SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 1O-QSB
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1998.
or
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from ____________ to ____________
Commission File No.0-23965
CENTENNIAL BANC SHARE CORP.
---------------------------
(Exact name of Registrant as specified in its charter)
Colorado 84-1374481
-------- ----------
(State or other (IRS Employer File Number)
jurisdiction of
incorporation)
6970 South Holly Circle, #105, Englewood, CO 80112
--------------------------------------------------
(Address of principal executive offices) (zip code)
(303) 840-2000
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) had filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
The number of shares outstanding of Registrant's common stock, par value
$.0000001 per share, as of May 1, 1998 were 1,149,300 common shares.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM I. Financial Statements
See attached financial statements
ITEM 2. Managements Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
The Company has had operational activity and has generated revenues to
date. However, the Company does not have an extensive history of operations and
is marginally unprofitable. The Company's primary activity for the coming fiscal
year will be to internally expand its business by processing increasing amounts
of mortgage banking business. The Company plans to work with its established
contacts and to attempt to develop new contacts to increase its business.
As in the past, the Company plans to concentrate its activities in Colorado
and particularly in the Denver and Colorado Springs Metropolitan areas. As the
Company expands, it will focus next on markets within the Rocky Mountain states.
The Company collects loan fees for acting as the broker under oral
agreements with non-affiliate loan originators. The Company principally utilizes
such non-affiliate loan originators for its operations and currently employs
only two persons, each of whom coordinate the relationships with these
non-affiliate loan originators.
Contract labor is a substantial part of the Company's planned operations.
The principal variable in the Company's operation is also contract labor, which
represents fees paid to third party loan originators for developing loans. Such
contract labor is subject to fluctuation, based upon the loan activity within a
given period. However, this cost is not fixed and is directly related to the
successful placement of loans and the resultant generation of revenue for the
Company.
The Company's fixed expenses run approximately $8,000 per month. Such costs
are not expected to materially increase in the foreseeable future as the
Company's business increases. The Company believes that it is meeting its fixed
expenses as of the date hereof. Within six months from the date hereof, the
Company believes that it will begin to generate a modest profit and will
thereafter be profitable. The extent of the Company's profitability cannot be
ascertained at this point.
The Company also plans, as a secondary matter, to search for and to
identify potential acquisition candidates in businesses related to or compatible
with the Company's core business of mortgage banking. Because the Company has
limited capital, any such acquisition would most likely result in a change of
control of the Company. As of the date hereof, the Company has not engaged in
any preliminary efforts intended to identify such possible potential acquisition
candidates and has neither conducted negotiations nor entered into a letter of
intent concerning any such candidates.
<PAGE>
The principal criteria for evaluating such acquisitions which the Company
may engage in will be the amount of investment required by the Company, the
degree of risk to the Company, the potential return on investment to the
Company, the Company's expertise in each situation and the expertise and
reliability of the acquiree in any such situation.
Liquidity and Capital Resources
As of the end of the reporting period, the Company had no material cash or
cash equivalents. There was no significant change in working capital during this
fiscal year. In February, 1998, the Company completed a private placement and
raised $110,750, which it plans to utilize in its operations.
As of the date of this Registration Statement, there are no plans,
proposals, arrangements, or understandings with respect to the sale or issuance
of additional securities by the Company. During the latter part of 1998, the
Company plans to examine the feasibility of a public offering to expand its
operations. No definitive plans currently exist for a public offering at this
time.
Management feels that the Company has inadequate working capital to pursue
most of its business opportunities other than to internally expand the
operations of its existing offices or to effect an acquisition with third
parties. The Company's capital requirements for the foreseeable future will be
supplied through internally generated profits, if any, and borrowings. The
opening of additional offices will require a substantial infusion of capital,
which the Company feels can only be accomplished by additional equity financing
through either a public or private offering, or both.
The Company does not intend to pay dividends in the foreseeable future.
PART II- OTHER INFORMATION
ITEM 1. Legal Proceedings
No legal proceedings of a material nature to which the Company is a party
were pending during the reporting period, and the Company knows of no legal
proceedings of a material nature pending or threatened or judgments entered
against any director or officer of the Company in his capacity as such.
ITEM 2. Changes in Securities. None.
ITEM 3. Defaults upon Senior Securities. None.
ITEM 4. Submission of Matters to a Vote of Security Holders. None
ITEM 5. Other Information. None.
ITEM 6. Exhibits and Reports on Form 8-K.
No exhibits as set forth in Regulation S-K are considered necessary in this
lO-QSB filing. No reports on Form 8-K were filed as of the most recent fiscal
quarter.
<PAGE>
<TABLE>
<CAPTION>
CENTENNEAL BANC SHARE CORPORATION
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
March 31 December 31,
1998 1998
(unaudited) (audited)
--------- ---------
Current Assets
<S> <C> <C>
Cash $ 7,396 $ 111,093
Certificate of Deposit 65,000
Note Recievable 4,700 4,700
--------- ---------
Total current assets 77,096 115,793
Property & Equipment:
Net of accumulated depriation of $600 10976 3,274
Other Assets:
Deposit 1,828 25,000
--------- ---------
$ 89,900 $ 144,067
========= =========
LIABILITIES AND STOCKHOLDERS EQUITY
Current Liabilities:
Accounts Payable $ 2,508 $ 524
Accrued Expenses 6,556 3,730
Notes Payable 35,007 34,382
--------- ---------
Total Current Liabilities 44,071 38,636
Shareholders Equity:
Preferred stock, $.0000001 par value,
1,000,000 shares authorized, None issued -- --
Common stock, $.0000001 par value,
50,000,000 authorized, 1,147,500 shares
and 1,147,500 shares issued and outstanding
at December 31, 1997 and March 31, 1978 1 1
Additional Paid-in Capital 110,510 108,510
Retained Earnings (Deficit) (5,080) (3,080)
Year to date profit (loss) (59,602)
--------- ---------
Total stockholders equity (deficit) 45,829 105,431
--------- ---------
Total liabilities and shareholders equity $ 89,900 $ 144,067
========= =========
</TABLE>
<PAGE>
CENTENNIAL BANC SHARE CORPORATION
STATEMENTS OF OPERATIONS
Inception
Three months (November 8,
ended 1996)
March to March 31
31, 1998 31, 1998
(unaudited) (unaudited)
Operating Revenue
Brokerage Fees 22,872 $ 168,519
Miscellaneous Income 1,202 $ 1,569
----------- -----------
Total Revenue 24,074 170,088
Costs and Expenses:
Advertising 3,714 5,859
Appraisal Fees 4,254 7,454
Bank Charges (31) 443
Bonus 5,000 5,000
Commissions & Contract Labor 16,729 90,542
Contributions 105 105
Credit Reports 720 1,926
Depreceation Expense 400 600
Dues & Subscriptions 1,600
Equipment Lease 1,121
Interest Expense 1,279 1,599
Licenses 1,240
Loan Expenses 1,944 1,944
Maintenance & Repairs 2,400 2,680
Marketing 5,829
Mea;s & Entertainment 3,603
Micellaneous Expense 1,471 1,855
Office Expenses 7,234
Office Supplies 460 4,474
Payroll Service 110 110
Payroll Taxes 1,985 3,960
Postage 503 855
Printing 1,215 2,298
Processing Fees 600 1,759
Professional Fees 8,971 14,693
Rent 5,483 8,733
Salary & Wages 19,839 42,147
Telemarketing 2,666
Telephone 2,721 5,785
Travel 2,804 3,656
Warehouse Banking Fees 1,000 1,000
----------- -----------
Total Operation Expenses 83,676 232,770
----------- -----------
Loss from Operations (59,602) (62,682)
Other income (expense):
Other income -- --
Income (loss) before provision
for income tax benefit (59,602) (62,682)
Provision for income tax -- --
----------- -----------
Net Income (loss) ($ 59,602) ($ 62,682)
=========== ===========
Net income (loss) per
common share ($ 0.05) ($ 0.06)
=========== ===========
Weighted average
number of shares
outstanding 1,111,192 1,111,192
----------- -----------
<PAGE>
<TABLE>
<CAPTION>
CENTENNIAL BANC SHARE CORPORATION
STATEMENTS OF CASH FLOWS
For the period
November 8,
Three months 1996
ended (Inception) to
March March 31,
31, 1998 1998
(unaudited) (unaudited)
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income (loss) ($ 59,602) ($ 62,682)
Depreciation 400 600
CHANGES IN ASSETS & LIABILITIES:
Certificate of Deposit (65,000) (65,000)
Notes Recievable (4,700) (4,700)
Deposits 23,172 (1,828)
Accounts Payable 1,984 2,508
Notes Payable 625 35,007
Accrued Expenses 2,826 6,556
--------- ---------
Net Cach Provided by Operating Activities (95,595) (89,539)
CASH FLOWS USED FOR INVESTING ACTIVITIES
Capital Expenditures (8,102) (11,576)
Cash flows from financing activities:
Proceeds recieved from issuance of stock 0 108,511
--------- ---------
Net cash provided by financing activities 0 108,511
Net increase (decrease) in Cash & Cash Equivalents (103,697) 7,396
Cash, beginning of period 111,093 --
--------- ---------
Cash, end of period $ 7,396 $ 7,396
========= =========
#VALUE!
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CENTENNIAL BANC SHARE CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY
March 31, 1998
(Unaudited)
COMMON STOCKS
$.0000001 Additional
Par Paid-in Retained
Shares Value Capital Earnings Total
--------- -------- ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 1,147,500 1 108,510 (3,080) 105,431
Issuance of common stock for cash at $2.50
per share, recieved December 1997, but 10,750
shares formally issued February 1998 4,300
The 2,000 was credited to revenue for
the previous period in error 2,000 (2,000) 0
Cancellation of common stock previously
issued at $.0000001 per share (2,500) --
Net loss for the period ended (59,602) (59,602)
March 31, 1998
---------- ---------- ---------- --------- --------
Balance at March 31, 1998 1,149,300 1 110,510 (64,682) 56,579
========== ========== ========== ========= ========
</TABLE>
<PAGE>
CENTENNIAL BANC SHARE CORP.
Notes to Financial Statements
March 31, 1998
Note 1 - Organization and Summary of Significant Accounting Policies:
------------------------------------------------------------
Organization:
- -------------
The Company was formed on November 8, 1996, and incorporated under the laws of
the State of Colorado. The Company Spent several months of preparation and
research before formal operations which began on March 10, 1997. No Financial
transactions occured in 1996.
The Company is a Colorado corporation organized for the purpose of developing
and maintaining the business associated with mortgage banking. The Company name
has been approved by the State of Colorado division of banking. The Company is
an approved broker which has a correspondent relationship with several large
wholesale banks. The Company lends to all markets in the mortgage business. The
Company's business is concentrated in the niche market of lending to borrowers
whose credit is less that perfect. The market is known in the industry as the B
& C grade market. The Company has discovered what ir perceives as a great need
for this type of financing and is aggressively pursuing these customers. It
appears to the Company that the future of the B & C grade clietele is not
necessarily affected by changing interest rate, and therefore may allow for
increased profitability for the Company.
Basis of Presentation:
- ----------------------
The Company is primarily engaged in mortgage brokering. The authorized capital
stock of the Company is 50,000,000 shares of common stock at $.0000001 and
1,000,000 shares of preferred stock at $.0000001 par value. No preferred stock
has been issued.
Cash and Cash Equivalents:
- --------------------------
The Company considers all highly-liquid debt instruments, purchased with an
original maturity of three months, to be cash equivalents.
Property and Equipment
- ----------------------
Property and equipment is stated at cost. The cost of ordinary maintenance and
repairs is charged to operations while renewals and replacements are
capitalized. Depreciation is computed on the straight-line method over the
useful lives of five years for furniture and fixtures.
Revenue and Expense Recognition:
- --------------------------------
Revenue is recognized when earned and expenses are recognized when they occur.
Use of 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 disclosure of
the 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.
<PAGE>
CENTENNIAL BANC SHARE CORP.
Notes to Financial Statements
March 31, 1998
Note 2 - Notes Payable
-------------
The following is a summary of notes payable:
Note Payable to Peggie Beattie due April 1, 1998. The
interest is 10%. Note is secured by an officer of the
corporation. 25,625
Note payable to Jerold Burden, officer and director of the
corporation. The note is payable August 3, 1998, at 10% per
annum. Note is unsecured. 5,000
Note payable to Metrum Commercial Credit Union. Interest
rate is six percent. Note is unsecured. 4,382
-----
$35,007
=======
Note 3 - Common stock
------------
Common shares were formally issued in February, 1998 for cash recieved in
December. Of the $10,750 recieved in December, 1998, $8,750 was properly
included in Additional Paid-in Capital, pending issuance of 3,500 shares, and
$2,000 was recorded as revenue , in error. The $2,000 has been adjusted to
Retained Earnings and is reflected as Additional Paid-in Capital. A total of
4,300 shares of common were issued during February, 1998 as a result of the
above.
Cancellation of 2,500 shares of previously issued shares also took place in
February.
Note 4 - Subsequent event
----------------
The note payable to Peggie Beatie in the amount of $25,625 was converted to
10,000 shares of common stock as of April 1, 1998.
<PAGE>
SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
CENTENNIAL BANC SHARE CORP.
Dated: 7/22/98 By: /s/ David J. Gregarek
---------------------------------------
David J. Gregarek
President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Dated: 7/22/98 By: /s/ Michael J. Delaney
--------------------------------------
Michael J. Delaney
Chief Financial and Accounting Officer
and Director
Dated: 7/22/98 By: /s/ Pat Kimminau
--------------------------------------
Pat Kimminau
Director
Dated: 7/22/98 By: /s/ J. Dean Burden
--------------------------------------
J. Dean Burden
Director
Dated: 7/22/98 By: /s/ Richard Shreck
--------------------------------------
Richard Shreck
Director
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 7,396
<SECURITIES> 65,000
<RECEIVABLES> 47,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 77,096
<PP&E> 10,576
<DEPRECIATION> (600)
<TOTAL-ASSETS> 89,900
<CURRENT-LIABILITIES> 44,071
<BONDS> 0
0
0
<COMMON> 111,511
<OTHER-SE> (64,682)
<TOTAL-LIABILITY-AND-EQUITY> 89,900
<SALES> 24,074
<TOTAL-REVENUES> 24,074
<CGS> 0
<TOTAL-COSTS> 83,676
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (59,602)
<INCOME-TAX> (59,602)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (59,602)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> 0
</TABLE>
