SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-KSB/A

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934 [FEE REQUIRED] OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE
     ACT OF 1934 [NO FEE REQUIRED]

                       For the fiscal year ended 12/31/00
                           Commission File No. 0-9416

                                WCM CAPITAL, INC.
                 (Name of small business issuer in its charter)

          Delaware                                         13-2878202
(State or other jurisdiction of                          (I.R.S. Employer
Incorporation or organization)                          Identification No.)

                    P.O. Box 344, Millburn, New Jersey, 07041
                    (Address of principal executive offices)

Issuer's telephone number: 212-344-2828

Securities Registered under Section 12(b) of the Exchange Act: None

Securities Registered under Section 12(g) of the Exchange Act: Common

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  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 [_]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B is not  contained  in  this  form,  and no  disclosure  will  be
contained,  to the  best of  registrant's  knowledge,  in  definitive  proxy  or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

State issuer's revenues for its most recent fiscal year.  $ 0

State the  aggregate  market value of the voting and non- voting  common  equity
stock held by  non-affiliates  computed by  reference  to the price at which the
common equity was sold, or the average bid and asked price of such common equity
as of a specified date within the past 60 days. $ 1,459,236

State the  number  of shares  outstanding  of each of  issuers'  class of common
equity, as of the latest practical date. 1,782,676(1) as of March 15, 2001

DOCUMENTS INCORPORATED BY REFERENCE IN PART III - SIX
Transitional Small Business Disclosure Format (check one)    Yes [_] No [X]

(1)  Includes  169,750 shares and 153,690  shares issued to Richard  Brannon and
     Joseph Laura and thereafter rescinded.  See Item 1.  Business-Employees and
     Technical Consultants

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PART I       TABLE OF CONTENTS                                            PAGE

Item 1      Description of Business                                         3

Item 2      Properties                                                      6

Item 3      Legal Proceedings                                              12

Item 4      Submission of Matters to a Vote of Security Holders            15

PART II

Item 5      Market for Registrant's Common Equity                          16
            and Related Stockholder Matters

Item 6      Management's Discussion and Analysis                           18
            or Plan of Operation

Item 7      Financial Statements                                     F1 - F26

Item 8      Changes in and Disagreements with                              24
            Accountants on Accounting and
            Financial Disclosure
PART III

Item 9      Directors, Executive Officers, Promoters,                      25
            and Control Person; Compliance with
            Section 16 under the Exchange Act

Item 10     Executive Compensation                                         26

Item 11     Security Ownership of Certain Beneficial                       27
            Security Owners and Management

Item 12     Certain Relationships and Related                              27
            Transactions

PART IV

Item 13     Exhibits, Reports on Form 8-K                                  31
            Signatures


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                                     PART I


Item 1. Description of Business

General

The  Company  incorporated  on  December  1, 1976 under the laws of the State of
Delaware, is engaged in the exploration,  development and mining of precious and
nonferrous metals,  including gold,  silver,  lead, copper and zinc. The Company
owns or has an interest in a number of precious and nonferrous metal properties.
The Company's  principal  mining  property is the Franklin  Mines,  located near
Idaho Springs in Clear Creek County,  Colorado,  for which the Company  acquired
the exclusive right to explore,  develop,  mine and extract all minerals located
in approximately  51 owned and/or patented mining claims (the "Franklin  Mines")
and a crushing and  flotation  mill which is located on the site of the Franklin
Mines (the  "Franklin  Mill").  The Company  cannot  assure that a  commercially
mineable  ore body,  i.e. a reserve,  exists in the  properties  comprising  the
Franklin  Mines,  which has been  maintained in "stand by"  condition  since our
inception.  While none of our properties  were  operational in fiscal year 2000,
the Company continues its  rehabilitation of the property in anticipation of the
establishment of a commercially mineable ore body and commencement of operations
in the future.

History and Development of the Company

The claims that  comprise  the  Franklin  Mines are located on a site upon which
placer gold was discovered above the ground at Idaho Springs,  Colorado in 1859.
The  Franklin  Mines vein  system was  discovered  in 1865.  Thereafter,  mining
commenced  on the site in 1865 and  continued on an almost  uninterrupted  basis
through  1915 until the  outbreak  of World War I caused  curtailment  of mining
operations in the area. The principal minerals extracted during this period were
gold, silver,  lead, copper, and zinc. The Franklin Mines have not operated on a
continuous or consistent commercial basis since 1915.

On December  26,  1976,  the Company  acquired  Gold  Developers  and  Producers
Incorporated,  a Colorado corporation that leased 28-patented mining claims from
Audrey and David Hayden and Dorothy Kennec pursuant to a mining lease and option
to purchase,  dated November 12, 1976 (hereinafter  collectively  referred to as
the  "Hayden/Kennec  Leases").  In 1981, the Company  commenced a rehabilitation
program  to extend  and  rehabilitate  the  shafts  and  tunnels in place at the
Franklin Mines, install the Franklin Mill and search for and delineate a body of
minerals. The Company completed the Franklin Mill, which is capable of crushing,
processing  and  concentrating  approximately  150 tons of minerals  per 24-hour
period, in 1983.

Operations at the Company's Mining Properties

Since its inception,  the Company has spent significant monies  constructing the
Franklin  Mill,  rehabilitating  the Franklin and  Freighters  Friend shafts and
underground workings and constructing surface support facilities of the Franklin
Mines.  In recent  years,  the Company has (a)  instituted a plan for  quarterly
ground water  monitoring  which includes surface water and ground water sampling
plans, (b) taken steps to correct run-off problems  associated with the Tailings
Pond disposal areas currently  located on the property,  (c) reclaimed the lined
tailings ponds located adjacent to the Franklin Mill, (d) set forth  preliminary
plans for the installation of a paste backfill system for tailings  disposal and
(e)  applied  to the  Colorado  Division  of  Minerals  and  Geology,  the state
governing  authority  for mining and milling  (the "DMG") for  expansion  of the
permitted area at the Franklin Mines and Franklin Mill to allow for  performance
of certain of the remediation work outlined above.


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In  addition,  the Company  has  instituted  an  environmental  protection  plan
containing  emergency response plans for designated  chemicals which may be used
on site and appropriate  measures  consistent with local government  agencies to
prevent damage to area wildlife form chemicals,  toxic or acid forming materials
and/or acid mine drainage. The Company's plan has been approved by the DMG.

(1) The Franklin Mining Properties

During fiscal year 1999 and 2000, no  exploration  activities  were conducted at
the Franklin  Mine. The Company  continued its  rehabilitation  and  reclamation
efforts.  Specifically, the Company continued with its water monitoring programs
and  commissioned  additional  reports and research  into claims  located on the
mining property.

Throughout  1999,  inspections of the Franklin Mining  properties  revealed that
certain reclamation issues still remained outstanding at the property.  Drainage
problems  and  substandard  linings  at  the  tailings  disposal  areas  created
potential hazards and required protection measures are addressed.  Tailings Pond
No. 5 was of specific  concern to the DMG.  After  several  extensions  had been
granted,  the Company was unable to complete all of the preventive work required
by the DMG. Due to lack of funds, the Company has not been able to institute its
paste backfill program, which it believes would alleviate the problems currently
existing at its tailings disposal area.

On January 5, 2000,  the Company  submitted a letter to the DMG to clarify  why,
among other  things,  it has not  completed  all of the  recommended  preventive
measures at the site,  specifically  with  respect to its  tailings  ponds.  The
Company  explained its difficulty in obtaining  needed financing to continue its
reclamation and remediation plans and to begin mining and milling  operations at
the Franklin Mines due to the depressed  price of gold.  Therefore,  the Company
concluded that it is economically  unfeasible to mine and mill at the properties
at this time. Notwithstanding, the Company does not wish to abandon its business
plan or reclaim the  property  but rather  intends to maintain the mine and mill
site and to comply with all DMG  regulations  with hopes of restarting  the mine
and mill as soon as the price of gold makes it profitable to do so.

On February 7, 2000,  the DMG responded to the Company's  correspondence  with a
recommendation   that  the  Company's  mining  permit  be  placed  in  Temporary
Cessation.  Temporary  Cessation is a limited  period of  non-production,  which
results when an operator plans to temporarily  cease production for at least 180
days upon the  filing  of  notice  thereof  with the DMG.  In the  event  that a
Temporary Cessation is granted, no further reclamation work or mining work would
be  required  for  the  duration  of  the  Temporary  Cessation,   beyond  basic
maintenance   and   reclamation   required   to  keep  the  site  from   further
deterioration. The DMG further indicated that should the Company choose to apply
for Temporary Cessation,  certain of the tailings pond area would be required to
be stabilized and the  groundwater  and the stability of the tailings ponds must
be protected  from further  deterioration.  The DMG required  that any notice of
Temporary Cessation  submitted must specifically  address an alternative interim
reclamation  plan for  Tailings  Pond No. 5 as well as outlining  the  temporary
stabilization measures needed to comply with these requirements.

As recommended  by the DMG, the Company  requested for a change of status of its
permit  to   Temporary   Cessation.   Following   a  meeting   of  the  DMG  and
representatives  of the Company held on February 10, 2000, the DMG set forth the
measures in a letter, dated March 9, 2000, which must be taken by the Company to
bring the site into compliance with groundwater regulations and to stabilize the
tailings pond and site during the Temporary Cessation.


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The Company's application for Temporary Cessation of its permit is still pending
before the DMG. While the Company continues its water monitoring  activities and
to work the DMG to obtain  Temporary  Cessation,  there can be no assurance that
our request will be granted.  In the event that our  application  is denied,  we
will have to comply with more stringent  requirements to keep our permit active.
It is likely that we will be unable to continue  rehabilitation and reclaimation
work as required  by the DMG due to our lack of funding.  Failure to comply with
any rules,  regulations or orders of the DMG can result in citations  which,  if
remained uncorrected, will result in the loss of our mining permit and will have
a material adverse effect on the Company as a whole.

The Company has not conducted any  commercial  mining  operations  during fiscal
year 2000 and, as a result,  had not generated  any revenues from  operations at
the Franklin Mine in fiscal year ended December 31, 2000. Therefore, the Company
remains  in the  exploration  stage.  Given the  Company's  efforts to place its
permit in Temporary  Cessation,  it is unlikely  that the Company will  commence
exploration  in the year 2001. The Company,  however,  plans to continue to work
closely  with the Federal  and  Colorado  state  mining  regulatory  agencies as
required by law to obtain the  Temporary  Cessation  Order and to  maintain  its
properties until such time as exploration activities can recommence.

(2) Other Ventures

On or about January 11, 1999, US Mining, Inc. ("USM"), a Company wholly-owned by
Mr. William C. Martucci,  a director of the Company  executed a letter of intent
with agents for the Alamosa Mining and Leasing  Company,  Inc. and the Renegade,
LLC to  enter  into a joint  venture  arrangement  for the  exploitation  of the
Shafter Mining Property located in Clear Creek County,  Colorado. USM is engaged
in the business of holding and investing in mining  properties.  To date,  USM's
sole  business  has been  providing  the  Company  with  financial  support  and
contracting  to  acquire  50% of the  mineral  rights  originally  leased by the
Company under the Hayden/Kennec Leases. See Item 2 - Property; Item 12 - Certain
Transactions  and  Related  Parties.  The letter of intent was  assigned  to the
Company on January 11,  1999.  After  consultation  with USM and  completion  of
preliminary due diligence with respect to the  feasibility of commencing  mining
operations at the Shafter Mining  Property,  the Company  determined that it was
not feasible to pursue this  arrangement  and notified the parties of its intent
in April 1999.

On January 18, 2000, the Company,  Mr.  William C.  Martucci,  a director of the
Company and USM entered into an agreement  whereby the Company would acquire USM
in exchange for  approximately  85% of the issued and outstanding  shares of the
Company  on  the  closing  date  The  parties  were  unable  to  consummate  the
transaction and the contract  expired on September 30, 2000. See Item 12-Certain
Transactions and Related Parties.

Employees and Technical Consultants

The Company had no full-time  employees.  The Company's executive officers serve
as needed on a part-time  basis for no  compensation.  The  Company  will engage
technical personnel and other qualified consultants and experts on a contract or
consulting basis as needed.

On or about June 1, 2000 the Company  issued  169,750  shares of Common Stock to
Richard  Brannon,  a Vice  President of the Company and 153,690 shares of Common
Stock to Joseph Laura,  a consultant  of the Company.  The shares were issued to
Laura as  compensation  for  services  rendered  and to Brannon  for present and
future services rendered in connection with the Company's mining business. These
shares were registered by the Company on Form S-8 on or about June 6, 2000.


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On or about December 29, 2000, the Company  entered into Agreements with each of
Mr.  Brannon  and  Mr.  Laura  regarding  the  issuance  of  shares  to  them as
compensation for services.  Pursuant to these Agreements,  the Company rescinded
its  agreement  to  issue  shares  to each of Mr.  Laura  and  Mr.  Brannon  but
acknowledged  indebtedness  to  Laura of  $716,500  set  forth  in the  original
Agreement and consulting fees of approximately $175,000 which were earned by Mr.
Brannon from May 2000 through December 31, 2000.

Item 2. Properties

Glossary of Terms

Assay                                   A chemical  evaluation  of metal content
                                        conducted After mining ore.

Backfill                                Mine   waste   which  is   disposed   of
                                        underground in a formerly mined area.

Chalcopyrite                            A mineral  containing  copper,  iron and
                                        sulphur.

Exploration Stage Company               Companies  engaged in the preparation of
                                        an  Established   commercially  mineable
                                        deposit or reserve for its extract which
                                        are not in the production stage.

Dip                                     An angle  measured  in degrees  from the
                                        horizon.

Fault                                   A fracture  in the earth  through  which
                                        mineralizing solutions may rise and form
                                        a vein.

Fault System                            A large regional fracture.

Footwall                                That   portion  of  the  vein  which  is
                                        located below.

Galena                                  A  mineral   containing  both  lead  and
                                        sulphur.

Hanging wall                            That   portion  of  the  vein  which  is
                                        overhead.

J.L. Emerson Fault                      A large  fracture  in the earth' s crust
                                        located in the Franklin Mine area.

Main Trunk                              A highly mineralized portion of the J.L.
                                        Emerson fault located on the  properties
                                        constituting the Franklin Mines.

Microcline gneiss                       A type of  rock  found  at the  Franklin
                                        Mine.

Mill                                    The  plant  facility  where  the  metals
                                        constituting  the ore are  removed  from
                                        mined rock.


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Mineralized Material                    A   mineralized   body  which  has  been
  or Deposit                            delineated   by   appropriate   drilling
                                        and/or  underground  sampling to support
                                        sufficient  tonnage and average grade of
                                        metals  under  SEC  standards.   Such  a
                                        deposit  does not  qualify  as a reserve
                                        until a comprehensive evaluation,  based
                                        upon  unit  cost,  grade,  recovers  and
                                        other   factors,    concludes   economic
                                        feasibility.

Monzonite                               Intrusive  rock types  containing  large
                                        Amounts   of   quartz   and   often  the
                                        progenitor  of  metallic,   mineralizing
                                        solutions.

Orogeny                                 An event  causing  a major  upheaval  or
                                        reshapement of the earth's  crust,  such
                                        as volcanism,  mountain  building or ore
                                        formation.

Paste                                   Backfill  Procedure in which backfill is
                                        treated   with   certain   chemicals  to
                                        solidify the same to prevent seepage.

Pillars                                 Unmined sections of ore in a stope.

Pre-Cambrian age                        A time  period in  history  dating  back
                                        approximately 600 million years ago.

Probable (Indicated) Reserves           Reserves  for which  quantity  and grade
                                        and/or   quality   and   computed   from
                                        information  similar  to that  used  for
                                        proven   reserves,   but  the  site  for
                                        inspection, sampling and measurement are
                                        farther  apart  or  are  otherwise  less
                                        adequately   spaced.   The   degree   of
                                        assurance,  although lower than that for
                                        proven  reserves,   is  high  enough  to
                                        assume   continuity   between  point  of
                                        observation.

Proven (Measured) Reserves              Reserves   for  which  (a)  quantity  is
                                        computed  from  dimensions  revealed  in
                                        outcrops,  trenches,  workings  or drill
                                        holes;  grade  quality are computed from
                                        the results of detailed sampling and (b)
                                        the sites for  inspection,  sampling and
                                        measurement  are spaced so  closely  and
                                        the   geologic   character  is  so  well
                                        defined  that  size,  shape,  depth  and
                                        mineral  content  of  reserves  are well
                                        established.

Pyrite                                  A  mineral   containing  both  zinc  and
                                        sulphur.

Raise                                   A tunnel driven upward from a level.

Reserves                                A  reserve  is that  part  of a  mineral
                                        deposit which could be economically  and
                                        legally  extracted  or  produced  at the
                                        time of the reserve determination.


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Shaft                                   A  vertical  tube-like  opening  whereby
                                        miners enter the mine.

Sphalerite                              A  mineral   containing  both  zinc  and
                                        sulphur.

Strike                                  In a horizontal direction.

Stope                                   The  area  of  the  mine  where   miners
                                        extract mineral deposits from the mine.

Tailings                                Waste, which is produced by the Mill.

Tailings Pond                           The  location   where  mill  wastes  are
                                        deposited.

Telluride                               A  mineral  containing  tellurium  often
                                        found  with  quantities  of gold  and/or
                                        silver and sulphur.

Tennentite                              A  complex  mineral  containing  copper,
                                        antimony or silver.

Tertiary Period                         A time  period in  history  dating  back
                                        approximately  40  to 70  million  years
                                        ago.

Vein                                    A fracture  in the  earth's  crust where
                                        minerals have been deposited.

Winze                                   A tunnel driven downward from a level.


Colorado Mining Properties

The property  which  constitutes  the Franklin  Mines  consists of (i) leasehold
interests in the mineral rights to 28 claims comprising  approximately 322 acres
evidenced by the  Hayden/Kennec  Leases and (ii) an  additional 23 claims leased
and/or purchased by the Company  comprising  approximately 20 additional  acres,
for a total of 51 claims over 340 acres.  The  Franklin  properties  include all
improvements made by the Company thereon, including the Franklin Mill capable of
supporting up to a 150 ton per day operation in its present  state.  The Company
is required to pay taxes and certain other  expenses  relating to the properties
leased.  Management  believes that it currently maintains adequate insurance for
all of its mining properties.

Hayden/Kennec Leases

Under the original terms of the Hayden/Kennec  Leases, which expired in November
1996, the Company was required to pay an aggregate  minimum  royalty  payment of
$2000 or 5% of the net smelter royalties  realized by the Company to Mrs. Hayden
and Mrs.  Kennec.  The Company was also  required to pay all other  amounts with
respect to  maintenance  and upkeep of the  property  including  any taxes.  The
Hayden/Kennec  Leases also  contained an option to purchase  the leased  mineral
rights for a purchase price of $1,250,000 less all royalty  payments made during
the term of the lease.


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As of the  expiration  date,  the Company had paid $480,000 in royalties,  which
would have set the option price at $770,000.  In November  1996, the Company was
granted a one-year  extension of the  Hayden/Kennec  Leases under the same terms
and conditions.

In late 1997, the Company had been in discussions  with Martucci to effectuate a
business  combination  with  certain  of his  entities.  See  Item 12 -  Certain
Relationships and Certain  Transaction.  During these  discussions,  the Company
explained to Martucci the situation regarding the Hayden/Kennec  leases. By this
time, the extension period was set to expire and the Company was unsuccessful in
its efforts to renegotiate the terms of the lease. In addition,  Mrs. Hayden had
entered into an agreement  with Gems & Minerals  Corp.,  a former joint  venture
partner of the  Company,  to sell her 50%  interest to Gems for a cash  payment.
This  purchase  agreement  was set to expire and it was unlikely that Gems would
consummate the purchase by the expiration date. Additionally, the Company was in
the  process of  severing  its  relationship  with  Gems,  which  would  further
aggravate the situation regarding the leases.

The Company  explained to Martucci the  importance of maintaining an interest in
the mineral  rights covered by the  Hayden/Kennec  Leases as they represent over
50% of  the  mineral  claims  available  to  the  Company  for  exploration  and
development.  Since the Company did not posses the funds to purchase  the Hayden
Interest and was  unsuccessful in its efforts to renegotiate  the  Hayden/Kennec
Leases, USM began negotiations with Mrs. Hayden to acquire her interest.

On November 13, 1997,  just prior to the  expiration of the extension  period of
the  Hayden/Kennec  leases,  USM entered into an agreement  with Mrs.  Hayden to
purchase her 50% interest  (the "Hayden  Interest")  in the mineral  rights (the
"Purchase Agreement"). Mrs. Hayden had sold her portion of the surface rights to
the Company in August 1982.

Pursuant to the Purchase Agreement, Mrs. Hayden agreed to sell to USM the Hayden
Interest for $75,000, which would be evidenced by a note issued to Hayden by USM
at the  consummation  of the sale.  The  Purchase  Agreement  also  contained  a
provision  that  extended  the  Hayden/Kennec  Leases with respect to the Hayden
Interest until March 13, 1998 and required USM to pay royalty payments of $1,000
per month.

As of the date  hereof,  USM has not  consummated  the  purchase  of the  Hayden
Interests because of title issues pertaining to the ownership of the properties;
however,  the terms of the Purchase  Agreement  remain in effect and Mrs. Hayden
has agreed to further extend the Hayden/Kennec Leases with respect to the Hayden
Interest  through  December 31,  2001.  The Company has also been advised by USM
that all royalty  payments  have been paid and will  continue to be paid to Mrs.
Hayden until the sale is  consummated  or the Purchase  Agreement is terminated.
Since  November  1997,  USM  has  paid  royalty   payments  to  Mrs.  Hayden  of
approximately $37,000 through December 31, 2000.

Fifty percent (50%) of the rights comprising the original  Hayden/Kennec  Leases
is owned  by Mrs.  Kennec  (the  "Kennec  Interest").  Upon  the  expiration  of
extension  period of the  Hayden/Kennec  Leases,  the  Company  entered  into an
extension agreement with Mrs. Kennec to extend the Hayden/Kennec  Leases as they
pertain to the Kennec Interest until March 12, 1998. No further  extensions have
been  granted by Mrs.  Kennec and the  Company is not in  discussions  with Mrs.
Kennec  regarding  her  interest  in the mineral  rights.  While the Company had
discussions  with Mrs. Kennec in the past regarding her interests,  we could not
come to terms  acceptable  to either party.  The Company has not had  meaningful
discussions  with Mrs. Kennec in some time and it is unlikely that  negotiations
will resume with Mrs. Kennec any time in the near future.


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Currently, the ability of the Company to exploit the mineral rights evidenced by
the  Hayden/Kennec  Leases is  unclear.  In 1994,  Gems  received  an opinion of
counsel  from  Freeborn & Peters,  stating  that  Colorado  Law would permit the
exploitation  of the mineral rights that are not 100% owned by one party so long
as the  non-participating  owner (Mrs.  Kennec) is paid whatever net profits are
owed to her upon  commencement  of  operations.  Since USM is in a  position  to
purchase the Hayden  Interest,  we are hopeful that our  inability to come to an
Agreement with Mrs. Kennec with respect to the Kennec Interest will not prohibit
us from exploiting these mineral rights. Our belief assumes that we maintain our
relationship  with USM and that USM will  consummate  the purchase of the Hayden
Interest and allow us to exploit these claims.

It is important to note that since the legal  opinion on which we are relying is
several years old, the  statements  made may be out of date and may not apply to
our  current  situation.  In the event that the advice  rendered  in the opinion
letter is not applicable, the fact that the Company does not own a 100% interest
in the mineral rights subject to the Hayden/Kennec Leases may severely limit the
ability of the Company to exploit  these  minerals  should we decide to commence
operations in the future.  Moreover,  if USM fails to acquire the mineral rights
from Mrs.  Hayden prior to the  expiration  of the Purchase  Agreement or if USM
should  acquire the rights but decide not to allow the  Company  access to them,
the Company will no longer have any access to the mineral  rights covered by the
Hayden/Kennec Leases.

Location and Access

The  Franklin  Mines  and  Franklin  Mill are  located  in Clear  Creek  County,
Colorado,  approximately 2.7 miles north of the town of Idaho Springs,  which is
accessible from Interstate 70  approximately  33 miles west of Denver.  The mine
location is accessible  year round,  except in the case of a major  snowstorm in
winter months.

Mineralization in the Area

Most of the minerals  deposition  in the area where the Franklin Mine is located
has been credited to the period of the Laramide Orogeny. Minerals extracted from
the region included gold, silver,  copper,  lead, zinc, and uranium.  By far the
largest  single metal values were in gold,  with silver being a distant  second.
Though many of the  smaller  veins  located in the area  pinched out at moderate
depth, some have shown strong mineralization at greater depths.

The  minerals  deposits  are of four types:  (i)  pyritic  gold  minerals;  (ii)
galena-sphalerite minerals; (iii) composite  (pyrite-galena-sphalerite) minerals
and (iv) telluride  minerals.  Pyritic gold minerals are chiefly associated with
pyrite,  chalcopyrite,  and tennentite. The "composite minerals" are believed to
be the result of two or more periods of  mineralization,  with pyritic  minerals
first and  galena-sphalerite  second;  mineral  content  varies  widely with the
relative  percentage of the different types of ore present.  Telluride  minerals
are present mostly in the Northeast  corner of the district,  but some telluride
minerals have been noted elsewhere.

Geology of the Franklin Mines

The rocks most commonly seen in the Franklin Mines are  Pre-Cambrian age granite
and microcline gneiss. Tertiary Period,  monzonite,  the most common of which is
quartz  monzonite,  can be seen on the ninth level and are  reported  from lower
levels in the Gem vein or Gem workings of the Franklin Mines. The general strike
of the system is N75 degrees W with dips varying from 45(0) to 79(0).


--------------------------------------------------------------------------------
                                    Page 10
<PAGE>

The structure of the mines is  controlled by the J.L.  Emerson Fault system that
runs in a  west-northwest  direction  across  the  whole  property  and  beyond.
Secondary to the J.L.  Emerson Fault are  multitudes of small fissure veins that
are parasitic to the main break.  Some of these veins contribute to considerable
mineralization  where they  intersect the J.L.  Emerson Fault  structure.  These
mineral bodies are  observable in several  locations in the Franklin 73 mine and
the Gem mine,  one  measuring  22 feet wide and 60 feet in  length.  It has been
reliably  reported  that some of the  large  stopes  mined in the Gems  workings
measured up to 105 feet in width.

Estimated Mineralized Material

Mineralization  of the Franklin Mine and associated  Gem, the Freighter mines is
that generally  associated  with the "Main Trunk" of the J.L.  Emerson Fault. No
reference is being made regarding the mineral  potential of structures  situated
adjacent to, or off the "Main Trunk".

Sampling by the channel  sample method was  conducted  during the period of 1975
through 1993 with assaying  provided by the Franklin and other accredit ed assay
laboratories.  Assays were also  obtained from the old Gem Mining Co. mine assay
map, dated 1921 (the "Gems Assay Map").  The sampling process was carried out at
right  angles to the strike of the veins.  Blocks were  sampled on three or four
sides  and at  times  within  by  raise  or  winze.  Those  blocks,  which  were
extensively  mined,  were entered where  possible  through open stopes with both
pillars and "backfill" being sampled.

The Franklin  mineral  structure  is generally a tabular  structure in shape and
consisting of several  parallel to  sub-parallel  veins,  striking in a westerly
direction and dipping at 45(0) to 79(0) north. Its depth is unknown.

The J.L. Emerson Fault is a large regional structure,  striking east to west and
having an irregular  plain that dips to the north at 45 to 79 degrees.  The J.L.
Emerson Fault is associated throughout with a series of parallel to sub-parallel
sigmoidal  shaped  fractures that may focus east or west on the principal  fault
plain.  These  fracture  patterns  are found on nearly all levels and  represent
important  Parallel  mineralized fault fractures,  the so-called  "footwall" and
"hanging wall" veins.  Each of the principal veins has historically  contributed
to  production  in the Gem vein. A second set of true  fissure  veins of a later
date and striking  northeast and southwest  interdict the J.L.  Emerson Fault at
several  points,  but  does not  cross.  These  veins  are of  unknown  economic
potential.

The  mineral  structures  in the  Franklin  Mines are often  large,  but  poorly
defined. It was suggested that a core-drilling program be conducted at promising
locations to determine mineralized zones therein.

The Company has not developed a systematic  exploration  methodology to increase
the tonnage of mineral deposits,  which have been drilled and channel sampled by
our geologists due to the fact that the Company is in the process of placing its
mining permit in Temporary  Cessation.  There is no assurance  that any reserves
exist in the Franklin Mine system. Moreover,  mining activities are not possible
without the existence of a commercially viable ore body. A core-drilling program
and a comprehensive  economic evaluation will be required to determine whether a
commercially  viable ore body exists and whether it is economically  Feasible to
exploit such ore body should one exist.


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                                    Page 11
<PAGE>

Operations

During 1999, the Company continued reclaimation and rehabilitation activities in
hopes of conducting  additional  exploration to obtain more detailed evaluations
of its mineralized material. The Company ceased these activities during 2000 and
focused its efforts on preparing its  properties  for Temporary  Cessation.  The
Company is currently awaiting approval of its application.

The Company  continues to explore the  possibility  of obtaining  custom milling
business  from small  operators  in the  general  area.  Our  efforts  have been
unsuccessful to date.

USM has verbally  pledged to continue to provide  financing to the Company on an
as needed basis through  December 31, 2001. This financing is in addition to the
advances  made to the Company by USM from 1998 though  December 31, 2000.  Other
alternatives  such as private  placements,  loans,  or public  offerings  may be
considered for future operating capital;  however, it is uncertain as to whether
any of these  financing  options will be viable  alternatives  for the Company's
capital needs.

As mining is a regulated  business,  compliance with regulatory  requirements of
the various agencies having jurisdiction over the Company's activities may cause
delays in the  schedules  set by the  Company  for  returning  the status of its
permit  to  active  and  performing  work as may be  needed  from  time to time.
Moreover,  capital  outlays in excess of those  anticipated  may be  required by
regulatory bodies; thus adversely affecting the scope and timing of future plans
and operations.

Mill/Metallurgy

In the past, the Franklin Mill operated on a limited schedule while  exploration
and development was taking place.  While the Franklin Mill has not operated with
respect to the milling of minerals,  limited-crushing  activities  took place in
early 1996 for the purpose of  preparing  bulk  mineral  samples  for assay.  We
anticipate that the Company's permit will be placed in Temporary Cessation,  and
therefore,  it is unlikely that the Company will conduct any crushing activities
in 2001. However, if economically feasible opportunities present themselves, the
Company  may make  application  to the DMG for a change in permit  status in the
future.

Offices of the Company

The  Company  maintains  its  executive  offices  in  Millburn,  New  Jersey and
maintains an office on site at the Franklin mine in Idaho Springs.

Item 3. Legal Proceedings

The Company,  from time to time,  may become  involved in various  legal actions
associated with the normal conduct of its business operations.  No such actions,
other  than  those  set  forth  below,  involve  known  material  gain  or  loss
contingencies not reflected in the Company's financial statements.

Convertible Debentures

On June 1, 1994, the Company advised the Transfer Agent/Trustee that the Company
was  not  in  compliance  with  certain  of the  terms  of  the  indenture  (the
"Indenture")  relating to the  Company's  12 1/4%  Convertible  Debentures  (the
"Debentures") in that it had not maintained  current filings with the Securities
and  Exchange  Commission  (the  "Commission")  as  required.  Accordingly,  the
Transfer  Agent/Trustee was instructed not to convert any of the Debentures into
Common Stock of the Company until such time as the Company notified the Transfer
Agent.


--------------------------------------------------------------------------------
                                    Page 12
<PAGE>

The Company failed to make required sinking fund payments in 1994 and was unable
to pay the principal balance of the Debentures due on December 31, 1994
resulting in default under the terms of the Indenture.

In  September,  1997,  certain of the  Company's 12 1/4%  Convertible  Debenture
holders, including the Hopis Trust (the "Plaintiff Debentureholders") instituted
an action in the Supreme  Court of the State of New York against the Company for
payment on approximately $42,500 principal amount of Debentures plus accrued and
unpaid  interest  totaling  approximately  $13,000 and other costs and  expenses
related thereto.

Thereafter,  the Plaintiff  Debentureholders  moved for summary judgment against
the  Company.  The  Company did not to oppose the motion and default was entered
against  the  Company  in  the  amount  of  $42,500  plus  interest,  costs  and
disbursements  (the  "Default").  Moreover,  the  issue of  attorney's  fees was
severed from the case and all to be set down for an inquest.

In  February   1998,   USM  entered  into  an  Agreement   with  the   Plaintiff
Debentureholders  agreeing to pay the Judgment plus certain  additional costs in
the event that the Company  fails to pay the  Judgment and USM  consummates  the
Transaction  with the  Company.  In the event  that USM did not  consummate  the
Transaction by July 12, 1998,  USM agreed to pay the Plaintiff  Debentureholders
$5,100 for their  Agreement  not to enter the  Judgment  against  the Company or
pursue the inquest.  Plaintiff Debentureholders agreed not to enter the Judgment
against the Company  until July 12, 1998 or until USM notifies them that it will
not pursue the Transaction.

On or  about  April 6,  1998,  Martucci  terminated  his  letter  of  intent  to
consummate the Transaction with the Company. Despite such termination, Plaintiff
Debenture holders agreed to extend the terms of their Agreement with USM through
December  1998.  As of date  hereof,  the  Company  is not aware of any  further
extension  nor, to its knowledge has the Judgment been entered.  If the proposed
settlement is not consummated,  there can be no assurance that the Judgment will
not be  entered  and the  Company  will be  required  to pay the  amount  of the
Judgment, including any costs, interest and penalties related thereto.

The  continued  default in the  Debentures  by the Company may result in Company
being  subject to additional  legal  proceedings  by the Transfer  Agent/Trustee
under the  Indenture  or from other  holders  seeking  immediate  payment of the
$102,500 plus related  interest and  penalties.  While the Company hopes to cure
the default or, in the alternative,  reach an acceptable settlement  arrangement
with the holders,  there can be no assurance that the funds will be available in
the future to meet all of the Company's obligations.

On November 2, 2000 American Stock Transfer and Trust Company served the Company
with a summons,  as Trustee under the Indenture dated January 2, 1990 to receive
damages on behalf of the holders of the Company's 12-1/4% Convertible  Debenture
Holders in the amount of $142,000.00  plus interest and other fees.  This action
is as a result of the default on the Debentures described above and are separate
and apart from the September  1997 action,  which  involves  specific  debenture
holders. As of the date of this report,  there has been no further  developments
with either proceedings.

NASDAQ Delisting

From  January  11,  2000  through  December  31,  2000,  the Company has been in
compliance with the requirements  for continued  listing on the NASDAQ Small Cap
Market;  however,  there can be no assurance that in the future the Company will
maintain  such  compliance.  Should  this  occur,  our stock might be subject to
delisting from the NASDAQ Small Cap Market. In such event, Management is hopeful
that  the   Company's   Common   Stock   will   qualify   for   trading  on  the
Over-The-Counter/Bulletin  Board ("OTC")  market and the Company will make every
effort to include  its Common  Stock on the OTC in the event of a  delisting  by
NASDAQ.


--------------------------------------------------------------------------------
                                    Page 13
<PAGE>

In the event that the Company's Common Stock is traded on the OTC, it may become
subject to the "penny stock" trading rules. The penny stock trading rules impose
additional  duties  and a  responsibility  upon  broker-dealers  recommends  the
purchase of a penny stock (by a purchaser that is not an accredited  investor as
defined by Rule 501(a)  promulgated by the Commission  under the Securities Act)
or the sale of a penny  stock.  Among  such  duties and  responsibilities,  with
respect to a purchaser who has not previously  had an  established  account with
the  broker-dealer,  the  broker-dealer  is required  to (i) obtain  information
concerning the  purchaser's  financial  situation,  investment  experience,  and
investment objectives, (ii) make a reasonable determination that transactions in
the  penny  stock are  suitable  for the  purchaser  and the  purchaser  (or his
independent   adviser  in  such  transactions)  has  sufficient   knowledge  and
experience in financial matters and may be reasonably  capable of evaluating the
risks of such  transactions,  followed by receipt of a manually  signed  written
statement  which sets forth the basis for such  determination  and which informs
the purchaser  that it's unlawful to effectuate a transaction in the penny stock
without first  obtaining a written  agreement to the  transaction.  Furthermore,
until the purchaser becomes an established customer (i.e., having had an account
with the dealer for at least one year or, the dealer had effected three sales or
more of penny stocks on three or more  different  days  involving  three or more
different  issuers),  the broker-dealer must obtain from the purchaser a written
agreement  to purchase  the penny stock which sets forth the identity and number
of shares of units of the security to be purchased  prior to confirmation of the
purchase.  A dealer is obligated to provide certain  information  disclosures to
the purchaser of penny stock,  including (i) a generic risk disclosure  document
which  is  required  to  be  delivered  to  the  purchaser  before  the  initial
transaction in a penny stock,  (ii) a  transaction-related  disclosure  prior to
effecting  a  transaction  in  the  penny  stock  (i.e.,   confirmation  of  the
transaction) containing bid and asked information related to the penny stock and
the dealer's  and  salesperson's  compensation  (i.e.,  commissions,  commission
equivalents,  markups and markdowns) connection with the transaction,  and (iii)
the  purchaser-customer  must be furnished  account  statements,  generally on a
monthly basis, which include prescribed information relating to market and price
information  concerning  the penny stocks held in the  customer's  account.  The
penny  stock  trading  rules do not  apply to those  transactions  in which  the
broker-dealer or salesperson  does not make any purchase or sale  recommendation
to the purchaser or seller of the penny stock.

Required compliance with the penny stock trading rules affect or will affect the
ability  to resell  the  Common  Stock by a holder  principally  because  of the
additional  duties and  responsibilities  imposed  upon the  broker-dealers  and
salespersons  recommending and effecting sale and purchase  transactions in such
securities.  In addition,  many  broker-dealers  will not effect transactions in
penny stocks,  except on an unsolicited basis, in order to avoid compliance with
the penny stock trading rules.  The penny stock trading rules  consequently  may
materially  limit or restrict  the  liquidity  typically  associated  with other
publicly  traded equity  securities.  In this  connection,  the holder of Common
Stock may be unable to obtain on resale the quoted bid price because a dealer or
group of dealers may control  the market in such  securities  and may set prices
that are not based on competitive forces.

Furthermore,  at times there may be a lack of bid quotes which may mean that the
market among  dealers is not active,  in which case a holder of Common Stock may
be  unable  to  sell  such   securities.   Because  market   quotations  in  the
over-the-counter  market are often  subjected to  negotiation  among dealers and
often differ from the price at which  transactions  in securities  are effected,
the bid and asked quotations of the Common Stock may not be reliable.


--------------------------------------------------------------------------------
                                    Page 14
<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders

2000 Annual Meeting of Shareholders

On November 24, 2000,  the Company held its annual meeting of  shareholders,  in
South San  Francisco,  California at which time the  shareholders  (i) reelected
Messrs  Waligunda,  Martucci,  Wishinsky,  Myhre and  DeMartino  to the Board of
Directors and (ii) confirmed JH Cohn as independent auditors of the Company.

Of the 1,782,676 shares entitled to vote at the meeting,  1,498,670 were present
either in person or by proxy  constituting  a quorum for purposes of  conducting
the business that was brought before the meeting. The following table sets forth
the  matters  brought  before  the  shareholders,  the number of votes cast for,
against or withheld,  as well as the number of abstentions and broker non-votes,
if any, for each matter.

Matter                              For           Against            Abstain
------                              ---           -------            -------

Election of                      1,478,103         14,083              6564
Robert Waligunda
as Director

Election of                      1,478,103         14,083              6564
William C. Martucci
as Director

Election of                      1,478,103         14,083              6564
William Wishinsky
as a Director

Election of Casey                1,478,103         14,083              6564
Myhre as a Director

Election of Vincent              1,478,103         14,083              6564
A. DeMartino as a Director

Confirmation of                  1,490,886           4062              3722
Independent Auditors

December, 1999 Special Meeting of Shareholders

On December 13,  1999,  the Company held a special  meeting of  stockholders  to
consider a proposal  to amend the  Company's  Certificate  of  Incorporation  to
reverse   split  the  Company's   outstanding   shares  of  common  stock  on  a
three-for-one  basis and to reduce the  authorized  capital of the Company  from
100,000,000  to  40,000,000.  Of the  3,991,107  shares  entitled to vote at the
meeting,  3,016,123 were presented  either in person or by proxy  constituting a
quorum for  purposes of  conducting  the  business  that was brought  before the
meeting.  The amended  Certificate of Incorporation was filed with the Secretary
of State of the State of Delaware on December 17, 1999.


--------------------------------------------------------------------------------
                                    Page 15
<PAGE>

1999 Annual Meeting of Shareholders

On November 15, 1999,  the Company held its annual  meeting of  shareholders  in
Springfield,  New Jersey at which time the shareholders  (i) re-elected  Messrs.
Waligunda and Martucci,  and elected William H. Wishinsky,  Casey Myhre and John
Bruno to the Board of Directors of the Company and (ii) confirmed Lazar,  Levine
& Felix as independent auditors of the Company.

Of the 3,991,107 shares entitled to vote at the meeting,  3,016,123 were present
either in person or by proxy  constituting  a quorum for purposes of  conducting
the business that was brought before the meeting. The following table sets forth
the  matters  brought  before  the  shareholders,  the number of votes cast for,
against or withheld,  as well as the number of abstentions and broker non-votes,
if any, for each matter.

Matter                              For           Against          Abstain
------                              ---           -------          -------

Election of
William C. Martucci              2,969,910         46,213            ----
As a Director

Election of
Robert Waligunda
as Director                      2,969,910         46,213            ----

Election of
William                          2,968,370         47,753            ----
Wishinsky as a Director

Election of Casey                2,968,370         47,753            ----
Myhre as a Director

Election of  John                2,968,342         47,781            ----
Bruno as a Director

Confirmation of
Independent Auditors             2,962,757         42,205           11,161


Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

The principal  U.S.  market on which shares of the Company  Common Stock (all of
which are of one  class,  $.01 per  share) are traded on the small cap market on
the National Association of Securities Dealers,  Inc. Automated Quotation System
(Symbol "WCMC").  For Information  regarding possible delisting of the Company's
Common Stock. See Item 3. Litigation NASDAQ Delisting.


--------------------------------------------------------------------------------
                                    Page 16
<PAGE>

The  following  table  sets  forth the  range of high and low bid  quotes of the
Company's  Common Stock per quarter  since the  beginning of fiscal year 1998 as
reported by the National  Quotation Bureau (which reflects  inter-dealer  prices
without  retail  mark-up,  mark-down  or  commission  and  may  not  necessarily
represent actual transactions). The following stock prices have been adjusted to
reflect a one for twenty-five reverse stock split which occurred on May 26, 1998
and a one-for-three  reverse stock split effected on December 13, 1999 except as
noted.

                                   High                  Low
Quarter Ended                      Bid Price             Bid Price

March 31, 1998                     $1.5625               $1.5625
June 30, 1998                      $2.25                 $1.5625
September 30, 1998                 $1.50                 $1.00
December 31, 1998                  $0.875                $0.4375

March 31, 1999                     $1.125                $1.06
June 30, 1999                      $1.50                 $0.4375
September 30, 1999                 $1.00                 $0.9375
December 31, 1999                  $2.50                 $1.00*

March 31, 2000                     $5.50                 $5.50
June 30, 2000                      $1.75                 $1.4375
September 30, 2000                 $2.00                 $1.8125
December 31, 2000                  $0.875                $0.6875

----------

* Takes into account one for three reverse split effective December 20, 1999

As of  December  31,  2000,  the  approximate  number  of  recordholders  of the
Company's  Common  Stock is 2,749  inclusive  of those  brokerage  firms  and/or
clearinghouses  holding  the  Company's  Common  Shares in street name for their
clientele (with each such brokerage house and/or clearing house being considered
as one holder).

The  aggregate  number of  shares of Common  Stock  issued  and  outstanding  is
1,782,676 as of March 15, 2001.  This number  includes  323,440 shares issued to
Mr.  Brannon  and Mr.  Laura  and  thereafter  rescinded.  See Item 1.  Business
Employees and Technical Consultants and Sales of Restricted Securities below. No
dividends on Common Shares have ever been paid by the Company due to the lack of
excess capital and the Company does not  anticipate  that dividends will be paid
in the foreseeable  future. In addition,  pursuant to the terms of the Company's
12-1/4%  Convertible  Debentures,  the Company,  the Company is prohibited  from
paying dividends on its Common Stock unless and until it is no longer in default
under the debentures. See Item 3. Litigation.

Sales of Restricted Securities

On or about June 1, 2000 the Company  issued  169,750  shares of Common Stock to
Richard  Brannon,  a Vice  President of the Company and 153,690 shares of Common
Stock to Joseph Laura,  a consultant  of the Company.  The shares were issued to
Laura as  compensation  for  services  rendered  and to Brannon  for present and
future services rendered in connection with the Company's mining business. These
shares were originally issued in accordance with the exemption from registration
under Section 4(2) of the Act and were subsequently registered by the Company on
Form S-8 on or about June 6, 2000.


--------------------------------------------------------------------------------
                                    Page 17
<PAGE>

On or about December 29, 2000, the Company  entered into Agreements with each of
Mr.  Brannon  and  Mr.  Laura  regarding  the  issuance  of  shares  to  them as
compensation for services.  Pursuant to these Agreements,  the Company rescinded
its  agreement  to  issue  shares  to each of Mr.  Laura  and  Mr.  Brannon  but
acknowledged  indebtedness  to  Laura  of  $614,760.00  and  Consulting  fees of
approximately  $175,000  which were earned by Mr.  Brannon from May 2000 through
December 31, 2000.

Item 6. Management's Discussion and Analysis or Plan of Operation

CAUTIONARY STATEMENT ON FORWARD LOOKING STATEMENTS

Except for the historical information contained herein, Management believes that
certain  of the  matters  discussed  in this  Annual  Report  for the year ended
December  31, 2000 are  "forward  looking  risks and  uncertainties  which cause
actual results to differ materially from those discussed herein  including,  but
not limited, risks relating to changing economic conditions,  change in price of
disclosed  in this Annual  Report.  The Company  cautions  readers that any such
forward-looking  statements are based upon management's current expectations and
beliefs but are not  guaranties  of future  performance.  Actual  results  could
differ materially from those expressed or implied in forward-looking statements.

The Company is engaged in the business of  investing  and  participating  in the
development  of commercial  mining and milling  operations  primarily  involving
leased  properties  for which the  mineral  rights  are  leased in or near Idaho
Springs, Colorado.

During 1999,  remediation work and rehabilitation was performed and completed at
the  Franklin  Mines  and the  Franklin  Mill to  prepare  for  commencement  of
operations  in the  future.  However,  in 2000,  economic  conditions  and other
factors led to the Company's decision to apply for a change in its permit status
from active to Temporary  Cessation.  Temporary Cessation is a limited period of
non-production,  which  results  when an  operator  plans to  temporarily  cease
production for at least 180 days upon the filing of notice thereof with the DMG.
When a request for Temporary  Cessation is granted,  no further reclamation work
or mining work would be required  for the duration of the  temporary  cessation,
beyond basic maintenance and reclamation  required to keep the site from further
deterioration

The Company has not commenced  commercial  operations at the Franklin Mine since
our inception.  Therefore,  the Company remains in the exploration stage and has
not generated  significant  revenues on a sustained  basis.  The Company did not
realize any revenues based on sales in 2000 and 1999.

Liquidity and Capital Resources

Since its  inception,  we have financed our activities  principally  through the
sale of equity securities,  the accumulation of debt and monies provided through
our relationship  with USM. Since 1998, the Company's sole source of funding has
been USM.  The  Company  has  derived  no income  from its  mining  and  milling
investments, which as of December 31, 2000, were comprised of investments in the
assets and rights  related to the  Franklin  Mines and Mill.  As of December 31,
2000,  no funds  where  borrowed  form USM.  The US Mining  note had a principle
amount of  $1,768,829  which was a debt to equity  exchange  recorded as paid in
capital as of December 31, 2000 for future  consideration.  The equity  exchange
was principle  only and the interest in the amount of $328,040 still remains due
as of December 31, 2000 to US Mining


--------------------------------------------------------------------------------
                                    Page 18
<PAGE>

The Company had total current liabilities as of December 31, 2000 of $2,266,315,
convertible  debentures  with a  principal  amount of  $145,000  and other notes
payable with a principal balance of $287,028.  In addition to the payment of its
current  liabilities,  the Company incurred  general,  administrative  and other
costs and expenditures related to any mining and milling operations, at the rate
of  approximately  $25,000  per month in 2000 and  expects  to incur  additional
administrative  expenses of  approximately  $25,000  per month plus  interest in
2001.

During  2000  and  1999,  USM  advanced  approximately  $298,534  and  $278,000,
respectively,  on behalf of the  Company.  The US  Mining  note had a  principle
amount of  $1,768,829  which was a debt to equity  exchange  recorded as paid in
capital as of December 31, 2000 for future  consideration.  The equity  exchange
was principle  only and the interest in the amount of $328,040 still remains due
as of December 31, 2000 to US Mining These monies were used  primarily for legal
and accounting fees in connection with public filings and necessary  general and
administrative  expenses.  USM has  continued  to fund the  Company  directly or
indirectly since mid 1997. USM has verbally pledged to provide  financing to the
Company on an as needed basis through  December 31, 2001.  The Company  believes
based on prior  performance  that USM will fulfill its  commitment to fund until
December 31, 2001. It is anticipated that the funds received from USM will cover
the general,  administrative and other costs, which Management estimates will be
approximately  $25,000 per month for the year 2001. Management believes that the
estimate of monthly  expenses  will  include any  incidental  costs  incurred in
connection  with the  maintenance of the mining  facilities in Idaho Springs and
related taxes. However,  certain unforeseen costs may arise during the course of
the year and the  Company  cannot  assure  that USM will  commit to provide  the
Company with additional monies should such expenses arise.

The Hayden/Kennec Leases cover mineral rights to 28 mining claims over 322 acres
of the Franklin  Mining  properties.  Currently,  the  Hayden/Kennec  Leases are
expired;  however,  the terms of the Purchase  Agreement  between USM and Hayden
extend  the  terms of the  Hayden/Kennec  Leases as they  relate  to the  Hayden
interests  upon the same  terms  and  conditions  of the  Hayden/Kennec  Leases.
Therefore,  USM has  advanced,  and is  continuing  to advance,  $1,000  royalty
payment  to Mrs.  Hayden on a monthly  basis as  required  by the  Hayden/Kennec
Leases.  As of the date hereof,  the Company has not reached any Agreement  with
Mrs. Kennec concerning her portion of the Leasehold. See Item 2 - Properties.

Under  the  terms of the  Hayden/Kennec  Leases,  the  Company  would  have been
required to pay $777,000 to Mrs. Hayden and Mrs. Kennec in order to exercise the
purchase  options set forth therein as of November 1997 when the lease  expired.
Although the exercise price may be less if additional  moneys paid to Hayden and
Kennec  after  November  1997 are  credited,  the Company is unable to make such
payment. Notwithstanding,  Management remains cautiously optimistic that it will
maintain its access to the leased mineral  rights  covered by the  Hayden/Kennec
Leases  since the  Purchase  Agreement  between  Mrs.  Hayden and USM remains in
effect and the  Company has no reason to believe at this time that the sale will
not be consummated  prior to the expiration of the Purchase  Agreement.  USM has
advised the Company that it is current with its payments to Mrs.  Hayden and the
Company,  based  upon the prior  commitments  and past  payment  history of USM,
believes that USM will continue to make the necessary  royalty  payments to Mrs.
Hayden until the purchase of Mrs.  Hayden's  leasehold  interest is consummated.
See Item 2 - Properties.

In the absence of liquid  resources,  cash flows from  operations  and any other
commitments for debt or equity financing,  Management  believes that the ability
of the Company to continue to maintain its properties will be dependent upon the
provision of financing by USM; however,  it cannot assure that USM will continue
to finance the Company  after  December 31, 2001.  Management  believes that the
Company will remain  dependent on USM as its primary source of financing for its
operations until such time, if any, as the Company can secure additional funding
from other sources.


--------------------------------------------------------------------------------
                                    Page 19
<PAGE>

The Company has conducted no exploration activities during 2000 and has no plans
to do so in 2001.  However, as a condition to granting the Company's request for
Temporary  Cessation,  the DMG required that the Company  address certain issues
with respect to groundwater  and tailings  disposal  ponds.  Thus, the Company's
efforts during the majority of 2000 were focused on addressing these issues. The
Company is continuing these efforts and is awaiting  approval of its application
from the DMG.  This  status  will allow the  Company to retain all its  permits.
However, given the current economic climate and lack of reserves, it is unlikely
that the Company will commence any operations in the year 2001.

Management  estimates  that the Company will incur general,  administrative  and
other costs and expenditures, exclusive of any costs and expenditures related to
its Idaho Springs Mining  properties and interest,  at the rate of approximately
$25,000 per month for the remainder of 2001.

U.S. Mining Co. has verbally  pledged to provide  financing to the Company on an
as needed basis until on or about  December 31, 2001. The Company cannot assure,
however,  that USM will fulfill its commitment to fund the Company's  operations
through  year-end  2001.  The funds  received  from USM will cover the  general,
administrative  and other costs approximated at $25,000 per month plus interest.
There can be no assurance that the Company will have adequate funds available to
repay the funds advanced by USM or that USM will fulfill its obligations to fund
the Company through December 31, 2001. In the event that the Company defaults on
its  obligations,  USM may foreclose on the assets secured by the USM note. Such
foreclosure  actions by USM would have a material  adverse  effect on the future
operations of the Company and the Company's  ability to maintain its permits and
explore the Franklin Mines.

Plan of Operations

In 2001, the Company's primary focus will be to (i) continue its  rehabilitation
and remediation  work as is statutorily  required to maintain its properties and
permit's  Temporary  Cessation  status,  (ii) seek possible  joint ventures with
neighboring  mines  and  (iii)  work  to  secure  additional   funding  for  its
operations.  Should  the  Company  become  unable  to  adequately  maintain  its
properties  as required by the DMG, it may face the  possibility  of being cited
for  violations by the DMG which can lead to a cease and desist order or, result
in the loss of our mining  permit.  The loss of our mining  permit  would have a
serious adverse effect of the future operations of the Company as a whole.

We believe that the best way to achieve profitability in the short term would be
to seek to acquire  businesses,  which are operational and generating  revenues.
Since the prices of metals and other  minerals are low at this time, the Company
is open to entertaining  possible  business  combinations or joint ventures with
operational  businesses,  irrespective of whether a target business is operating
in our business segment.

The Company has no immediate plans to abandon our efforts at our Colorado mining
properties  or to sell a portion or all of our  interests  in these  properties.
However,  the  Company  has not  developed  an  exploration  plan  and  does not
anticipate doing so until we determine it is economically feasible to reactivate
our mining  permits.  There can be no assurance that we will be in a position to
reactivate  our  permit  in the near  future.  Given the  current  status of our
permit,  we believe  acquiring a business or businesses  that generate  revenues
would  allow  the  Company  to  attract  third  party  investment  and  increase
shareholder  value.  Moreover,  profits realized by the Company may be available
for reinvestment in our mining  properties should the economics of mining become
more  favorable,  thus  alleviating  the need to seek outside funding for future
exploration plans at the Franklin Mines.


--------------------------------------------------------------------------------
                                    Page 20
<PAGE>

Results of Operations:

Results of Operations; 2000 verses 1999

The Company had no active mining or milling operations during 2000.

The Company had a net loss of $1,943,155 for the year ended December 31, 2000 as
compared to a net loss of $501,926  during the same period in 1999. The increase
of  $1,441,229  was  attributable  to  professional  services  rendered  and the
recording of the impairment of equipment.

(a)  A decline in mine  expenses and  remediation  costs from $14,677  (1999) to
     $480 (2000) resulted from a decrease in mine site activities.

(b)  Depreciation  expense increased from $6,677 in 1999 to $13,447 in the first
     quarter of 2000 due to Management's  recording of  depreciation  expense on
     idle equipment in 2000.

(c)  General  and  administrative  expenses  increased  from  $25,642 in 1999 to
     $126,768  in  2000  an  increase  of  $101,126.   This  increase   resulted
     principally  from an  increase  in  legal,  professional  and  other  costs
     associated with the filing of a proxy statement (approximately $61,000) and
     the reversal of previously accrued costs during the quarter ended March 31,
     1999 (approximately $38,000).

(d)  Interest  expense  increased from $34,599 in 1999 to $40,137 in 2000 due to
     additional interest on the USM note].

Results of Operations 1999 vs. 1998.

The Company had no active mine operations during 1999.

The  Company  had a net loss of  $501,926  for 1999 as compared to a net loss of
$1,531,317 during 1998. The decrease of $1,029,391 was attributable to:

     (a)  A decline in mine expenses and  remediation  costs from $62,560 (1998)
          to $34,812 (1999) resulted from a decrease in mine site activities.

     (b)  Loss on sales and impairment  losses on property and equipment in 1998
          of  $465,000 , which  declined to  $130,000  in 1999,  a reduction  of
          $335,000.

     (c)  Depreciation  expense  declining  from  $146,355 in 1998 to $60,746 in
          1999 due to a reduction in property and equipment from the recognition
          of impairment losses and property disposals.

     (d)  General and administrative  expenses  decreasing from $642,592 in 1998
          to  $233,829  in 1999,  a cost  savings  of  $408,763.  This  decrease
          resulted from a decline in two costs, bad debt expense and legal fees.

     (e)  During  1998,   a  bad  debt   expense  of  $350,000  was   recognized
          attributable  to the note  receivable  from the sale of the Gold  Hill
          Mill  Properties.  During 1999, no bad debt expense was  incurred.  In
          addition,  legal fees declined to  approximately  $91,000  (1999) from
          approximately $149,000 (1998), a reduction of approximately $58,000.


--------------------------------------------------------------------------------
                                    Page 21
<PAGE>

     (f)  Other expenses of $100,000 (1998) were  attributable to an accrual for
          the  settlement  of certain  litigation.  Such accrual was reversed in
          1999 when the litigation was settled.



--------------------------------------------------------------------------------
                                    Page 22
<PAGE>

Item 7. Financial Reports


                                                                       Page
                                                                       ----

Independent Auditor's Report                                            F-1

Financial Statements:

   Balance Sheets                                                    F-2 - F-3

   Statements of Operations                                             F-4

   Statements of Stockholders' Equity                                F-5 - F-9

   Statements of Cash Flows                                         F-10 - F-11

Notes to Consolidated Financial Statements                          F-12 - F-24

--------------------------------------------------------------------------------
                                    Page 23
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Stockholder
WCM CAPITAL, INC.
New York, New York

We have audited the balance  sheets of WCM Capital,  Inc., A  Exploration  Stage
Company  (formerly  Franklin  Consolidated  Mining Co., Inc.) as of December 31,
2000, and the related statements of operations, changes in stockholders' equity,
and cash  flows for the year then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial  statements  based on our audit. We did not audit the
accumulated  amounts from inception through December 31, 1999, which includes an
accumulated deficit of ($16,201,967) as of December 31, 1999. Those amounts were
audited by other  auditors whose report has been furnished to us and our opinion
insofar as it relates to those accumulated amounts is based solely on the report
of the other  auditors.  The  financial  statements  of WCM Capital,  Inc. as of
December  31,  1999  were  audited  by  other  auditors  whose  report  on those
statements dated March 28, 2000 included an explanatory paragraph that described
the going concern uncertainty discussed in Note 1 to the financial statements.

We conducted our audit in accordance with generally accepted auditing standards.
These standards  require that we plan and perform the audit to obtain reasonable
assurance  as  to  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our  opinion,  based on our  audit and the  reports  of other  auditors,  the
financial statements referred to above present fairly, in all material respects,
the  financial  position of WCM Capital,  Inc. as of December 31, 2000,  and the
results of its operations and cash flows for the year then ended,  in conformity
with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 1 to the
financial  statements,  the Company is an  exploration  stage  enterprise  whose
operations  have  generated  recurring  losses and cash flow  deficiencies  from
inception  and, as of December  31,  2000,  has a  substantial  working  capital
deficiency.  As a result,  it was in default with respect to payments on several
notes and on convertible  debentures and wholly  dependent on outside funding to
finance  current  operations.  Such matters  raise  substantial  doubt about the
Company's ability to continue as a going concern.  Management's plans concerning
these  matters are also  described in Note 1. The  financial  statements  do not
include  any   adjustments   that  might   result  from  the  outcome  of  these
uncertainties.


                                          POLAKOFF WEISMANN LEEN LLC
                                          Certified Public Accountants
                                          Livingston, New Jersey
                                          April 13, 2001


--------------------------------------------------------------------------------
                                    Page F-1
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                                 BALANCE SHEETS

                                     ASSETS


                                                               December 31,
                                                         -----------------------
                                                            2000         1999
                                                         ----------   ----------
Property and equipment -  at cost                        $6,310,550    6,784,095

   Less: Accumulated depreciation and amortization        2,156,738    2,166,261
                                                         ----------   ----------

          Net property and equipment                      4,153,812    4,617,834
                                                         ----------   ----------

Other assets -
   Mining reclamation Bonds                                 139,756      137,016
                                                         ----------   ----------

          Total                                          $4,293,568    4,754,850
                                                         ==========   ==========


             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-2
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                           BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                        -------------------------------
                                                                            2000                1999
                                                                        ------------       ------------
<S>                                                                    <C>                   <C>
Current liabilities:
  Accounts payable and accrued expenses                                 $  1,824,285            689,049
  Payroll and other taxes                                                         --             29,960
  Convertible debentures                                                     145,000            145,000
  Notes payable:
    Related companies and others                                             297,028            218,965
    U.S. Mining Inc. - related company                                            --          1,470,295
                                                                        ------------       ------------

       Total current liabilities                                           2,266,313          2,553,269
                                                                        ------------       ------------

Commitments and contingencies

Stockholders' equity:
  Common stock, par value $.01 per share; 40,000,000 shares
    authorized; 1,318,767 shares issued and outstanding                       13,188             13,188
  Additional paid-in capital                                              20,159,189         18,390,360
  Deficit accumulated during the exploration stage                       (18,145,122)       (16,201,967)
                                                                        ------------       ------------

       Total stockholders' equity                                          2,027,255          2,201,581
                                                                        ------------       ------------

          Total                                                         $  4,293,568          4,754,850
                                                                        ============       ============
</TABLE>


             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-3
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                                                                           Cumulative
                                                                                                           December 1,
                                                                                                               1977
                                                                                                           (Inception)
                                                                           Years Ended                       through
                                                                           December 31,                    December 31,
                                                                     2000                 1999                 2000
                                                                 -----------          -----------          -----------
<S>                                                              <C>                   <C>                 <C>
Revenues:
  Sales                                                          $        --                   --              876,082
  Interest income                                                      2,740                2,414              553,849
  Other income                                                            --                   --               79,397
                                                                 -----------          -----------          -----------

    Total                                                              2,740                2,414            1,509,328
                                                                 -----------          -----------          -----------

Expenses:
  Mine expenses and environmental remediation costs                   47,049               34,812            3,668,159
  Loss on sale/write down of mining and milling and
    other property and equipment                                     429,983              130,000            2,224,983
  Depreciation and depletion                                          34,039               60,746            2,395,649
  General and administrative                                       1,195,148              233,829            7,677,354
  Interest                                                           239,676              144,953            1,526,108
  Amortization of debt issuance                                           --                   --              683,047
  Equity in net loss and settlement of claims
    of Joint Venture                                                      --                   --            1,059,971
  Other                                                                   --             (100,000)             419,179
                                                                 -----------          -----------          -----------

    Total                                                          1,945,895              504,340           19,654,450
                                                                 -----------          -----------          -----------

  Net loss                                                       $(1,943,155)            (501,926)         (18,145,122)
                                                                 ===========          ===========          ===========

  Loss per common share                                                (1.47)               (0.38)
                                                                 ===========          ===========

  Weighted average shares outstanding                              1,318,767            1,318,767
                                                                 ===========          ===========
</TABLE>


             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-4
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                                Deficit
                                                                                              Accumulated
                                                                                Additional    During the
                                                                    Common       Paid-in      Exploration    Treasury
                                                        Shares       Stock       Capital         Stage         Stock        Total
                                                      ----------   ----------   ----------    ----------    ----------   ----------
<S>                                                      <C>       <C>           <C>            <C>                 <C>   <C>
Issuance of common stock:
  Cash                                                     8,268   $       83       43,017            --            --       43,100
  Non-cash:
    Related parties                                       49,332          493        8,757            --            --        9,250
    In exchange for shares of Gold
      Developers and Producers, Inc.                      58,400          584       16,850            --            --       17,434
Net loss                                                      --           --           --       (45,584)           --      (45,584)
                                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance, December 31, 1977                               116,000        1,160       68,624       (45,584)           --       24,200

Issuance of common stock:
  Pursuant to public offering, net of
    underwriting expenses of $11,026                      31,368          314      283,681            --            --      283,995
  Cash                                                    12,000          120      242,757            --            --      242,877
  Non-cash                                                   268            2        4,998            --            --        5,000
Net loss                                                      --           --           --       (66,495)           --      (66,495)
                                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance, December 31, 1978                               159,636        1,596      600,060      (112,079)           --      489,577

Issuance of common stock:
  Cash                                                    12,368          124      441,126            --            --      441,250
  Non-cash:
    Related parties                                        2,132           21       59,979            --            --       60,000
    Other                                                    356            4       13,346            --            --       13,350
Net loss                                                      --           --           --      (128,242)           --     (128,242)
                                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1979                                174,492        1,745    1,114,511      (240,321)           --      875,935

Issuance of common stock:
  Cash                                                    15,452          154      839,846            --            --      840,000
  Non-cash                                                 3,176           32      118,968            --            --      119,000
Net loss                                                      --           --           --      (219,021)           --     (219,021)
                                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1980                                193,120        1,931    2,073,325      (459,342)           --    1,615,914

Issuance of common stock:
  Cash                                                    11,206          112      820,388            --            --      820,500
  Non-cash                                                 1,387           14      103,986            --            --      104,000
  Commission on sale of common stock                          --           --      (57,300)           --            --      (57,300)
Net loss                                                      --           --           --      (288,105)           --     (288,105)
                                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1981                                205,713   $    2,057    2,940,399      (747,447)           --    2,195,009
</TABLE>


             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-5
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                               Deficit
                                                                                             Accumulated
                                                                                Additional   During the
                                                                    Common       Paid-in     Exploration    Treasury
                                                        Shares       Stock       Capital        Stage         Stock        Total
                                                     ----------   ----------   ----------    ----------    ----------   ----------
<S>                                                     <C>       <C>           <C>          <C>                   <C>   <C>
Balance December 31, 1981 (forwarded)                   205,713   $    2,057    2,940,399      (747,447)           --    2,195,009
                                                     ==========   ==========   ==========    ==========    ==========   ==========
Issuance of common stock:
  Cash                                                   11,480   $      115      764,011            --            --      764,126
  Non-cash                                                2,160           22      161,978            --            --      162,000
  Commission on sale of common stock                         --           --      (56,075)           --            --      (56,075)
Net loss                                                     --           --           --      (287,291)           --     (287,291)
                                                     ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1982                               219,353        2,194    3,810,313    (1,034,738)           --    2,777,769

Issuance of common stock:
  Cash                                                   16,975          170    1,189,380            --            --    1,189,550
  Non-cash                                                  944            9       70,825            --            --       70,834
  Exercise of stock options:
    Related parties                                       3,567           35      267,465            --            --      267,500
    Others                                                   52            1        3,999            --            --        4,000
  Commission on sale of common stock                         --           --     (124,830)           --            --     (124,830)
Net loss                                                     --           --           --      (749,166)           --     (749,166)
                                                     ----------   ----------   ----------    ----------    ----------   ----------
Balance, December 31, 1983                              240,891        2,409    5,217,152    (1,783,904)           --    3,435,657

Issuance of common stock:
  Cash                                                   16,023          160    1,151,540            --            --    1,151,700
  Non-cash                                                  367            3       27,497            --            --       27,500
  Exercise of stock options by related parties            2,667           27      199,973            --            --      200,000
  Commission on sale of common stock                         --           --      (90,950)           --            --      (90,950)
Net loss                                                     --           --           --      (301,894)           --     (301,894)
                                                     ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1984                               259,948        2,599    6,505,212    (2,085,798)           --    4,422,013

Issuance of common stock:
  Cash                                                    5,618           56      300,023            --            --      300,079
  Non-Cash                                                  133            2        7,498            --            --        7,500
  Exercise of stock options:
    Related parties                                       2,667           27      149,973            --            --      150,000
    Others                                                   12           --          750            --            --          750
  Commission on sale of common stock                         --           --       (3,462)           --            --       (3,462)
Net loss                                                     --           --           --      (133,929)           --     (133,929)
                                                     ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1985                               268,378   $    2,684    6,959,994    (2,219,727)           --    4,742,951
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-6
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                               Deficit
                                                                                             Accumulated
                                                                                Additional   During the
                                                                    Common       Paid-in     Exploration    Treasury
                                                        Shares       Stock       Capital        Stage         Stock         Total
                                                     ----------   ----------   ----------    ----------    ----------    ----------
<S>                                                     <C>       <C>           <C>          <C>              <C>         <C>
Balance December 31, 1985 (forwarded)                   268,378   $    2,684    6,959,994    (2,219,727)           --     4,742,951
                                                     ==========   ==========   ==========    ==========    ==========    ==========
Issuance of common stock:
  Cash                                                    7,587   $       76      300,424            --            --       300,500
  Non-cash:
    Related parties                                       2,133           21       79,979            --            --        80,000
    Others                                                1,800           18       53,982            --            --        54,000
Net loss                                                     --           --           --      (227,788)           --      (227,788)
                                                     ----------   ----------   ----------    ----------    ----------    ----------
Balance, December 31, 1986                              279,898        2,799    7,394,379    (2,447,515)           --     4,949,663

Issuance of common stock:
  Cash                                                   34,725          347    1,286,954            --            --     1,287,301
  Non-cash:
    Related parties                                       2,695           27       70,873            --            --        70,900
    Other                                                   500            5       37,245            --            --        37,250
  Commission on sale of common stock                         --           --     (110,243)           --            --      (110,243)
Net loss                                                     --           --           --      (730,116)           --      (730,116)
                                                     ----------   ----------   ----------    ----------    ----------    ----------
Balance, December 31, 1987                              317,818        3,178    8,679,208    (3,177,631)           --     5,504,755

Issuance of common stock:
  Non-cash - related parties                              2,666           27       49,973            --            --        50,000
  Purchase of 666 shares of treasury stock -
    at cost                                                  --           --           --            --       (12,500)      (12,500)
Net loss                                                     --           --           --      (386,704)           --      (386,704)
                                                     ----------   ----------   ----------    ----------    ----------    ----------
Balance December 31, 1988                               320,484        3,205    8,729,181    (3,564,335)      (12,500)    5,155,551

Issuance of common stock:
  Cash                                                    9,040           90      110,410            --            --       110,500
  Non-cash:
    Related parties                                       2,800           38       33,828            --            --        33,866
    Other                                                 3,782           28       31,472            --            --        31,500
  Private placement:
    Cash                                                 30,333          303       22,447            --            --        22,750
    Debt issuance expense                                    --           --      455,000            --            --       455,000
    Conversion of debentures                             14,000          140      104,860            --            --       105,000
    Exercise of stock options                             4,000           40       44,960            --            --        45,000
  Compensation resulting from stock options
    granted                                                  --           --       39,000            --            --        39,000
  Commission on sale of common stock                         --           --       (1,500)           --            --        (1,500)
Net loss                                                     --           --           --    (1,279,804)           --    (1,279,804)
                                                     ----------   ----------   ----------    ----------    ----------    ----------
Balance December 31, 1989                               384,439   $    3,844    9,569,658    (4,844,139)      (12,500)    4,716,863
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-7
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                            Deficit
                                                                                          Accumulated
                                                                            Additional    During the
                                                               Common        Paid-in      Exploration     Treasury
                                                  Shares        Stock        Capital         Stage          Stock           Total
                                               -----------   -----------   -----------    -----------    -----------    -----------
<S>                                                <C>       <C>            <C>            <C>               <C>          <C>
Balance December 31, 1989 (forwarded)              384,439   $     3,844     9,569,658     (4,844,139)       (12,500)     4,716,863
                                               ===========   ===========   ===========    ===========    ===========    ===========
Sale of underwriter's stock warrants                    --   $        --           100             --             --            100
Issuance of common stock:
  Cash                                               4,467            45        45,180             --             --         45,225
  Non-cash - others                                    531             5         5,973             --             --          5,978
  Conversion of debentures                           2,133            22        31,978             --             --         32,000
Net loss                                                --            --            --     (1,171,962)            --     (1,171,962)
                                               -----------   -----------   -----------    -----------    -----------    -----------
Balance, December 31, 1990                         391,570         3,916     9,652,889     (6,016,101)       (12,500)     3,628,204

Issuance of common stock:
  Cash                                              23,995           240        96,691             --             --         96,931
  Cash - related parties                            24,000           240        89,760             --             --         90,000
  Non-cash - others                                 15,783           158        59,029             --             --         59,187
  Conversion of debentures                          49,747           498       625,502             --             --        626,000
  Exercise of stock options                          3,333            33        12,467             --             --         12,500
  Conversion of notes payable                        3,333            33        14,967             --             --         15,000
Net loss                                                --            --            --       (764,926)            --       (764,926)
                                               -----------   -----------   -----------    -----------    -----------    -----------
Balance, December 31, 1991                         511,761         5,118    10,551,305     (6,781,027)       (12,500)     3,762,896

Issuance of common stock:
  Cash                                              26,959           269       169,339             --             --        169,608
  Cash - related parties                             8,400            84        48,916             --             --         49,000
  Non-cash:
    Others                                          23,062           231       365,827             --             --        366,058
    Related parties                                    161             2           604             --             --            606
    Exercise of options by related parties          27,333           273       102,227             --             --        102,500
  Conversion of debentures                           7,200            72       161,928             --             --        162,000
  Commission on sale of stock -
    related parties                                     --            --        (7,123)            --             --         (7,123)
Net loss                                                --            --            --     (1,343,959)            --     (1,343,959)
                                               -----------   -----------   -----------    -----------    -----------    -----------
Balance December 31, 1992                          604,876         6,049    11,393,023     (8,124,986)       (12,500)     3,261,586

Issuance of common stock:
  Cash                                              11,645           116       133,848             --             --        133,964
  Cash - related parties                            10,360           104        77,596             --             --         77,700
  Non-cash:
    Others                                           2,000            20        14,980             --             --         15,000
    Settlement of litigation                        13,333           133        99,867             --             --        100,000
    Exercise of options by related parties           2,667            27         9,973             --             --         10,000
  Conversion of debentures                           1,867            19        34,981             --             --         35,000
  Conversion of loan                                 1,333            13         9,987             --             --         10,000
Net loss                                                --            --            --       (797,619)            --       (797,619)
                                               -----------   -----------   -----------    -----------    -----------    -----------
Balance December 31, 1993                          648,081   $     6,481    11,774,255     (8,922,605)       (12,500)     2,845,631
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-8
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                       STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                                              Deficit
                                                                                            Accumulated
                                                                               Additional   During the
                                                                  Common        Paid-in     Exploration    Treasury
                                                     Shares        Stock        Capital        Stage         Stock         Total
                                                  -----------   -----------   -----------   -----------   -----------   -----------
<S>                                                 <C>         <C>            <C>          <C>                    <C>    <C>
Balance December 31, 1993 (forwarded)                 648,081   $     6,481    11,774,255    (8,922,605)      (12,500)    2,845,631
                                                  ===========   ===========   ===========   ===========   ===========   ===========
Retirement of treasury stock                             (666)  $        (7)      (12,493)           --        12,500            --
Net loss                                                   --            --            --      (381,596)           --      (381,596)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance, December 31, 1994                            647,415         6,474    11,761,762    (9,304,201)           --     2,464,035

Issuance of common stock:
  Settlement of claims by joint venture partner        80,000           800       935,200            --            --       936,000
  Repayments:
    Loan from joint venture partner                    42,667           427       498,773            --            --       499,200
    Long-term loans from related parties
      and accrued interest                            115,730         1,157       675,868            --            --       677,025
  Exchange of shares for profit participation
    interests                                          36,000           360          (360)           --            --            --
Net loss                                                   --            --            --    (1,641,944)           --    (1,641,944)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance, December 31, 1995                            921,812         9,218    13,871,243   (10,946,145)           --     2,934,316

Issuance of common stock:
  Cash                                                 23,379           234       297,366            --            --       297,600
  Services and interest                                49,547           495       561,942            --            --       562,437
  Conversion of convertible notes                      57,263           573       557,747            --            --       558,320
  Repayments:
    Loan from joint venture partner                    30,880           309       361,566            --            --       361,875
    Long-term loans from related party                124,892         1,249     1,462,332            --            --     1,463,581
Net loss                                                   --            --            --    (1,314,104)           --    (1,314,104)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance December 31, 1996                           1,207,773        12,078    17,112,196   (12,260,249)           --     4,864,025

Issuance of common stock:
  Extension of lease rights                             1,386            14        12,986            --            --        13,000
  Conversions:
    Note payable                                      102,941         1,029       598,971            --            --       600,000
    Debt                                                6,667            67        50,433            --            --        50,500
  Acquisition of joint venture                             --            --       615,774            --            --       615,774
Net loss                                                   --            --            --    (1,908,475)           --    (1,908,475)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance December 31, 1997                           1,318,767        13,188    18,390,360   (14,168,724)           --     4,234,824

Net loss                                                   --            --            --    (1,531,317)           --    (1,531,317)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance December 31, 1998                           1,318,767        13,188    18,390,360   (15,700,041)           --     2,703,507

Net loss                                                   --            --            --      (501,926)           --      (501,926)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance December 31, 1999                           1,318,767        13,188    18,390,360   (16,201,967)           --     2,201,581

Donated loan from related party                            --            --     1,768,829            --            --     1,768,829
Net loss                                                   --            --            --    (1,943,155)           --    (1,943,155)
                                                  -----------   -----------   -----------   -----------   -----------   -----------
Balance December 31, 2000                           1,318,767   $    13,188    20,159,189   (18,145,122)           --     2,027,255
                                                  ===========   ===========   ===========   ===========   ===========   ===========
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                    Page F-9
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                                        Cumulative
                                                                                                                        December 1,
                                                                                                                            1977
                                                                                                                        (Inception)
                                                                                          Years Ended                     through
                                                                                          December 31,                  December 31,
                                                                                   2000                 1999                2000
                                                                                -----------         -----------         -----------
<S>                                                                             <C>                    <C>              <C>
Cash flows from operating activities:
 Net loss                                                                       $(1,943,155)           (501,926)        (18,145,122)
 Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation and depletion                                                         34,039              60,746           2,395,649
  Depreciation impairment loss                                                      (43,562)                 --             (43,562)
  Provision for uncollectible account                                                    --                  --             350,000
  Write down of mining and milling and the other
   property and equipment                                                           473,545             130,000           2,003,545
  Amortization of debt issuance expense                                                  --                  --             683,047
  Loss on sale of equipment                                                              --                  --             265,000
 Value of common stock issued for:
  Services and interest                                                                  --                  --           1,934,894
  Settlement of:
   Litigation                                                                            --                  --             100,000
   Claims by joint venture partner                                                       --                  --             936,000
  Compensation resulting from stock options granted                                      --                  --             311,900
  Value of stock options granted for services                                            --                  --             112,500
  Equity in net (income) loss of joint venture                                           --                  --             123,971
  Other                                                                                  --                  --              (7,123)
 Changes in operating assets and liabilities:
  Interest accrued on mining reclamation bonds                                       (2,740)             (2,414)            (14,756)
  Accounts payable and accrued expenses                                           1,135,236              34,885           2,086,501
  Payroll and other taxes                                                           (29,960)                 --             (29,960)
                                                                                -----------         -----------         -----------
   Net cash used in operating activities                                           (376,597)           (278,709)         (6,937,516)
                                                                                -----------         -----------         -----------

Cash flows from investing activities:
 Purchases and additions to mining, milling and other
  property and equipment                                                                 --                  --          (5,120,354)
 Purchases of mining reclamation bonds, net                                              --                  --            (125,000)
 Deferred mine development costs and other expenses                                      --                  --            (255,319)
                                                                                -----------         -----------         -----------
   Net cash used in investing activities                                                 --                  --          (5,500,673)
                                                                                -----------         -----------         -----------
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                   Page F-10
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                   Cumulative
                                                                                                   December 1,
                                                                                                      1977
                                                                                                   (Inception)
                                                                           Years Ended               through
                                                                           December 31,            December 31,
                                                                       2000            1999           2000
                                                                   -----------     -----------    -----------
<S>                                                                 <C>                <C>          <C>
Cash flows from financing activities:
 Issuance of:
  Common stock                                                              --              --      8,758,257
  Underwriter's stock warrants                                              --              --            100
 Commissions on sales of common stock                                       --              --       (381,860)
 Purchases of treasury stock                                                --              --        (12,500)
 Payments:
  Deferred underwriting costs                                               --              --        (63,814)
  Debt issuance expenses                                                    --              --       (164,233)
 Repayments:
  Other notes and loan payables                                             --              --       (120,000)
  Loans from affiliate                                                      --              --        (48,661)
 Proceeds:
  Exercise of stock options                                                 --              --        306,300
  Advances from joint venture partner                                       --              --        526,288
  Other notes and loans payable                                     (1,392,232)        278,709        489,546
  Donated loan                                                       1,768,829              --      1,768,829
  Loans from affiliate                                                      --              --         55,954
 Issuance of convertible debentures and notes                               --              --      1,505,000
 Advances to joint venture partner                                          --              --       (181,017)
                                                                   -----------     -----------    -----------

Net cash provided by financing activities                              376,597         278,709     12,438,189
                                                                   -----------     -----------    -----------

Increase (decrease) in cash                                                 --              --             --

Cash Beginning                                                              --              --             --

Cash Ending                                                                 --              --             --
                                                                   ===========     ===========    ===========

Supplemental disclosure of cash flow data -
 Interest paid                                                              --              --        299,868
                                                                   ===========     ===========    ===========
</TABLE>

             See auditors' report and notes to financial statements.


--------------------------------------------------------------------------------
                                   Page F-11
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 1 - BASIS OF PRESENTATION/GOING CONCERN UNCERTAINTY:

     The  accompanying  financial  statements  have been  prepared  assuming the
     Company  will  continue as a going  concern.  However,  the Company has had
     recurring losses and cash flow deficiencies since inception. As of December
     31, 2000 and 1999, the Company had no cash balances, an accumulated deficit
     of $18,145,000 and  $16,200,000,  respectively  and current  liabilities of
     $2,266,300 and $2,553,300,  respectively,  and a working capital deficiency
     of $2,266,300 and $2,553,300,  respectively.  The Company was in default on
     the payment of the principal balances and accrued interest on certain notes
     and  debentures  (Notes  5, 6 and 7). In  addition  to the  payable  of its
     current  liabilities,  management  estimates  that the  Company  will incur
     general, administrative, and other costs and expenditures, exclusive of any
     costs and  expenditures  related to any mining and  milling  operations  or
     environmental  matters  (Note 8B), at a rate of  approximately  $25,000 per
     month during the year 2001 as based upon the year 2000 actual  costs.  Such
     matters raise  substantial doubt as to the Company's ability to continue as
     a going concern.

     U.S.  Mining Co. (USM),  has verbally  pledged to provide  financing to the
     Company on an as needed basis  through  December  31, 2001.  The funds will
     cover general,  administrative  and other costs.  Additional  funds will be
     needed to support the  extraction  and milling  processes  once underway as
     well as to upgrade the  processing  facilities  to allow for an increase in
     ore processing capacity.

     There  can be no  assurance  that the  Company  will  have  adequate  funds
     available to repay the funds advanced by USM. In the event that the Company
     defaults on its obligations,  USM may file suit for recovery of advances to
     the  Company.  Such  actions  would have a material  adverse  effect on the
     future operations of the Company.

     Substantially all of the $4,153,800 of plant and equipment  included in the
     accompanying  balance  sheet  as  of  December  31,  2000,  is  related  to
     exploration   properties.   The  ultimate   realization  of  the  Company's
     investment in such  properties  and equipment is dependent upon the success
     of  future  property  sales,  the  existence  of  economically  recoverable
     reserves,  the  ability of the  Company to obtain  financing  or make other
     arrangements for development, and future profitable production.


--------------------------------------------------------------------------------
                                   Page F-12
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     Organization:

     WCM  Capital,  Inc.  (formerly  Franklin  Consolidated  Mining  Co.,  Inc.)
     (Company),  incorporated on December 1, 1976 under the laws of the State of
     Delaware,  was formed to engage in the exploration,  development and mining
     of precious and non-ferrous  metals,  including gold, silver,  lead, copper
     and zinc.  The Company  owns or has an interest in a number of precious and
     non-ferrous metal properties. The Company's principal mining properties are
     (i) the Franklin  Mines,  located near Idaho Springs in Clear Creek County,
     Colorado,  for which the Company  acquired the exclusive  right to explore,
     develop,  mine, and extract all minerals located in approximately 51 mining
     claims of which 28 are  patented  (Franklin  Mines)  and (ii) the  Franklin
     Mill,  a crushing  and  flotation  mill which is located on the site of the
     Franklin  Mines  (Franklin  Mill).  The  Company  is an  exploration  stage
     enterprise as it did not generate any significant revenues through December
     31, 2000.

     During  October 1998, the Company's  shareholders  approved an amendment to
     its  certificate of  incorporation  changing the name of the Company to WCM
     Capital, Inc.

     Accounting Estimates:

     The  preparation  of financial  statements  in  accordance  with  generally
     accepted   accounting   principles  requires  management  to  make  certain
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities  at the  date  of the  financial  statements,  as  well  as the
     reported  amounts of revenues and  expenses  during the  reporting  period.
     While actual results could differ from those estimates, management does not
     expect such  variances,  if any, to have a material effect on the financial
     statements.


--------------------------------------------------------------------------------
                                   Page F-13
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

     Mining, Milling and Other Property and Equipment:

     Recorded at costs incurred to acquire,  explore, improve and develop mining
     and  milling  properties  capitalized  and  amortized  in  relation  to the
     production of estimated  reserves.  General  exploration costs and costs to
     maintain the mineral rights and leases are expensed as incurred. Management
     periodically   reviews  the  recoverability  of  the  capitalized   mineral
     properties  and  mining  equipment.  Management  takes  into  consideration
     various information  including,  but not limited to, historical  production
     records  taken  from  previous  mine  operations,  results  of  exploration
     activities  conducted  to date,  estimated  future  prices and  reports and
     opinions of outside geologists, mine engineers, and consultants. When it is
     determined  that a project or property  will be  abandoned  or its carrying
     value has been  impaired,  a provision is made for any expected loss on the
     project or property.

     Post-closure  reclamation  and site  restoration  costs are estimated based
     upon environmental and regulatory requirements and accrued over the life of
     the  mine  using  the  units-of-production   method.  Current  expenditures
     relating to ongoing  environmental and reclamation programs are expenses as
     incurred.

     Depreciation of equipment is computed using the  straight-line  method over
     the estimated useful lives of the related assets.

     Impairment of Long-Lived Assets:

     The company  has adopted the  provisions  of FASB  Statement  of  Financial
     Accounting  Standards No. 121,  "Accounting of the Impairment of Long-Lived
     Assets and for Long-Lived  Assets to be Disposed Of" (SFAS 121). Under SFAS
     121,  impairment  losses on long-lived assets are recognized when events or
     changes  in  circumstances   indicate  that  the  undiscounted  cash  flows
     estimated to be generated by such assets are less than their carrying value
     and,  accordingly,  all or a  portion  of such  carrying  value  may not be
     recoverable.  Impairment  losses then are  measured by  comparing  the fair
     value of assets to their carrying amounts.  The Company determined that due
     to certain restrictions  associated with milling operations,  sold the Gold
     Hill Mill Properties on June 5, 1998 in exchange for property and equipment
     with a market value of $725,000 and a 14% note  receivable of $350,000.  As
     of December 31, 1998 the  $350,000  note was reduced to zero and a $200,000
     impairment loss was


--------------------------------------------------------------------------------
                                   Page F-14
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

     Impairment of Long-Lived Assets (continued):

     taken  against the $725,000 of equipment  acquired.  Additional  impairment
     losses of $430,000  and $130,000 in 2000 and 1999  respectively  were taken
     against the Company's mining, milling and other property and equipment.

     Revenue Recognition:

     Revenues,  if any, from the possible sales of mineral  concentrates will be
     recognized by the Company only upon receipt of final  settlement funds from
     the smelter.

     Environmental Remediation Costs:

     Accrued based on estimates of known  environmental  remediation  exposures.
     Ongoing   environmental   compliance  costs,   including   maintenance  and
     monitoring costs are expensed as incurred.

     Income Taxes:

     Deferred  income  taxes  are to be  provided  on  transactions,  which  are
     reported in the financial  statements in different  periods than for income
     tax purposes. The Company utilized Financial Accounting Board Statement No.
     109,  "Accounting  for  Income  Taxes,"  ("SFAS  109").  SFAS 109  requires
     recognition of deferred tax  liabilities and assets for expected future tax
     consequences of events that have been included in the financial  statements
     or tax returns. Under this method,  deferred tax liabilities and assets are
     determined based on the difference between the financial statements and tax
     basis of assets and  liabilities  using enacted tax rates in effect for the
     year in which the  difference  is expected to reverse.  Under SFAS 109, the
     effect on deferred tax assets and  liabilities  of a change in tax rates is
     recognized  in income in the  period  that  includes  the  enactment  date.
     Valuation  allowances are established when necessary to reduce deferred tax
     assets to the amounts expected to be realized (Note 9).


--------------------------------------------------------------------------------
                                   Page F-15
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

     Loss Per Common Share:

     The Company has adopted SFAS 128 "Earnings  Per Share" ("SFAS 128"),  which
     requires the  presentation  of "basic" and "diluted"  earnings per share on
     the face of the income  statement.  Loss per common  share is  computed  by
     dividing  the net loss by the  weighted  average  number of  common  shares
     outstanding during each period. Common stock equivalents have been excluded
     from the computations  since the results would be anti-dilutive.  Loses per
     share have been  restated  for prior  periods to give effect to the reverse
     stock splits during 1999 (Note 10).

     Fair Value of Financial Investments:

     The carrying amount of the Company's borrowings approximate fair value.

     Statement of Comprehensive Income:

     SFAS  130  "Reporting   Comprehensive   Income"  prescribes  standards  for
     reporting  comprehensive  income  and its  components.  Since  the  Company
     currently does not have any items of  comprehensive  income, a statement of
     comprehensive income is not required.

NOTE 3 - ACQUISITIONS OF MINING AND MILLING PROPERTIES:

     Joint Venture

     On December 26, 1976,  the Company  acquired Gold  Developers and Producers
     Incorporated,  a  Colorado  corporation  which,  prior to the  acquisition,
     leased 28 patented  mining  claims from Audrey and David Hayden and Dorothy
     Kennec  pursuant to a mining lease and option to purchase,  dated  November
     12, 1976 (hereinafter  referred to as "Hayden" and "Kennec").  In 1981, the
     Company  commenced a rehabilitation  program to extend and rehabilitate the
     shafts and tunnels in place at the  Franklin  Mines,  install the  Franklin
     Mill,  and search for and  delineate a commercial  ore body.  In 1983,  the
     Company completed the Franklin Mill.


--------------------------------------------------------------------------------
                                   Page F-16
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 3 - ACQUISITIONS OF MINING AND MILLING PROPERTIES (continued):

     Gold Hill Mill:

     On July 3,  1996,  the  Company  acquired  the Gold Hill Mill from a wholly
     subsidiary  of Gems,  in exchange  for an 8% mortgage  note with an initial
     principal  balance of $2,500,000.  The Gold Hill Mill is a fully  permitted
     milling facility located in Boulder, Colorado.

     At December 31, 1997, the Company  reduced by $1,200,000 the carrying value
     of certain of the Gold Hill Mill assets to $1,340,000,  which  approximates
     management's  estimate  of fair  value.  All the Gold Hill assets were sold
     during 1998 (see Note 2).

NOTE 4 - MINING, MILLING AND OTHER PROPERTY AND EQUIPMENT:

     Consist of the following at December 31:

                                                     2000            1999
                                                  ----------      ---------
     Machinery and equipment                      $1,240,675      1,617,220
     Mine and mill improvements (a)                4,974,065      5,071,065
     Furniture and fixtures                           11,714         11,714
     Automotive equipment                             84,096         84,096
                                                  ----------      ---------
                                                   6,310,550      6,784,095
     Less: accumulated depreciation and
     depletion                                     2,156,738      2,166,261
                                                  ----------      ---------

                                                  $4,153,812      4,617,834
                                                  ==========      =========

     (a)  The improvements and equipment were written down $430,000 and $130,000
          in 2000 and 1999 (Note 2) based upon the  independent  appraisal  of a
          qualified equipment appraiser.

     During the years ended  December  31, 2000 and 1999,  the Company  expended
     $47,049 and $34,812,  respectively,  on environmental remediation costs and
     mine expense.


--------------------------------------------------------------------------------
                                   Page F-17
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 5 - NOTES PAYABLE - RELATED PARTY AND OTHERS:

     Due to related party and others consisting of the following at December 31,
     2000 and 1999:

     12% unsecured demand notes due to the
     Company's former President and his
     affiliated entity                                             $142,718
     Secured promissory note (a)                                     60,000
     Unsecured promissory notes (b)                                  94,310
                                                                   --------
                                                                   $297,028
                                                                   ========

     (a)  The  outstanding  principal  balance of the note,  payable on July 18,
          1996 was defaulted. Collateralized by a subordinated security interest
          in the Company's mining reclamation bond. Interest is payable based on
          the rate of interest  applicable to the mining reclamation bond (8% at
          December 31, 2000).

     (b)  This principal amount represents four unsecured  promissory notes. The
          Company  assumed these  obligations  on Novembers 25, 1997, as part of
          the acquisition  from USM. These notes were in default when assumed by
          the Company,  and remain in default as of December 31, 2000,  interest
          accrued at 17%.

          Accrued  interest  on the above  notes at  December  31, 2000 and 1999
          aggregated approximately $45,744 and $27,575, respectively.

NOTE 6 - CONVERTIBLE DEBENTURES AND OTHER CONVERTIBLE DEBT:

     At December 31, 2000 and 1999 consists of:

     12.25% convertible debenture maturing
     December 31, 1994                                  $145,000

     As of December  31, 2000 and 1999,  the Company was in default with respect
     to  the  principal  balance  of  the  debenture  and  accrued  interest  of
     approximately  $102,000  and  $84,000,  respectively.  As a  result  of its
     default,  the Company may be subject to legal  proceedings  by the Transfer
     Agent/Trustee  under the  Indenture  Agreement  or from  debenture  holders
     seeking  immediate  repayment of principal  plus  interest and other costs.
     Management  cannot  assure that funds will be  available  for the  required
     payments or the effect  will be of any  actions  brought by or on behalf of
     the debenture holders (Note 8c).


--------------------------------------------------------------------------------
                                   Page F-18
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 6 - CONVERTIBLE DEBENTURES AND OTHER CONVERTIBLE DEBT (continued):

     In  September  1996,  the Company  acquired a 20%  interest in Newmineco by
     issuing a 9.5% note  payable of  $600,000  to Gems,  convertible  to common
     stock at the Company's  option on or after January 1, 1997. On February 10,
     1997,  the Company  notified the  assignees  that it elected to convert the
     principal balance into 102,564 shares of common stock, as adjusted based on
     the  conversation  rate of  $5.85,  per share as  adjusted.  As a result of
     problems  concerning  permitting  and various  other issued  related to the
     Mogul  Mines,  the  purchase  price was reduced to $150,000 on December 31,
     1996 and to zero on  December  31, 1997 (Note 3). The  $450,000  (1996) and
     $150,000 (1997)  reductions in the purchase price were effectuated  through
     an equivalent  reduction in the principal  balance of an 8% mortgage  notes
     payable to an affiliate of Gems by the Company.

NOTE 7 - NOTE PAYABLE - RELATED PARTY:

     The Company had an 8% promissory note balance of $955,756,  at December 31,
     1997,  representing  advances to the Company by an affiliated  entity,  POS
     Financial,  Inc. (POS), a New Jersey corporation and obligations assumed in
     connection with the  contributions  of Joint Venture interest (Note 3). The
     note was payable on May 4, 1998, and is secured by all the Company's mining
     claims and mining  properties.  The note is  subject to  successive  30-day
     extensions  throughout 1998 and 1999 upon the mutual agreement of the maker
     and lender for no additional consideration.  On March 5, 1998, POS assigned
     this note to USM. Both POS and USM are considered  related  parties because
     they are owned by a  director  of WCM and can exert  significant  influence
     over the  Company.  Additional  amounts  were  loaned to the Company by USM
     during 1999 and 2000.  The  balance  due on the note at  December  31, 2000
     aggregated $1,764,829 plus accrued interest of $328,040. The balance due on
     the note at December 31, 1999 aggregated  $1,470,295 plus accrued  interest
     of $198,745.

     This  note was  donated  to the  Company  as of  December  31,  2000 and is
     included as  additional  paid in capital.  The accrued  interest  remains a
     liability of the Company.

     All royalty payments made under the  Hayden/Kennec  Leases were expenses as
     incurred and included in mine expenses and environmental  remediation costs
     in the accompanying Statements of Operations.


--------------------------------------------------------------------------------
                                   Page F-19
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 8 - COMMITMENTS AND CONTINGENCIES:

     On November 13, 1997,  Hayden  entered into an agreement to sell the Hayden
     interests to USM for a purchase price of $75,000 (the "Hayden-USM  Purchase
     Agreement"). The purchase price was evidenced by a note, due on February 2,
     1998.  Payment on the note has been extended until USM receives a report of
     clear title.

     Upon the execution of the Hayden-USM Purchase Agreement, USM agreed to give
     Hayden mineral rights to some land parcels and will receive royalties whish
     will be  expenses  as  incurred.  As of  December  31,  2000 USM had yet to
     received  clear title but  continued to make Purchase  Agreement  extension
     payments.

     Kennec  receives  on certain  parcels of acreage a 50/50  split on land and
     mineral rights.

     All  royalty  payments  made under the Hayden  and Kennec  agreements  were
     expenses as incurred in mine expenses and  environmental  remediation costs
     in the accompanying Statement of Operations.

     The Company pays a monthly rental of $3,500 (on a month to month basis) for
     the office space,  secretarial  and other services  provided to the Company
     pursuant  to an oral  agreement  with a  non-affiliate.  Rent  expense  was
     $39,700 and  $41,000 in 2000 and 1999,  respectively.  As of  February  28,
     2001, the Company has ceased renting office space.


--------------------------------------------------------------------------------
                                   Page F-20
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 8 - COMMITMENTS AND CONTINGENCIES (continued):

     (b)  Environmental Matters:

     During 1999,  inspections of the Franklin Mining  properties  revealed that
     certain drainage problems and substandard  linings at the tailings disposal
     areas created potential hazards and that protection measures are required.

     The  Company  received  a letter  dated  March 9,  2000  from the  Colorado
     Division of Minerals  and Geology (the "DMG") which sets forth the measures
     which must be taken by the Company to bring the site into  compliance  with
     groundwater regulations and to stabilize the tailings pond and site. In the
     event the Company  completes all of the required actions by May 30, 2001, a
     Temporary  Cessation order will be granted by DMG. In the event a Temporary
     Cessation is granted,  no further  reclamation work or mining work would be
     required  for  the  duration  of  the  Temporary  Cessation,  beyond  basic
     maintenance  and  reclamation  required  to  keep  the  site  from  further
     deterioration.

     (c)  Litigation:

     The Company is involved in various litigation as explained below:

     (i)  The  Company  and others  were  defendants  in an action  related to a
          dispute over fees for  engineering  consulting  services.  The parties
          settled  this  matter  in  September   1999  and  the  litigation  was
          discontinued.

     (ii) In  September  1997,  certain  of  the  Company's  12.25%  Convertible
          Debenture  holders  (see  Note 6)  instituted  an action  against  the
          Company for payment of approximately  $42,500  principal amount of its
          12.25%  Convertible   Debentures  plus  accrued  and  unpaid  interest
          totaling  approximately  $13,000 and other costs and expenses  related
          thereto. The Company has answered the aforesaid  complaint.  A default
          judgment was entered against the Company in the amount of $42,500 plus
          interest,  costs  and  disbursements.  The  Company  and USM have been
          negotiating with the debenture holders but to this point no settlement
          agreement has been reached. The continued default of the Company could
          result in the Company being subject to additional  legal  proceedings.
          In  addition,  there is no  assurance  that funds will be available to
          cure the default or reach an acceptable settlement.


--------------------------------------------------------------------------------
                                   Page F-21
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999


NOTE 8 - COMMITMENTS AND CONTINGENCIES (continued):

      (c)   Litigation (continued):

      (iii) On or about May 14,  1998,  Redstone  Securities  Inc.  ("Redstone")
            commenced  an action  against  the  Company  in  connection  with an
            Investment Banking Agreement dated August 28, 1996, between Redstone
            and the Company. On or about July 31, 1998, the Company answered the
            complaint and filed a cross complaint against Redstone. In September
            1999, the matter was settled  whereby the Company agreed to lift the
            stop transfer order on the shares held by Redstone to allow Redstone
            the ability to sell those shares to an unqualified third party.

      (d)   NASDAQ Notification:

      During  1998 and 1999,  the Company  received  notification  letters  from
      NASDAQ  informing  them  that  the  Company's  common  stock  was  not  in
      compliance with the NASDAQ  small-cap  market price  requirement of $1.00,
      which became effective on February 23, 1998.

      In order to  mitigate  the  minimum  bid  price  requirement  the  Company
      effectuated  reverse  stock splits  during 1998 and 1999 (Note 10).  After
      each reverse  split the  Company's  stock price  remained  above the $1.00
      minimum bid price requirement for the necessary ten-day period.

      While the Company is  currently in  compliance  with the minimum bid price
      requirement,  there can be no assurance in the future that it will be able
      to maintain such compliance.


--------------------------------------------------------------------------------
                                   Page F-22
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 9 - INCOME TAXES:

     As of December  31,  2000,  the Company  had  federal  net  operating  loss
     carryforwards  of  approximately  $11,836,000  available  to reduce  future
     federal  taxable  income,  which, if not used, will expire at various dates
     through  December  31,  2020.  Changes in the  ownership of the Company may
     subject these loss carryforwards to substantial limitations.

     The Company  has offset the  deferred  tax  attributable  to the  potential
     benefits from such net operating  loss  carryforwards  and the reduction in
     carrying   value  by  an   equivalent   valuation   allowance  due  to  the
     uncertainties  related  to the  extent  and  timing of its  future  taxable
     income. There are no other material temporary differences.

                                                      Deferred      Valuation
                                                      Tax Asset     Allowance
                                                     ----------     ---------
       Balance at December 31, 1998                  $4,509,000     4,509,000

       Increase in Federal net operating loss,
       year ended December 31, 1999                     210,000       210,000
                                                     ----------     ---------

       Balance at December 31, 1999                   4,719,000     4,719,000

       Increase in Federal net operating loss,
       year ended December 31, 2000                   1,384,000     1,384,000
                                                     ----------     ---------

       Balance at December 31, 2000                  $6,103,000     6,103,000
                                                     ==========     =========


--------------------------------------------------------------------------------
                                   Page F-23
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2000 AND 1999

NOTE 10 - STOCKHOLDERS' EQUITY:

     (a)  Reverse Stock Splits:

          On May 26, 1998, the Company effectuated a twenty-five-for-one reverse
          stock  split.  On  December  20,  1999,  the  Company   effectuated  a
          three-for-one  reverse stock split. The  accompanying  financials give
          retroactive effect to these reverse stock splits.

     (b)  Common Stock Reserved for Issuance:

          At December 31, 2000 and 1999, there were 3,867 shares of common stock
          reserved  for  issuance  upon  the  exercise  of the  12.25%  $145,000
          convertible debentures (see Note 6).

     (c)  Issuance of Common Stock

          From  December 1, 1997  (inception)  through  December 31,  2000,  the
          Company issued common stock for:

<TABLE>
<S>                                                             <C>             <C>
          Cash, including net proceeds of $283,995
          from Public offering                                    355,648       $  8,758,256
          Exercise of stock options                                46,298            792,250
          Commissions of sales of common stock                         --           (451,483)
          Purchase and retirement of treasury stock                  (666)           (12,500)

          Non-cash, other than related parties:
              Services and property                               165,582          1,673,394
              Conversion of debentures and notes payable          246,107          2,648,820
              Stock options and stock warrants granted                 --             39,100
              Settlement of litigation and other                   13,710            100,000

          Non-cash, related parties:
              Services and property                                97,919            918,030
              Settlement of claims by related parties              80,000            936,000
              Donated related party loans                              --          1,768,829
              Repayment of related party loans                    314,169          3,001,681
                                                                ---------       ------------
                                                                1,318,767       $ 20,172,377
                                                                =========       ============
</TABLE>


--------------------------------------------------------------------------------
                                   Page F-24
<PAGE>

ITEM  8.  Changes  In And  Disagreements  With  Accountants  On  Accounting  And
          Financial Disclosure

On March 16, 2000,  the Company  notified  Lazar Levine & Felix  ("LLF") that it
would no longer serve as its independent  auditors.  The decision to dismiss LLF
was approved by the Board of Directors of the Company.

During the two most recent  fiscal years of the Company,  none of the reports of
LLF on the financial statements of the Company contained an adverse opinion or a
disclaimer  of  opinion or was  qualified  or  modified  as to audit  scope,  or
accounting principles; however, LLF has qualified or modified its reports on the
financial  statements  of the  Company as a going  concern.  During the two most
recent fiscal years and any subsequent interim period preceding the dismissal of
LLF,  there  were no  disagreements  between  the  Company  and  LLF  concerning
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure  which  would  have  caused LLF to make a  reference  to the
subject matter thereof in its report had such  disagreement not been resolved to
the satisfaction of LLF.

The Company retained  Ehrenkrantz Sterling & Co. Certified Public Accountants as
its independent auditors for fiscal year 1999.

On October 19, 2000, the Company notified Ehrenkrantz,  Sterling & Co. Certified
Public  Accountants  ("ESC")  that it would no longer  serve as its  independent
auditors.  The decision to dismiss ESC was approved by the Board of Directors of
the Company.

During the two most recent  fiscal years of the Company,  none of the reports of
ESC on the financial statements of the Company contained an adverse opinion or a
disclaimer  of  opinion or was  qualified  or  modified  as to audit  scope,  or
accounting principles; however, ESC has qualified or modified its reports on the
financial  statements  of the  Company as a going  concern.  During the two most
recent fiscal years and any subsequent interim period preceding the dismissal of
ESC,  there  were no  disagreements  between  the  Company  and  ESC  concerning
accounting principles or practices,  financial statement disclosure, or auditing
scope or  procedure  which  would  have  caused ESC to make a  reference  to the
subject matter thereof in its report had such  disagreement not been resolved to
the satisfaction of ESC.

The Company  retained JH Cohen & Company as its independent  auditors for fiscal
year 2000. JH Cohen was the  independent  auditor for the Company through fiscal
year 1997

On April 9, 2000,  the  Company  notified JH Cohen & Company.  Certified  Public
Accountants  that it would no  longer  serve as its  independent  auditors.  The
decision to dismiss JH Cohen & Company was approved by the Board of Directors of
the Company.  JH Cohen was  dismissed  prior to issuing any reports on behalf of
the  Company.  The  Company  retained  Polakoff,  Weismann,  Leen,  LLC  as  its
independent auditors for fiscal year 2000.


--------------------------------------------------------------------------------
                                    Page 24
<PAGE>

                                    PART III

Item 9. Directors,  Executive Officers, Promoters and Control Person; Compliance
with Section 16(a) of the Exchange Act

Name                            Age          Position
----                            ---          --------

Robert Waligunda                55           Current President and Treasurer

Richard Brannon                 52           Vice-President-Secretary

George E. Otten                 75           Vice President

William C. Martucci             58           Director

William Wishinsky               36           Director

Casey Myhre                     35           Director

Vincent A. DeMartino            37           Director

ROBERT L. WALIGUNDA.  Mr. Waligunda has served as President and Treasurer of the
Company  since  October  1998.  Mr.  Waligunda  has served as a director  of the
Company  from 1985 and as  Secretary  of the Company from August 1995 to October
1998. From 1965 to the present, Mr. Waligunda has served as founder,  President,
and  principal  stockholder  of Sky  Promotions,  Inc., a Pittstown,  New Jersey
marketing and management company involved in sales, advertising and marketing of
hot air  balloons  and  inflatable  products.  He is the founder and director of
International  Professional  Balloon Pilots Racing Association,  a member of the
advisory board of Aerostar  International,  Inc., the world's oldest and largest
balloon  manufacturing   company,  and  a  member  of  the  National  Aeronautic
Association,  the Experimental Aircraft Association,  and the Airplane Owner and
Pilots  Association.  Mr.  Waligunda  received a Masters  of  Science  degree in
guidance and psychological services from Springfield College in 1968.

RICHARD BRANNON Mr. Brannon has served as the Vice President since February 1996
and Secretary of the Company since  October  1998.  Mr.  Brannon is a California
licensed real estate broker and 100% owner of A Reel Mortgage,  Inc., a mortgage
and loan servicing company organized in 1991. Mr. Brannon is a founding director
of  the  California  Trustee  Mortgage  Broker  Association,   a  not-for-profit
corporation.

GEORGE E. OTTEN Mr.  Otten has served as Vice  President  of the  Company  since
October 1998. Mr. Otten was the first president of the Company from 1976 through
1985 and is the  owner and  operator  of the Bates  Hunter  Mine  under the name
"Central City Consolidated  Mining Company" since 1985. Since 1997, Mr. Otten is
the  president,  director,  and General  Operating  officer of all operations of
Hunter Gold  Mining,  Inc.  Central City  Colorado.  Mr. Otten holds a degree in
Business Administration from Adams State College, Alamosa, Colorado.


--------------------------------------------------------------------------------
                                    Page 25
<PAGE>

WILLIAM  C.  MARTUCCI  From 1974 to the  present,  Mr.  Martucci  has  served as
president and chairman of United Grocers Clearing House,  Inc., a privately held
company he founded to serve the coupon  redemption,  fulfillment and promotional
needs of  manufacturers  and retailers.  In 1997 Mr. Martucci founded and is the
sole director,  officer and  shareholder of Shoppers On Line that portal and web
page for  business-to-business  and business to consumer  products and services.
Additionally,  Mr. Martucci is the sole  shareholder;  director and president of
U.S.  Mining,  Inc.  ("USM")  Mr.  Martucci  received a  Bachelor  of Science in
Philosophy from Florida International University in 1973.

WILLIAM H.  WISHINSKY  Mr.  Wishinsky  has been a Director  of the Company and a
member of the Audit  Committee of the Board of Directors  since October 4, 1999.
Since 1990, Mr.  Wishinsky has been the principal of William H. Wishinsky,  CPA,
P.C.,  an  accounting  firm.  From 1988  until  1990,  he was an  accountant  at
Friedman,  Alpren & Green, CPA's in New York City. Mr. Wishinsky  graduated from
Pace University in New York and received a B.B.A. in Accounting in June 1986. He
became a certified public accountant in 1990.

CASEY  MYHRE Mr.  Myhre has been a Director  of the  Company and a member of the
Audit  Committee of the Board of Directors  since  October 4, 1999.  Since early
1999,  Mr.  Myhre  has  been  manager  of  Kimball  International,  a  furniture
manufacturing  company.  For the four  years  prior  to his  being  promoted  to
management he worked for Kimball International as a salesman. Mr. Myhre attended
Minnesota School of Business and graduated in 1987.

VINCENT A.  DEMARTINO.  Mr.  DeMartino  has been a Director of the Company since
March  23,  2000.  Since  1996,  Mr.  DeMartino  has  been  Professional   Sales
Representative and District Trainer for TAP  Pharmaceuticals  Inc. Prior to 1996
Mr. DeMartino was account  executive for Boston Group in New York and maintained
brokerage  accounts for customers  with growth  objectives  and managed over one
million  dollars in assets.  Mr.  DeMartino  attended Seton Hall  University and
received a Bachelors of Arts Degree in May 1989 and majored in criminal justice.
He is also accredited with a Series 7 in 1963.

To the Company's knowledge and based solely on a review of such materials as are
required by the  Securities  and Exchange  Commission,  no officer,  director or
beneficial  holder  of  more  than  ten  percent  of the  Company's  issued  and
outstanding shares of Common Stock ("Beneficial  Owner") has filed any forms and
reports  required to be filed  pursuant to Section 16(a) of the  Securities  and
Exchange Act of 1934, as amended (the  "Exchange  Act"),  during the fiscal year
ended December 31, 2000; and no officer,  director or Beneficial  Holder has not
submitted  any  representation  letter to the Company  stating that they are not
subject to the filing  requirements  under  Section 16 of the  Exchange  Act for
fiscal year 2000.

Item 10. Executive Compensation

Except with respect to Mr. Brannon,  no compensation has been awarded to, earned
by, or paid to any of the named  executives  or directors of the Company  during
the fiscal year ended 2000 On or about June 1, 2000,  the Company issued 169,750
shares of Common Stock to Richard Brannon. The shares were issued to Mr. Brannon
for present and future services rendered in connection with the Company's mining
business.  These shares were originally  issued in accordance with the exemption
from registration under Section 4(2) of the Act and were subsequently registered
by the Company on Form S-8 on or about June 6, 2000.


--------------------------------------------------------------------------------
                                    Page 26
<PAGE>

On or about  December 29, 2000,  the Company  entered into an Agreement with Mr.
Brannon  regarding the issuance of shares to him as  compensation  for services.
Pursuant to the Agreement,  the Company  rescinded its agreement to issue shares
in lieu of cash compensation to Mr. Brannon but acknowledged  consulting fees of
approximately  $175,000 earned by Mr. Brannon from May 2000 through December 31,
2000.

Item 11. Security Ownership of Certain Beneficial Owners and Management

(a)  Certain Beneficial Owners of Common Stock

None

(b)  Security Ownership of Management of Common Stock

The  following  table  sets  forth  the  beneficial  ownership  of shares of the
Company's common stock as of March 15, 2001 for each (a) director, (b) executive
officer,  and (c) person who is known to be the beneficial owner of five percent
or more of the  outstanding  shares  of  Common  Stock  and  all  directors  and
executive officers as a group.

Name and                                    Amount and            Percentage
Address of                                  Nature of              of Class
Beneficial                                  Beneficial
Owner (1)(6)                                Ownership

Robert L. Waligunda(3)                        856(4)                 .06
George E. Otten(2)                            -0-                    -0-
Richard Brannon (3)(5)
William C. Martucci(3)                        -0-                    -0-
William H. Wishinsky(3)                       -0-                    -0-
Casey Myhre(3)                                -0-                    -0-
Vincent A. DeMartino(3)                       -0-                    -0-
                                            -------                 -----

All Directors and Executive                   856                    .06%
Officers as a Group
----------
*Less than 1%

(1)  Except as otherwise  noted all shares are  beneficially  owned and the sole
     voting and investment power is held by persons indicated.

(2)  Former officer and/or director of the Company

(3)  Executive officer and/or director of the Company

(4)  Includes 400 shares pledged as collateral to a non-affiliate individual

(5)  Does not reflect  169,750  shares of Common Stock issued to Brannon in May,
     2000 but rescinded in December,  2000. (6) Does not include  159,369 shares
     of Common  Stock  issued  to Joseph  Laura in May,  2000 but  rescinded  in
     December, 2000.

Item 12. Certain Relationships and Related Transactions

In early 1997,  a former  officer of the Company  introduced  Gems to William C.
Martucci  ("Martucci")  at which time Gems began  negotiations  with Martucci to
effectuate a business  combination with Martucci's  businesses and Gems business
ventures.  At that time,  Gems  controlled  an 82.5%  interest in the Zeus No. 1
Investments,  a California General Partnership formed by the Company and Gems to
facilitate  the  rehabilitation,  reclaimation  and  reopening of the  Company's
mining ventures (the "Zeus Joint Venture").


--------------------------------------------------------------------------------
                                    Page 27
<PAGE>

However,  during mid 1997,  it had become  apparent to the Company that Gems did
not possess the technical and financial resources required to bring the Franklin
Mines into  operation as  contemplated  by the Zeus Joint  Venture.  It was also
during this time that the Company began discussions  directly with Martucci with
respect to a possible business combination between his entities and the Company.

As a result of these  discussions,  on September 25, 1997,  the Company  entered
into a letter of intent with Martucci to acquire all of the  outstanding  shares
of certain entities owned by him, including US Mining,  Inc. ("USM") in exchange
for 85% of the outstanding  shares of stock of the Company.  USM is a New Jersey
corporation  engaged in the business of acquiring and holding mining  properties
and related acquisition was consummated.

Management  believed that the financial  support to be supplied by Mr.  Martucci
pursuant  to the  Martucci  letter of  intent  would be  sufficient  to fund the
Company prior to the consummation of the Transaction.

On November 13, 1997 USM entered into an agreement with Audrey Hayden to acquire
her interest in the 28-patented claims comprising the Hayden/Kennec  Leases. See
Item 2 - Property - Hayden/Kennec Leases.

On November 25, 1997 USM  acquired an  aggregate  of 82.5%  interest in the Zeus
Joint  Venture in  exchange  for the  assumption  of  approximately  $100,000 in
liabilities  of Gems (the "Gems  Liabilities").  USM  thereafter  simultaneously
assigned the acquired  interest to the Company in exchange for the assumption of
the Gem's  liabilities.  The  assignment  effectively  terminated the Zeus Joint
Venture giving the Company 100% control over its mining ventures.

On April 6, 1998, Martucci terminated the Letter of intent but continued to fund
the Company  (the  "Advances").  On March 9, 1998,  the Company  executed a Loan
Agreement and Promissory  Note (the "USM Note")  evidencing the terms upon which
the  Company  would  repay the USM  Advances  and upon  which USM would  advance
additional  funds to the  Company on an "as needed"  basis.  The USM Note in the
principal  amount of $955,756 at December 31, 1997 bore interest at a rate of 8%
per annum and was due and  payable on May 4, 1998,  but could be  extended  on a
month-to-month  basis.  The USM  Note is  secured  by a first  priority  lien on
substantially  all of the assets of the Company.  As of December  31, 1999,  the
Company owed USM $1,669,040 of which $1,470,295 is attributable to principal and
$198,745 to accrued unpaid interest on the USM Note.

On or about August 3, 1998, the Company entered into agreements with each of USM
(the "USM  Agreement") and Martucci (the "POS  Agreement").  Pursuant to the USM
Agreement,  USM agreed to forgive the  indebtedness of the Company  evidenced by
the USM Note;  release the security  interests in the  collateral of the Company
securing the USM Note and assign its rights to the Hayden-USM Purchase Agreement
in exchange for 42.5% of the issued and outstanding shares of the Company. Under
the terms of the POS Agreement,  Martucci  agreed to sell to the Company 100% of
the  outstanding  shares  of  POS  and  100%  of  the  assets  in  exchange  for
approximately  42.5% of the issued and  outstanding  shares of the Company.  The
Company  intended to seek  stockholders'  approval of these  transactions at its
Annual Meeting of Stockholders held in October 1998.

In August  1998,  the  Company  filed a  preliminary  proxy  statement  with the
Securities and Exchange  Commission (the "Commission") for its annual meeting of
stockholders,  which included proposals to approve each of the USM Agreement and
the POS Agreement.  Shortly after the filing of the preliminary proxy materials,
the  Commission  informed  the  Company  that the staff of the  Commission  (the
"Staff") would be conducting a review of the proxy materials and the proposals.


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<PAGE>

The Company  informed USM and Martucci of the Staff's inquiry and was thereafter
notified that both parties wished to terminate the agreements  under the premise
that the Company could not secure stockholder  approval of the transactions in a
timely manner.

On September 21, 1998,  the Company  received a letter from USM  concerning  the
monies  loaned to the Company by USM,  which  included the monies owed to USM by
the  Company  pursuant to the terms of the USM Note and an  additional  $144,280
loaned to the Company  subsequent  to the date of the USM Note.  At a meeting of
the  Board of  Directors  of the  Company  on  October  8,  1998,  a  negotiated
settlement  agreement  was approved by the Board,  whereby USM agreed to convert
the Company's  indebtedness to USM into shares of common stock of the Company at
a  conversion  price  equal to 50% of the  closing  bid price as of the close of
business  October 7, 1998. The price of the Company's  common stock at the close
of business on October 7, 1998 was $1.98, as adjusted per share. Therefore,  the
conversion  rate  under the  settlement  agreement  would be one share of common
stock of the Company for each $1.00,  as adjusted of indebtedness of the Company
to USM.

It was  further  agreed  that the  settlement  plan  would be  implemented  in a
two-step  transaction.   Approximately  $306,160  of  loans  would  be  paid  by
converting that portion into 309,252,  as adjusted shares of common stock of the
Company  resulting  in USM  holding  approximately  19% of the total  issued and
outstanding  shares  of  common  stock of the  Company.  The  conversion  of the
remaining  indebtedness would be predicated upon either (i) stockholder approval
of the issuance of more than 20% of the Company's  common stock in the aggregate
to USM at a  discount  to market  price as  required  by the rules of  corporate
governance  promulgated by the NASDAQ Small Cap Market  ("NASDAQ"),  or (ii) the
issuance of a waiver by the NASDAQ  excepting  the Company for  compliance  with
this rule.  USM also agreed that it would  continue to provide the Company  with
financing  going  forward as further  inducement to  consummate  the  settlement
agreement set forth above.

Due to the fact that the  Company  had already  expended  significant  monies to
conduct a proxy  solicitation  for its annual  meeting  scheduled on October 12,
1998,  the  Company  made  application  to NASDAQ  for a waiver  of the  meeting
requirement described above.

On  October  19,  1998,  the  Company  made a formal  application  to  NASDAQ in
accordance with Rule  4310(C)(25)(H)(ii) of the NASDAQ Stock Market for a waiver
of the  requirement  that the  Company  call a meeting  of its  stockholders  to
approve the issuance of over 20% in the aggregate of its stock to USM at a price
below market price. The rule allows for a waiver of this requirement when, among
other  things,  a  delay  in  securing   stockholder  approval  would  seriously
jeopardize the financial viability of the Company. On or about October 24, 1998,
the NASDAQ Stock Market contacted the Company and indicated that it was inclined
to deny the Company's  application  unless additional  information was submitted
for review.  The Company  thereafter  withdrew  its  application  and  re-opened
negotiations with USM. The Company sought to continue  discussions with Martucci
in hopes of preventing a foreclosure on the USM Note. The Company was successful
in convincing Martucci to continue funding the Company in hopes that the Company
could begin operations and generate revenues to repay the USM Note

Mr.  Martucci  was  elected  to  the  Board  of  Directors  of  the  Company  in
October,1998.

On or about June 21, 1999, the Company  entered into a letter of intent with USM
to purchase  substantially  all of its assets in  exchange  for shares of common
stock of the Company equal to 69% of the issued and outstanding shares of common
stock. The letter of intent further contemplated the forgiveness of the USM Note
and release of the security therefore upon the closing of the transaction. On or
about October 5, 1999 USM notified WCM Capital, Inc. that it was withdrawing its
letter of intent.


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                                    Page 29
<PAGE>

On January 18,  2000,  the  Company,  Martucci and USM entered into an agreement
whereby the Company  agreed to acquire USM in exchange for  7,473,013  shares of
the Common Stock which is  approximately  85% of the Company's common stock (the
"Transaction"). The terms of this agreement were negotiated between Mr. Martucci
and Mr.  Waligunda  and were  approved by the Board of Directors of the Company.
The  agreement may be  terminated  by unanimous  consent of the parties,  in the
event of a breach of the terms of the  contract  by any of the  parties,  in the
event of an injunction preventing the closing or if the closing has not occurred
on or before July 16,  2000.  As a condition  to closing,  the Company must seek
shareholder approval of the Transaction.  In addition, the Company has agreed to
grant  Martucci  piggyback  and demand  registration  rights with respect to the
shares he is to receive in the Transaction.  The Company filed a proxy statement
with  respect to the  Transaction  shortly  after the  execution of the purchase
agreement.

In March  2000,  the  Company  announced  that it has  reached an  agreement  in
principal with Martucci to acquire Shoppers Online, Inc. and Freebees, Inc., two
related Internet companies 100% owned by him. Shoppers Online was in the process
of launching an on line shopping portal  (www.shoppersonline.com)  and incubator
for the development of business-to-business e-commerce. Freebees is developing a
give-away, fulfillment and refund web site to be linked to Shoppers Online which
will allow  Internet  consumers to  participate  in  promotional  and redemption
programs offered by various companies operating in both e-commerce and brick and
mortar retail businesses. To memorialize our agreement, the Company and Martucci
executed  a letter  of intent on April 17,  2000.  It was  anticipated  that the
Company and  Martucci  would amend the USM Stock  Purchase  Agreement to include
these  Internet   businesses  as  part  of  the  stock  for  stock   transaction
contemplated thereby.

After completing our  investigation  of Shoppers Online and Freebees,  it became
evident that both Shoppers  Online and Freebees  were both in the  developmental
stages and were not  generating any revenues.  Moreover,  we believed that these
companies  would require  additional  investments of capital  before  full-scale
operations  could  begin.  At  this  point,  the  Company  determined  that  the
acquisition of these companies would not add any value to our Company as neither
company could provide us with much needed revenues. Therefore, we terminated our
letter of intent and decided not to proceed with this transaction.

By June,  2000, it became clear that the proxy materials would not be cleared by
the  Commission  prior to the  July 16,  2000  expiration  date of the  purchase
agreement.  USM agreed to extend the contract  through  September 30, 2000.  The
Company was unable to obtain  shareholder  approval of the Transaction  prior to
September 30, 2000 and USM was not willing to grant any further extensions. As a
result the purchase agreement expired.

Since the  expiration  of the  purchase  agreement,  there  have been no further
negotiations  between the Company  and USM with  respect to a possible  business
combination or other  transaction.  The Company has not made any payments to USM
in satisfaction of its indebtedness, rather, USM has agreed and is continuing to
fund the  Company on a  month-to-month  basis.  While USM has not  notified  the
Company of its  intention to  foreclose  on its note,  there can be no assurance
that the USM will do so in the future. Any actions concerning the foreclosure of
the USM Note can have a serious adverse effect on the business of the Company.


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                                    Page 30
<PAGE>

                                     PART IV

Item 13. Exhibits, Financial Statement Schedules and Reports on Form 8-K

Exhibits

The  following  documents  are  filed as  exhibits  herewith,  unless  otherwise
specified by an asterisk, and are incorporated herein by this reference:

Exhibit
Number    Description of Exhibit

3.1       Amended  and  Restated  Certificate  of  Incorporation  filed with the
          Delaware  Secretary  of State on  December 4, 1995.  (Incorporated  by
          reference,  Annual  Report on Form 10KSB for year ended  December  31,
          1995)

3.2       Amended  and  Restated   By-Laws  of  the  Company   (Incorporated  by
          reference,  Annual  Report on Form 10-K for Year  Ended  December  31,
          1994, Exhibit 3.2.)

3.3       Amendment to the Certificate of Incorporation filed with the Secretary
          of State of  Delaware on May 21,  1998.  (Incorporated  by  reference,
          Annual Report on Form 10-KSB for Year Ended December 31, 1998).

3.4       Amendment to the Certificate of Incorporation filed with the Secretary
          of State of Delaware on October 16, 1998.  (Incorporated by reference,
          Annual Report on Form 10-KSB for Year Ended December 31, 1998)

3.5       Amendment to the Certificate of Incorporation filed with the Secretary
          of State of Delaware on December 17, 1999. (Incorporated by reference,
          Annual Report on Form 10-KSB for Year Ended December 31, 1999)

4.1       Form of Indenture  dated January 2, 1990  (Incorporated  by reference,
          Registration Statement on Form S-1, File No. 33-31418, Exhibit 4.1.)

10.1      Mining Lease and Option to Purchase,  dated  November 12, 1976,  among
          Davis I. And  Audrey I.  Hayden,  husband  and wife,  and  Dorothy  L.
          Kennec,  a  single  woman  and  trustee  for her  children,  and  Gold
          Developers  and  Producers  Incorporated  (Incorporated  by reference,
          Registration Statement on Form S-1, File No. 33-31418, Exhibit 10.1.)

10.2      Indenture,  dated August 2, 1982, by and between the Company and David
          I. and Dorothy I. Hayden.  (Incorporated  by  reference,  Registration
          Statement on Form S-1, File No. 33-31418, Exhibit 10.2.)

10.3      Agreement  dated August 2, 1982,  by and between the Company and David
          I. and Audrey I.  Hayden.  (Incorporated  by  reference,  Registration
          Statement on Form S-1, File. No. 33-31418, Exhibit 10.3)

10.5      Zeus Joint  Venture  Agreement,  dated  February  26, 1993 between the
          company and Island Investment Co. (Incorporated by reference,  Current
          Report on Form 8-K dated July 19, 1993,  File No. 0-9416,  Exhibit (a)
          filed as exhibit to Schedule 13D filed by Gems & Minerals Corp.)


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<PAGE>

10.8      Amendment  to Zeus  Joint  Venture  Agreement,  dated as of August 31,
          1993, by and between the Company and Island  Investment Co. and Gems &
          Minerals Corp. (Incorporated by reference, Current Report on Form 8-K,
          dated August 31,1993, File No. 0-9416, Exhibit (a)).

10.26     Promissory Note dated July 6, 1996 by the Company in favor of Anderson
          Chemical   Co.  in  the   aggregate   principal   amount  of  $20,000.
          (Incorporated  by  reference,  Annual  Report on Form  10-KSB for year
          ended December 31, 1996, File No. 0-9416, Exhibit 10.26).

10.28     First  Amendment  to  the  Joint  Venture  Agreement  of  Zeus  No.  1
          Investments, a California general partnership,  dated August 15, 1996.
          (Incorporated  by  reference,  Annual  Report on Form  10-KSB for year
          ended December 31, 1996, File No. 0-9416, Exhibit 10.28)

10.32     Amendment  dated  November  19,  1996,  mining  lease  and  Option  to
          Purchase,  dated  November  12,  1996,  between  the  Company and Mrs.
          Dorothy  Kennec.  (Incorporated  by  reference,  Annual Report on Form
          10-KSB for year ended  December 31,  1996,  File No.  0-9416,  Exhibit
          10.31).

10.34     Lease  Extension  Agreement dated November 21, 1997 between Dorothy L.
          Kennec, individually and Dorothy L. Kennec, Trustee and the Company.

10.35     Assumption of Debt dated December 1, 1997 between the Company and Gems
          & Minerals Corp.

10.36     Promissory  Note  dated  March 5, 1998  between  the  Company  and POS
          Financial, Inc.

10.37     Termination  Letter dated March 6, 1998 between William Martucci,  POS
          Financial, Inc. and US Mining, Inc. and the Company.

10.38     Letter of intent dated  September 25, 1997, by and between the Company
          and William C. Martucci  (Incorporated  by reference on Form 8-K dated
          October 20, 1997, File No. 0-9416, Exhibit A).

10.39     Letter of intent dated June 21,  1999,  by and between the Company and
          U.S.  Mining,  Inc.  (Incorporated by reference on Form 8-K dated June
          24, 1999, File No. 0-9416).

10.40     Agreement  dated  January  2000,  by and  between  the  Company and US
          Mining,  Inc.  (Incorporated  by reference in Preliminary  Proxy dated
          February 22, 2000.

13        Proxy  Statement  to  Stockholders  of the Company for the fiscal year
          ended  December  31,  1994.  Except for those  portions  of such Proxy
          Statement to  Stockholders,  expressly  incorporated by reference into
          this  Report,  such Annual  Report to  Stockholders  is solely for the
          information of the Securities and Exchange Commission and shall not be
          deemed a "filed" document.  (Incorporated by reference,  Annual Report
          on Form 10-KSB for Year Ended December 31, 1995).


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                                    Page 32
<PAGE>

24.1      Consent of Gifford A. Dieterle,  dated June 3, 1994, as an Expert with
          respect to the geological  reports dated December 7, 1993, and May 16,
          1994  filed as  supplemental  information  with the  Company's  Annual
          Report  on  Form  10-K  for  the  year  ended   December   31,   1994.
          (Incorporated by reference,  Annual Report on Form 10-K for Year Ended
          December 31, 1993, File No. 0-9416, Exhibit 23.)

28.1      Maps and Geological Reports prepared by consultant Gifford A. Dieterle
          dated December 7, 1993 and May 16, 1994.  (Incorporated  by reference,
          Annual Report on Form 10-K for Year Ended December 31, 1993,  File No.
          0-9416, Exhibit 23.)

* Filed herewith

Reports on Form 8-K

     November 6, 2000 - dismissal of Ehrenkrantz Sterling & Co., LLC



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                                    Page 33
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities  and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          WCM CAPITAL, INC.
                               (Formerly FRANKLIN CONSOLIDATED MINING CO., INC.)


                                /s/ Robert Waligunda
April 16, 2000                  --------------------------------------
                                Robert Waligunda, President/Treasurer


Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the dates indicated.

/s/ Robert Waligunda
------------------------        President, Treasurer             April 16, 2001
    Robert Waligunda            and Director


/s/ Richard Brannon
------------------------        Vice President/Secretary         April 16, 2001
    Richard Brannon


/s/ George Otten
------------------------        Vice President                   April 16, 2001
    George Otten


/s/ William C. Martucci         Director                         April 16, 2001
------------------------
    William C. Martucci


/s/  Casey Meyer                Director                         April 16, 2001
------------------------
     Casey Meyer


/s/  William Wishinsky          Director                         April 16, 2001
------------------------
     William Wishinsky


/s/ Vincent A. DeMartino        Director                         April 16, 2001
------------------------
    Vincent A. DeMartino


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