity securities, loans from financial
institutions and/or agreements with strategic partners. Management is also
evaluating an alternative whereby it would suspend the development of the
Company's internet technology, at least temporarily, and search for another
company that has had ongoing commercial operations that would merge with
the Company and continue its business operations. However, management
cannot assure that the Company will be able to sell equity securities,
obtain loans from financial institutions and/or form strategic alliances
that will generate financing for the further development of the Company's
internet technology or enter into a merger agreement with an operating
company on acceptable terms. If the Company is not able to obtain adequate
financing or consummate a merger, it may have to curtail or terminate some
or all of its operations.
The accompanying condensed consolidated financial statements do not include
any adjustments related to the recoverability and classification of assets
or the amounts and classification of liabilities that might be necessary
should the Company be unable to continue its operations as a going concern.
Note 2 - Earnings (loss) per common share:
As further explained in Note 2 of the notes to the Audited Financial
Statements, the Company presents basic earnings (loss) and, if appropriate,
diluted earnings per share in accordance with the provisions of Statement
of Financial Accounting Standards No. 128, "Earnings per Share". Diluted
per share amounts have not been presented in the accompanying unaudited
condensed consolidated statements of operations because the Company had net
losses for the nine and three months ended September 30, 2002 and 2001 and,
accordingly, the assumed effects of the exercise of options granted to
consultants in April 2000 that expired in April 2001 (see Note 5 herein)
would have been anti-dilutive.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 3 - Income taxes:
As of September 30, 2002, the Company had net operating loss carryforwards
of approximately $6,465,000 available to reduce future Federal taxable
income which, if not used, will expire at various dates through 2022. The
Company had no other material temporary differences as of that date. Due to
the uncertainties related to, among other things, the changes in the
ownership of the Company, which could subject those loss carryforwards to
substantial annual limitations, and the extent and timing of its future
taxable income, the Company offset the deferred tax assets attributable to
the potential benefits of approximately $2,586,000 from the utilization of
those net operating loss carryforwards by an equivalent valuation allowance
as of September 30, 2002.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 3 - Income taxes (concluded):
The Company had also offset the potential benefits from net operating loss
carryforwards by equivalent valuation allowances during 2001. As a result
of the increases in the valuation allowance of $27,000 and $103,000 during
the nine months ended September 30, 2002 and 2001, respectively, and
$14,000 during both the three months ended September 30, 2002 and 2001, the
Company did not recognize any credits for income taxes in the accompanying
condensed consolidated statements of operations to offset its pre-tax
losses in any of those periods.
Note 4 - Stock option plan:
On April 17, 2000, the Board of Directors approved a Stock Option Plan (the
"Plan"), subject to ratification by the Company's stockholders, whereby up
to 2,000,000 shares of the Company's common stock may be granted to key
personnel in the form of incentive stock options and nonstatutory stock
options, as defined under the Internal Revenue Code. Key personnel eligible
for these awards may include all present and future employees of the
Company and individuals who are consultants to the Company as well as
nonemployee directors of the Company. Under the Plan, the exercise price of
options must be at least 100% of the fair market value of the common stock
on the date of grant (the exercise price of an incentive stock option for
an optionee that holds more than 10% of the combined voting power of all
classes of stock of the Company must be at least 110% of the fair market
value on the date of grant). The maximum term of any stock option granted
may not exceed ten years (or five years for an optionee that holds 10% or
more of the Company's stock) from the date of grant.
As of November 4, 2002, no stock options had been awarded under the Plan.
Note 5 - Consulting agreements:
On April 17, 2000, the Company entered into agreements with three
consultants that expired on April 17, 2001. Under these agreements, the
consultants were, among other things, assisting the Company in finding
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
businesses located primarily in England, other European countries and the
Northeastern section of the United States that would advertise in and/or
link to the Company's online community.
As consideration for their services, the three consultants received options
to purchase a total of 1,300,000 shares of the Company's common stock that
were exercisable at $.40 per share at any time during the terms of the
consulting agreements. The options expired on April 17, 2001. As further
explained in Note 8 of the notes to the Audited Financial Statements, the
aggregate fair value of the options granted to the consultants as of the
date of grant was $377,000. The Company recorded the aggregate fair value
as unearned compensation which it amortized to expense over the period from
April 17, 2000 to April 17, 2001.
NorStar Group, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Note 5 - Consulting agreements (concluded):
On July 25, 2002, the Company entered into new agreements with certain of
these consultants as well as additional agreements with other consultants.
Under these agreements, the consultants will be required to, among other
things, assist the Company in finding businesses located primarily in
Europe that would advertise in and/or link to the Company's online
community in addition to performing web site development services. These
agreements will expire on July 25, 2003. As consideration for their
services, the consultants received a total of 5,050,000 shares of common
stock with an aggregate fair market value of $101,000. The Company recorded
the aggregate fair value as unearned compensation which it will amortize to
expense over the period from July 25, 2002 to July 25, 2003.
* * *
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS ON PLAN OF OPERATION
The following discussion regarding NorStar and its business and operations
contains "forward-looking statements" within the meaning of Private Securities
Litigation Reform Act 1995. Such statements consists of any statement other than
a recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect," "anticipate," "estimate" or
"continue" or the negative thereof of other variations thereon or comparable
terminology. The reader is cautioned that all forward-looking statements are
necessarily speculative and there are certain risks and uncertainties that could
cause actual events or results to differ materially from those referred to in
such forward-looking statements. NorStar does not have a policy of updating or
revising forward-looking statements and thus it should not be assumed that
silence by management of NorStar over time means that actual events are bearing
out as estimated in such forward-looking statements.
OVERVIEW
NorStar Group, Inc. was originally incorporated in the State of Utah in
March 1961 as Florist Accounting Services, Inc., a finance company that was
primarily engaged in factoring accounts receivables for florists in Utah. The
name Florist Accounting Services, Inc. was changed to Luxor Group N.S. during
1971 and to Norstar Group, Inc. during 1992. The Company was unable to develop a
profitable operation and became inactive until April 1992. During the period
from April 1992 through December 31, 1999, the Company acquired and/or began to
develop and dispose of, several businesses and certain other investments. In
1998, the company began the development of its Internet business which involves
the creation of a portal to a cyber-city, an on-line community of "One Stop
Shopping" for products, entertainment, education and business services. The
on-line community is being developed through its two subsidiaries
VeeAreCity.com, Inc. and VeeAre City the Burbs.com, Inc. The portal is designed
to provide the subscriber/member with access to several web browsers, a
directory to thousands of stores, three dimensional virtual reality ("VR") chat
rooms, forums and game rooms, a VR dating service, VR business conference room,
specialty advertising rooms with VR activities and global e-mails that can be
accessed through the web anywhere in the world. The Company also holds mineral
rights attributable to 17 claims that were acquired for gold mines located in
the Gold Mountain mining district of Esmeralda County Nevada. However,
management does not expect mining operations to become one of the Company's core
businesses. Management is attempting to find a joint venture partner to assist
the Company in developing these claims. Presently management is also evaluating
an alternative where it would suspend the development of the company's Internet
technology, at least temporarily, and look for another company that has had
ongoing commercial operations, that would merge with the company and continue
its business operation.
RESULTS OF OPERATIONS:
Nine and Three months ended September 30, 2002 as compared to the Nine and
Three months ended September 30, 2001.
The Company did not have any revenues during the nine and three months
ended September 30, 2002 and 2001. Management estimates that the Company will
not generate revenues from sales of memberships to subscribers for the near
future.
During the nine months ended September 30, 2002, the Company's operating
expenses decreased by approximately $189,000 to approximately $68,000 from
approximately $257,000 for the nine months ended September 30, 2002. The primary
cause of the decrease was a decrease in non-cash charges of approximately
$124,000 relating to amortization of unearned compensation, which resulted from
the issuance of stock options to consultants relating to the agreements
described below.
On April 17, 2000, the Company entered into agreements with three
Consultants that expired on April 17, 2001. Under these agreements, the
consultants were, among other things, assisting the Company in finding
businesses located primarily in England, other European countries and the
Northeastern section of the United States of America that would advertise in
and/or link to the Company's on-line community. The three
consultants received options to purchase a total of 1,300,000 shares of the
Company's common stock that were exercisable at $.40 per share at any time
during the term of the consulting agreements as consideration for their
services.
The aggregate fair value of the options granted to the consultants of
$377,000 as of the date of grant, as determined based on the Black-Scholes
option-pricing model, was recorded as unearned compensation, which were
amortized to expense over the periods in which the related services were
rendered, as required by accounting principles generally accepted in the United
States of America.
On July 25, 2002, the Company entered into new agreements with certain of
these consultants as well as additional agreements with other consultants. Under
these agreements, the consultants will be required to, among things, assist the
company in finding businesses located primarily in Europe that would advertise
in and/or link to the Company's online community in addition to performing web
site development services. These agreements will expire on July 25, 2003. As
consideration for their services, the consultants received a total of 5,050,000
shares of common stock with an aggregate fair market value of $101,000. The
Company recorded the aggregate fair market value as unearned compensation, which
it will amortize to expense over the period from July 25, 2002 to July 25, 2003.
In addition to the aforementioned agreements, the Company's operating expenses
also were impacted by a reduction in corporate overhead and research and
development costs of approximately $21,000 and $43,000, respectively, due to the
Company's cash position.
During the Three months ended September 30, 2002, the Company's operating
expenses increased by approximately $3,000 to approximately $35,000 from
approximately $32,000 for the three months ended September 30, 2001. This
increase was primarily a result of the Company's consulting agreement that it
entered into on July 25, 2002. Under such agreement the Company incurred a
non-cash charge of $18,000.
As a result of the above, the Company incurred a loss of approximately
$68,000 and $35,000 for the nine and three months ended September 30, 2002,
respectively, as compared to approximately $257,000 and $32,000 for the
comparable period ended September 30, 2001.
(a) Liquidity and Capital Resources
NorStar's condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. However,
the Company has not generated any significant revenues on a sustained basis from
its current operations. As shown in the condensed consolidated financial
statements, the Company has continued to incur net losses, although a
substantial portion of the losses was attributable to noncash charges for the
fair value of shares and stock options issued for services, compensation and
other expenses. As of September 30, 2002, the Company had a cash balance of only
$4,000, a working capital deficiency of approximately $257,000 and an
accumulated deficit of $6,465,000. Management believes that the Company will
continue to incur net losses through at least September 30, 2003 and that it
will need additional equity and/or debt financing of at least $2,000,000 to
enable it to fully develop its web services and development of its proprietary
virtual reality products as initially planned and sustain its operations until
it can achieve profitability and generate cash flows from its operating
activities on a recurring basis. These matters raise substantial doubt about the
Company's ability to continue as a going concern.
Management is attempting to obtain additional financing for the Company
through the issuance of equity securities, loans from financial institutions
and/or agreements with strategic partners. Management is also evaluating an
alternative where it would suspend the operations of the Company's Internet
technology, at least temporarily, and shall look for another Company that has
had ongoing commercial operations, that would merge with the Company and
continue its business operation. However, management cannot assure that the
Company will be able to sell equity securities, obtain loans from financial
institutions and/or form strategic alliances that will generate financing for
the further development of the Company's Internet technology or enter into a
merger agreement with an operating company on acceptable terms. If the Company
is not able to obtain adequate financing, or consummate a merger, it may have to
curtail or terminate some or all of its operations.
During the nine months ended September 30, 2002, the Company financed its
operations from its existing cash reserves and or the proceeds generated from
the sale of notes to its stockholders of approximately $62,000 for the nine
months ended September 30, 2002 and $99,000 for the nine months ended September
30, 2001.
We do not believe that our business is subject to seasonal trends or
inflation. On an ongoing basis we will attempt to minimize any effect of
inflation on our operating results by controlling operating costs and whenever
possible, seeking to insure that subscription rates and usage fees reflect
increases in costs due to inflation.
The Company believes the following trends, events and uncertainties
could have a material impact on their short-term and/or long-term liquidity. The
market for Internet discount services and product programs is relatively new and
is evolving rapidly. NorStar's future growth is dependent upon its ability to
create, develop and distribute programs that are accepted by its clients as an
integral part of their business model for communicating with their targeted
audiences. Demand and market acceptance of discount products and service
programs is dependent upon a number of factors, including the growth in consumer
access to and acceptance of these programs, the willingness of service and
product providers to offer their services and products to customers of NorStar
at a discount, and NorStar's ability to develop and maintain distribution
channels to sell memberships to consumers. The failure of providers or consumers
to participate in NorStar's programs or substantial increases in the adequacy or
availability of other programs could have a material and adverse impact on
NorStar's business, operating results and financial condition. In addition,
NorStar does not have long-term contracts and needs to establish relationships
with new vendors. As a result, providers of discounted services or products to
NorStar's members may unilaterally reduce the scope of, or terminate their
relationships with NorStar. The termination of NorStar's business relationship
or a material reduction in the availability of services or products from any of
NorStar's significant providers or networks thereof or NorStar's failure to
develop significant new provider relationships would materially and adversely
affect its business, operating results and financial condition.
NorStar believes that within the market niche it seeks to develop, the following
known trends, events or uncertainties that have had or that are reasonably
expected to have a material impact on their net sales or revenues or income from
their continuing operations will include the following: (i) The market for
discounted products and services is characterized by rapid changes in
participating companies, consumers and service provider requirements and
preferences, new service and product introductions and evolving industry
standards that could render NorStar's existing service practices and
methodologies obsolete; (ii) NorStar's success will depend, in large part, on
its ability to improve its existing services, develop new services and solutions
that address the increasingly sophisticated and varied needs of NorStar's
clients, and respond to technological advances, emerging industry standards and
practices, and competitive service offerings; and (iii) NorStar may not be
successful in responding quickly, cost-effectively and sufficiently to these
developments. If NorStar is unable, for technical, financial or other reasons,
to adapt in a timely manner in response to changing market conditions or these
requirements, its business, results of operations and financial condition would
be materially adversely affected.
Item 3 - CONTROLS AND PROCEDURES
(a) DISCLOSURE CONTROLS AND PROCEDURES. Within 90 days before filing this
report, the Company evaluated the effectiveness of the design and operation
of its disclosure controls and procedures. The Company's disclosure
controls and procedures are the controls and other procedures that it
designed to ensure that it records, processes, summarizes and reports in a
timely manner the information it must disclose in reports that it files
with or submits to the Securities and Exchange Commission. Harry
DiFrancesco, the Company's President and CEO and Andrew Peck, our Principal
Accounting Officer, supervised and participated in this evaluation. Based
on this evaluation, Messrs. DiFrancesco and Peck concluded that, as of the
date of their evaluation, the Company's disclosure controls and procedures
were effective.
(b) INTERNAL CONTROLS. Since the date of the evaluation described above, there
have not been any significant changes in the Company's internal accounting
controls or in other factors that could significantly affect those
controls.
PART II - OTHER INFORMATION
Item 1. Legal proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Default in Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
------- -----------
99.1 Certification of the Chief Executive Officer of
Norstar Group, Inc. Pursuant to 18 U.S.C. Section
1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Certification of the Chief Financial Officer of
Norstar Group, Inc. Pursuant to 18 U.S.C. Section
1350, As Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) There were no Current Reports on Form 8-K filed by
the registrant during the quarter ended September 30,
2002.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Company
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
NORSTAR GROUP, INC.
By: /s/ Harry DiFrancesco
Harry DiFrancesco
President
Date: November 12, 2002
In accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Company in the capacities set forth and on
the dates indicated.
Signature Position Date
--------- -------- ----
By: S/Harry DiFrancesco President and Chairman Date: November 12, 2002
-------------------------- of the Board
Harry DiFrancesco
By: S/Andrew S. Peck Vice President of Finance Date: November 12, 2002
------------------------- Secretary and Director
Andrew S. Peck
By: S/Maynard Neil Abogov Vice President of Sales Date: November 12, 2002
------------------------ and Management and Director
Maynard Neil Abogov
By: S/Jay Sanet CEO and Director Date: November 12, 2002
------------------------
Jay Sanet