UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number: 001-16105
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
STONEPATH GROUP, INC. 401(K) PLAN (FORMERLY THE STONEPATH GROUP, INC.
401(K) PROFIT SHARING PLAN)
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
STONEPATH GROUP, INC.
1930 6TH AVE. S., SUITE 401
SEATTLE, WA 98134
STONEPATH GROUP, INC. 401(K) PLAN
FINANCIAL STATEMENTS AND
SUPPLEMENTAL SCHEDULE
Year Ended December 31, 2004
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Administrative Committee of the
STONEPATH GROUP, INC. 401(K) PLAN
We have audited the accompanying statements of net assets available for benefits
of the Stonepath Group, Inc. 401(k) Plan (the "Plan") as of December 31, 2004
and 2003, and the related statement of changes in net assets available for
benefits for the year ended December 31, 2004. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). 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 audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2004 and 2003, and the changes in net assets available for benefits
for the year ended December 31, 2004, in conformity with U.S. generally accepted
accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedule is
presented for the purpose of additional analysis and is not a required part of
the basic financial statements, but is required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. This supplemental schedule is the responsibility of
the Plan's management. The supplemental schedule has been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
Plymouth Meeting, Pennsylvania
July 7, 2005
STONEPATH GROUP, INC. 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
2004 2003
------------ ------------
ASSETS
Investments $ 8,825,500 $ 8,418,128
Participants' loans receivable 386,942 246,561
------------- -------------
9,212,442 8,664,689
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Receivables:
Employer contributions 21,849 35,367
Participants' contributions 75 22,027
Other contributions - 1,987
------------- -------------
21,924 59,381
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TOTAL ASSETS 9,234,366 8,724,070
LIABILITIES
Accrued expenses 24,189 12,024
------------- -------------
NET ASSETS AVAILABLE
FOR BENEFITS $ 9,210,177 $ 8,712,046
============= =============
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STONEPATH GROUP, INC. 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year Ended
December 31, 2004
-----------------
ADDITIONS
Additions to net assets attributed to:
Net appreciation in fair value of
investments $ 204,777
Interest from participant loans 18,041
------------
222,818
------------
Contributions:
Employer 621,417
Participants 1,385,765
Rollover 88,934
------------
2,096,116
------------
TOTAL ADDITIONS 2,318,934
------------
DEDUCTIONS
Deductions from net assets attributed to:
Benefits paid to participants 1,672,231
Administrative expenses 148,572
------------
TOTAL DEDUCTIONS 1,820,803
------------
NET INCREASE 498,131
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 8,712,046
------------
NET ASSETS AVAILABLE FOR
BENEFITS - END OF YEAR $ 9,210,177
============
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STONEPATH GROUP, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(1) DESCRIPTION OF PLAN
The following description of the Stonepath Group, Inc. (the "Company")
401(k) Plan (the "Plan") provides only general information. The
effective date of the Plan is January 1, 2003. Participants should
refer to the Plan document for a more complete description of the
Plan's provisions.
GENERAL - The Plan is a defined contribution plan covering all
full-time employees of the Company who have six months of service and
are age twenty-one or older. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS - Each year, participants may contribute up to 100% of
pretax annual compensation, as defined in the Plan. Participants may
also contribute amounts representing distributions from other qualified
defined benefit or contribution plans. Participants direct the
investment of their contributions into various investment options
offered by the Plan. The Plan currently offers eleven pooled separate
accounts within the UBS Fiduciary Trust Company common collective trust
funds and the Company's stock fund as investment options for
participants. The Company contributes 50% of the first 8% of base
compensation that a participant contributes to the Plan. The matching
Company contribution is participant-directed. Contributions are subject
to certain limitations.
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the Company's
contribution and (b) the Plan's earnings, and charged with an
allocation of administrative expenses. Allocations of expenses are
based on participant account balances, as defined. The benefit to which
a participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING - Participant's contributions plus actual earnings are 100%
vested immediately. Employer contributions made after January 1, 2003,
are generally subject to the following vesting schedule:
Years of Service Vested %
------------------ ---------
0 20%
1 40%
2 60%
3 80%
4 100%
PARTICIPANT LOANS - Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50%
of their account balances. The loans are secured by the balance in the
participant's account and bear interest at rates ranging from 2.0% to
10.5%, which are commensurate with local prevailing rates at the
inception of the loan. Principal and interest are paid ratably through
payroll deductions.
-4-
STONEPATH GROUP, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
PAYMENT OF BENEFITS - On termination of service, a participant will
receive a lump sum amount equal to the value of the participant's
vested interest in his or her account.
FORFEITED ACCOUNTS - At December 31, 2004 and 2003, forfeited nonvested
accounts totaled $12,282 and $14,437, respectively. These accounts will
be used to pay administrative expenses and reduce Company matching
contributions. During the year ended December 31, 2004, forfeitures
were used to pay $26,254 of administrative expenses.
INVESTMENT OPTIONS - Upon enrollment in the Plan, participants may
direct employee and Company contributions in the following investment
options:
o UBS Fiduciary Trust Company Common Collective Trust Funds -
The participants may invest in various investment options
under a common collective trust. A description of each
investment option can be found in the Plan document.
o Stonepath Group, Inc. Stock Fund
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements of the Plan are prepared
under the accrual method of accounting.
ESTIMATES - The preparation of financial statements in conformity with
U.S. generally accepted accounting principles requires the plan
administrator to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results may
differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION - The value of each
investment option within the common collective trust is determined at
the close of each business day based on fair value as determined by the
respective fund managers. The fair values are generally determined
based on quoted market prices of the funds' investment holdings. The
value of the Company's stock fund is based on quoted market price.
Purchases and sales of securities are recorded on a trade-date basis.
Dividends are recorded on the ex-dividend date.
PAYMENT OF BENEFITS - Benefits are recorded when paid.
ADMINISTRATIVE EXPENSES - Certain expenses of the Plan are paid by the
sponsor and are not included in the Plan's financial statements.
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STONEPATH GROUP, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
(3) INVESTMENTS
The following investments represent 5% or more of the Plan's net assets
available for benefits:
December 31,
---------------------------
2004 2003
----------- ------------
UBS Fiduciary Trust Company
Common Collective Trust Funds
Large Company Growth Portfolio $ 1,941,406 $ 2,222,634
Mid-Cap Growth Portfolio $ 1,010,242 $ 1,069,980
Guaranteed Investment Contracts Portfolio $ 898,003 $ 894,322
Small Company Value Portfolio $ 717,207 $ 466,740
Balanced Portfolio $ 695,491 $ 643,318
Conservative Bond Portfolio $ 686,635 $ 649,380
Large Company Value Portfolio $ 664,145 $ 334,737
International Growth Portfolio $ 650,967 $ 607,664
S&P 500 Index $ 462,180 $ 318,835
Stonepath Group, Inc. Stock Fund $ 502,764 $ 779,625
During the year ended December 31, 2004, the Plan's investments
(including gains and losses on investments bought and sold, as well as
held during the year) appreciated in value by $204,777 as follows:
UBS Fiduciary Trust Company
Common Collective Trust $ 595,442
Stonepath Group, Inc. Stock Fund (390,665)
----------
$ 204,777
==========
(4) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of Plan termination, participants would become 100% vested in their
employer contributions.
(5) TRANSACTIONS WITH PARTIES-IN-INTEREST
As of December 31, 2004 and 2003, the Plan held 414,519 and 339,063
shares, respectively, of Stonepath Group, Inc. common stock (employer
securities) in the Stonepath Group, Inc. stock fund with a fair value
of $502,764 and $779,625, respectively. Included in the fair value of
the Stonepath Group, Inc. stock fund at December 31, 2004 and 2003, is
an amount of $3,000 and $13,553, respectively, that Stonepath Group,
Inc. provided to the Plan to aid efficient administration and trading.
During the year ended December 31, 2004, the Plan purchased 110,019
shares of Stonepath Group, Inc. common stock at a cost of $183,271, and
sold 29,550 shares of Stonepath Group, Inc. common stock for $47,380.
During the year ended December 31, 2004, 5,013 shares of Stonepath
Group, Inc. common stock with a value of $11,332 were transferred out
of the Plan.
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STONEPATH GROUP, INC. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
Certain Plan investments are units of common collective trusts and
money market funds managed by UBS Fiduciary Trust Company, the Plan's
Trustee. Transactions with UBS Fiduciary Trust Company qualify as
party-in-interest transactions. Fees paid by the Plan for asset
management services amounted to $91,039 for the year ended December 31,
2004.
(6) TAX STATUS
The Plan has adopted a prototype standardized 401(k) profit-sharing
plan and trust sponsored by UBS Fiduciary Trust Company. The prototype
plan has obtained a determination letter, dated April 11, 2002, in
which the Internal Revenue Service stated that the Plan, as then
designed, was in compliance with the applicable requirements of the
Internal Revenue Code. UBS Fiduciary Trust Company believes the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code; therefore, no provision for
income taxes has been included in the Plan's financial statements.
-7-
SUPPLEMENTAL SCHEDULE
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STONEPATH GROUP, INC. 401(K) PLAN
SCHEDULE H, LINE 4I - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2004
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EIN: 65-0867684
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Plan Number: 001
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(a) (b) (c) (d) (e)
Description
of investment
including maturity
date, rate of interest,
Identity of issue, borrower, collateral, par, or Current
lessor, or similar party maturity value Cost value
-------------------------------------------------------------------------------------------------------
UBS Fiduciary Trust Company Common Collective Trust Funds
-------------------------------------------------------------------------------------------------------
* GIC Portfolio 30,962.280 shares (1) $ 898,003
-------------------------------------------------------------------------------------------------------
* Conservative Bond Portfolio 22,473.683 shares (1) 686,635
-------------------------------------------------------------------------------------------------------
* Balanced Portfolio 16,070.577 shares (1) 695,491
-------------------------------------------------------------------------------------------------------
* Large Company Growth Portfolio 184,878.046 shares (1) 1,941,406
-------------------------------------------------------------------------------------------------------
* Large Company Value Portfolio 11,562.688 shares (1) 664,145
-------------------------------------------------------------------------------------------------------
* Mid-Cap Growth Portfolio 119,611.129 shares (1) 1,010,242
-------------------------------------------------------------------------------------------------------
* Small Company Value Portfolio 28,389.543 shares (1) 717,207
-------------------------------------------------------------------------------------------------------
* International Growth Portfolio 46,834.988 shares (1) 650,967
-------------------------------------------------------------------------------------------------------
* International Value Portfolio 21,561.658 shares (1) 359,908
-------------------------------------------------------------------------------------------------------
* Fixed Income Index Portfolio 16,233.160 shares (1) 236,552
-------------------------------------------------------------------------------------------------------
* S&P 500 Index 31,029.105 shares (1) 462,180
-------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------
* Stonepath Group, Inc. Stock Fund 414,519.000 shares (1) 502,764
-------------------------------------------------------------------------------------------------------
* Participant Loans Interest ranging from
-------------------------------------------------------------------------------------------------------
2.0% to 10.5% $0 386,942
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$ 9,212,442
=======================================================================================================
* Party-in-interest as defined by ERISA
-------------------------------------------------------------------------------------------------------
(1) Cost information may be omitted as Plan assets are participant-directed.
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EXHIBIT LISTING
EXHIBIT
NO. DOCUMENT
------- --------
23.1 Consent of Independent Registered Public Accounting Firm (filed herewith)
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Stonepath Group, Inc.
Date: July 14, 2005 401(k) Plan
By: /s/ Christopher A. Foster
------------------------------------
Christopher A. Foster, Authorized
Signatory for Advisory Committee, as
Plan Administrator
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INDEX OF EXHIBITS
EXHIBIT
NO. DOCUMENT
------- --------
23.1 Consent of Independent Registered Public Accounting Firm (filed herewith)
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