SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[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 12/31/01
                           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.      $ [ none ]

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. $329,691.75.

State the  number  of shares  outstanding  of each of  issuers'  class of common
equity, as of the latest practical date. 1,318,767 as of March 28, 2002.

DOCUMENTS INCORPORATED BY REFERENCE IN PART III - SIX
Transitional Small Business Disclosure Format (check one)    Yes___  No  _X_

<PAGE>


PART I             TABLE OF CONTENTS                                        PAGE

Item 1            Description of Business                                     3

Item 2            Properties                                                  5

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                       17
                  or Plan of Operation

Item 7            Financial Statements                                       20

Item 8            Changes in and Disagreements with                          21
                  Accountants on Accounting and
                  Financial Disclosure

PART  III

Item 9            Directors, Executive Officers, Promoters,                  23
                  and Control Person; Compliance with
                  Section 16 under the Exchange Act

Item 10           Executive Compensation                                     24

Item 11           Security Ownership of Certain Beneficial                   25
                  Security Owners and Management

Item 12           Certain Relationships and Related
                  Transactions                                               25

PART IV

Item 13           Exhibits, Reports on Form 8-K
                           Signatures                                        29


                                     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. None of our properties were operational in fiscal year 2001.

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.

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,


                                     Page 3
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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 2000 and 2001, no exploration  activities  were conducted at
the Franklin  Mine. The Company  continued its  rehabilitation  and  reclamation
efforts as  required  by current  DMG  regulations.  Specifically,  the  Company
continued with its water monitoring programs and commissioned additional reports
and research into claims located on the mining property.

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.

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 on March 7, 2000.  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.

On November 5, 2001, the Company's  application  for Temporary  Cessation of its
permit was granted by the DMG. The Temporary  Cessation  status of the permit is
deemed to commence on the day our application was submitted to the DMG which was
March 7, 2000.  In  accordance  with Section  1.13.8 and 1.13.9,  our  Temporary
Cessation  status may  continue  in effect for not more than five years from the
beginning  of such  status.  The Company may apply for an extension of this time
provided that we submit an extension  request to the DMG stating the reasons for
the  continuation  of this status and the plans for  resumption  of  operations.
However,  in no event can the Temporary  Cessation  exceed ten years.  While the
Company's  permit  is in  Temporary  Cessation,  we will  still be  required  to
continue our water monitoring  programs and maintain the property in its current
condition.

The Company has not conducted any  commercial  mining  operations  during fiscal
years  2000 and 2001 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.  Moreover,  since the Company's permit has been placed
in  Temporary  Cessation,   it  is  unlikely  that  the  Company  will  commence
exploration in the near future . The Company, however, plans to continue to work
closely  with the Federal  and  Colorado  state  mining  regulatory  agencies as
required  by law to  maintain  its  properties  until  such time as  exploration
activities can recommence.


                                     Page 4
<PAGE>

(2) Other Ventures

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.

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.

On or about September 28, 2001, the Company filed an S-8 registration  statement
pursuant to which the Company  agreed to issue and register  common stock of the
Company  to  certain  consultants  as  compensation  for a variety  of  services
rendered  thereby.  As of the date hereof,  none of the stock  registered in the
form S-8 has been issued.

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.


                                     Page 5
<PAGE>

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.

Mineralized Material     A  mineralized   body  which  has  been  delineated  by
 or Deposit              appropriate  or  Deposit  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 for which  quantity  and grade and/or  quality
  Reserves               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.


                                     Page 6
<PAGE>


Proven(Measured)         Reserves  for  which  (a)  quantity  is  computed  from
  Reserves               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.

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


                                     Page 7
<PAGE>

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.

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.  Mrs. Hayden and
U.S. Mining have mutually agreed to no longer extend the  Hayden/Kennec  Leases.
Since  November  1997,  USM  has  paid  royalty   payments  to  Mrs.  Hayden  of
approximately $54,000 through December 31, 2001.

Fifty percent (50%) of the rights comprising the original  Hayden/Kennec  Leases
are  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,


                                     Page 8
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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.

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.  Currently,  the matter of  ownership  rights of the
mineral  rights covered to the  Hayden/Kennec  leases are the subject of a legal
proceeding,  in District  Court,  Clear Creek County  Colorado (Case No. 01CV76)
against Audrey L. Hayden,  Gold  Developers and Producers,  Inc.,  U.S.  Mining,
Inc.,  Franklin  Consolidated  Mining Co., Inc. and the Company as occupants and
all other persons claiming an interest in certain  properties and mineral rights
located in Idaho Springs,  Clear Creek County,  Colorado.  For more  information
concerning this proceeding, See Item 3 Litigation, Kennec v. Franklin Mining Co.
et al.  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


                                     Page 9
<PAGE>

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).

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-


                                    Page 10
<PAGE>

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.

Operations

The Company ceased all reclamation and rehabilitation activities during 2000 and
2001 so as to focus its  efforts  on  preparing  its  properties  for  Temporary
Cessation. Our application was approved by the DMG on November 5, 2001.

USM has verbally  pledged to continue to provide  financing to the Company on an
as needed basis through  December 31, 2002. This financing is in addition to the
advances  made to the Company by USM from 1998 though  December 31, 2001.  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.  No
crushing  activities  were conducted in fiscal year 2001 and it is unlikely that
the Company will conduct any crushing activities in 2002.

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. 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.


                                    Page 11
<PAGE>

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.

On or about October 4, 2001 AST filed a motion for default  judgment against the
Company in Supreme  Court,  New York County for the entire  amount of the unpaid
debentures  (including those holders  represented  separately in the Hopis Trust
litigation)  plus  interest,  attorney's  fees costs and expenses.  AN Order and
Judgment  was entered in Supreme  Court,  New York County on January 29, 2002 in
the amount of $142,000,  plus interest  compounded at the contractual rate of 12
1/4% from April 1, 1995 to the date of entry of the Judgment  (January 29, 2002)
in the amount of $181,086.58 plus interest at the statutory rate of 9% per annum
thereafter,  plus  attorneys  fees in the  amount  of  $4653.73  plus  costs and
disbursements in the amount of $ 445.00, for a total amount of $328,185.31.

NASDAQ Delisting

On or about October 5, 2001, the Company received a delisting  notification from
the NASDAQ Stock Market pursuant to which the Staff  determined that the Company
failed  to  comply   with  the   filing,   net   tangible   assets/shareholders'
equity/market  capitalization/  net income and disclosure


                                    Page 12
<PAGE>

requirements,  as  set  forth  in  the  Nasdaq  Marketplace  Rules  4310(c)(14),
4310(c)(02)(B)  and  4310(c)(16).  In addition,  the Staff cited the Company for
certain public interest  concerns,  as referenced in Marketplace  rules 4300 and
4330(a)(03).  On or about  October  12, the  Company  sent a formal  request for
continued  listing on the Nasdaq SmallCap  Market,  notwithstanding  the Staff's
determinations  as set forth above.  On or about  October 16, 2001,  the Company
received  confirmation that our request will be considered at an oral hearing to
be held before a Panel  authorized by the Board of Directors of the Nasdaq Stock
Market,  Inc. Board of Directors on Thursday,  November 15, 2001 at 9:30 a.m. in
Washington DC. The Company voluntarily withdrew its request for hearing prior to
its November 15, 2001 hearing date and its securities were withdrawn on November
13,th, 2001.

Currently  the  Company's  stock is traded on the "pink sheets" under the symbol
"WCMC")  and is subject to the "penny  stock"  trading  rules.  The penny  stock
trading rules impose additional duties and a responsibility  upon broker-dealers
if they  recommend 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


                                    Page 13
<PAGE>

securities.  Because market quotations in the over-the-counter markets 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.

Management is hopeful that the  Company's  Common Stock will qualify for trading
on the  Over-The-Counter/Bulletin  Board  ("OTC")  market in the  future and the
Company  will  continue to make every  effort to include its Common Stock on the
OTC.

Kennec v. Franklin Mining Co. et al.

On or about September 4, 2001, Dorothy L. Kennec commenced an action in District
Court,  Clear Creek County  Colorado (Case No. 01CV76) against Audrey L. Hayden,
Gold Developers and Producers,  Inc., U.S. Mining,  Inc., Franklin  Consolidated
Mining Co., Inc. and the Company as occupants and all other persons  claiming an
interest in certain  properties  and mineral  rights  located in Idaho  Springs,
Clear Creek County,  Colorado.  The suit (1) alleges breach of contract  Against
Gold Developers & Producers,  Inc. Franklin Mining and the Company, (2) requests
termination of possessory  rights and eviction of Franklin Mining, US Mining and
WCM  Capital,  (3)  requests an  adjudication  of the rights of the parties with
respect to the property,  (4) alleges unlawful encumbrance of the property which
slandered  Plaintiff  Kennec's title, (5) alleges that Defendant Franklin Mining
is  committing  waste on the  property  by failing to  maintain  said  property,
failing to mine the property in accordance with current  standards and operating
the  property in  violation  of Federal and State  mining and zoning  laws,  (6)
requests partition of the mining claims so as to segregate and identify one half
of the property in which  Plaintiff  Kennec will have an  undivided  surface and
mineral interest, (7) seeks an accounting from Defendants Hayden, Franklin Mines
and US  Mining  as to all  amounts  paid  as rent  and/or  royalties  under  the
Hayden/Kennec  Leases.  In addition to seeking  damages for breach of  contract,
slander of title and waste, Plaintiff Kennec is seeking orders for partition and
possess,  to  adjudicate  the  rights  of the  parties  regarding  title  to the
Property, declaring the Hayden/Kennec Leases terminated and restoring possession
of 1/2  interest to  Plaintiff  Kennec,  releasing  the liens as to  Plaintiff's
property and any damages related thereto,

On or about  January 3, 2002,  the Company,  together  with US Mining,  filed an
answer to the  aforementioned  complaint  pursuant to which we denied all of the
material allegations set forth in the complaint. We further asserted affirmative
defenses that Plaintiff  fails to state a claim against us upon which relief can
be  granted,  the  Complaint  fails  to  join  necessary  parties,   accord  and
satisfaction,  assumption of risk, estoppel, failure of consideration,  license,
payment,  release,  waiver  and  failure  to use  reasonable  means to  mitigate
damages.  Additionally,  US Mining  filed a  counterclaim  for  $10,000  loan to
Plaintiff   which  was  never  repaid.   The  Company  intends  to  continue  to
aggressively  defend this case;  however,  we are pursuing avenues of settlement
with plaintiff.

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

2001 Meeting of Shareholders.

No matters were submitted to shareholders for a vote during fiscal year 2001.

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.


                                    Page 14
<PAGE>


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

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

Shares of the  Company's  Common Stock (all of which are of one class,  $.01 per
share)  are  traded  on  the  "pink  sheets"  under  the  symbol  ("WCMC").  For
information  regarding the recent  delisting of the Company's  Common Stock from
the NASDAQ SmallCap Market, 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 1999 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-three reverse stock split effected on December 13, 1999 except
as noted.


                                    Page 15
<PAGE>

                                               High                     Low
Quarter Ended                                  Bid Price               Bid Price

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

March 31, 2001                                  $  0.50                $  0.44
June 30, 2001                                   $  1.25                $  1.15
September 30, 2001                             *$  0.90                $
December 31, 2001                              *$  0.25                $

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

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

     *    There are no bid and ask on Pink Sheets

As of  December  31,  2001,  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
1,318,767 as of March 28, 2002.  See Item 1.  Business  Employees  and Technical
Consultants  and Sales of Restricted  Securities  below.  No dividends on Common
Shares have ever been paid by the Company due to the lack of excess  capital and
the Company does not anticipate  that dividends will be paid in the  foreseeable
future. In addition,  pursuant to the terms of the Company's 12-1/4% Convertible
Debentures,  the Company, the Company is prohibited from paying dividends on its
Common Stock unless and until it is no longer in default  under the  debentures.
See Item 3. Litigation.

Sales of Restricted Securities

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

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.


                                    Page 16
<PAGE>

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, 2001 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.

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. Our request was granted in
November, 2001.

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 2000 and 2001.

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, 2001, were comprised of investments in the
assets and rights  related to the  Franklin  Mines and Mill.  As of December 31,
2000,  no funds  were  borrowed  from 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,  2001  of $
2,644,034,  convertible debentures with a principal amount of $145,000 and other
notes  payable  with a principal  balance of $297,029.  See Item 3.  Litigation.
Convertible  Debentures.  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 2001 and  expects  to  incur  additional  administrative
expenses of approximately $20,000 per month plus interest in 2002.

During 2001, USM advanced  $91,068 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
and  additional  interest  in the amount of  $4829.00  still  remains  due as of
December 31, 2001 to US Mining.  These monies


                                    Page 17
<PAGE>


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,
2002. The Company believes based on prior  performance that USM will fulfill its
commitment  to fund until  December 31, 2002. It is  anticipated  that the funds
received from USM will cover the general,  administrative and other costs, which
management estimates will be approximately  $20,000 per month for the year 2002.
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, 2002.  Management  believes that the
Company will remain  dependent on USM as its primary source of financing for its
operations until such time, if any, as the Company can secure additional funding
from other sources.

The Company conducted no exploration  activities during 2001 and has no plans to
do so in 2002.  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 and 2001 were focused on  addressing  these
issues. The Company application for Temporary Cessation was approved on November
5, 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
$20,000 per month for the remainder of 2002.


                                    Page 18
<PAGE>

Plan of Operations

In 2002, 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, and (ii) 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.
The Company remains 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.

Results of Operations:

The Company had no active mining or milling operations during the years 2001 and
2000.
The Company  incurred  net losses of $374,925  and  $235,304 for the years ended
December 31, 2001 and 2000, respectively.

Mine expenses and remediation  costs were $10,065 and $47,049 for 2001 and 2000,
respectively. This decrease was due to decreased mine site activities.

General and  administrative  expenses were $306,806 and  $1,195,148 for 2001 and
2000,   respectively.   This  decrease  was  due  primarily  to  a  decrease  in
professional fees.

Interest  expense  decreased  to $60,850  in 2001 from  $239,676  in 2000.  This
decrease  was due to the  forgiveness  of the U.S.  Mining  note in the mount of
$1,768,829 at December 31, 2000.

The Company had  forgiveness  of debt income of $1,768,829  and an impairment of
mining assets of $525,000,  in 2000. For the year ended December 31, 2001, there
was no  forgiveness  of debt income and no  impairment  of mining  assets as the
carrying costs of these assets had been reduced to zero at December 31, 2000.



                                    Page 19
<PAGE>

Item 7. Financial Reports

                                WCM CAPITAL, INC.

                              FINANCIAL STATEMENTS

                                   YEARS ENDED
                           DECEMBER 31, 2001 AND 2000


                                    Page 20
<PAGE>


                                                                            Page

Independent Auditor's Report                                             1

Financial Statements:

   Balance Sheets                                                        2

   Statements of Operations                                              3

   Statements of Stockholders' Deficiency                                4 - 8

   Statements of Cash Flows                                              9 - 10

Notes to Consolidated Financial Statements                               11 - 20


<PAGE>


                          INDEPENDENT AUDITOR'S REPORT


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

We have audited the balance sheets of WCM Capital, Inc., (formerly Franklin
Consolidated Mining Co., Inc.) as of December 31, 2001 and 2000 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, 1995, which includes an accumulated
deficit of ($10,946,145) as of December 31, 1995.

We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. 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.

As described in Note 3, the Company changed its accounting policy for the mining
and exploration costs resulting in the correction of errors for the years ended
December 31, 2000, 1999, 1998, 1997 and 1996.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WCM Capital, Inc. as of
December 31, 2001 and 2000 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's operations have generated recurring losses
and cash flow deficiencies from inception and, as of December 31, 2001 and 2000,
had a substantial working capital deficiency. As a result, it was in default
with respect to payments on several notes and on convertible debentures and was
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
                                        March 28, 2002


                                      F-1
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)

                                 BALANCE SHEETS

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           December 31,
                                                                   ---------------------------
                                                                       2001            2000
                                                                   ------------    -----------
<S>                                                                <C>                 <C>
Assets - Mining Reclamation bonds                                  $    142,552        139,756
                                                                   ============    ===========


                        LIABILITIES AND STOCKHOLDERS' DEFICIENCY

Current liabilities:
  Accounts payable and accrued expenses                            $  2,110,937      1,824,284
  Convertible debentures                                                145,000        145,000
  Notes payable:
    Related companies and others                                        297,029        297,029
    U.S. Mining Inc. - related company                                   91,068             --
                                                                   ------------    -----------

      Total current liabilities                                       2,644,034      2,266,313
                                                                   ------------    -----------

Commitments and contingencies

Stockholders' deficiency:
  Common stock, par value $.01 per share; 40,000,000 shares
    authorized; 1,318,767 shares issued and outstanding                  13,188         13,188
  Additional paid-in capital                                         18,390,360     18,390,360
  Deficit accumulated during the exploration stage                  (20,905,030)   (20,530,105)
                                                                   ------------    -----------

      Total stockholders' deficiency                                 (2,501,482)    (2,126,557)
                                                                   ------------    -----------

        Total                                                      $    142,552        139,756
                                                                   ============    ===========
</TABLE>

            See auditors' report and notes to financial statements.

                                      F-2
<PAGE>


                               WCM CAPITAL, INC.

                         (An Exploration Stage Company)

                            STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                 Cumulative
                                                                                 December 1,
                                                                                     1976
                                                                                 (Inception)
                                                                                   through
                                                     Years Ended December 31,    December 31,
                                                       2001           2000           2001
                                                    -----------    ----------    -----------
<S>                                                 <C>              <C>         <C>
Revenues:
  Sales                                             $        --            --        876,082
  Interest income                                         2,796         2,740        556,645
  Forgiveness of debt                                        --     1,768,829      1,768,829
  Other income                                               --            --         79,397
                                                    -----------    ----------    -----------

      Total                                               2,796     1,771,569      3,280,953
                                                    -----------    ----------    -----------

Expenses:
  Mine expenses and environmental remediation costs      10,065        47,049      3,678,224
  Write down of inventories                                  --            --        223,049
  Loss on sale/write down of mining, milling and
    other property and equipment                                      525,000      6,638,901
  Depreciation and depletion                                 --            --      1,910,543
  General and administrative                            306,806     1,195,148      7,984,160
  Interest                                               60,850       239,676      1,586,958
  Amortization of debt issuance                              --       683,047
  Loss on settlement of litigation                           --            --        100,000
  Loss on sale of property                                   --            --        225,000
  Equity in net loss and settlement of claims
    of Joint Venture                                                       --      1,059,971
  Other                                                      --            --         96,130
                                                    -----------    ----------    -----------

      Total                                             377,721     2,006,873     24,185,983
                                                    -----------    ----------    -----------

Net loss                                            $  (374,925)     (235,304)   (20,905,030)
                                                    ===========    ==========    ===========

Loss per common share                               $     (0.28)        (0.18)
                                                    ===========    ==========

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

            See auditors' report and notes to financial statements.

                                      F-3
<PAGE>


                               WCM CAPITAL, INC.

                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                   Cumulative
                                                                                   December 1,
                                                                                      1976
                                                                                   (Inception)
                                                        Years Ended December 31,     through
                                                        -----------------------    December 31,
                                                          2001          2000          2001
                                                        ---------    ----------    -----------
<S>                                                     <C>            <C>         <C>
Cash flows from operating activities:
  Net loss                                              $(374,925)     (235,304)   (20,905,030)
  Adjustments to reconcile net loss to net cash used in
    operating activities:
    Depreciation and depletion                                 --            --      1,910,543
    Forgiveness of debt                                        --    (1,768,829)    (1,768,829)
    Provision for uncollectible account                        --            --        350,000
    Write down of mining, milling and other
      property and equipment                                   --       525,000      6,638,901
    Amortization of debt issuance expense                      --            --        683,047
    Loss on sale of equipment                                  --            --        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           (2,795)       (2,740)       (17,551)
    Accounts payable and accrued expenses                 286,652     1,135,236      2,373,153
    Payroll and other taxes                                    --       (29,960)       (29,960)
                                                        ---------    ----------    -----------
      Net cash used in operating activities               (91,068)     (376,597)    (7,028,584)
                                                        ---------    ----------    -----------

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

            See auditors' report and notes to financial statements.

                                      F-4
<PAGE>


                               WCM CAPITAL, INC.

                         (An Exploration Stage Company)

                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                           Cumulative
                                                                           December 1,
                                                                              1976
                                                                           (inception)
                                                                             through
                                                Years Ended December 31,   December 31,
                                                  2001          2000          2001
                                               -----------   -----------   -----------
<S>                                                 <C>          <C>         <C>
Cash flows from financing activities:
  Issuance of:
    Common stock                               $        --            --     8,758,257
    Underwriter's stock warrants                        --            --           100
  Commissions on sales of common stock                  --            --      (381,860)
  Purchases of treasury stock                           --            --       (12,500)
  Payments:                                                                         --
    Deferred underwriting costs                         --            --       (63,814)
    Debt issuance expenses                              --            --      (164,233)
  Repayments:                                                                       --
    Other notes and loan payables                       --            --      (120,000)
    Loans from affiliate                                --            --       (48,661)
  Proceeds:                                                                         --
    Exercise of stock options                           --            --       306,300
    Advances from joint venture partner                 --            --       526,288
    Other notes and loans payable                   91,068       376,597     2,349,443
    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     91,068       376,597    12,529,257
                                               -----------   -----------   -----------

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

Cash Beginning                                          --            --            --
                                               -----------   -----------   -----------

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

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

            See auditors' report and notes to financial statements.

                                      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>
Issuance of common stock:
  Cash                                     8,268   $       83       43,017            --            --       43,100
  Non-cash:
    Related parties                       49,332          493        8,757            --            --        9,250
    In exchange for shares of Gold
      Developers and Producers, Inc.      58,400          584       16,850            --            --       17,434
Net loss                                      --           --           --       (45,584)           --      (45,584)
                                      ----------   ----------   ----------    ----------    ----------   ----------
Balance, December 31, 1977               116,000        1,160       68,624       (45,584)           --       24,200

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

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

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

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

            See auditors' report and notes to financial statements.

                                      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, 1981 (forwarded)             205,713   $    2,057    2,940,399      (747,447)           --    2,195,009
Issuance of common stock:
  Cash                                             11,480   $      115      764,011            --            --      764,126
  Non-cash                                          2,160           22      161,978            --            --      162,000
  Commission on sale of common stock                   --           --      (56,075)           --            --      (56,075)
Net loss                                               --           --           --      (287,291)           --     (287,291)
                                               ----------   ----------   ----------    ----------    ----------   ----------
Balance December 31, 1982                         219,353        2,194    3,810,313    (1,034,738)           --    2,777,769

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

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

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

            See auditors' report and notes to financial statements.

                                      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, 1985 (forwarded)           268,378   $    2,684    6,959,994    (2,219,727)           --     4,742,951
Issuance of common stock:
  Cash                                            7,587   $       76      300,424            --            --       300,500
  Non-cash:
  Related parties                                 2,133           21       79,979            --            --        80,000
  Others                                          1,800           18       53,982            --            --        54,000
Net loss                                           --           --           --      (227,788)           --      (227,788)
                                             ----------   ----------   ----------    ----------    ----------    ----------
Balance, December 31, 1986                      279,898        2,799    7,394,379    (2,447,515)           --     4,949,663

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

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

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

            See auditors' report and notes to financial statements.

                                      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, 1989 (forwarded)        384,439   $     3,844     9,569,658     (4,844,139)       (12,500)     4,716,863
Sale of underwriter's stock warrants              --   $        --           100             --             --            100
Issuance of common stock:
  Cash                                         4,467            45        45,180             --             --         45,225
  Non-cash - others                              531             5         5,973             --             --          5,978
  Conversion of debentures                     2,133            22        31,978             --             --         32,000
Net loss                                          --            --            --     (1,171,962)            --     (1,171,962)
                                         -----------   -----------   -----------    -----------    -----------    -----------
Balance, December 31, 1990                   391,570         3,916     9,652,889     (6,016,101)       (12,500)     3,628,204

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

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

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

            See auditors' report and notes to financial statements.

                                      F-9
<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)
                                               =========    ===========    ===========    ===========    ===========    ===========

Net loss                                              --             --             --       (374,925)            --       (374,925)
                                               ---------    -----------    -----------    -----------    -----------    -----------
Balance December 31, 2001                      1,318,767    $    13,188     18,390,360    (20,905,030)            --     (2,501,482)
                                               =========    ===========    ===========    ===========    ===========    ===========
</TABLE>

            See auditors' report and notes to financial statements.

                                      F-10
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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, 2001 and 2000, the Company had no cash balance, an accumulated deficit
     of $20,905,030 and $20,530,105 respectively, and a working capital
     deficiency of $2,644,034 and $2,266,313 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 2002 as based upon the year 2001 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, 2002. 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, 2001.

                                      F-11
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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 31, 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-12
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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-13
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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-14
<PAGE>

                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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:

                                               2001       2000
                                             --------   --------
     12% unsecured demand notes due to the
       Company's  former  President
       and his affiliated entity             $142,719    142,719
     Secured promissory note (a)               60,000     60,000
     Unsecured promissory notes (b)            94,310     94,310
                                             --------   --------
                                             $297,029    297,029
                                             ========   ========

                                      F-15
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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, 2001).

     (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, 2001; interest
          accrued at 17%.

          Accrued interest on the above notes at December 31, 2001 aggregated
          approximately $61,776.

NOTE 5 - CONVERTIBLE DEBENTURES AND OTHER CONVERTIBLE DEBT:

     As of December 31, 2001, consists of a 12.25% convertible debenture in the
     amount of $145,000 that matured on December 31, 1994.

     As of December 31, 2001, the Company was in default with respect to the
     principal balance of the debenture and accrued interest of approximately
     $115,000. 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 7c).

     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-16
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 6 - NOTE PAYABLE - RELATED PARTY:

     The Company had an 8% promissory note 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 as of December 31, 2000. Accrued interest of
     $332,869 remains a liability of the Company.

     Additional amounts were loaned to the Company through December 31, 2001 and
     remain unpaid as of that date.

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, 2001, 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-17
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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 in 2000. 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-18
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

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, 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 currently is 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, 2001, the Company had federal net operating loss
     carryforwards of approximately $12,210,000 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-19
<PAGE>


                                WCM CAPITAL, INC.

                         (An Exploration Stage Company)
                          NOTES TO FINANCIAL STATEMENTS
                           DECEMBER 31, 2001 AND 2000

NOTE 9 - STOCKHOLDERS' EQUITY:

     (a)  Reverse Stock Splits:

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

     (b)  Common Stock Reserved for Issuance:

          At December 31, 2001, 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, 2001, the
          Company issued common stock for:

                                                          Shares       Amount
                                                         ---------  -----------
          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
                                                         =========  ===========

                                      F-20




<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 LLP 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 LLP. Certified Public Accountants
that it would no longer  serve as its  independent  auditors.  The  decision  to
dismiss JH Cohn LLP 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.

On August 23,  2001,  the Company was notified  that the managing  member of our
account left the firm of Polakoff,  Weismann, Leen, LLC to form a new accounting
firm,  IWA  Financial  Consulting,  LLC.  The Company  elected to  continue  its
relationship  with  this  member  and has  moved its  account  to IWA  Financial
Consulting, LLC. Therefore, IWA will act as independent auditors for the Company
for fiscal year 2001.


                                    Page 21
<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                        56       Current President and Treasurer

Richard Brannon                         53       Vice-President-Secretary

George E. Otten                         76       Vice President

William C. Martucci                     59       Director(1)

William Wishinsky                       37       Director

Casey Myhre                             36       Director

Vincent A. DeMartino                    38       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 22
<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 23
<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, 2002 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 24
<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 25
<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 26
<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. In fiscal year 2001,  USM advanced  $91,068 to the
Company and is owed  interest in the  aggregate  amount of $332,869.  See Item 6
Managements Discussion and Analysis of Operations.


                                    Page 27
<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)

10.26     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).


                                    Page 28
<PAGE>

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).

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


                                    Page 29
<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.


                                          /s/ Robert Waligunda

April 1, 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.

/s/ Robert Waligunda
------------------------             President, Treasurer         April 1, 2002
    Robert Waligunda                 and Director

/s/ Richard Brannon
------------------------             Vice President/Secretary     April 1, 2002
    Richard Brannon

/s/ George Otten
------------------------             Vice President               April 1, 2002
    George Otten

/s/ William C. Martucci              Director                     April 1, 2002
------------------------
    William C. Martucci

/s/  Casey Meyer                     Director                     April 1, 2002
-----------------------
     Casey Meyer

/s/  William Wishinsky               Director                     April 1, 2002
------------------------
     William Wishinsky

/s/  Vincent A. DeMartino Director                               April 1, 2002
----------------------------------
     Vincent A. DeMartino