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. 1,318,767(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
<PAGE>

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


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

                                     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.


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

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 years 1996 to 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.


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

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
years  1996 to 2000 and,  as a  result,  had not  generated  any  revenues  from
operations at the Franklin Mine in those years.  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.


--------------------------------------------------------------------------------
                                     Page 5
<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  $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.


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

Mineralized Material                               A mineralized  body which has
 or Deposit                                        been       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.


--------------------------------------------------------------------------------
                                     Page 7
<PAGE>
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.


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

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.


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

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.


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

Operations

During 1999, the Company continued reclamation 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 1,642,207 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>

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.

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
1,642,207 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.


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

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.

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  $716,500.00  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 during the years 1996 to 2000.

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


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

December 31, 2000,  no funds where  borrowed  form USM. The US Mining note had a
principal  balance of $1,768,829 which was forgiven as of December 31, 2000. The
forgiveness  was principal only and the interest in the amount of $328,040 still
remains due as of December 31, 2000 to US Mining.

The Company had total current liabilities as of December 31, 2000 of $2,266,313,
convertible  debentures  with a  principal  amount of  $145,000  and other notes
payable with a principal balance of $297,028.  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, USM advanced $298,534 on behalf of the Company.  The US Mining note
had a principal amount of $1,768,829 which was forgiven as of December 31, 2000.
The  forgiveness  was principal  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


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

financing for its operations  until such time, if any, as the Company can secure
additional funding from other sources.

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.

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 19
<PAGE>

Results of Operations:

The Company had no active mining or milling  operations during the years 1996 to
2000.

The Company  incurred  net losses of  $5,125,232,  $2,567,282,  $1,344,962,  and
$311,180 and $235,304 for the years ended December 31, 1996,  1997,  1998, 1999,
and 2000 respectively.

In 1996,  in  accordance  with FASB No.  121,  the  Company  took an  impairment
write-down of mine and mill  improvements  in the amount of $3,933,114.  In 1997
and 1998, additional write-downs of $1,980,787 and $200,000,  respectively, were
recorded. The write-down in 1996 was against previously capitalized  exploration
costs in addition to mine and mill improvements  accumulated from inception. The
write-down  in 1997  was  comprised  of  $1,200,000  on the Gold  Hill  Mill and
$780,787 on the capitalized mill  improvements in connection with the Zeus Joint
Venture.  The impairment of $200,000 in 1998 was against  equipment  received as
partial  consideration  for the sale of the Gold Hill  property.  The  remaining
$525,000 of this equipment was deemed impaired and, accordingly,  written off at
December 31, 2000.

Mine expenses and remediation costs consistently decreased from $162,945 in 1997
to $47,049 in 2000 due to decreased mine site activities.

General  and  administrative  expenses  of  $939,701,  $368,353,  $642,592,  and
$233,829 were  incurred for the years ended  December 31, 1996,  1997,  1998 and
1999,  respectively.  For the year  ended  December  31,  2000,  these  expenses
increased to $1,195,148,  mainly due to approximately $750,000 in legal fees and
officer's  compensation  of  $175,000.  Included in general  and  administrative
expenses in 1998 was a bad debt in the amount of $350,000. This was a note taken
as partial consideration for the sale of the Gold Hill property and subsequently
deemed uncollectible.

Interest  expense of  $241,818,  $33,334,  $123,127,  $144,953  and $239,676 was
incurred for the years ended  December 31, 1996,  1997,  1998,  1999,  and 2000,
respectively.  In addition to interest  expense in connection  with  convertible
debentures  and notes  payable,  the  increase  each year was  mainly  due to an
increase  in loans  from U.S.  Mining,  which  were  ultimately  forgiven  as of
December 31,  2000.  Interest in 1996 was  extraordinarily  high due to interest
incurred on convertible notes which were converted to stock in that year.

In 1998,  the  Company  incurred a loss of $225,000 on the sale of the Gold Hill
property.  The mill  located  on the  property  was  impaired  in the  amount of
$1,200,000 in 1997.


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

Item 7. Financial Reports



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

                                WCM CAPITAL, INC.

                              FINANCIAL STATEMENTS

                                   YEARS ENDED
                        DECEMBER 31, 2000, 1999 AND 1998


<PAGE>

                                                                         Page

Independent Auditor's Report                                               1

Financial Statements:

          Balance Sheets                                                 2 - 3

          Statements of Operations                                         4

          Statements of Stockholders' Equity                             5 - 9

          Statements of Cash Flows                                      10 - 11

Notes to Financial Statements                                           12 - 21

Independent Auditor's Report on Condensed Supplementary Information       22

Supplementary Information                                               23 - 28

<PAGE>


                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors
WCM CAPITAL, INC.
Millburn, New Jersey

We have audited the balance sheets of WCM Capital,  Inc., an  Exploration  Stage
Company  (formerly  Franklin  Consolidated  Mining Co., Inc.) as of December 31,
2000,  1999  and 1998 and the  related  statements  of  operations,  changes  in
stockholders'  equity,  and cash flows for the years 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, 1997, which included an accumulated  deficit of ($18,638,659) as of
December 31, 1997.  Those amounts were audited by other  auditors  whose reports
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.

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,  1999 and
1998 and the results of its  operations and cash flows for the years 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 is 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.




                                                   IWA FINANCIAL CONSULTING LLC
                                                   Certified Public Accountants
                                                   Livingston, New Jersey
                                                   December 3, 2001


                                      F-1
<PAGE>



                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                              December 31,
                                                       2000       1999        1998
                                                     --------    -------    -------
<S>                                                  <C>         <C>        <C>
Property and equipment -  at cost                    $     --    525,000    525,000

  Less: Accumulated depreciation and amortization          --         --         --
                                                     --------    -------    -------

      Net property and equipment                           --    525,000    525,000
                                                     --------    -------    -------

 Other assets -
    Mining reclamation Bond                           139,756    137,016    134,602
                                                     --------    -------    -------

           Total                                     $139,756    662,016    659,602
                                                     ========    =======    =======
</TABLE>

             See auditor's report and notes to financial statements

                                      F-2
<PAGE>


                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                           BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                December 31,
                                                               --------------------------------------------
                                                                   2000             1999            1998
                                                               ------------     -----------     -----------
<S>                                                            <C>                <C>             <C>
Current liabilities:
  Accounts payable and accrued expenses                        $  1,824,285         689,049         684,124
  Payroll and other taxes                                                --          29,960              --
  Convertible debentures                                            145,000         145,000         145,000
  Notes payable:
    Related companies and others                                    297,028         218,965         218,965
    U.S. Mining Inc. - related company                                   --       1,470,295       1,191,586
                                                               ------------     -----------     -----------

       Total current liabilities                                  2,266,313       2,553,269       2,239,675
                                                               ------------     -----------     -----------

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          13,188
  Additional paid-in capital                                     18,390,360      18,390,360      18,390,360
  Deficit accumulated during the exploration stage              (20,530,105)    (20,294,801)    (19,983,621)
                                                               ------------     -----------     -----------

      Total stockholders' equity                                 (2,126,557)     (1,891,253)     (1,580,073)
                                                               ------------     -----------     -----------

               Total                                           $    139,756         662,016         659,602
                                                               ============     ===========     ===========
</TABLE>


             See auditor's report and notes to financial statements

                                      F-3
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                      Cumulative
                                                                                                      December 1,
                                                                                                         1977
                                                                                                      (Inception)
                                                                 Years Ended December 31,               through
                                                        -----------------------------------------     December 31,
                                                            2000           1999           1998           2000
                                                        -----------     ----------     ----------     -----------
<S>                                                     <C>             <C>            <C>            <C>
Revenues:
 Sales                                                  $        --             --             --         876,082
 Interest income                                              2,740          2,414          3,920         553,849
 Forgiveness of debt                                      1,768,829             --             --       1,768,829
 Other income                                                    --             --          4,397          79,397
                                                        -----------     ----------     ----------     -----------

       Total                                              1,771,569          2,414          8,317       3,278,157
                                                        -----------     ----------     ----------     -----------

Expenses:
 Mine expenses and environmental remediation costs           47,049         34,812         62,560       3,668,159
 Write down of inventories                                       --             --             --         223,049
 Write down of mining and milling and other property
   and equipment                                            525,000             --        200,000       6,638,901
 Depreciation and depletion                                      --             --             --       1,910,543
 General and administrative                               1,195,148        233,829        642,592       7,677,354
 Interest                                                   239,676        144,953        123,127       1,526,108
 Amortization of debt issuance                                   --             --             --         683,047
 Equity in net loss and settlement of claims
   of Joint Venture                                              --             --             --       1,059,971
 Loss on settlement of litigation                                --             --             --         100,000
 Loss on sale of property                                        --             --        225,000         225,000
 Other                                                           --       (100,000)       100,000          96,130
                                                        -----------     ----------     ----------     -----------

    Total                                                 2,006,873        313,594      1,353,279      23,808,262
                                                        -----------     ----------     ----------     -----------

Net loss                                                $  (235,304)      (311,180)    (1,344,962)    (20,530,105)
                                                        ===========     ==========     ==========     ===========

Loss per common share                                   $     (0.18)         (0.24)         (0.34)
                                                        ===========     ==========     ==========

Weighted average shares outstanding                       1,318,767      1,318,767      3,955,169
                                                        ===========     ==========     ==========

</TABLE>


             See auditor's report and notes to financial statements

                                      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 auditor's report and notes to financial statements

                                      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 auditor's report and notes to financial statements

                                      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 auditor's report and notes to financial statements

                                      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 auditor's report and notes to financial statements

                                      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                                                   --           --              --      (5,125,232)         --   (5,125,232)
                                                   ----------     --------     -----------     -----------     -------   ----------
Balance December 31, 1996                           1,207,773       12,078      17,112,196     (16,071,377)         --    1,052,897

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                                                   --           --              --      (2,567,282)         --   (2,567,282)
                                                   ----------     --------     -----------     -----------     -------   ----------
Balance December 31, 1997                           1,318,767       13,188      18,390,360     (18,638,659)         --     (235,111)

Net loss                                                   --           --              --      (1,344,962)         --   (1,344,962)
                                                   ----------     --------     -----------     -----------     -------   ----------
Balance December 31, 1998                           1,318,767       13,188      18,390,360     (19,983,621)         --   (1,580,073)

Net loss                                                   --           --              --        (311,180)         --     (311,180)
                                                   ----------     --------     -----------     -----------     -------   ----------
Balance December 31, 1999                           1,318,767       13,188      18,390,360     (20,294,801)         --   (1,891,253)

Net loss                                                   --           --              --        (235,304)         --     (235,304)
                                                   ----------     --------     -----------     -----------     -------   ----------
Balance December 31, 2000                           1,318,767     $ 13,188      18,390,360     (20,530,105)         --   (2,126,557)
                                                   ==========     ========     ===========     ===========     =======   ==========
</TABLE>


             See auditor's report and notes to financial statements

                                      F-9
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                        Cumulative
                                                                                                        December 1,
                                                                                                           1977
                                                                                                        (Inception)
                                                                   Years Ended December 31,               through
                                                           ----------------------------------------     December 31,
                                                              2000           1999          1998            2000
                                                           ------------    ---------    -----------    ------------
<S>                                                        <C>             <C>          <C>            <C>
Cash flows from operating activities:
  Net loss                                                 $  (235,304)    (311,180)    (1,344,962)    (20,530,105)
  Adjustments to reconcile net loss to net cash used in
   operating activities:
   Depreciation and depletion                                       --           --             --       1,910,543
   Provision for uncollectible account                              --           --        350,000         350,000
   Forgiveness of debt                                      (1,768,829)          --             --      (1,768,829)
   Write down of mining and milling and the other
     property and equipment                                    525,000           --        200,000       6,638,901
   Amortization of debt issuance expense                            --           --             --         683,047
   Loss on sale of equipment                                        --           --        225,000         225,000
  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 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)        (3,921)        (14,756)
   Accounts payable and accrued expenses                     1,135,236       34,885        285,010       2,086,501
   Payroll and other taxes                                     (29,960)          --             --         (29,960)
                                                           -----------     --------     ----------     -----------
    Net cash used in operating activities                     (376,597)    (278,709)      (288,873)     (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 auditor's report and notes to financial statements

                                      F-10
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                          Cumulative
                                                                                          December 1,
                                                                                             1977
                                                                                          (inception)
                                                         Years Ended December 31,           through
                                                     -------------------------------      December 31,
                                                       2000        1999        1998          2000
                                                     --------    -------     -------       ---------
<S>                                                   <C>        <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                        376,597    278,709     287,795       2,258,375
 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     287,795      12,438,189
                                                      -------    -------    --------     -----------

Decrease in cash                                           --         --      (1,078)             --

Cash Beginning                                             --         --       1,078              --

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

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


             See auditor's report and notes to financial statements

                                      F-11
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999, AND 1998

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, 1999 and 1998, the Company had no cash balance,  an
          accumulated  deficit  of  $20,530,105,   $20,294,800  and  $19,983,600
          respectively,   and  a  working  capital   deficiency  of  $2,266,300,
          $2,553,300 and $2,239,700 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.

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.


                                      F-12
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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

          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.

          The  Company  had an  accounting  policy of  capitalizing  milling and
          mining  exploration costs because they are a development stage company
          and operations had not commenced.

          Subsequent to the year ended  December 31, 2000,  the  Securities  and
          Exchange  Commission  deemed the  financial  statements  for the years
          ended December 31, 1996, 1997, 1998 and 1999 as unaudited  because the
          accounting  firm for each year did not secure the consent of the prior
          firm to use their report in the  financial  statements  they  reported
          thereon.

          The SEC also stated that since this was a  development  stage  company
          for  approximately  20  years,  the  Company  should  write  off as an
          impairment  loss, all the capitalized  milling and mining  exploration
          costs as these costs were materially in excess of the present value of
          projected  net profits to be  realized  from  future  operations.  The
          Company agreed with the SEC findings.

          Therefore,  for the  year  beginning  January  1,  1996,  the  Company
          expensed all prior capitalized  milling and mining  exploration costs,
          as an impairment loss. This change of accounting policy and correction
          of an error had a significant  impact on the  financial  statement for
          the year ended December 31, 1996 and all subsequent  years.  Therefore
          the  reports  on the  financial  statements  for the prior  years from
          December  31,  1998  through  December  31,  2000 have been  noted and
          reissued as of December 2001.

          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.

          Fair value of Financial Instruments:

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


                                      F-13
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                         DECEMBER 31, 2000, 1999 AND 1998

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

          Mining, Milling and Other Property and Equipment:

          Recorded at costs incurred to acquire,  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.

          As stated under  "Organization  of This Note",  all prior  capitalized
          milling and mining  exploration  costs were written off as impairments
          losses as of December 31, 2000.

          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,  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, this
          note was voided and a $200,000  impairment  loss was taken against the
          $725,000 of equipment  acquired.  As of December 31, 2000, the Company
          determined  that the  recoverability  of the  carrying  amount  of the
          equipment  was  uncertain;   therefore,  the  remaining  cost  of  the
          equipment was impaired in the amount of $525,000.  All other  property
          and equipment were considered  impaired as of December 31, 1997, for a
          total impairment loss of $5,913,901.


                                      F-14
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

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

          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 it is necessary to reduce
          deferred tax assets to the amounts expected to be realized (Note 9).

          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.  Income or loss per common
          share is computed by dividing  the net income or 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.  Losses per share have been restated
          for prior  periods to give effect to the reverse  stock splits  during
          1999 and 1998 (Note 10).


                                      F-15
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999, AND 1998

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

          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:

          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.

          On July 3, 1996, the Company acquired the Gold Hill Mill from a wholly
          owned  subsidiary of Gems, in exchange for an 8% mortgage note with an
          initial  principal  balance  of  $2,500,000.  The Gold Hill Mill was a
          fully permitted milling facility located in Boulder, Colorado. All the
          Gold Hill Mill assets were sold during 1998 (See Note 2).

NOTE 4 - NOTES PAYABLE - RELATED PARTY AND OTHERS:

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

<TABLE>
<CAPTION>
                                                         2000            1999            1998
                                                       --------        -------          -------
<S>                                                    <C>             <C>              <C>
          12% unsecured demand notes due to the
           Company's former President and his
           affiliated entity                           $142,718         71,965           71,965
          Secured promissory note (a)                    60,000         60,000           60,000
          Unsecured promissory notes (b)                 94,310         87,000           87,000
                                                       --------        -------          -------
                                                       $297,028        218,965          218,965
                                                       ========        =======          =======
</TABLE>


                                      F-16
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 4 - NOTES PAYABLE - RELATED PARTY AND OTHERS (continued):

          (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
               aggregated approximately $45,744.

NOTE 5 - CONVERTIBLE DEBENTURES AND OTHER CONVERTIBLE DEBT:

          As of December  31,  2000,  consists of 12.25%  convertible  debenture
          maturing December 31, 1994 is $145,000.

          As of December  31,  2000,  the Company was in default with respect to
          the  principal  balance  of the  debenture  and  accrued  interest  of
          approximately $102,000. 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).

          In September 1996, the Company acquired a 20% interest in Newmineco by
          issuing a 9.5% note of $600,000 payable 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  issues  related  to the Mogul  Mines,  the  purchase  price was
          reduced to $150,000 on December  31, 1996 and to zero on December  31,
          1997.  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.


                                      F-17
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 6 - NOTE PAYABLE - RELATED PARTY:

          The Company had an 8% promissory  note  outstanding  with a 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 as
          they  are  owned  by a  director  of WCM  and  can  exert  significant
          influence  over the Company.  The principal  balance due of $1,768,829
          was forgiven by USM at December 31, 2000. Accrued interest of $328,040
          remains a liability of the Company.

NOTE 7 - 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 promissory note, due February 2, 1998.  Payment on the note has been
          waived 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 which will be expenses as incurred. As of December 31, 2000,
          USM had not  received  clear  title  but  continued  to make  Purchase
          Agreement extension payments.

          Kennec  receives  a 50% share on land and  mineral  rights on  certain
          parcels of acreage.

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


                                      F-18
<PAGE>


                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 7 - COMMITMENTS AND CONTINGENCIES (continued):

          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,  $41,000 and $41,000 in 2000,1999  and 1998,
          respectively. As of February 28, 2001, the Company ceased its tenancy.

          (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 set forth  measures
          that must be taken 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 litigations:

          (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 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  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
               without  arriving at a settlement.  The  continued  default 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 a settlement.


                                      F-19
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 7 - COMMITMENTS AND CONTINGENCIES (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  allowing them 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 and 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.

          The Company is currently not in compliance  with the minimum bid price
          requirement,   additionally,  there  can  be  no  assurance  that  the
          company's  common  stock will be able to meet such  compliance  in the
          future.

NOTE 8 - 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  carrying  value  of the  deferred  tax
          attributable  to the potential  benefits from such net operating  loss
          carryforwards  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.


                                      F-20
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                        DECEMBER 31, 2000, 1999 AND 1998

NOTE 9 - STOCKHOLDERS' EQUITY:

          (a) Reverse Stock Splits:

               On May 26, 1998,  the Company  effectuated a  twenty-five-for-one
               reverse  stock split,  and on December 20, 1999, 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,  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, 1976 (inception)  through December 31, 2000, the
               Company issued common stock for:

<TABLE>
<CAPTION>
                                                                                     Shares       Amount
                                                                                     ------       ------
<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 on 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
                   Repayment of related party loans                                 314,169       3,001,681
                                                                                 ----------    ------------

                                                                                  1,318,767    $ 18,403,548
                                                                                 ==========    ============
</TABLE>


                                      F-21
<PAGE>

                         INDEPENDENT AUDITOR'S REPORT ON
                            SUPPLEMENTARY INFORMATION

To the Board of Directors
WCM CAPITAL, INC.
Millburn, New Jersey

Our report on our audit of the financial statements of WCM Capital, Inc. for the
years ended December 31, 2000, 1999 and 1998 appears on page one. That audit was
conducted  for  the  purpose  of  forming  an  opinion  on the  basic  financial
statements taken as a whole. The supplementary information contained on pages 23
to 28 from the interim quarterly  reports,  the Statements of Operations and the
Statements  of Cash Flows for the years  ended  December  31, 1996 and 1997 were
prepared by management.  We have not audited or reviewed this information and do
not express any forms of assurance on them.












                                                    IWA FINANCIAL CONSULTING LLC
                                                    Certified Public Accountants
                                                    Livingston, New Jersey

December 3, 2001


                                      F-22

<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            SUPPLEMENTARY INFORMATION

                                 BALANCE SHEETS

                                     ASSETS
<TABLE>
<CAPTION>
                                                                      December 31,
                                                    ----------------------------------------------------
                                                      2000      1999      1998       1997         1996
                                                    --------   -------   -------   ---------   ---------
<S>                                                  <C>       <C>       <C>         <C>         <C>
Current assets:
 Cash                                               $     --        --        --       1,078         127
 Prepaid expenses                                         --        --        --          --     107,979
 Advances to joint venture partners                       --        --        --          --     266,438
                                                    --------   -------   -------   ---------   ---------

  Total current assets                                    --        --        --       1,078     374,544
                                                    --------   -------   -------   ---------   ---------

Property and equipment -  at cost                         --   525,000   525,000   1,300,000   2,500,000

 Less: Accumulated depreciation and amortization          --        --        --          --          --
                                                    --------   -------   -------   ---------   ---------

     Net property and equipment                           --   525,000   525,000   1,300,000   2,500,000
                                                    --------   -------   -------   ---------   ---------

Other assets -
   Investment in equity investee                          --        --        --          --     150,000
   Mining reclamation Bonds                          139,756   137,016   134,602     130,681     126,875
                                                    --------   -------   -------   ---------   ---------

         Total other assets                          139,756   137,016   134,602     130,681     276,875
                                                    --------   -------   -------   ---------   ---------

              Total                                 $139,756   662,016   659,602   1,431,759   3,151,419
                                                    ========   =======   =======   =========   =========
</TABLE>


         See independent auditor's report on supplementary information

                                      F-23
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                           BALANCE SHEETS (CONTINUED)

                            SUPPLEMENTARY INFORMATION

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                      December 31,
                                                     ----------------------------------------------------------------------------
                                                         2000            1999             1998            1997            1996
                                                     ------------     -----------     -----------     -----------     -----------
<S>                                                  <C>                  <C>             <C>             <C>             <C>
Current liabilities:
  Accounts payable and accrued expenses              $  1,824,285         689,049         684,124         399,114         553,883
  Payroll and other taxes                                      --          29,960              --              --              --
  Convertible note payable                                     --              --              --              --         600,000
  Convertible debentures                                  145,000         145,000         145,000         145,000         145,000
  Notes payable:
   Related companies and others                           297,028         218,965         218,965         167,000          80,000
   U.S. Mining Inc. - related company                          --       1,470,295       1,191,586         955,756              --
                                                     ------------     -----------     -----------     -----------     -----------

     Total current liabilities                          2,266,313       2,553,269       2,239,675       1,666,870       1,378,883
                                                     ------------     -----------     -----------     -----------     -----------

Other liabilities:
  Mortgage note payable                                        --              --              --              --         586,419
  Excess of equity in net losses of joint
   venture over investment                                     --              --              --              --         133,220
                                                     ------------     -----------     -----------     -----------     -----------

      Total other liabilities                                  --              --              --              --         719,639
                                                     ------------     -----------     -----------     -----------     -----------

            Total liabilities                           2,266,313       2,553,269       2,239,675       1,666,870       2,098,522
                                                     ------------     -----------     -----------     -----------     -----------

Commitments and contingencies

Stockholders' equity:
   Common stock, par value $.01 per share;
     40,000,000 shares authorized; 1,318,767
   (except 1,207,773 for 1996) shares issued
   and outstanding                                         13,188          13,188          13,188          13,188          12,078
 Additional paid-in capital                            18,390,360      18,390,360      18,390,360      18,390,360      17,112,196
 Deficit accumulated during the exploration stage     (20,530,105)    (20,294,801)    (19,983,621)    (18,638,659)    (16,071,377)
                                                     ------------     -----------     -----------     -----------     -----------

      Total stockholders' equity                       (2,126,557)     (1,891,253)     (1,580,073)       (235,111)      1,052,897
                                                     ------------     -----------     -----------     -----------     -----------

         Total                                       $    139,756         662,016         659,602       1,431,759       3,151,419
                                                     ============     ===========     ===========     ===========     ===========
</TABLE>

         See independent auditor's report on supplementary information

                                      F-24
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            SUPPLEMENTARY INFORMATION

                            STATEMENTS OF OPERATIONS
            YEARS ENDED DECEMBER 31, 1996 THROUGH DECEMBER 31, 2000

<TABLE>
<CAPTION>
                                                                             Years Ended December 31,
                                                     -------------------------------------------------------------------------
                                                         2000           1999           1998            1997           1996
                                                     -----------     ----------     ----------     -----------     -----------
<S>                                                  <C>             <C>            <C>            <C>             <C>
Revenues:
Sales                                                $        --             --             --              --              --
Interest income                                            2,740          2,414          3,920           3,888           2,351
Forgiveness of debt                                    1,768,829             --             --              --              --
Other income                                                  --             --          4,397              --              --
                                                     -----------     ----------     ----------     -----------     -----------


Total                                                  1,771,569          2,414          8,317           3,888           2,351
                                                     -----------     ----------     ----------     -----------     -----------

Expenses:
Mine expenses and environmental remediation costs         47,049         34,812         62,560         162,945              --
Write down of mining and milling and
other property and equipment                             525,000             --        200,000       1,980,787       3,933,114
General and administrative                             1,195,148        233,829        642,592         368,353         939,701
Interest                                                 239,676        144,953        123,127          33,334         241,818
Equity in net loss and settlement of claims
of Joint Venture                                              --             --             --          (9,249)         12,950
Loss on sale of property                                      --             --        225,000          35,000              --
Other                                                         --       (100,000)       100,000              --              --
                                                     -----------     ----------     ----------     -----------     -----------

Total                                                  2,006,873        313,594      1,353,279       2,571,170       5,127,583
                                                     -----------     ----------     ----------     -----------     -----------

Net loss                                             $  (235,304)      (311,180)    (1,344,962)     (2,567,282)     (5,125,232)
                                                     ===========     ==========     ==========     ===========     ===========

Loss per common share                                $     (0.18)         (0.24)         (0.34)          (0.03)          (0.07)
                                                     ===========     ==========     ==========     ===========     ===========

Weighted average shares outstanding                    1,318,767      1,318,767      3,955,169      98,500,000      74,284,324
                                                     ===========     ==========     ==========     ===========     ===========
</TABLE>


         See independent auditor's report on supplementary information

                                      F-25
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            SUPPLEMENTARY INFORMATION

                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>
                                                                                   Years Ended December 31,
                                                            ---------------------------------------------------------------------
                                                                2000          1999          1998           1997           1996
                                                            ------------    ---------    -----------    -----------    ----------
<S>                                                         <C>             <C>          <C>            <C>            <C>
 Cash flows from operating activities:
  Net loss                                                  $  (235,304)    (311,180)    (1,344,962)    (2,567,282)    (5,125,232)
  Adjustments to reconcile net loss
  to net cash used in operating activities:
    Provision for uncollectible account                              --           --        350,000             --             --
    Forgiveness of debt                                      (1,768,829)          --             --             --             --
    Write down of mining and milling and other equipment        525,000           --        200,000      1,980,787      3,933,114
    Loss on sale of equipment                                        --           --        225,000             --             --
  Value of common stock issued for:
    Services and interest                                            --           --             --         13,000        702,017
    Equity in net (income) loss of joint venture                     --           --             --         (9,249)        12,950
  Changes in operating assets and liabilities:
    Prepaid expenses                                                                                       107,979       (107,979)
    Interest accrued on mining reclamation bonds                 (2,740)      (2,414)        (3,921)        (3,806)        (1,875)
    Accounts payable and accrued expenses                     1,135,236       34,885        285,010       (104,986)       274,607
    Payroll and other taxes                                     (29,960)          --             --             --             --
                                                            -----------     --------     ----------     ----------     ----------

     Net cash used in operating activities                     (376,597)    (278,709)      (288,873)      (583,557)      (312,398)
                                                            -----------     --------     ----------     ----------     ----------

Cash flows from investing activities:
 Purchases and additions to mining, milling and other
 property and equipment                                              --           --             --             --        (85,000)
 Purchases of mining reclamation bonds, net                          --           --             --             --        (80,000)
                                                            -----------     --------     ----------     ----------     ----------

    Net cash used in investing activities                   $        --           --             --             --       (165,000)
                                                            ===========     ========     ==========     ==========     ==========
</TABLE>


         See independent auditor's report on supplementary information

                                      F-26
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                            SUPPLEMENTARY INFORMATION

                      STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
                                                               Years Ended December 31,
                                                 ------------------------------------------------------
                                                  2000       1999        1998        1997        1996
                                                 -------    -------    --------     -------    --------
<S>                                              <C>        <C>         <C>         <C>          <C>
Cash flows from financing activities:
 Issuance of:
   Common stock                                       --         --          --          --     297,600
 Proceeds:
   Advances from joint venture partner                --         --          --      37,234          --
   Other notes and loans payable                 376,597    278,709     287,795     547,274      80,000
 Issuance of convertible debentures and notes         --         --          --          --     200,000
 Advances to joint venture partner                    --         --          --          --    (218,251)
                                                 -------    -------    --------     -------    --------

  Net cash provided by financing activities      376,597    278,709     287,795     584,508     359,349
                                                 -------    -------    --------     -------    --------

Increase in cash                                      --         --      (1,078)        951    (118,049)

Cash - Beginning of period                            --         --       1,078         127     118,176
                                                 -------    -------    --------     -------    --------

Cash - End of period                                  --         --          --       1,078         127
                                                 =======    =======    ========     =======    ========
</TABLE>

         See independent auditor's report on supplementary information

                                      F-27
<PAGE>

                                WCM CAPITAL, INC.
                         (An Exploration Stage Company)

                      CONDENSED SUPPLEMENTARY INFORMATION

<TABLE>
<CAPTION>
                         LOSS FROM                                                   STOCKHOLDERS'
     QUARTER             OPERATIONS/    NET LOSS                                        EQUITY
      ENDED               NET LOSS      PER SHARE       ASSETS        LIABILITIES     (DEFICIENCY)
------------------      ------------    ---------     ----------      -----------     ------------
<S>                     <C>              <C>          <C>             <C>             <C>
March 31, 1996          $(4,109,000)     $(0.60)      $   93,318      $1,051,402      $  (958,084)

June 30, 1996              (195,616)         --          125,367         720,747         (595,380)

September 30, 1996         (583,114)      (0.01)       3,226,954       2,396,867          830,087

March 31, 1997             (125,907)         --        3,028,771       2,101,781          926,990

June 30, 1997              (181,995)         --        2,838,868       1,443,373        1,395,495

September 30, 1997         (183,593)         --        2,656,776       1,431,874        1,224,902

March 31, 1998             (139,955)         --        1,431,661       1,806,727         (375,066)

June 30, 1998              (390,790)      (0.10)       1,211,044       1,976,900         (765,856)

September 30, 1998         (119,285)      (0.03)       1,224,275       2,109,415         (885,140)

March 31, 1999              (74,519)      (0.02)         660,001       2,314,592       (1,654,591)

June 30, 1999               (90,108)      (0.03)         660,073       2,405,372       (1,745,299)

September 30, 1999          (74,095)      (0.02)         661,345       2,480,139       (1,818,794)

March 31, 2000             (166,700)      (0.13)         662,701       2,720,652       (2,057,951)

June 30, 2000               (99,025)      (0.08)         663,386       2,820,363       (2,156,977)

September 30, 2000         (127,891)      (0.10)         664,071       2,948,938       (2,284,867)
</TABLE>

         See independent auditor's report on supplementary information

                                      F-28

<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 Cohn & Company as its  independent  auditors for fiscal
year 2000. JH Cohn was the  independent  auditor for the Company  through fiscal
year 1997

On April 9, 2000,  the  Company  notified  JH Cohn & Company.  Certified  Public
Accountants  that it would no  longer  serve as its  independent  auditors.  The
decision to dismiss JH Cohn & Company was  approved by the Board of Directors of
the Company. JH Cohn 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 22
<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 23
<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 24
<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  153,690  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, reclamation and reopening of the Company's mining
ventures (the "Zeus Joint Venture").


--------------------------------------------------------------------------------
                                    Page 25
<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.

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.


--------------------------------------------------------------------------------
                                    Page 26
<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.


-------------------------------------------------------------------------------
                                    Page 27
<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.  Additionally,  USM has forgiven all
monies owed by the Company,  not including accrued interest,  as of December 31,
2000.  The balance  forgiven was  $1,768,829 and is included in revenues for the
year ended December 31, 2000.


--------------------------------------------------------------------------------
                                    Page 28
<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.)


--------------------------------------------------------------------------------
                                    Page 29
<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).


--------------------------------------------------------------------------------
                                    Page 30
<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


--------------------------------------------------------------------------------
                                    Page 31
<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

January 11, 2002               --------------------------------------
                               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.

<TABLE>

<S>                               <C>                             <C>
/s/ Robert Waligunda
--------------------------        President, Treasurer            January 11, 2002
    Robert Waligunda                and Director

/s/ Richard Brannon
--------------------------        Vice President/Secretary        January 11, 2002
    Richard Brannon

/s/ George Otten
--------------------------        Vice President                  January 11, 2002
    George Otten

/s/ William C. Martucci              Director                     January 11, 2002
--------------------------
    William C. Martucci

/s/ Casey Meyer                      Director                     January 11, 2002
--------------------------
    Casey Meyer

/s/ William Wishinsky                Director                     January 11, 2002
--------------------------
    William Wishinsky

/s/ Vincent A. DeMartino             Director                     January 11, 2002
--------------------------
    Vincent A. DeMartino
</TABLE>


--------------------------------------------------------------------------------
                                    Page 32