U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ------- COMMISSION FILE No. 0-20922 Date of Report (Date of earliest event reported) May 26, 2000 ------------ WHITEHALL ENTERPRISES, INC. ---------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 75-2274730 -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation) 801 Brickell Avenue, 9th Floor, Miami, Florida 33131 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (904) 409-0200 ------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 1. Changes in Control of Registrant N/A, No change of control of registrant. ITEM 2. Acquisition and Disposition of Assets Agreement For The Purchase Of Direct Financial, LLC. ---------------------------------------------------- On March 23, 2000 Whitehall Enterprises, Inc., Alternative Lending Group, a wholly owned subsidiary of Whitehall Enterprises, Inc., entered into an agreement to purchase Direct Financial, LLC, a Michigan Limited Liability Company and the interests of James P. Mack, Wallace W. Qualls, III, Greg Kitchen, and Kip W. Weston (collectively, the "Members"). The Members' agreed to sell and transfer to Alternative Lending Group all their Members' interests in Direct Financial, LLC. Whitehall Enterprises, Inc. agrees, in consideration of the sale and transfer of the Members' interests to Alternative Lending Group, to issue to the Members' shares of the common stock of Whitehall. The following table summarizes the more significant terms of the agreement: * Whitehall Enterprises, Inc. issued two million one hundred twenty-five thousand (2,125,000) shares of their common stock for the purchase of Direct Financial, LLC. by Alternative Lending Group, a wholly owned subsidiary of Whitehall. * The Members own all the outstanding Members' interest in Direct Financial, LLC. * Whitehall Enterprises, Inc. agrees that in the event that James P. Mack or William W. Qualls becomes entitled to an additional 187,500 shares each of Whitehall's common stock, pursuant to their Employment Agreement, Whitehall will upon receipt of written notification to that effect from Alternative Lending Group, issue and deliver to Mack and Qualls each 187,500 additional shares of Whitehall Enterprises, Inc. common shares. * Direct Financial, LLC. and the Members' represents that they are not a party to or bound by any agreement of guarantee, indemnification, surety, or similar commitments of the obligations, liabilities (contingent or otherwise) or indebtedness of any other person, corporation or partnership, except for trade accounts payable incurred in the normal course of operations. * Direct Financial, LLC. and Members' have executed all necessary documents holding Whitehall Enterprises, Inc. harmless of any liability pursuant to the stock purchase agreement. 2 Business Since its formation, Direct Financial LLC. and Members' have operated as a mortgage broker/lender in Southfield, Michigan. Direct Financial's current gross loan origination volume is between $10-12 million per month. As a result of the acquisition of Direct Financial, LLC., Alternative Lending Group will increase their annual gross mortgage originations from $93.3 million to $250 million. With Direct Financial's two Michigan locations and an expanded retail staff it will immediately enhance Alternative Lending Group's East Coast presence and double their retail origination staff. Management at Whitehall Enterprises, Inc. states Direct Financial's average gross loan amount is almost double that of Alternative Lending Group's because of their geographical location. This acquisition is just the next step in Whitehall Enterprises' plan to expand Alternative Lending Group's state-of-the art Web site presence, as well as accelerate the growth of Alternative Lending Group's Internet, Retail and Wholesale Divisions. Alternative Lending Group recently created two new divisions, the Wholesale Division and the Internet Online Mortgage Division. The new divisions will augment its present operation, which provides hands-on service to customers who request it, through its traditional offices located in the Midwest and Southwest regions, and will help establish the company's national presence and substantially increase gross production over the next twelve months. Additionally, the company has developed a new state-of-the art web-site Alternativelending.com, and business plan. The focus of the plan is to increase its market share over the next twelve months, from nine states to a national level. Since Alternative Lending Group is a mortgage bank it can provide a superior Internet online mortgage service, compared to those companies that still operate under the mortgage broker laws. Alternative Lending Group will have more flexibility with pricing, underwriting, closing times/locations and customer commination. All of this will place Alternative Lending Group in a strong position to compete directly with online leaders E-Loan and Mortgage.com, offering a superior product, and providing low cost mortgage options to all customers regardless of credit history. ITEM 3. Bankruptcy or Receivership None; not applicable. ITEM 4. Changes in Registrant's Certifying Accountant. None; not applicable. ITEM 5. Other Events See item 2 ITEM 6. Resignations of Directors and Executive Officers. None; not applicable. 3 ITEM 7. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. The Direct Financial LLC balance sheet, as of December 31, 1999 and related statements of income and members' equity and cash flows for the year then ended and the report of independent auditors Canvasser, Rofel & Associates certified public accountants and consultants thereon, together with the notes thereto, are located at pages 6 through 13 of this Report. Audited Financial Statements of Direct Financial LLC. for the period ended December 31, 1999. * Accountant's Report * Balance Sheet * Statement of Income and Members' Equity * Statement of Cash Flows * Notes to Financial Statements (b) Pro Forma Financial Information. The Pro Forma condensed combined Balance Sheet (unaudited) as of September 30, 1999 and the Pro Forma condensed combined statement of operations (unaudited) for the year then ended and the notes thereto, are located at pages 14 through 19 of this report. * Pro Forma Combined Financial Data * Pro-Forma Condensed Combined Balance Sheet * Pro-Forma Condensed Combined Statement of Operations * Notes to the Pro Forma Condensed Combined Financial Statements (c) Exhibits Exhibit Number Description of Exhibit ------ ---------------------- 10.49 Stock Purchase Agreement for the purchase of Direct Financial, LLC, and the interests of James P. Mack, Wallace W. Qualls, III, Greg Kitchen, and Kip W. Weston. ITEM 8. Change in Fiscal Year. None; not applicable. ITEM 9. Sales of Equity Securities pursuant to Regulation S. None; not applicable. 4 Signature Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereto duly authorized. Whitehall Enterprises, Inc. By: /s/ Luis Alvarez ---------------- Luis Alvarez - President 5 DIRECT FINANCIAL, LLC FINANCIAL STATEMENTS with INDEPENDENT AUDITOR'S REPORT YEAR END DECEMBER 31, 1999 6 CONTENTS -------- Page ---- Independent Auditor's Report 8 Financial Statement: Balance sheet 9 Statement of income and members' equity 10 Statement of cash flows 11 Notes to financial statements 12-13 7 CANVASSER, ROFEL & ASSOCIATES Phone (248)539-8888 ------------------------------------------------------- CERTIFIED PUBLIC ACCOUNTANTS AND CONSULTANTS Fax (248)539-8080 7071 Orchard Lake Road, Suite 315, West Bloomfield, Michigan 48322 INDEPENDENT AUDITOR'S REPORT To the Members of Direct Financial, LLC Southfield, Michigan We have audited the accompanying balance sheet of Direct Financial, LLC, at December 31, 1999, and the related statements of income and members' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Direct Financial, LLC as of December 31, 1999, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. March 6, 2000 8 DIRECT FINANCIAL, LLC BALANCE SHEET December 31, 1999

~~PAGE~~ASSETS ~~----~~Current ~~INDEPENDENT~~assets: ~~AUDITORS'~~Cash ~~REPORT....................................................~~$ 46,931 Fees receivable 67,584 Prepaid Expenses 1,995 ~~BALANCE~~Total ~~SHEET...................................................................~~Current 2Assets ~~STATEMENT~~116,510 OFProperty ~~OPERATIONS.........................................................~~and equipment: Furniture and fixtures 35,145 Equipment under capital lease 79,996 Leasehold improvements 3,700 ~~STATEMENT~~118,841 OFLess: ~~STOCKHOLDERS~~accumulated depreciation (21,512) 97,329 Other assets: Organization costs, net of amortization 983 Deposits 3,029 4,012 $ 217,851 LIABILITIES AND MEMBERS' EQUITY~~...............................................~~ 4Current ~~STATEMENT~~liabilities: OFCurrent ~~CASH~~portion ~~FLOWS.........................................................~~of 5capital ~~NOTES~~lease TOobligations ~~FINANCIAL~~$ ~~STATEMENTS...................................................~~19,200 6Lines of credit 3,922 Accounts payable 52,181 Accrued expenses 26,332 Taxes payable, other than income 1,501 Total current liabilities 103,136 Long-term 7capital lease obligations 36,547 Members' equity 78,168 $ 217,851

The accompanying notes are an integral part of these financial statements 9 DIRECT FINANCIAL, LLC STATEMENT OF INCOME AND MEMBERS' EQUITY Year Ended December 31, 1999

~~ASSETS~~Broker ~~------~~and ~~CURRENT~~origination ~~ASSETS:~~fees ~~Cash~~ $ ~~600 -------- TOTAL CURRENT ASSETS $ 600 -------- FIXED ASSETS: Research & Development (Note #1) $210~~2,~~000 -------- TOTAL FIXED ASSETS $210~~367,~~000~~985 ~~--------~~Operating ~~OTHER~~expenses ~~ASSETS: Organization Costs (Net) $ 697 -------- TOTAL OTHER ASSETS $ 697 -------- TOTAL ASSETS $211~~2,~~297 ======== LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ CURRENT LIABILITIES: $ 0 -------- TOTAL CURRENT LIABILITIES $ 0 -------- STOCKHOLDERS' EQUITY: Preferred stock~~004,423 ~~$.00l~~Income ~~par~~from ~~value~~operations ~~authorized 5~~363,~~000,000~~562 ~~shares~~Interest ~~issued~~expense ~~and outstanding at July 31~~13,168 ~~1998-None~~Net $income ~~0 Common stock~~350,394 ~~$.001~~Members' ~~par value~~equity, ~~authorized~~January 451,~~000,000~~ ~~shares;~~1999 ~~issued and outstanding at July 31~~2,645 ~~1998-4,000,000~~Contributions ~~shares $ 4~~13,~~000~~760 ~~Additional~~Distributions ~~paid-in capital $208~~(288,~~809~~631) ~~Deficit~~Members' ~~accumulated during development stage -1~~equity,~~512~~ ~~--------~~December ~~TOTAL STOCKHOLDER'S EQUITY $211~~31,~~297~~ ~~--------~~1999 ~~TOTAL LIABILITIES AND STOCKHOLDERS'~~ $~~211,297~~ ~~EQUITY ========~~78,168

The accompanying notes are an integral part of these financial statements 10 DIRECT FINANCIAL, LLC STATEMENT OF CASH FLOWS

~~INCOME~~Year Ended December 31, 1999 Increase (decrease) in cash: ~~Revenue~~Cash $flows 0from ~~----------~~operating ~~EXPENSES~~activities: ~~Accounting~~Net income $ 1350,~~500~~394 ~~----------~~Adjustments ~~Amortization~~to 12reconcile ~~----------~~net ~~TOTAL~~income ~~EXPENSES~~to $cash provided by operating activities: Depreciation and amortization 21,806 Changes in assets and liabitlies: (Increase) in fees receivable (67,584) Decrease in member receivables 10,149 (Increase) in prepaid expenses (1,~~512~~995) ~~----------~~Decrease ~~NET~~in ~~LOSS~~deposits $2,441 -Increase in accounts payable 52,181 Increase in accrued expenses 26,332 Increase in taxes payable, other than on income 1,~~512~~211 ~~==========~~44,541 ~~Weighted~~Net ~~average~~cash ~~number~~provided by operating activities 394,935 Cash flows from investing activities: Capital expenditures (39,316) Net cash flows used in investing activities (39,316) Cash flows from financing activities: Proceeds from lines of ~~common~~credit ~~shares~~25,964 ~~outstanding~~Principal 3payments on line of credit (37,~~666~~042) Principal payments on capital leases (23,~~667~~777) ~~==========~~Member contributions 13,760 Member distributions (288,631) Net ~~Loss~~cash ~~Per~~used ~~Share~~in $financing ~~-.0004~~activities ~~==========~~(309,726) Net increase in cash 45,893 Cash at January 1, 1999 1,038 Cash at December 31, 1999 $ 46,931

The accompanying notes are an integral part of these financial statements 11 DIRECT FINANCIAL, LLC NOTES TO FINANCIAL STATEMENTS December 31, 1999 1. Summary of significant accounting policies ------------------------------------------ This summary of significant accounting policies of Direct Financial, LLC is presented to assist in understanding the limited liability company's financial statements. The financial statements and notes are representations of the limited liability company's management, which is responsible for their integrity and objectivity. These accounting policies conform to generally accepted accounting principles. Nature of operations -------------------- Direct Financial, LLC is a mortgage broker-lender engaged in the funding of residential non-conforming mortgage loans in Michigan. The Company's revenue is derived primarily from commissions and origination fees charged on these loans. Estimates --------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Fees receivable --------------- Accounts receivable represent loans that closed prior to December 31, 1999, but were not funded until the following year. Property and equipment ---------------------- Property and equipment are stated at cost. Depreciation and amortization are provided using straight-line and accelerated methods over their estimated useful lives. Income taxes ------------ Effective May 7, 1998, the members of Direct Financial, LLC elected to be taxed as a partnership. As a partnership, each member reports and pays income taxes on their respective share of the Company's taxable earnings and specially allocated items, therefore, no provision for income taxes has been made. 12 2. Depreciation and amortization ----------------------------- Property and equipment is being depreciated over their estimated useful lives as follows: Years Furniture and fixtures 5 - 7 Capital leases 5 - 7 Leasehold improvements 39 Depreciation and amortization of property and equipment for the year December 31, 1999 is $21,511. Organization costs of $1,475 are being amortized over five years using the straight-line method. Amortization for the year ended December 31, 1999 is $ 295. 3. Lines of credit --------------- The Company has two lines of credit. The first line of credit in the amount of $25,000 with a variable interest rate (10.5% at December 31, 1999), matures January 2000 and requires monthly principal and interest payments and is secured by all the assets of the company and personal guarantees of the members. At December 31, 1999, the balance outstanding on the credit line is $3,922. The second line of credit in the amount of $35,000 with interest at 2% over bank prime expires November 2000. This line is secured by the personal guarantees of the members of the Company. At December 31 1999, there were no advances against this line. 4. Leases ------ At December 31, 1999, the Company is obligated under three capital leases, secured by personal guarantees of company members, for office and computer equipment. 13 FINANCIAL STATEMENTS WITH PRO FORMA COMBINED FINANCIAL DATA (UNAUDITED) AS OF SEPTEMBER 30, 1999 14 Pro Forma Combined Financial Data 16 Financial Statement: Pro-Forma Condensed Combined Balance Sheet 17 Pro-Forma Condensed Combined Statement of Operations 18 Notes to the Pro Forma Condensed Combined Financial Statements 19 15 PRO FORMA COMBINED FINANCIAL DATA On March 23, 2000 Alternative Lending Group, a wholly owned subsidiary of Whitehall Enterprises, Inc., entered into an agreement to purchase Direct Financial, LLC, ("DF") a Michigan Limited Liability Company and the interests of James P. Mack, Wallace W. Qualls, III, Greg Kitchen, and Kip W. Weston (collectively, the "Members"). As a result thereof DF became a wholly owned subsidiary of the Company. The following pro forma financial data of the Company consists of (i) a pro forma condensed combined balance sheet (unaudited) as of September 30, 1999 (the "Pro Forma Balance Sheet"), and (ii) a 1999 fiscal year pro forma condensed combined statement of income (unaudited) (the 1999 ro Forma Statement of Income"), (collectively, the "Pro Forma Statements"). The Pro Forma Balance Sheet reflects the combination of the balance sheet of the Company as of September 30, 1999, and the balance sheet of DF as of December 31, 1999, as adjusted for the DF Acquisition. The Pro Forma Balance Sheet is presented as if the DF Acquisition was consummated on December 31, 1999. The 1999 Pro Forma Statement of Income reflects the combination of the income statement of the Company for the year ended September 30, 1999, and the income statement of DF for year ended December 31, 1999, as adjusted for the DF Acquisition. The 1999 Pro Forma Statement of Income is presented as if the DF Acquisition was consummated on September 30, 1999. The Pro Forma Statements should be read in conjunction with the separate historical financial statements of the Company and DF and the notes thereto and with the accompanying notes to the Pro Forma Statements. The Pro Forma Statements are based upon currently available information and upon certain assumptions that the Company believes are reasonable under the circumstances. The Pro Forma Statements do not purport to represent what the Company's financial position or results of operations would actually have been if the aforementioned transaction in fact had occurred on such date or at the beginning of the period indicated or to project the Company's financial position or the results of operations at any future date or for any future period. 16 WHITEHALL ENTERPRISES, INC. AND DIRECT FINANCIAL LLC Pro-Forma Condensed Combined Balance Sheet - Unaudited September 30, 1999

~~Deficit~~PRO-FORMA ~~accumulated~~-------------------------------------------- ~~Additional~~------------------------------------------ ~~during~~ASSETS ~~Common~~Whitehall ~~Stock~~Direct ~~paid~~Financial September 30, December 31, Adjustments for 1999 1999 Combined Acquisition Combined -in------------ ~~development~~---------------- ~~Shares~~------------ ~~Amount~~----------- ~~capital~~--------------- ~~stage~~------------- Current Assets Cash $ 2,264 $ 46,931 $ 49,195 $ 49,195 Accounts receivable 577,477 67,584 645,061 645,061 Inventories 448,361 0 448,361 448,361 Prepaid expenses 73,949 1,995 75,944 75,944 ----------- ----------- ----------- ----------- ~~July~~Total 29Current Assets 1,102,051 ~~1998~~116,510 ~~issued~~1,218,561 ~~for~~1,218,561 ~~Research~~----------- &----------- ~~Development~~----------- ~~See~~----------- ~~Note~~Loans #Receivable 1,608,853 30 1,~~500~~608,853 1,608,853 Deferred Financing Costs 279,337 0 279,337 279,337 Property and Equipment 2,662,553 118,841 2,781,394 2,781,394 Less Accumulated Depreciation (2,142,371) (21,512) (2,163,883) (2,163,883) ----------- ----------- ----------- ----------- Property and Equipment - Net 520,182 97,329 $ 617,511 617,511 ----------- ----------- ----------- ----------- Investments in DF 0 0 $ 0 Other Assets Patents 350,000 983 350,983 350,983 Deposits 1,166 3,029 4,195 4,195 Goodwill 0 0 0 (a) 510,977 510,977 ----------- ----------- ----------- ----------- Total Other Assets 351,166 4,012 355,178 866,155 ----------- ----------- ----------- ----------- TOTAL ASSETS $ 3,~~500~~861,589 $ ~~206~~217,~~500~~851 $ 04,079,440 ~~July~~$ 314,590,417 ~~1998~~=========== ~~issued~~=========== ~~for~~=========== ~~cash~~=========== ~~500~~LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Current Liabilities Current portion of long term debt $ 536,~~000~~510 ~~500~~19,200 $ 555,710 555,710 Lines of credit 0 3,922 3,922 3,922 Notes payable - bank 525,624 0 ~~Capital~~525,624 ~~Contribution~~525,624 Income taxes payable 30,413 0 30,413 30,413 Accounts payable 995,585 52,181 1,047,766 1,047,766 Other liabilities 0 27,833 27,833 27,833 ----------- ----------- ----------- ----------- Total Current Liabilities 2,~~309~~088,132 ~~Net~~103,136 ~~loss~~2,191,268 ~~June~~2,191,268 29----------- ----------- ----------- ----------- Deferred Income Taxes 54,171 ~~1998~~0 ~~(inception)~~54,171 to54,171 ~~July~~Capital 31lease liability 0 36,547 ~~1998~~36,547 36,547 Warehouse line of credit 0 0 0 0 Long-1Term Debt 629,~~512~~771 0 629,771 629,771 ----------- ----------- ----------- ----------- ~~Balance~~Total Liabilities 2,772,074 ~~July~~139,683 2,911,757 2,911,757 ----------- ----------- ----------- ----------- Shareholders' Equity Preferred stock, $.001 par value, 4,000,000 million shares authorized, issued and outstanding at December 31, 1998 4,000 0 4,000 $ 4,000 $Common ~~208~~Stock,~~809~~ $.0001 par value, 200,000,000 shares authorized, 124,900,000 shares issued and outstanding 12,493 0 12,493 (b) 213 12,706 Additional Paid In Capital 998,653 0 998,653 (a) & (b) 588932 1,587,585 Retained Earnings (Accumulated deficit) 74,369 78,168 152,537 (b) (78,168) 74,369 ----------- ----------- ----------- ----------- Total Stockholders' Equity 1,~~512~~089,515 78,168 1,167,683 1,678,660 ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 3,861,589 $ 217,851 $ 4,079,440 $ 4,590,417 =========== =========== =========== ===========

See Notes to Financial Statements. 17 WHITEHALL ENTERPRISES, INC. AND DIRECT FINANCIAL LLC Pro-Forma Condensed Combined Statement of Operations - Unaudited For the Year Ended September 30, 1999

~~Cash~~PRO-FORMA ~~Flows~~---------------------------------------------- ------------------------------------------ Whitehall Direct Financial September 30, September 30, Adjustments 1999 1999 Combined for Acquisitions Combined -------------- ---------------- ------------ --------- ---------------- --------------- Income from ~~Operating~~Operations ~~Activities:~~Sales ~~Net~~$ ~~loss~~4,170,370 $ 2,367,985 $ 6,538,355 $ 6,538,355 Cost of Sales 3,282,274 0 3,282,274 3,282,274 -1------------ ------------- ------------- ------------- Gross Profit 888,~~512~~096 ~~Amortization~~2,367,985 +3,256,081 123,256,081 ~~Changes~~------------- in------------- ~~assets~~------------- ------------- Operating Expenses Sales, General and ~~liabilities:~~Administration ~~Organization~~709,230 ~~Costs~~2,004,423 2,713,653 (c) 274,871 2,988,524 Depreciation 199,932 0 199,932 199,932 ------------- ~~709~~------------- ~~Cash~~------------- ~~Flows~~------------- Total Operating Expenses 909,162 2,004,423 2,913,585 3,188,456 ------------- ------------- ------------- ------------- Net Income/Loss from ~~Investing~~Operations ~~Activities:~~(21,066) 363,562 342,496 67,625 ------------- ------------- ------------- ------------- Other Income Unrealized income current translation 1,801 0 ~~Cash~~1,801 ~~Flows~~1,801 ~~from~~Interest ~~Financing~~242,589 ~~Activities:~~0 ~~Capital~~242,589 ~~Contribution~~242,589 +------------- 2------------- ------------- ------------- Total Other Income 244,~~309~~390 ~~Issuance~~0 of244,390 ~~common~~244,390 ~~stock~~------------- ~~for~~------------- ~~cash~~------------- +------------- ~~500~~Other Expenses Interest expense 95,839 13,168 109,007 109,007 ------------- ~~Net~~------------- ~~increase~~------------- in------------- ~~cash~~Total $Other +Expenses ~~600~~95,839 ~~Cash~~13,168 ~~Beginning~~109,007 of109,007 ~~period~~------------- ------------- ------------- ------------- Income taxes Currently payable 29,709 0 29,709 29,709 Deferred 23,406 0 23,406 23,406 ------------- ~~Cash~~------------- ------------- ------------- Total Income Taxes 53,115 ~~End~~0 of53,115 ~~period~~53,115 ------------- ------------- ------------- ------------- Net income (Loss) $ ~~600~~74,370 $ 350,394 $ 424,764 (c) (274,871) $ 149,893 ============= ============= ============= ============= Net income (Loss) per common share 0.0006 0.1649 0.1655 0.0012 ============= ============= ============= ============= Number of shares used in computation 124,900,000 2,125,000 127,025,000 127,025,000 ============= ============= ============= =============

See Notes to Financial Statements. 18 WHITEHALL ENTERPRISES, INC. AND DIRECT FINANCIAL LLC NOTES TO THE PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1999 (UNAUDITED) (a) Reflects the estimated purchase accounting adjustments for the DF Acquisition based upon a preliminary appraisal of the assets and liabilities assumed. For purchase accounting, DF assets have been recorded at estimated fair market value subject to adjustment based upon the results of an independent appraisal. The estimated amounts recorded for assets and liabilities acquired from DF are not expected to differ materially from the final assigned values. Purchase accounting adjustments were recorded to eliminate DF's members' equity. The calculation of excess purchase cost over fair value of net assets acquired is as follows:

(b) Reflects the elimination of DF's shareholders' equity. (c) Reflects the effect of inclusion of net contributions and distributions of members' equity as operating expenses and a reduction of net income. 19

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