Edgar Filing: WENTWORTH III INC

U.S. 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

For the fiscal year ended December 31, 2002
-----------------

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from ____________ to ____________

Commission File Number 333-75044
---------

WENTWORTH III, INC.
-------------------
(Name of small business issuer in its charter)

Delaware 84-1588927
------------------------ ------------------------
State or jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

650 So. Cherry Street, Suite 420
Denver, CO 80246
--------------------------------
(Address and telephone number
of principal executive offices)

Issuer's telephone number: (303) 320-1870
--------------

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

Title of each class Name of each exchange on which registered

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

Securities registered under Section 12(g) of the Exchange Act: None

---------------------------------------------------
(Title of class)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or
for 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 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. [X]

The issuer had no revenues in its most recent fiscal year.

State the aggregate market value of the voting and non-voting common equity
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. (See definition of affiliate in Rule
12b-2 of the Exchange Act): N/A

As of December 31, 2002, there were 200,000 shares of our common stock, par
value $0.01 per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
None

Transitional Small Business Disclosure Format (check one):
Yes [ ]; No [X]

PART I

Item 1. Description of Business
------ -----------------------

The Company was formed as a Delaware corporation in March 2001 to effect a
merger, exchange of capital stock, asset acquisition or other similar business
combination (a "Business Combination") with an operating business (a "Target")
which the Company believes has significant growth potential. The Company filed a
registration statement on Form SB-2 (the "Registration Statement") with the
Securities and Exchange Commission (the "Commission") which became effective
August 6, 2002, and the Company commenced an offering of its common stock
pursuant to this effective Registration Statement (the "Offering"). The Company
has not engaged in any commercial or other business activities which generate
any cash flow since the offering and has not determined when it will do so. The
Company has no plan, proposal, agreement, understanding or arrangement to
acquire or merge with any specific business or entity. The Company intends to
utilize cash (derived from the proceeds of the offering), equity, debt or a
combination thereof to effect a Business Combination.

Business Combination
--------------------

The Company's evaluation of potential Targets is not restricted to any specific
business, industry or geographic location. It may participate in a business
venture of virtually any kind. In implementing a structure for a particular
Business Combination, the Company may become party to a merger, consolidation,
reorganization, joint venture or licensing agreement with another corporation or
entity. The Company may acquire assets and establish wholly-owned subsidiaries
in various businesses, or acquire existing businesses as subsidiaries.

Evaluation of Business Combination by Investors
-----------------------------------------------

The Offering is a "blank check" offering due to management's broad discretion
with respect to the specific application of the net proceeds of the offering.
Substantially all of the net proceeds of the Offering are intended to be
generally applied toward effecting a Business Combination, but have not been
marked for any specific purpose. Management has sole discretion in determining
which businesses, if any, are to be acquired, and the terms of such acquisition.
Investors in the blank check offering will have the opportunity to evaluate the
merits and risks of an acquisition and will be entitled to elect whether they
desire to remain investors in the Company. An acquisition will only be
consummated if investors representing 80% of the maximum offering proceeds
reconfirm their investments (as described in the following paragraph).

The "blank check" offering is subject to Rule 419 of Regulation C ("Rule 419")
under the Securities Act of 1933, as amended (the "Securities Act"). Rule 419
requires that net offering proceeds and the securities issued to investors must
be deposited in an escrow account. Rule 419 requires that the deposited funds
(except for an amount up to 10% of the deposited funds) and deposited securities
may not be released until an acquisition conforming to certain specified
criteria has been consummated and a sufficient number of investors reconfirm
their investment in accordance with the procedures set forth in that rule. At
that time the Company will file a post-effective amendment to the Registration
Statement with the Commission describing the

acquisition candidate and its business and including audited financial
statements which, upon being declared effective by the Commission, will be
delivered to all investors. The Company must return the pro rata portion of the
deposited funds to any investor who does not elect to remain an investor. A
sufficient number of investors must elect to remain investors, or all investors
will be entitled to the return of a pro rata portion of the deposited funds
(plus interest) and none of the deposited securities will be issued to
investors. In the event an acquisition is not consummated within 18 months of
the effective date of the prospectus (February 6, 2004), the deposited funds
will be returned on a pro rata basis to all investors.

Identifying a Target
--------------------

The selection of a Target is complex and risky because of competition for such
business opportunities among all segments of the financial community. In
evaluation of a Target, the Company is considering various factors, including,
but not limited to:

o costs associated with effecting a Business Combination

o equity interest in and possible management participation in the
Target

o growth potential of the Target and its industry

o experience and skill of management and availability of additional
personnel of the Target

o capital requirements of the Target

o competitive position of the Target

o potential for further
research, development or exploration

o degree of current or potential market acceptance of product/service

o risk factors

o regulatory environment of the Target's industry

o profit potential

The evaluation as to the merits of a particular Business Combination will be
based on relevant factors as listed above as well as other considerations deemed
by management to be relevant to effecting a Business Combination consistent with
the Company's business objective. Management will conduct a due diligence review
which will encompass, among other things, meeting with target management and
inspection of target facilities, as well as a review of financial or other
information made available to the Company.

Terms of Business Combination Agreement
---------------------------------------

The actual terms of an acquisition or merger transaction are unpredictable. Tax
considerations as well as other relevant factors will be evaluated in
determining the precise structure of a particular Business Combination, which
could be effected through various forms of a merger, consolidation or stock or
asset acquisition. The parties will endeavor to structure the Business
Combination to achieve the most favorable tax treatment to the Company, the
Target and their respective shareholders. Although the Company has no
commitments to date to issue any of its securities other than as described in
the Offering Registration Statement, the Company anticipates that it will, in
all likelihood, issue a substantial number of additional securities in
connection with a Business Combination. To the extent that such additional
securities are issued, dilution to the

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interests of the Company's stockholders will occur, and a change in control of
the Company may occur.

The Company believes that any written agreement executed in consummation of a
Business Combination will contain, but not be limited to, the following
provisions:

o representations and warranties by all parties thereto

o specifications as to default penalties

o terms of closing

o conditions to be met prior to closing

o allocation of costs, including legal and accounting fees

The Company plans to file reports in accordance with the reporting requirements
included in the Securities Exchange Act of 1934 (the "Exchange Act"). It
therefore plans to file independent audited financial statements with the
Commission as part of its Form 8-K upon consummation of a merger or acquisition.
The closing documents should provide that such audited financial statements be
available at closing or within ample time to comply with reporting requirements.
If such statements are not available, or do not conform to representations made
by the Target, the Company intends that the proposed transaction will be
voidable at the discretion of present Company management.

Governmental Approval
---------------------

The Company will need the Commission to declare its post-effective amendment to
the Registration Statement effective in order to consummate a Business
Combination.

Employees
---------

The Company has two part time employees: Kevin R. Keating and Spencer I. Browne.
Kevin R. Keating serves as President and Chief Financial Officer. Spencer I.
Browne serves as Secretary. Both individuals are members of our board of
directors and neither individual is currently receiving any salary in exchange
for their services.

Competition
-----------

We will remain an insignificant player among the firms which engage in business
combinations. There are many established venture capital and financial concerns
which have significantly greater financial and personnel resources and technical
expertise than we will. In view of our combined limited financial resources and
limited management availability, we will continue to be at a significant
competitive disadvantage compared to our competitors. Also, we will be competing
with a number of other small, blank check public and shell companies.

-3-

Item 2. Description of Property
------ -----------------------

We are presently using the office of Spencer I. Browne, our Secretary, at no
cost, as our office, an arrangement which we expect to continue until a Business
Combination is consummated. We are not required to pay any rent. We presently do
not own or lease any equipment, real estate or interests in real estate related
entities, directly or indirectly, and do not intend to purchase or lease any
such equipment, real estate or interests prior to a Business Combination being
consummated.

Item 3. Legal Proceedings
------ -----------------

The Company is not a party to, nor is it aware of, any threatened litigation of
any nature.

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

None.

PART II

Item 5. Market for Common Equity and Related Stockholder Matters
------ --------------------------------------------------------

There is no trading market for the shares of the Company nor is there any
assurance that a regular trading market will develop for the Shares, or that, if
developed, any such market will be sustained. The Company anticipates that, if a
Business Combination is consummated, trading of the Shares will be conducted
through the National Quotation Bureau's Over-the-Counter Electronic Bulletin
Board. Any market for the shares of the Company which may result will likely be
less well developed than if such shares were traded on NASDAQ or on another
exchange.

The Company has registered the shares of the Offering only in New York and
Colorado. The Company may apply to register its shares in several states or for
secondary trading.

There is no common equity of the Company which is subject to outstanding options
or warrants to purchase, or securities convertible into, common equity of the
Company.

As of December 31, 2002, there was a total of 200,000 shares of our common
stock, par value $0.01 per share, outstanding ("Common Stock"). These 200,000
shares of Common Stock are held by a total of three shareholders. 50,000 shares
of Common Stock were sold in the Offering at a price of $1.00 per share. The
remaining 150,000 shares of Common Stock are owned by our President, Kevin R.
Keating, and our Secretary, Spencer I. Browne. Prior to the Offering, Kevin R.
Keating and Spencer I. Browne privately purchased 90,000 shares and 60,000
shares, respectively, directly from the Company at a price of $0.05 per share,
pursuant to Section 4(2) of the Securities Act, and the rules and regulations
promulgated thereunder. The 150,000 shares of Common Stock held by our officers
and directors are "restricted securities" as that term is defined under the
Securities Act and in the future may be sold pursuant to a registration
statement filed under the Securities Act. These shares may not be sold by these
officers or their affiliates, or their transferees, pursuant to Rule 144 of the
Securities Act. This is true for any such sale either before or after a Business
Combination with an operating company or other

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person, regardless of technical compliance with the rule. The position of the
staff of the Division of Corporation Finance of the Commission is that any such
resale transaction under Rule 144 would appear to be designed to distribute or
redistribute such shares to the public without coming within the registration
requirements of the Securities Act. Therefore, our directors or officers
generally can only resell the shares they hold as of the date hereof through a
registration statement filed under the Securities Act.

No dividends have been paid on our shares of Common Stock. As we have no
business operations which would result in revenues, no dividends will be paid on
the shares of Common Stock prior to the consummation of any Business
Combination.

The Company has no employee benefit plan or dividend reinvestment plan.

No use has been made of the net proceeds raised in the Offering. The Offering
closed on November 4, 2002, after the sale of all 50,000 shares of Common Stock
registered under the Registration Statement at a price of $1.00 per share, for a
total of $50,000 in aggregate proceeds to the Company. The proceeds, net of
$5,000 used by the Company to pay expenses, are being held in escrow until the
earlier of (i) consummation of a Business Combination or (ii) the return of such
proceeds to the applicable investors, pursuant to Rule 419, if a Business
Combination has not been completed within the allowed time period.

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

This annual report on Form 10-KSB contains forward looking statements. Forward
looking statements are statements not based on historical information and that
relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond our
control and many of which, with respect to future business decisions, are
subject to change. These uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward looking statements made by us or on our behalf. We disclaim any
obligation to update forward looking statements.

Plan of Operation
-----------------

We were organized as a vehicle to seek, investigate and, if such investigation
warrants, acquire a target company or business that primarily desires to seek
the perceived advantages of a publicly-held corporation. Our principal business
objective is to seek long-term growth potential through the acquisition of a
business rather than immediate, short-term earnings. Our search is not
restricted to any specific business, industry or geographical location.

We do not currently engage in any business activities that provide cash flow.
The bulk of our funds were raised in our securities offering pursuant to our
amended registration statement on Form SB-2, as filed with the Securities and
Exchange Commission on July 22, 2002, and declared effective as of August 6,
2002. In the Offering we sold 50,000 shares of Common Stock at $1.00 per share.
The Offering closed on November 4, 2002. The net proceeds of the Offering,
$45,000, after the deduction of $5,000 in permitted expenses, are currently held
in an

-5-

escrow account in accordance with Rule 419(b) of the Securities Act of 1933, as
amended, and Rule 15c2-4 of the Securities Exchange Act of 1934. The costs of
identifying, investigating and analyzing Business Combinations will be paid with
money in our treasury. Our stockholders will not have the opportunity to
participate in any of these decisions. We are sometimes referred to as a "blank
check" company because investors will entrust their investment monies to our
management without having a chance to analyze the ultimate use to which their
money may be put. Although substantially all of the net proceeds of our
securities offering are intended to be utilized generally to effect a Business
Combination and to pay expenses and fees related thereto, the net proceeds are
not otherwise designated for any specific purposes. Investors will have an
opportunity to evaluate the specific merits or risks of only the Business
Combination our management in which our management decides to enter.

Our management anticipates that it will likely be able to effect only one
Business Combination, due primarily to our limited financing, and the dilution
of interest for present and prospective stockholders, which is likely to occur
as a result of our management's plan to offer a controlling interest to a target
business in order to achieve a tax free reorganization. This lack of
diversification should be considered a substantial risk in investing in us,
because it will not permit us to offset potential losses from one venture
against gains from another.

We have until 18 months following the date of our prospectus, in other words
until February 6, 2004, to consummate a Business Combination with another
entity. If we fail to consummate such a combination, then we will return the
escrowed funds to our investors. Prior to such date, each investor will have an
opportunity, pursuant to a reconfirmation offer effected when such a combination
is probable (the details of which Business Combination will be set forth in a
post-effective amendment to our amended registration statement), to reconfirm
their interest in the potential Business Combination or have their funds
returned. If we do not consummate a Business Combination by February 6, 2004 and
as a result we return funds to our investors, we may decide to (i) initiate a
new offering pursuant to Rule 419, (ii) liquidate and dissolve or (iii) pursue
another business strategy to be determined at such time.

Selection of a Business
-----------------------

We may seek a business which has recently commenced operations, is a developing
company in need of additional funds for expansion into new products or markets,
is seeking to develop a new product or service, or is an established business
which may be experiencing financial or operating difficulties and is in need of
additional capital. In the alternative, a Business Combination may involve the
acquisition of, or merger with, a company which does not need substantial
additional capital, but which desires to establish a public trading market for
its shares or seeks the perceived advantages of a publicly-held corporation.

We do not intend to advertise or promote ourselves to potential target
businesses. We intend to retain certain entities to act as "finders" to identify
and analyze the merits of potential target businesses. Apart from retaining of
finders to locate target companies, we are not presently considering hiring any
individual as a consultant. However, we cannot rule out the need for outside
consultants in the future. We have not made any decision regarding payment of
these consultants, if any are hired. It is likely that any finders will be
compensated through a payment

-6-

consisting solely of our stock. Any compensation paid to a finder will be in
accordance and comply with all federal and state securities laws.

Under Rule 419 of the Securities Act of 1933, as amended, we cannot acquire a
target business unless its fair value represents 80% of our Offering proceeds.
In addition, the Colorado Securities Act further requires, among other things,
that the proceeds of our Offering not be removed from the escrow account in
which they are currently held until 50% of the gross proceeds of the Offering
are committed to one or more specific lines of business. To determine the fair
market value of a target business, our management may examine the financial
statements, including balance sheets and statements of cash flow and
stockholders' equity, of any candidate, focusing attention on its assets,
liabilities, revenue and net worth taking into account the business' business
plan, opportunity for growth and other measures generally used to evaluate
businesses. In addition, our management will participate in a personal
inspection of any potential target business. If we determine that the financial
statements of a proposed target business do not clearly indicate that its fair
value represents 80% of the Offering proceeds, we will obtain an opinion from an
investment banking firm which is a member of the National Association of
Securities Dealers, Inc. with respect to the satisfaction of such criteria.

Any target business that is selected may be a financially unstable company or an
entity in its early stages of development or growth, including entities without
established records of sales or earnings. In that event, we will be subject to
numerous risks inherent in the business and operations of financially unstable
and early stage or potential emerging growth companies. In addition, we may
effect a Business Combination with an entity in an industry characterized by a
high level of risk, and, although our management will endeavor to evaluate the
risks inherent in a particular target business, there can be no assurance that
we will properly ascertain or assess all significant risks.

We anticipate that the selection of a Business Combination will be complex.
Because of general economic conditions, rapid technological advances being made
in some industries and shortages of available capital, our management believes
that there are numerous firms seeking even the limited additional capital which
we will have and/or the benefits of becoming a publicly traded corporation. Such
perceived benefits of becoming a publicly traded corporation may include, among
other things, facilitating or improving the terms on which additional equity
financing may be obtained, providing liquidity for the principals of a business,
creating a means for providing incentive stock options or similar benefits to
key employees, providing liquidity (subject to restrictions of applicable
statutes) for all stockholders and other benefits. Potentially available
Business Combinations may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex.

-7-

Our officers and directors will analyze or supervise the analysis of potential
Business Combinations. Our management intends to concentrate on identifying
preliminary prospective Business Combinations which may be brought to its
attention through the use of finders. While we have not established definitive
criteria for acquisition candidates, we intend to focus on candidates generally
satisfying the following criteria:

o Two years of audited financial statements,
o Five million dollars in annual revenue,
o Positive cash flow,
o Little or no debt,
o Five million dollars in shareholders' equity and
o Five or more employees.

In analyzing prospective Business Combinations, our management will also
consider such matters as:

o available technical, financial, and managerial resources,
o working capital and other financial requirements,
o history of operations, if any,
o prospects for the future,
o nature of present and expected competition,
o the quality and experience of management services which may be
available and the depth of that management,
o the potential for further research, development, or exploration,
o specific risk factors not now foreseeable but which then may be
anticipated to impact on our proposed activities,
o the potential for growth or expansion,
o the potential for profit,
o the perceived public recognition or acceptance or products or
services and
o name identification and other relevant factors.

As a part of our investigation, our officers and directors will meet personally
with management and key personnel, may visit and inspect material facilities,
obtain independent analyses or verification of certain information provided,
check references of management and key personnel, and take other reasonable
investigative measures, to the extent of our limited financial resources and
management expertise. It is anticipated that any finders retained will assist in
these efforts; however, the ultimate investigation, analysis, decision and
negotiation with respect to a potential target will reside with our management
and board of directors.

Since we will be subject to Section 13 or 15 (d) of the Securities Exchange Act
of 1934, we will be required to furnish information about significant
acquisitions, including audited financial statements for the target company,
covering one, two or three years depending upon the relative size of the
acquisition. Consequently, acquisition prospects that do not have or are unable
to obtain the required audited statements may not be appropriate for acquisition
so long as the reporting requirements of the Exchange Act are applicable.

-8-

We anticipate that any Business Combination will present certain risks. We may
not be able adequately to identify many of these risks prior to selection. Our
investors must, therefore, depend on the ability of our management to identify
and evaluate these risks. We anticipate that the principals of some of the
combinations which will be available to us will be in its development stage in
that it has not generated significant revenues from its principal business
activity. The risk exists that even after the consummation of such a Business
Combination and the related expenditure of our funds, the combined enterprise
will still be unable to advance beyond the development stage. Many of the
potential Business Combinations may involve new and untested products,
processes, or market strategies. We may assume such risks although they may
adversely impact on our stockholders because we consider the potential rewards
to outweigh them.

At present, the sole finder of Business Combinations for Wentworth III is
Keating Investments, LLC, a California limited liability company and a
registered broker-dealer. Timothy J. Keating, the son of our President, Kevin R.
Keating, is the Managing Member of, and holds approximately an 87% interest in,
Keating Investments, LLC. Any finder utilized by us will be a registered
broker-dealer, or exempt from such registration in connection with it activities
related to us, in accordance with the requirements of the Securities and
Exchange Commission.

Since the closing of our public offering, we have received numerous business
plans and reviewed several companies as potential merger candidates in detail.
To date, we have no existing agreement for a Business Combination or other
transaction, and our investors may lose some of their investment if we cannot
complete such a transaction. We have no arrangement, agreement or understanding
with respect to engaging in a merger with, joint venture with or acquisition of,
a private or public entity. No assurances can be given that we will successfully
identify and evaluate suitable business opportunities or that we will conclude a
Business Combination. Management has not identified any particular industry or
specific business within an industry for evaluation. We cannot guarantee that we
will be able to negotiate a business combination on favorable terms, and there
is consequently a risk that funds allocated to the purchase of our shares will
not be invested in a company with active business operations. If we are unable
to make such an investment, it is unlikely that our investors will make a
substantial return on their investment in us, and their funds could be returned
with some loss of capital due to expenses.

In the event our funds are not sufficient to enable us to successfully fund a
Business Combination, we may seek additional financing. At this time, we believe
that our funds will be sufficient for such purpose and therefore do not expect
to issue any additional securities before the consummation of a Business
Combination. However, we may issue additional securities, incur debt or procure
other types of financing if needed. We have not entered into any agreements,
plans or proposals for such financing and at present have no plans to do so. We
will not use escrowed funds from our Offering as collateral or security for any
loan or debt incurred. Further, the escrowed funds will not be used to pay back
any loan or debts incurred by us. If we require additional financing, there is
no guarantee that such financing will be available to us or if available that
such financing will be on terms acceptable to us.

-9-

Acquisition of a Business
-------------------------

In implementing a structure for a particular business acquisition, we may become
a party to a merger, consolidation, reorganization, joint venture, or licensing
agreement with another corporation or entity. We may alternatively purchase
stock or assets of an existing business.

Our management will not actively negotiate or otherwise consent to the purchase
of any portion of their common stock as a condition to or in connection with a
proposed Business Combination, unless such a purchase is demanded by the
principals of the target company as a condition to a merger or acquisition. Our
officers and directors have agreed to this restriction which is based on an oral
understanding between members of our management. Members of our management are
unaware of any circumstances under which such policy, through their own
initiative, may be changed.

The structure of the Business Combination will depend on, among other factors:

o the nature of the target business,
o our needs and desires and the needs and desires of those persons
controlling of the target business,
o the management of the target business and
o our relative negotiating strength compared to the strength of the
persons controlling the target business.

We will not purchase the assets of any company of which a majority of the
outstanding capital stock is beneficially owned by one or more or our officers,
directors, promoters or affiliates or associates. Furthermore, we intend to
adopt a procedure whereby a special meeting of our stockholders will be called
to vote upon a Business Combination with an affiliated entity, and stockholders
who also hold securities of such affiliated entity will be required to vote
their shares of stock in the same proportion as our publicly held shares are
voted.

We have adopted a policy that we will not pay a finder's fee to any member of
management for locating a merger or acquisition candidate. No member of
management intends to or may seek and negotiate for the payment of finder's
fees. In the event there is a finder's fee to be paid to any member of
management, it will be paid at the direction of the successor management after a
change in management control resulting from a Business Combination. Our policy
regarding finder's fees is based on an oral agreement among management. Our
management is unaware of any circumstances under which such policy through their
own initiative may be changed.

Upon the consummation of a Business Combination, we anticipate that our
management will change. Our present management anticipates that the escrowed
funds from our securities offering will be used by the post-merger management at
its sole discretion. Our Secretary will not receive any remuneration during this
period for providing us with office space. This policy is based upon an oral
agreement with our management. Our management is unaware of any circumstances
under which such policy through its own initiative may be changed.

It is possible that, after we successfully consummate a merger or acquisition
with an unaffiliated entity, that entity may desire to employ or retain one or a
number of members of our

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management or our directors for the purposes of providing services to the
surviving entity. However, we have adopted a policy whereby the offer of any
post-transaction employment to members of management will not be a consideration
in our decision to undertake any proposed transaction. Each member of management
has agreed to disclose to the Board of Directors any discussions concerning
possible employment by any entity that proposes to undertake a transaction with
us and further, to abstain from voting on the transaction. Therefore, as a
practical matter, if each member of the Board of Directors is offered employment
in any form from any prospective merger or acquisition candidate, the proposed
transaction will not be approved by the Board of Directors as a result of the
inability of the Board to affirmatively approve the transaction. The transaction
would then be presented to our shareholders for approval. In all cases, our
stockholders will have the opportunity to approve the transaction pursuant to
the reconfirmation offer.

Any merger or acquisition can be expected to have a significant dilutive effect
on the percentage of shares held by our existing stockholders, including
purchasers in our Offering. The target business we consider will, in all
probability, have significantly more assets than we do. Therefore, in all
likelihood, our management will offer a controlling interest in our company to
the owners of the target business. While the actual terms of a transaction to
which we may be a party cannot be predicted, we expect that the parties to the
business transaction will find it desirable to avoid the creation of a taxable
event and thereby structure the acquisition in a so-called "tax-free"
reorganization under Sections 368(a)(1) or 351 of the Internal Revenue Code. In
order to obtain tax-free treatment under the Internal Revenue Code, the owners
of the acquired business may need to own 80% or more of the voting stock of the
surviving entity. As a result, our stockholders, including investors in our
Offering, would retain 20% or less of the issued and outstanding shares of the
surviving entity, which would result in significant dilution in percentage of
the entity after the combination and may also result in a reduction in the net
tangible book value per share of our investors. In addition, a majority or all
of our directors and officers will probably, as part of the terms of the
acquisition transaction, resign as directors and officers.

Competition
-----------

Operation of a Business after an Acquisition
--------------------------------------------

Our activities following a Business Combination with a target company will be
dependent on the nature of the acquired business, as well as the interest
acquired. It may be expected that the business will present various risks to
investors. We cannot yet appropriately assess the risks of the business at the
present time, even in general terms, as we have not restricted our search for a
potential target company to any one particular field of endeavor.

-11-

SUBSEQUENT EVENT:
----------------

On February 6, 2003, the Wentworth board of directors unanimously approved
a merger with Whitco, a privately held Texas-based manufacturer and
marketer of steel outdoor lighting pole structures. Assuming all of the
escrow holders elect to reconfirm their investment in us, we believe that
the fair value of Whitco represents at least 80% of the offering proceeds
of $50,000 realized from our offering. Whitco's management and board will
assume significant majority control of the Company through a merger
structure whereby Whitco will become a wholly-owned subsidiary of
Wentworth. Wentworth will thereafter change its name to Catalyst Lighting
Group.

Keating Investments, LLC ("KI"), a registered broker-dealer, will receive
an investment banking fee payable by Whitco in connection with the proposed
transaction. Timothy J. Keating, the son of Kevin R. Keating, the Company's
President, is the Managing Member of, and holds approximately an 87%
interest in, KI. There is currently no signed agreement between KI and the
Company. However, KI has been engaged by Whitco and is representing Whitco
as its investment banker. Given the limited cash resources of the Company,
management of the Company anticipates that any fees to be paid to KI will
be paid either through the issuance of equity of Wentworth III or through
the cash resources of Whitco, or a combination of both.

Item 7. Financial Statements
------ --------------------

The financial statements that constitute Item 7 follow the text of this report.

An index to the financial statements appears in Item 13(a) of this report.

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

None.

Part III

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

Name Age Title
---- --- -----

Kevin R. Keating 62 President, Chief Financial Officer and Director
Spencer I Browne 52 Secretary and Director

Mr. Keating is a promoter of two blank check corporations which are currently in
registration with the Securities and Exchange Commission: Wentworth I, Inc. and
Wentworth II, Inc., both Delaware corporations.

-12-

Mr. Browne is a promoter of two blank check corporations which are currently in
registration with the Securities and Exchange Commission: Wentworth I, Inc. and
Wentworth II, Inc., both Delaware corporations.

The directors of the Company hold office until the next annual meeting of the
shareholders and until their successors have been elected and qualified. The
directors receive no compensation for serving as such. Officers are appointed by
the Board of Directors and serve at the discretion of the Board. Messrs. Keating
and Browne, the current executive officers of the Company, devote up to
approximately 10% of their time to the affairs of the Company.

Kevin R. Keating is an investment executive and for the past six (6) years has
been the Branch Manager of the Vero Beach, Florida office of Brookstreet
Securities Corporation. Brookstreet Securities is a full-service, national
network of independent investment professionals. Mr. Keating services the
investment needs of private clients with special emphasis on equities. For more
than 35 years, he has been engaged in various aspects of the investment
brokerage business. Mr. Keating is a director of the Company, Wentworth I, Inc.
and Wentworth II, Inc. and holds a directorship in the following reporting
company: iVideoNow, Inc.

Spencer I. Browne is a principal of Strategic Asset Management, LLC, a privately
owned investment firm which he founded in November 1996. Prior to that date Mr.
Browne has held various executive and management positions with several publicly
traded companies engaged in businesses related to the residential and commercial
mortgage loan industry. Mr. Browne is a director of the Company, Wentworth I,
Inc. and Wentworth II, Inc., and holds other directorships in the following
reporting companies: Annaly Mortgage Management, Inc., Internet Commerce
Corporation, Mego Financial Corp. and iVideoNow, Inc.

There are no agreements or understandings for any officer or director to resign
at the request of another person and neither of the officers or directors is
acting on behalf of or will act at the direction of another person.

There have been none of the following events that occurred during the past five
years that are material to an evaluation of the ability or integrity of any
director, person nominated to become a director, executive officer, promoter or
control person of the Company:

(1) Any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time
of the bankruptcy or within two years prior to that time;

(2) Any conviction in a criminal proceeding or being subject to a pending
criminal proceeding (excluding traffic violations and other minor
offenses);

(3) Being subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of
business, securities or banking activities; and

-13-

(4) Being found by a court of competent jurisdiction (in a civil action),
the Commission or the Commodity Futures Trading Commission to have
violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated.

Item 10. Executive Compensation
------- ----------------------

No compensation has been paid to any officers or directors since inception.
However, the officers and directors have not provided significant services to
the Company through December 31, 2002. The Company does not expect to pay any
direct or indirect compensation to its officers and directors except for
reimbursement for reasonable out-of-pocket expenses. There are no understandings
or arrangements otherwise relating to compensation. Management anticipates that
shares of the Company's authorized but unissued Common Stock may be utilized in
connection with a business acquisition or combination and not as compensation to
the Company's management.

Item 11. Security Ownership of Certain Beneficial Owners and Management
------- --------------------------------------------------------------

The following table sets forth information as of December 31, 2002 with respect
to the beneficial ownership of shares of Common Stock by (i) each person known
by the Company to be the owner of more than 5% of the outstanding shares of
Common Stock, (ii) each director and (iii) officers and directors as a group.

Amount and Approximate
Percentage of Outstanding Shares

Kevin R. Keating (1) 90,000 shares 45%
Spencer I. Browne (1) 60,000 shares 30%
Officers and directors as a group (2 150,000 shares 75%
persons)
Steven P. Salinas 41,600 shares 20.8%

(1) An officer and director

Unless otherwise noted, the persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned
by them. Neither person named in the table is acting as nominee for any persons
or is otherwise under the control of any person or group of persons.

There are no arrangements currently in place that may result in the change of
control of the Company, except for the search for a successful Business
Combination, as discussed throughout this Annual Report. The Company has no
equity compensation plans.

Item 12. Certain Relationships and Related Transactions
------- ----------------------------------------------

At present, the sole finder of Business Combinations on behalf of the Company is
Keating Investments, LLC, a California limited liability company and a
registered broker-dealer.

-14-

Timothy J. Keating, the son of Kevin R. Keating, our President, is the Managing
Member of, and holds approximately an 87% interest in, Keating Investments, LLC.
There is currently no signed agreement between Keating Investments, LLC and the
Company. The Company will file an amendment to its most current registration
statement describing any agreement with a finder. Given the limited cash
resources of the Company, it is anticipated that any fees to be paid to finders
will be paid in equity of the Company or through the cash resources of the
target company.

Our officers or directors could be deemed to be our promoters. They received
shares of Common Stock in return for their cash contributions to the Company.
Kevin R. Keating received 90,000 shares in exchange for a cash contribution of
$4,500. Spencer I. Browne received 60,000 shares in exchange for a cash
contribution of $3,000.

-15-

Item 13. Exhibits and Reports on Form 8-K
------- --------------------------------

(a) Exhibits.

Exhibit
Number Description
------ -----------

Financial Statements - December 31, 2002

Index............................................F-1
Independent Auditors' Reports....................F-2
Balance Sheet....................................F-4
Statement of Operations..........................F-5
Statement of Changes in Stockholders' Equity.....F-6
Statements of Cash Flows.........................F-7
Notes to Financial Statements....................F-8

* 3.1 Certificate of Incorporation

* 3.2 By-Laws

** 10.1 Escrow Agreement

99.1 Certification of the Company's Principal Executive Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

99.2 Certification of the Company's Chief Financial Officer
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002

99.3 Certification of the Company's Principal Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427

99.4 Certification of the Company's Principal Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
and Securities and Exchange Commission Release 34-46427

* Incorporated herein by reference to the exhibits of the Company's
Registration Statement on Form SB-2, filed with the Securities and Exchange
Commission on December 12, 2001.

** Incorporated herein by reference to Exhibit 4.6 of the Company's Amendment
No. 3 to its Registration Statement on Form SB-2/A, filed with the
Securities and Exchange Commission on July 22, 2002.

-16-

(b) Reports on Form 8-K

None

Item 14. Controls and Procedures
-------- -----------------------

As of February 3, 2003, an evaluation was completed under the supervision and
with the participation of the Company's management, including the Company's
President, Chief Financial Officer and Secretary, of the effectiveness of the
design and operation of the Company's disclosure controls and procedures. Based
on that evaluation, the Company's management including the President, Chief
Financial Officer and Secretary, concluded that the Company's disclosure
controls and procedures were effective as of February 3, 2003. There have been
no significant changes to the Company's internal controls or other factors that
could significantly affect internal controls subsequent to February 3, 2003.

-17-

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

WENTWORTH III, INC.

By: /s/ Kevin R. Keating
------------------------------
Kevin R. Keating
President

February 13, 2003

INDEX TO FINANCIAL STATEMENTS

PAGE
----

Independent Auditors' Reports................................................F-2

Balance Sheet - December 31, 2002............................................F-4

Statement of Operations - For the Year Ended December 31, 2002 and
for the Period from March 7, 2001 (Date of Inception) to
December 31, 2001 and 2002..............................................F-5

Statement of Changes in Stockholders' Equity - For the Period from
March 7, 2001 (Date of Inception) to December 31, 2002 and for
the Year Ended December 31, 2002........................................F-6

Statements of Cash Flows - For the Year Ended December 31, 2002 and
For the Period from March 7, 2001 (Date of Inception) to
December 31, 2001 and 2002..............................................F-7

Notes to Financial Statements................................................F-8

F-1

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Wentworth III, Inc.
Denver, Colorado

We have audited the accompanying balance sheet of Wentworth III, Inc. (a
development stage company) (the "Company") as of December 31, 2002, and the
related statements of operations, stockholders' equity, and cash flows for the
year then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. 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 Wentworth III, Inc. as of
December 31, 2002 and the results of its operations and its cash flows for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 2 to the
financial statements, the Company has suffered operating losses since its
inception and has a working capital deficiency that raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

The financial statements of the Company for the period from March 7, 2001 (date
of inception) to December 31, 2001 were audited by other auditors, whose report
dated May 24, 2002, expressed an unqualified opinion on these financial
statements with an explanatory paragraph indicating substantial doubt as to the
Company's ability to continue as a going concern. We have audited the
combination in the accompanying statements of operations, stockholders' equity
and cash flows of the period from March 7, 2001 (inception) to December 31, 2001
into the period from March 7, 2001 to December 31, 2002. In our opinion, such
financial statements have been properly combined.

/s/ HEIN + ASSOCIATES LLP

HEIN + ASSOCIATES LLP

Denver, Colorado
February 5, 2003

F-2

INDEPENDENT AUDITOR'S REPORT

Board of Directors
Wentworth III, Inc.
Denver, Colorado

We have audited the accompanying balance sheet of Wentworth III, Inc. (a
development stage company) as of December 31, 2001 (not presented herein), and
the related statements of operations, stockholders' equity and cash flows for
the period from March 7, 2001 (date of inception) to December 31, 2001. 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.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Wentworth III, Inc. as of
December 31, 2001 and the results of its operations, and its cash flows for the
period from March 7, 2001 (date of inception) to December 31, 2001 in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the notes to the
financial statements, the Company has suffered operating losses since its
inception and has a working capital deficiency that raise substantial doubt
about its ability to continue as a going concern. The financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.

/s/ GOLDSTEIN GOLUB KESSLER LLP

GOLDSTEIN GOLUB KESSLER LLP

New York, New York

May 24, 2002

F-3

WENTWORTH III, INC.
(A Development Stage Company)

BALANCE SHEET

DECEMBER 31, 2002

ASSETS
CURRENT ASSETS:
Cash $ 2,125
----------
Total current assets 2,125

CASH-RESTRICTED 45,000

DEFERRED TAX ASSET, net of valuation allowance of $7,371 -
----------

TOTAL ASSETS $ 47,125
==========

CURRENT LIABILITIES:

Accrued expenses $ 38,000
Due to officer 1,035
----------
Total current liabilities 39,035

STOCKHOLDERS' EQUITY:
Preferred stock - $.01 par value; authorized
10,000,000 shares, none issued -
Common stock - $.01 par value; authorized
40,000,000 shares, 200,000 shares issued and
outstanding 2,000
Additional paid-in capital 25,937
Deficit accumulated during the development stage (19,847)
----------
Total stockholders' equity 8,090
----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 47,125
==========

See accompanying notes to these financial statements.

F-4

WENTWORTH III, INC.
(A Development Stage Company)

STATEMENT OF OPERATIONS

FOR THE
FOR THE PERIOD PERIOD FROM
FROM MARCH 7, MARCH 7, 2001
FOR THE YEAR 2001 (DATE OF (DATE OF
ENDED INCEPTION) TO INCEPTION) TO
DECEMBER 31, DECEMBER 31, DECEMBER 31,
2002 2001 2002
------------- ------------- -------------
INTEREST INCOME $ 25 $ 20 $ 45

OPERATING EXPENSES:
Professional fees 17,753 - 17,753
Other general and
administrative
expense 797 1,342 2,139
------------- ------------- -------------
Total operating
expenses 18,550 1,342 19,892
------------- ------------- -------------

NET LOSS (18,525) (1,322) (19,847)
------------- ------------- -------------

NET LOSS PER
COMMON SHARE $ (0.01) $ (0.01)
============= =============

WEIGHTED-AVERAGE
NUMBER OF SHARES
OUTSTANDING 200,000 150,000
============= ============

See accompanying notes to these financial statements.

F-5

WENTWORTH III, INC.
(A Development Stage Company)

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

FOR THE PERIOD MARCH 7, 2001 (DATE OF INCEPTION) TO DECEMBER 31, 2002
FOR THE YEAR ENDED DECEMBER 31, 2002

DEFICIT
COMMON STOCK ADDITIONAL DURING THE
------------------ PAID-IN DEVELOPMENT STOCKHOLDERS'
SHARES AMOUNT CAPITAL STAGE EQUITY
-------- --------- ---------- ----------- -------------

Issuance of common stock for cash 150,000 $ 1,500 $ 6,000 $ - $ 7,500
at $.05 per share

Net loss for the period from
March 7, 2001 (date of
inception) to December 31, 2001 - - - (1,322) (1,322)
------- ------- --------- -------- ---------

BALANCE, December 31, 2001 150,000 1,500 6,000 (1,322) 6,178
Net proceeds from sale of
common stock for cash
received in public offering
at $1.00 per share 50,000 500 19,937 - 20,437
Net loss for the year ended
December 31, 2002 - - - (18,525) (18,525)
------- ------- --------- -------- ---------

BALANCE, December 31, 2002 200,000 $ 2,000 $ 25,937 $(19,847) $ 8,090
======= ======= ========= ======== =========

See accompanying notes to these financial statements.

F-6

WENTWORTH III, INC.
(A Development Stage Company)

STATEMENTS OF CASH FLOWS

FOR THE FOR THE
PERIOD PERIOD
FROM FROM
MARCH 7, MARCH 7,
2001 2001
FOR THE (DATE OF (DATE OF
YEAR INCEPTION) INCEPTION)
ENDED TO TO
DECEMBER DECEMBER DECEMBER
31, 2002 31, 2001 31, 2002
-------- --------- ----------

CASH FLOWS FROM OPERATING
ACTIVITIES:
Net loss $(18,525) $ (1,322) $ (19,847)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Changes in operating assets
and liabilities:
Increase in accrued
expenses 7,595 842 8,437
Increase in due to officer 1,035 - 1,035
-------- --------- ---------
Net cash used in
operating activities (9,895) (480) (10,375)

CASH USED IN INVESTING ACTIVITY,
increase in restricted cash (45,000) - (45,000)
-------- --------- ---------

CASH PROVIDED BY FINANCING
ACTIVITY, proceeds from the
issuance of common stock 50,000 7,500 57,500
-------- --------- ---------

INCREASE (DECREASE) IN CASH (4,895) 7,020 2,125

CASH, at beginning of period 7,020 - -
-------- --------- ---------

CASH, at end of period $ 2,125 $ 7,020 $ 2,125
======== ========= =========

SUPPLEMENTAL SCHEDULE OF
NON-CASH FINANCING ACTIVITY:
Expense accrued for offering
costs $ 18,419 $ 11,144 $ 29,563
======== ========= =========

See accompanying notes to these financial statements.

F-7

WENTWORTH III, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND OPERATIONS AND GOING CONCERN:
---------------------------------------------

Wentworth III, Inc. (the "Company") was incorporated in the State of
Delaware on March 7, 2001 for the purpose of raising capital that is
intended to be used in connection with a merger, acquisition or other
business combination with an operating business. On October 9, 2001,
the Company issued 150,000 shares of $.01 par value common stock for
$.05 per share, a total of $7,500. During 2001, the Company filed a
registration statement on Form SB-2, under SEC Rule 419, which was
declared effective by the Securities and Exchange Commission on August
6, 2002. Under this registration statement on November 4, 2002, the
Company sold 50,000 shares of $.01 par value common stock in a public
offering for $1.00 per share for gross proceeds of $50,000. The Company
incurred $29,563 in expenses of the offering.

The Company is currently in the development stage. All activities of
the Company to date relate to its formation, its public offering and
subsequent public filings and to finding an acquisition target with
which to consummate a business combination.

The proceeds of the initial public offering as well as the related
securities purchased have been placed in an escrow account where they
will remain until the consummation of any business combination as
required by the Securities and Exchange Commission Rule 419. The
Company may withdraw only 10% of the funds as working capital in order
to seek acquisition opportunities or for other corporate purposes. The
remaining $45,000 has been shown as cash in escrow in the accompanying
balance sheet.

At the time the Company seeks stockholder approval of any potential
merger, acquisition or other business combination, the Company will
offer each of the initial investors the right, for a specific period of
time, to reconfirm their investments and remain investors or,
alternatively, to require the return of their funds, including interest
if any, from the escrow account. Any investor not making a decision
within the specific time period will automatically have their funds
returned plus interest. The Company cannot consummate any business
combination unless investors owning at least 80% of the funds reconfirm
their investments.

As a result of limited resources, the Company will, in all likelihood,
have the ability to effect only a single business combination.
Accordingly, the prospects for the Company's success will be entirely
dependent upon the future performance of a single business.
Furthermore, there is no assurance that the Company will be able to
successfully execute a business combination. If the Company does not
complete a merger, acquisition or other business combination meeting
specified criteria within 18

F-8

WENTWORTH III, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

months of the date of the initial public offering, the Company will
return the $45,000 of funds in the escrow account, plus interest, if
any.

The financial instruments, which potentially subject the Company to
concentration of credit risk, consist of cash. The Company maintains
cash in an account with a financial institution in an amount which, at
times, may be in excess of the FDIC insured limit. The Company has not
experienced any losses on such account and does not believe it is
exposed to any significant risk with respect to cash.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
the use of estimates by management. Actual results could differ from
these estimates.

The Company does not believe that any recently issued but
not-yet-effective accounting standards will have a material effect on
the Company's financial position, results of operations or cash flows.

2. GOING CONCERN:
-------------

The Company has no revenue to date and has incurred operating losses of
$19,847 since inception. Since inception, the Company has been
dependent upon the receipt of capital investment or other financing to
fund its continuing activities. The Company has not identified any
business combination and therefore, cannot ascertain with any degree of
certainty the capital requirements for any particular transaction. In
addition, the Company is dependent upon certain related parties to
provide continued funding and capital resources. The accompanying
financial statements have been presented on the basis of the
continuation of the Company as a going concern and do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or the amounts and classification of liabilities
that might be necessary should the Company be unable to continue as a
going concern.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
------------------------------------------

Deferred Offering Costs - Deferred offering costs, which were being
incurred in anticipation of the Company filing a Rule 419 registration
statement, were deferred until the sale of common shares. On November
4, 2002, when the offering closed, these costs were charged to
additional paid in capital.

Income Taxes - The Company accounts for income taxes in accordance with
the Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes," which requires the recognition of deferred tax
liabilities and assets at currently enacted tax rates for the expected
future tax consequences

F-9

WENTWORTH III, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

of events that have been included in the financial statements or tax
returns. A valuation allowance is recognized to reduce the net deferred
tax asset to an amount that is more likely than not to be realized. The
tax provision shown on the accompanying statement of operations is zero
since the deferred tax asset generated from the net operating loss is
offset in its entirety by a valuation allowance. State minimum taxes
are expensed as incurred.

Cash and Cash Equivalents, and Restricted Cash - Cash and cash
equivalents, if any, include all highly liquid debt instruments with an
original maturity of three months or less at the date of purchase.
Restricted cash represents the proceeds of the Rule 419 common stock
offering, which are limited as to their use pursuant to this Rule (see
Note 1).

Fair Value of Financial Instruments - Cash and current liabilities are
recorded in the financial statements at cost, which approximates fair
market value because of the short-term maturity of those instruments.

Net Income (Loss) Per Share - Basic earnings per share (EPS) is
calculated by dividing the income or loss available to common
shareholders by the weighted average number of common shares
outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock
were exercised or converted into common stock. The Company currently
has no dilutive securities and as such, basic and diluted earnings per
share are the same for all periods presented.

Comprehensive Income (Loss) - Comprehensive income is defined as all
changes in stockholders' equity (deficit), exclusive of transactions
with owners, such as capital investments. Comprehensive income includes
net income or loss, changes in certain assets and liabilities that are
reported directly in equity such as translation adjustments on
investments in foreign subsidiaries and unrealized gains (losses) on
available-for-sale securities. During the year ended December 31, 2002
and for the period from March 7, 2001 (inception) to December 31, 2001,
the Company's comprehensive loss was the same as its net loss.

4. STOCKHOLDERS' EQUITY:
------------------------------------------

The Company's Certificate of Incorporation authorizes the issuance of
50,000,000 shares of stock. They are divided into 10,000,000 shares of
preferred stock and 40,000,000 shares of common stock. At December 31,
2002, none of the preferred stock has been issued. However, such
preferred shares may later be issued in such series with whatever
preferences as may be determined by the Board of Directors.

F-10

WENTWORTH III, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

During the year ended December 31, 2002, the Company completed the sale
of 50,000 shares of common stock at $1.00 in an initial public offering
(IPO). Offering cost associated with IPO totaled $29,563. Prior to the
IPO, the company sold 150,000 shares of common stock for $7,500 in a
private placement. At December 31, 2002, 200,000 shares of the common
stock have been issued. In addition, the Company will, in all
likelihood, issue a substantial number of additional shares in
connection with a merger, acquisition or business combination. To the
extent that additional shares of common stock are issued, dilution to
the interest of the Company's current stockholders will occur.

5. INCOME TAXES:
------------

The Company has a net operating loss carryforward of approximately
$20,000 available to offset taxable income through the years 2021 and
2022.

The Company recorded a deferred income tax asset for the tax effect of
net operating loss carryforwards and temporary differences, aggregating
$7,371, against which the Company has recorded a full valuation
allowance in recognition of the uncertainty regarding the ultimate
amount of income tax benefits to be derived. The change in the
valuation allowance for the period ended December 31, 2001 to December
31, 2002 is $6,922.

DECEMBER 31,
2002
------------

Start up costs $ 123
Net operating lost carryforwards 7,248
Valuation allowance (7,371)

$ -
=========

F-11

WENTWORTH III, INC.
(A Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

The difference between income taxes computed at the statutory federal rate of
34% and the provision for income taxes relates to the following:

Percent of
Pretax
Amount
----------

Provision at federal statutory rate 34%

Increase in valuation allowance (34)
----

0%
====

6. SUBSEQUENT EVENT:
----------------

On February 6, 2003, the Wentworth board of directors unanimously
approved a merger with Whitco Company, LLP ("Whitco"), a privately
held Texas-based manufacturer and marketer of steel outdoor lighting
pole structures. Assuming all of the escrow holders elect to reconfirm
their investment in us, management believes that the fair value of
Whitco represents at least 80% of the offering proceeds of $50,000
realized from our offering. Whitco's management and board will assume
significant majority control of the Company through a merger structure
whereby Whitco will become a wholly-owned subsidiary of Wentworth.
Wentworth will thereafter change its name to Catalyst Lighting Group.

Keating Investments, LLC ("KI"), a registered broker-dealer, will
receive an investment banking fee payable by Whitco in connection with
the proposed transaction. Timothy J. Keating, the son of Kevin R.
Keating, the Company's President, is the Managing Member of, and holds
approximately an 87% interest in, KI. There is currently no signed
agreement between KI and the Company. However, KI has been engaged by
and is representing Whitco as its investment banker. Given the limited
cash resources of Wentworth III, management of the Company anticipates
that any fees to be paid to KI will be paid either through the issuance
of equity of Wentworth III or through the cash resources of Whitco, or
a combination of both.

F-12