<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Initial Period Ended September 30, 1999
Commission File No. ___________
CENTRE CAPITAL CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 87-0385103
State of Incorporation (I.R.S. Employer Identification Number)
2619 Gravel Drive, Ft. Worth, Texas 76118
(Address of Principal Executive Offices-zip code)
(817) 595-0919
(Registrant's telephone number, including area code)
Indicate by check mark whether Registrant (10 has 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 Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes X No (2) Yes X No
---- ---- ---- ----
On September 30, 1999, the Registrant's common stock was not currently
trading. At such date, 8,748,584 shares of Registrant's common stock were held
by non-affiliates.
As of September 30, 1999, Registrant had outstanding 10,042,052 shares of
Common Stock.
<PAGE> 2
CENTRE CAPITAL CORPORATION
FORM 10-KSB
INITIAL PERIOD ENDED SEPTEMBER 30, 1999
INDEX
<TABLE>
<S> <C>
ITEM 1 BUSINESS
ITEM 2 PROPERTIES
ITEM 3 LEGAL PROCEEDINGS
ITEM 4 SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
ITEM 5 MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
ITEM 7 FINANCIAL STATEMENTS AND SUPLEMENTARY DATA
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9 DIRECTORS AND EXECUTIVE OFFICERS
ITEM 10 EXECUTIVE COMPENSATION
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
SIGNATURES
</TABLE>
<PAGE> 3
PART I
ITEM 1. BUSINESS
REGISTRANT. Centre Capital Corporation, the Registrant herein, is a Nevada
corporation, whose offices are located at 2619 Gravel Drive, Ft. Worth, Texas
76118. It can be reached by phone at (817) 595-0919 and by fax at (817)
595-0991.
The Company was organized February 1, 1999, as a Nevada corporation named Vista
InterNatural Products 1, Inc. ("VIP"). Effective June 1, 1999 VIP merged with
Centre Capital Corporation ("Centre"), ("the Merger"). The results of operations
of Centre are included in the financial statements since the date of
acquisition.
Centre was incorporated in Nevada on September 6, 1988 for the purpose of
exchanging stock with Burke Oil Company ("Burke"), a Utah corporation. Centre
acquired the controlling block (in excess of 60%) of the stock of Burke. Centre
was dormant at that time, and never activated or operated Burke.
In January, 1996 Centre issued 500,000 shares of its common stock for all of the
outstanding shares of KFA, Inc. ("KFA"). KFA marketed a non-toxic insecticide
designed primarily for the extermination of fire ants. Centre sold all of its
shares of KFA to a shareholder of Centre in May, 1999.
In Connection with the Merger, Centre effected a one for three reverse stock
split its common shares (all share figures have been adjusted to reflect this
reverse split). Centre then issued one share for every two shares of VIP common
stock to the shareholders of VIP in exchange for 100% of the outstanding shares
of VIP.
The Merger has been accounted for as a reverse merger with VIP being the
acquirer. Therefore, VIP's historical financial statements are now the Company's
historical financial statements.
EMPLOYEES. Registrant currently has 27 Employees, of whom 4 are executive
officers or members of management. 3 are departments heads, 5 are warehouse
employees and the remaining 15 are clerical and administrative. Registrant
anticipates adding 2 departments heads and 2 administrative to handle the
increased work load. None of the registrant's employees are represented by labor
unions and registrant has not experienced a work stoppage of any sort.
DISTRIBUTOR NETWORK. Registrant has approximately 1,753 independent distributors
located in 22 states. Registrant actively recruits individuals who can
effectively demonstrate and promote products sold in the registrant's product
line and use Registrant's direct marketing techniques to sell its products and
sponsor other distributors. Registrant uses a multi-level marketing system to
compensate its distributors. Under this system, the Registrant pays a commission
based on products purchased within his/her network. These commissions are paid
weekly. Distributors are responsible for all expenses incurred by them for their
sales efforts.
<PAGE> 4
CAPITAL STOCK. Registrant has authorized 50,000,000 shares of its $0.001 par
value common stock of which 10,042,052 are issued and outstanding. Registrant
has 20,000,000 shares of its $0.001 par value preferred stock. There has been no
preferred stock issued.
ITEM 2. PROPERTIES
Registrant leases approximately 6,000 square feet of office space in Ft. Worth,
Texas. Registrant purchased 5 acres of land in Duncan, Oklahoma. This land has 2
existing buildings that are registered with the local historical society. They
represent a total of 11,636 square feet in Duncan, Oklahoma. Registrant plans to
use this space as warehouse and office space.
ITEM 3. LEGAL PROCEDINGS
No legal proceedings are pending by or against Registrant or its subsidiaries or
their directors, officers or affiliates, and to Registrant's knowledge no such
legal proceedings are threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTEOF STOCKHOLDERS
No current matters are pending that would require it to be submitted to the
stockholders for a vote.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK ANR RELATED
STOCKHOLDER MATTERS
The registrants stock is not yet traded and has been assigned the symbol CETY.
There is currently no active public trading market for Registrant's Common
Stock, and there is no assurance that one will develop at any time in the
future. At December 03, 1999 Registrant had 252 record holders of its Common
Stock.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS:
Registrant formed its corporation on February 1, 1999. It had acquired most
of the assets from an existing Oklahoma corporation and has continued to do
business as Vista InterNatural Products 1, Inc. The registrant has considerable
knowledge and experience in the area of multi-level marketing of nutritional
supplements and body care products.
<PAGE> 5
PRODUCTS:
The Registrant currently offers a full line of leading edge nutritional
supplements, personal care, home and auto, and pest control products of the
highest quality. Several of these products are of a proprietary nature and are
manufactured exclusively for the Registrant. The Registrant is continually
seeking new leading edge products to add to its already successful product line.
The Registrant directly contracts with independent manufacturers to produce its
products in accordance with highest quality standards attainable. There are
several qualified manufacturers available to the Registrant to produce and
package the products sold. All dietary and nutritional supplements are produced
in licensed pharmaceutical laboratories for maximum quality control.
The Registrant is also developing supplier relationships that will give
first priority for its packaging in order to supply quality packaging in short
notice situations. This feature will greatly benefit the Registrant as it
increases inventory to match its anticipated rapid growth.
Several of the key ingredients are kept on hand to avoid costly supply
delays.
The Registrant anticipates its inventory requirements on a ninety day
forward requirement. The Registrant also carries a substantial quantity of
preprinted packaging products to avoid unnecessary delays.
Registrant incurred a loss in the amount of $472,293 for the eight month
period ended September 30, 1999. These losses were anticipated as the Registrant
demanded that the level of quality and service be maintained at a high standard
experienced by management. The Company has reported some losses due to the
merger. One time expenses for the merger, filing of a Form 10SB and the
associated costs of becoming a publicly traded company account for much of the
loss. Cost of sales in the amount of $218,000 comprised of product purchases,
commissions and freight was approximately 78% which is in line with enterprises
in the same industry and similar size. Operating expenses such as advertising,
office salaries, and general and administrative expenses amounted to $525,570
for the initial eight months. As sales increase with expansion the operating
expenses should be increase only slightly and place the registrant in a
profitable position.
Revenue:
Revenue is from the sale of nutritional supplements and body care products
sold through its network of distributors. The company also receives additional
income through a referral arrangement that it has developed.
Cost of sales:
For the initial eight months, cost of sales totaling $218,000 consisted of
the following:
<TABLE>
<S> <C>
Purchases and inventory acquired 129,188
Commissions and contract labor 78,254
Freight 10,558
-------
Total 218,000
=======
</TABLE>
<PAGE> 6
Operating expenses:
Operating expenses totaling $525,570 for the initial eight months consisted
of the following:
<TABLE>
<S> <C>
Advertising 42,487
Salaries 240,422
General and administrative 242,661
-------
Total 525,570
=======
</TABLE>
Property:
During the initial eight months of operations the registrant purchased two
building on three parcels of land located in Duncan, Oklahoma. The registrant
intends to use this facility as corporate headquarters and as a shipping and
receiving location in addition to inventory storage. The building was financed
with a short term note payable to the former owner in the amount of $425,000.
$125,000 has already been paid on the note leaving a balance of $400,000 to pay
by August 20, 2000.
Liquidity and Capital Resources:
The registrant has financed its operations since inceptions by cash
advances by several individuals.
MARKET ANALYSIS:
The Registrant sells products that are in high demand by the general
public. The market for these and similar products grows by 50,000 people per
week in the United States. The Registrant competes with other products and
providers with quality, service, price, and guarantees. The Registrant has
numerous experts throughout the industry seeking quality leading edge products
to promote through its network of trained distributors.
A Look to the Future:
The registrant has relied on financing from certain individuals to fund its
operations and acquisition of property. There are also financial commitments
from these and other individuals who believe very strongly in the dynamic future
growth of the company. Management believes that it can issue new shares of
common stock to retire all major debt.
The products are priced reasonably to the consumer and provide the company with
a very favorable profit margin. Many of the Registrant's products are listed
with the FDA and directly compete with health care products that cost many times
the price of ours and ours are often found to provide better results.
<PAGE> 7
The registrant is looking for quality distributors to market its products
and hopes to double/triple its distributor base within one year. The registrant
is currently distributing products in 22 states and plans to be in 22 more
before the end of the next fiscal year.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
The financial statements of registrant are set forth immediately following
the signature page of this Form 10-KSB.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON FINANCIAL
DISCLOSURE
Registrant has had no disagreements with its certified public accountant
with respect to accounting practices or financial disclosures.
PART III
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS
The following table presents the name, age, and position of each Executive
Officer and Director. Each was elected in February of 1999 and all director
terms expire February 1, 2000.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Karl Jacobs 49 Chairman of the Board
Catherine Jacobs 50 President, Treasurer
Linda Lohman 50 Vice president
Susan McNair 29 Secretary and Vice President
Mark Spradling 41 Director
Stephen Nibarger 27 Director
</TABLE>
BIOGRAPHICAL INFORMATION
Set forth below is certain biographical information regarding each of the
registrant's Executive Officers and Director.
<PAGE> 8
Karl F. Jacobs, Chairman of the Board and Chief Executive Officer. Mr. Jacobs
graduated from Oklahoma State University in 1972 with honors and a Bachelor's of
Science Degree in Business Administration. He worked in banking, real estate and
insurance and owned and operated retail music and video stores from 1968 to
1995. Since 1995 Mr. Jacobs has been engaged in direct multi-level marketing,
achieving numerous performance awards while developing and managing a large
multi-level sales organizations
Catherine Jacobs, President, Treasurer and Chief Financial Officer. Ms. Jacobs
is the wife of Karl Jacobs and has over 14 years experience in the oil and gas
industry. She has also trained and managed a large network marketing
organization and won numerous performance awards.
Linda Lohman, Vice-President. Ms. Lohman has more than 30 years experience in
medical health insurance with Traveler's Insurance Company and she presently has
supervisory position with Traveler's as Client Administrator while working
part-time for Centre.
Susan McNair, Secretary and Vice-President. Ms. McNair has been involved in
multi-level direct marketing since 1994 and has trained and developed large
sales organizations.
Mark Spradling, Director. Mr. Spradling owns and operates a construction and
real estate company since Duncan, Oklahoma. He has also worked in multi-level
marketing since 1994 and trained and developed a large sales organization
nationwide.
Stephen Nibarger, Director. Mr. Nibarger is a Technology Manager for a Fortune
500 Company in Dallas, Texas. Mr. Nibarger has considerable experience in
multi-level marketing and direct sales.
ITEM 10. EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
NAME CAPACITY 1999
- ---- -------- ----
<S> <C> <C>
Karl Jacobs Chairman of the Board $40,000
Catherine Jacobs President and Chief $35,000
Financial Officer
</TABLE>
ITEM 11. SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of September 30, 1999, the name address and
number of shares of Registrants common stock, par value $0.001 per share, held
of record or beneficially by each person who held of record, or was known by
Registrant to own beneficially, more than 5% of the then 10,042,052 issued and
outstanding shares of Registrant's Common Stock, and the name and share holdings
of each director and of all officers and directors as a group.
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
<CAPTION>
CLASS BENEFICIAL OWNER AMOUNT
- ----- ---------------- ------
<S> <C> <C>
Common Karl Jacobs 142,857
1526 N. 13th St.
Duncan, Oklahoma 73533
Common Catherine Jacobs 142,857
1526 N. 13th St.
Duncan, Oklahoma 73533
Common Linda Lohman 142,857
649 Buffalo Bend
Plano, Texas 75023
Common Susan McNair 142,857
3011 Whippoorwill Lane
Duncan, Oklahoma 73533
Common Mark Spradling 71,528
1539 North 13th street
Duncan, Oklahoma 73533
Common Stephen Nibarger 142,857
2619 Gravel Drive
Ft. Worth, Texas 76118
Common Everett Sparks 507,655
1861 Brown Blvd 631
Arlington, Texas 76006
</TABLE>
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
<CAPTION>
CLASS BENEFICIAL OWNER AMOUNT
- ----- ---------------- ------
<S> <C> <C>
Common Karl Jacobs 142,857
Common Catherine Jacobs 142,857
Common Linda Lohman 142,857
Common Susan McNair 142,857
</TABLE>
<PAGE> 10
<TABLE>
<S> <C> <C>
Common Mark Spradling 71,528
Common Stephen Nibarger 142,857
ALL OFFICERS, DIRECTORS & BENEFICIAL PERSONS
AS A GROUP (7 PERSONS) 1,293,468
</TABLE>
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain beneficial owners have advanced cash and paid expenses and
purchased property on behalf of the Registrant.
Officers of the Registrant have advanced $159,500 for operating capital.
ITEM 13. EXHIBITS
Exhibit No. Description
27 Financial Data Schedule
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this Form 10KSB to be signed on its behalf by the undersigned
hereunto duly authorized, this 28th day of December, 1999. Centre Capital
Corporation.
/s/ CATHERINE JACOBS By: /s/ KARL JACOBS
-------------------- ---------------------
Catherine Jacobs/ Karl Jacobs
Chief Financial Officer Chairman of the Board
<PAGE> 11
[MARK L. CLELAND LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Centre Capital Corporation
Ft. Worth, Texas
I have audited the accompanying balance sheet of Centre Capital Corporation as
of September 30, 1999 and the related statement of operations, accumulated
deficit, and cash flows for the period from inception February 1, 1999 to
September 30, 1999. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I 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.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Centre Capital Corporation as of
September 30, 1999, and the results of its operations and its cash flows for the
initial period then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As described in Note K to the
financial statements the Company has suffered recurring losses from operations
and has a net capital deficiency, which raises substantial doubt about the
Company's ability to continue as a going concern. The financial statements do
not include any adjustment that might result from the outcome of this
uncertainty.
/s/ MARK L. CLELAND
Dallas, Texas
November 22, 1999
F-1
<PAGE> 12
CENTRE CAPITAL CORPORATION
BALANCE SHEET
September 30, 1999
<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Inventory $ 141,381
Deposits 830
-----------
Total Current Assets 142,211
PROPERTY:
Property and equipment (net) 598,525
-----------
Total Property 598,525
OTHER ASSETS:
Organization costs (net) 707
-----------
Total Other Assets 707
-----------
TOTAL ASSETS $ 741,443
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Bank overdraft $ 57,302
Account payable 100,000
Note payable 400,000
Loans from officers 159,500
Other current liabilities 460,766
-----------
Total Current Liabilities 1,177,568
Commitments and Contingencies (Note F):
STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value --
Common stock, $0.001 par value 10,042
Additional paid-in capital 170,391
Accumulated deficit (616,558)
-----------
Total Stockholders' Deficit (436,125)
-----------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 741,443
===========
</TABLE>
See accompanying notes.
F-2
<PAGE> 13
CENTRE CAPITAL CORPORATION
STATEMENT OF OPERATIONS
For The Period February 1, 1999 (inception) to September 30, 1999
<TABLE>
<CAPTION>
1999
------------
<S> <C>
REVENUE:
Sales (net) $ 279,595
------------
Total Revenue 279,595
COST OF SALES:
Total Cost of Sales 218,000
------------
GROSS MARGIN: 61,595
OPERATING EXPENSE:
Advertising 42,487
Depreciation and amortization 5,652
General and administrative 242,661
Salaries 240,422
------------
Total Operating Expense 531,222
------------
OTHER EXPENSE:
Interest expense 2,666
------------
Total Other Expense 2,666
NET LOSS: $ (472,293)
============
Weighted average shares outstanding 10,042,052
============
LOSS PER SHARE: $ (0.05)
============
</TABLE>
See accompanying notes.
F-3
<PAGE> 14
CENTRE CAPITAL CORPORATION
STATEMENT OF STOCKHOLDERS' EQUITY AND ACCUMULATED DEFICIT For the
Period from February 1, 1999 (inception) to September 30, 1999
<TABLE>
<CAPTION>
Common Paid in Accumulated
Shares Amount Capital Deficit Total
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance
February 1, 1999 (date of inception) 15,496,472 $ 15,496 $ 47,648 $ -- $ 63,144
----------- ----------- ----------- ----------- -----------
Combine Centre common shares 6,881,447 6,881 14,002 (144,265) (123,382)
Reverse split of Centre common
shares 1 for 3 (4,587,631) (4,588) -- -- (4,588)
Shares exchanged per merger
1 share for 2 (7,748,236) (7,747) 108,741 -- 100,994
Net loss -- -- -- (472,293) (472,293)
Balance
----------- ----------- ----------- ----------- -----------
September 30, 1999 10,042,052 $ 10,042 $ 170,391 $ (616,558) $ (437,125)
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes.
F-4
<PAGE> 15
CENTRE CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
For The Period February 1, 1999 (inception) to September 30, 1999
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(472,293)
Adjustments to reconcile net loss to net
cash (used) by operating activities:
Amortization 115
Depreciation 5,537
Changes in working capital:
Decrease in inventory 13,306
Increase in
Account payable 100,000
---------
NET CASH (USED) BY
OPERATING ACTIVITIES: (353,335)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase property (577,493)
Organization Costs (385)
---------
NET CASH (USED)
BY INVESTING ACTIVITIES: (577,878)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from other payables 159,500
Proceeds from note payable 400,000
Proceeds from other current liabilities 314,410
---------
NET CASH PROVIDED
BY FINANCING ACTIVITIES: 873,910
---------
NET (DECREASE) IN CASH: (57,303)
CASH AT BEGINNING OF THE PERIOD 0
---------
CASH OVERDRAFT AT END OF PERIOD $ (57,303)
=========
</TABLE>
See accompanying notes.
F-5
<PAGE> 16
CENTRE CAPITAL CORPORATION
STATEMENT OF CASH FLOWS
For The Period February 1, 1999 (inception) to September 30, 1999
SUPPLEMENTAL DISCLOSURE OF
CASH FLOW AND NON-CASH INVESTING ACTIVITIES
<TABLE>
<CAPTION>
NON-CASH INVESTING ACTIVITIES:
<S> <C>
Assets acquired in the merger
Inventory 128,075
Deposit 750
Equipment 26,569
Organization Costs 1,657
--------
$157,051
========
</TABLE>
See accompanying notes.
F-6
<PAGE> 17
CENTRE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
History:
The Company was organized February 1, 1999, as a Nevada corporation named Vista
InterNatural Products 1, Inc. ("VIP"). Effective June 1, 1999 VIP merged with
Centre Capital Corporation ("Centre"), (the Merger"). The results of operations
of Centre are included in the financial statements since the date of
acquisition.
Centre was incorporated in Nevada on September 6, 1988 for the purpose of
exchanging stock with Burke Oil Company ("Burke"), a Utah corporation. Centre
acquired the controlling block (in excess of 60%) of the stock of Burke. Centre
was dormant at that time, and never activated or operated Burke. Centre's
charter was allowed to be forfeited in May, 1991 for non payment of Utah
franchise taxes.
In January, 1996 Centre issued 500,000 shares of its common stock for all of the
outstanding shares of KFA, Inc. ("KFA"). KFA marketed a non-toxic insecticide
designed primarily for the extermination of fire ants. Centre sold all of its
shares of KFA to a shareholder of Centre in May, 1999.
In Connection with the Merger, Centre effected a one for three reverse stock
split its common shares (all share figures have been adjusted to reflect this
reverse split). Centre then issued one share for every two shares of VIP common
stock to the shareholders of VIP in exchange for 100% of the outstanding shares
of VIP.
The Merger, a purchase under Accounting Principles Board Opinion 16, has been
accounted for as a reverse merger with VIP being the acquirer. Therefore, VIP's
historical financial statements are now the Company's historical financial
statements.
Basis of Accounting:
It is the Company's policy to prepare its financial statements on the accrual
basis of accounting in conformity with generally accepted accounting principles.
Sales are recorded as income in the period in which they are earned and expenses
are recognized in the period in which the related liability is incurred.
Revenue Recognition:
Revenue is recognized when payment is received and product is shipped. Sales are
reported net of returns and allowances.
Cash and Cash Equivalents:
For purposes of the statement of cash flows, the Company considers all highly
liquid debt instruments with a maturity of three months or less to be cash
equivalents. The Company places its cash investments in more than one high
quality financial institutions.
Fair Value of Financial Instruments:
The carrying value of cash, receivables and accounts payable approximates fair
value due to the short maturity of these instruments.
F-7
<PAGE> 18
CENTRE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE A - NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(CONTINUED):
Property:
Property is stated at cost. Upon retirement or disposal, the asset cost and
related accumulated depreciation are removed from the accounts and any resulting
gain or loss is included in the determination of net income. Depreciation is
computed by the straight line method over the following estimated useful lives.
<TABLE>
<S> <C>
Buildings.......................................... 40 years
Office furniture................................... 7 years
Equipment.......................................... 5 years
Software........................................... 3 years
</TABLE>
Expenditures for maintenance, repairs and renewals are charged to expense when
incurred. Additions and significant improvements are capitalized and
depreciated.
Loss per Common Share:
Loss applicable to common share is based on the weighted average number of
shares of common stock outstanding during the year.
Accounting Estimates:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the amount reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Long-lived Assets:
Generally accepted accounting principals require recognition of impairment of
long-lived assets in the event of net book value of such assets exceed the
future undiscounted cash flows attributable to such assets. Consequently, the
Company assesses its assets annually for impairment and writes down any amounts
necessary as a result of the assessment
Income Tax:
The Company is subject to the greater of federal income taxes computed under the
regular system or the alternative minimum tax (AMT) system.
The Company uses an asset and liability approach for the accounting and
financial reporting of income tax. Under this method, deferred tax assets and
liabilities are determined based on temporary differences between the financial
carrying amounts and the tax bases of assets and liabilities using enacted tax
rates in effect in the years in which the temporary differences are expected to
reverse.
F-8
<PAGE> 19
CENTRE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE B - CONCENTRATIONS:
Product warranty: The Company offers a money back guarantee on all products sold
for a period of one year. There has been no liability recorded for future claims
as there is limited history of minimal product returns.
NOTE C - INVENTORY:
The Company purchases a finished product and maintains an inventory stated at
cost. The Company uses the first in first out method in valuing its inventory.
All damaged and unmarketable product is reflected in cost of sales. As a result
of the merger, inventory on hand at the time of the merger was recorded at fair
market value in the amount of $128,075.
NOTE D - PROPERTY:
Property consists of the following:
<TABLE>
<S> <C>
Land..................................................... $ 130,000
Building and improvements................................ 420,000
Office furniture......................................... 9,373
Equipment................................................ 41,500
Software................................................. 3,189
----------
604,062
Less accumulated depreciation............................ 5,537
Total........................................... $ 598,525
==========
</TABLE>
Depreciation for the initial eight month period amounted to $5,537.
As a result of the merger $26,569 of equipment is recorded at fair market value
F-9
<PAGE> 20
CENTRE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE E - OTHER ASSETS:
Organization Costs:
Organization costs in the amount of $2,042 are amortized over sixty months
using the straight-line method. Amortization expenses amounted to $115 during
the period February 1, 1999 to September 30, 1999 and the total accumulated
amortization at September 30,1999 is $1,335.
NOTE F - COMMITMENTS AND CONTINGENCIES:
The Company leases an office in Duncan, Oklahoma and office with warehouse space
in Ft. Worth, Texas under noncancelable operating leases. The lease commitment
for the office in Duncan, Oklahoma expires November 1, 1999 and totals $750.
There are two lease agreements for office and warehouse space in Ft. Worth. One
lease commitment is in the amount of $750 per month and expires January 31,
2000. The other lease commitment ranges from $1,450 to $1,519 per month until
October 31, 2003. The total of all lease commitments is $94,315.
NOTE G - CURRENT LIABILITIES:
Account payable:
The Company has a $100,000 payable to the seller of the land and building. This
payable is for a term of 90 days and bears no interest.
Note payable:
The Company has a $400,000 note payable to the seller of the land and building.
This note bears interest at 8% per annum payable monthly. The remaining
principal balance is due August 20, 2000.
NOTE H - RELATED PARTY TRANSACTIONS:
Certain shareholders of the Company have advanced cash to the Company and also
paid expenses and acquired equipment on the Company's behalf. These advances are
recorded as other current liabilities and total $460,766 of which $146,357 was
acquired as a result of the merger. Officers of the company have also advanced
amounts totaling $159,500 at September 30, 1999.
F-10
<PAGE> 21
CENTRE CAPITAL CORPORATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE I - STOCKHOLDERS' EQUITY:
Preferred stock: The Company is authorized to issue 20,000,000 shares of
preferred stock at a par value of $0.001 per share. There were no shares issued
and outstanding as of September 30, 1999.
Common stock: The Company is authorized to issue 50,000,000 common shares of at
a par value of $0.001 per share. These shares have full voting rights. There
were 10,042,052 shares issued and outstanding as of September 30, 1999.
The Company has not paid a dividend to its stockholders.
NOTE J - INCOME TAXES:
The Company has net operating loss carryforwards of approximately $560,000 at
September 30, 1999 that is available to offset future income tax liability.
Approximately $137,000 is net operating losses acquired as a result of the
merger. No deferred tax asset has been recognized for the operating loss
carryforward as any valuation allowance would reduce the benefit to zero. These
losses begin to expire in 2009.
NOTE K - GOING CONCERN:
The Company has minimal capital resources available to meet obligations normally
expected to be incurred by companies that are of similar size and line of
business. Accordingly, the Company's continued existence is dependent upon the
successful operation of the Company's plan of operations, selling the Company's
assets, obtaining additional financing or issuing additional stock. Unless these
conditions among others are met, the Company may be unable to continue as a
going concern.
F-11
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> FEB-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 141,381
<CURRENT-ASSETS> 142,211
<PP&E> 604,062
<DEPRECIATION> 5,537
<TOTAL-ASSETS> 741,443
<CURRENT-LIABILITIES> 1,177,568
<BONDS> 0
0
0
<COMMON> 10,042
<OTHER-SE> (446,167)
<TOTAL-LIABILITY-AND-EQUITY> 741,443
<SALES> 279,595
<TOTAL-REVENUES> 279,595
<CGS> 218,000
<TOTAL-COSTS> 218,000
<OTHER-EXPENSES> 533,888
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (472,293)
<INCOME-TAX> 0
<INCOME-CONTINUING> (472,293)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (472,293)
<EPS-BASIC> (.05)
<EPS-DILUTED> (.05)
</TABLE>
