SECURITIES AND EXCHANGE COMMISSION
AMENDMENT NO. 1
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): August 25, 2000
UNITED AMERICAN COMPANIES, INC.
(Exact Name of Registrant as specified in its Charter)
Colorado 000-30003 05-0508617
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File No.) Identif. No.)
8609 Wood Lake Court, Suite 206
Charlotte, North Carolina 28210
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code:
(704) 556-7992
NADEAU & SIMMONS, P.C.
1250 TURKS HEAD BUILDING
PROVIDENCE, RHODE ISLAND 02903
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
WITH COPIES TO:
CAYER, PRESCOTT, CLUNE & CHATTALLIER
2 CHARLES STREET
PROVIDENCE, RI 02903
401-421-2710
1250 Turks Head Building, Providence, Rhode Island 02903
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Cautionary Statement for Purposes of "Safe Harbor Provisions" of the Private
Securities Litigation Reform Act of 1995:
Except for historical facts, all matters discussed in this report which are
forward looking involve a high degree of risks and uncertainties. Potential
risks and uncertainties include, but are not limited to, competitive pressures
from other food export companies and political developments in overseas
markets, economic conditions in the Company's primary markets and other
uncertainties detailed or to be detailed from time to time in the Company's
Securities and Exchange Commission filings.
Item 1. Changes in Control of Registrant.
On August 16, 2000, a closing was concluded under a Plan of Merger (the
"Plan"), pursuant to which a change of control of Providence Capital I, Inc.
("Providence") occurred. Pursuant to the Plan, shareholders of United
American Companies, Inc. ("UAC" and/or "Registrant") were issued 13,500,000
shares of Providence common stock in exchange for all of the issued and
outstanding shares of UAC, a North Carolina corporation. Pursuant to the Plan,
Providence officers and directors resigned and were replaced by new management
as set forth below. Providence advised the shareholders of the pending change
in control through the filing with the Commission on August 10, 2000 and
mailing to its shareholders of an Information Statement on Schedule 14(C),
pursuant to Rule 14 under the Securities and Exchange Act of 1934, as amended
(the "14C").
The following table, which was also included in the 14C, sets forth
certain information with respect to the persons designated as newly appointed
directors of the Registrant under the Plan, including their beneficial
ownership in the Registrant as of the closing under the Plan concluding
August 16, 2000.
<TABLE>
<CAPTION>
Date First
Became Positions and Offices
Name Age Director With the Company
-------------------- ------ --------------- -------------------------
<S> <C> <C> <C>
Mark A. Craven 50 Chairman, Executive Vice
President, Secretary,
Director
Arnold E. Pitoniak 37 CEO, President, Director
Michael Gilbert 59 Chief Financial Officer,
Treasurer, Director
William F. Ruth 65 Executive Vice President,
Retail Liquidation Services
Nicholas J. Coolidge 68 Director
Timothy A. Holly 51 Director
------------------------------------------------------------------------------
Please see personal biographies below
</TABLE>
Personal Biographies and Summary of Experience
-----------------------------------------------------------------
Mark A. Craven
In 1971, Mr. Craven became associated with a family apparel firm, Arnold
Craven, Inc., located in High Point, North Carolina. While serving as
President until 1993, he was responsible for expanding the company into
several prominent well-respected retail apparel stores. In 1980, to
compliment the company's retail apparel stores, Mr. Craven formed a direct
marketing catalog business. In 1981, his national catalog won an award for
layout and design from the Direct Marketing Association. With peak sales of
$4,500,000 Mr. Craven sold the catalog's name and concept in 1982. Since
1993, he has been involved in liquidations and consulting services for retail,
wholesale, and distribution firms. This has resulted in a national reputation
for excellence in liquidating inventory and maximizing value for his clients.
Born and raised in High Point, North Carolina, the world's furniture capital,
Mr. Craven has cultivated long-standing contacts in the apparel, textile and
furniture industries. To capitalize on these relations, he developed several
entities to cover all aspects of the liquidation industry. High Point
Furniture Liquidators, LLC, Craven & Ruth Promotions, LLC and The Craven
Companies, LLC. Mr. Craven graduated from Hargrave Military Academy, majored
in Business Administration at Wake Forest University (1968 -- 1971), and
studied at New York University's MRA Institute of Retailing. He is a member
of the Turnaround Management Association.
Arnold E. Pitoniak
Mr. Pitoniak has 17 years experience as an entrepreneur, investment banker and
merchant banker. While a senior at Wake Forest University, he formed his
first company, and has since formed, developed, bought or sold over 10
companies. Mr. Pitoniak has over three years as an investment banker
specializing in mergers and acquisition advisory services, as well as general
corporate finance where he raised equity and debt for real estate developers
and other businesses particularly public furniture and textile companies. His
significant entrepreneurial and banking expertise brings a unique perspective
as well as substantial financial and analytical skills with the ability to
negotiate and structure transactions that will help United American Companies
in becoming a fully-integrated asset management and disposition company.
Mr. Pitoniak attended Southern Methodist University and graduated in 1985 from
Wake Forest University with a Bachelor of Arts degree in Economics. He is a
member of the Turnaround Management Association.
William F. Ruth
Mr. Ruth has over 40 years of diversified retail experience. His long career
began in 1957 with Belk Stores, Inc., one of the country's largest department
store chains. With Belk he held numerous responsible positions including
floor manager, buyer, merchandiser, divisional merchandise manager, general
merchandise manager, and area merchandise manager.
After leaving Belk Stores, Mr. Ruth spent three years operating his own
apparel store in Winston-Salem, North Carolina. He also held a position in
sales with Pine Apparel, an apparel distributor. Mr. Ruth's experience in
merchandising, buying, managing apparel of retail inventory has provided him
the sound base from which he has provided liquidation consulting services to
retailers, wholesalers, and distributors since 1993. Mr. Ruth graduated with
Western Carolina University with a degree in Business Administration.
Michael H. Gilbert
Michael H. Gilbert is a Certified Public Accountant. From October 1997 to
October 1999, he was Chief Financial Officer, Secretary and Treasurer of The
Prima Group International, Inc., a Charlotte, North Carolina, holding
company. Previously from May 1986 to September 1997 was a shareholder,
officer, and director of Hitchner, Whitt & Co., P.A., a firm of certified
public accountants.
Nicholas J. Coolidge
Nicholas J. Coolidge is President of Jefferson Worldwide Group Ltd. He is a
graduate of Harvard College (1954) and Harvard Law School (1959) and spent two
years as a lieutenant in the United States Marine Corps. From 1959 to 1969 he
was associated with the New York Law firm of Sullivan & Cromwell, where he
worked for investment banking clients on debt and equity financings, both
domestic and international, investment company matters and mergers and
acquisitions. In 1965 he left the practice of law and became a member of the
Corporate Finance Department of Kidder, Peabody & Co. Incorporated in New York
City. While there, he served as a Vice President, Director and Stockholder,
with sixteen professionals under his direction. He had responsibility for the
firm's project finance, leasing, real estate and Canadian activities. He was
active in public offerings, private placements, international transactions and
mergers and acquisitions. While at Kidder, Peabody he and his staff
originated and carried out in excess of 200 separate financings for new
clients involving over two billion dollars of securities. In 1978 he left
Kidder, Peabody and formed Coolidge Securities Corporation, an investment
banking firm engaged in a broad range of financing activities for corporate
and government clients. More recently, he formed Jefferson Worldwide Group
Ltd., a member of the National Association of Securities Dealers, Inc. (NASD),
specializing in private placements for clients. Jefferson Worldwide Group,
Ltd. is also an investment advisor registered with the District of Columbia.
Timothy A. Holly
Mr. Holly, has extensive expertise and substantial skills in investment
analysis and management, international finance, foreign commercial
intelligence, and strategic planning. He is currently Chief Executive Officer
of Jefferson Acquisition Group, Inc., a merchant banking firm, that recently
acquired All Points Telecom, Inc., a manufacturing firm making the world's
only solar-powered wireless pay phones with internet capability. From 1994 to
1998, Mr. Holly was the Chairman of Stone Harbor Holdings, Ltd (an offshore
venture capital fund).
From 1987 to 1994, Mr. Holly headed Royal Overseas Investment Group, Ltd.,
which included Royal Asset Management Company, a registered investment
advisory firm managing the assets of high-net worth individuals and
institutions from the Middle East and Europe. Prior to 1987, he was lead
analyst for two private banks, with responsibility for structuring foreign
direct investments in the United States, advising on over $2.3 billion of
investments of foreign capital. He continues to advise certain members of the
Saudi Royal Family.
Also, active in education, Mr. Holly was on the faculties of both the
University of Massachusetts and the City Colleges of Chicago; the research
staff of the Investment Negotiation Center at the Institute for International
and Foreign Trade Law; the Board of the Association of Schools of
International Affairs; and General Editor of The Fletcher Forum; A Journal of
International Affairs.
Mr. Holly received his undergraduate education in Political Science at Indiana
University; and graduate studies in Comparative Systems, University of Notre
Dame, and law at Georgetown University. He was also a Compton Foundation
Fellow working towards a Ph.D. in International Business and Finance at the
Fletcher School of Law and Diplomacy (administered by Harvard University and
Tufts University).
Beneficial Ownership
The following table sets forth the beneficial ownership of our outstanding
common stock on August 15, 2000 by (i) each director and executive officer of
our company, (ii) all directors and executive officers of our company as a
group, and (iii) each shareholder who was known by us to be the beneficial
owner of more than five percent (5%) of our outstanding shares:
<TABLE>
<CAPTION>
---------------------------------------------
<S> <C> <C> <C>
COMMON STOCK
--------------------------------------------
Name and address # of %of
of beneficial owner shares Class Options
Mark A. Craven 5,700,000 38.00% 250,000
Arnold E. Pitoniak 5,600,000 37.33% 250,000
William F. Ruth 600,000 04.00% 150,000
Timothy A. Holly 1,500,000 10.00%
Michael Gilbert 30,000
All Officers and
Directors as a Group 13,500,000 90.00%
PREFERRED STOCK
------------------------------------
</TABLE>
Item 2. Acquisition or Disposition of Assets.
Pursuant to the Plan, Providence acquired all of the shares of UAC.
COMPLETION OF THE MERGER
An Agreement and Plan of Merger and Reorganization was executed on July 26,
2000, by and among Providence and UAC, who joined in the execution of the
Agreement for the purpose of making certain covenants regarding the
Transaction contemplated therein. Providence is a corporation duly organized
and validly existing under the laws of the state of Colorado, with its
registered office at 17 West Cheyenne Mountain Blvd., Colorado Springs,
Colorado 80906, its principal executive office at 1250 Turks Head Building,
and its phone number is (401) 272-5800; UAC is a corporation duly organized
and validly existing under the laws of the state of North Carolina, with its
registered office located in the city of Charlotte, State of North Carolina,
its principal executive office at 8609 Wood Lake Court, Suite 206, Charlotte,
North Carolina 28210, and its phone number is (704) 556-7992.
The respective boards of directors of Providence and UAC deemed it desirable
and in the best interests of their respective corporations, for Providence to
acquire the outstanding capital stock of UAC in exchange for the issuance of
shares of the common stock of Providence and have proposed, declared advisable
and approved such merger (the "UAC Merger") pursuant to the Agreement, which
Agreement has been duly approved by resolutions of the respective boards of
directors of Providence and UAC.
The UAC Merger became effective on the "Effective Date", such date being the
later upon which (i) amended Articles of Incorporation are filed with the
Secretary of State of Colorado and (ii) a Certificate of Merger is filed with
the Secretary of State of North Carolina. The "Closing Date" will be on or
within one (1) business day of the date the Agreement is approved by the
shareholders of Providence.
The UAC Merger is intended to qualify as an I.R.C. 368(b) tax-free
reorganization. At the Closing, (a) UAC shall deliver to Providence a
statement (in such form as may be reasonably requested by counsel to
Providence) conforming to the requirements of Section 1.897-2(h)(1)(i) of the
United States Treasury Regulations, and (b) UAC shall deliver to the IRS the
notification required under Section 1.897-2(h)(2) of the United States
Treasury Regulations.
EFFECT OF UAC MERGER
In all other respects, the identity, existence, purposes, powers, objects,
franchises, rights, and immunities of Providence shall continue unaffected and
unimpaired by the UAC Merger.
The laws of Colorado shall continue to govern UAC. On and after the Effective
Date, the articles of incorporation of UAC shall be the articles of
incorporation of Providence until further amended in the manner provided by
law and in such articles of incorporation (the "Articles"). On the Effective
Date, the bylaws of UAC shall be the bylaws of Providence (the "Restated
Bylaws") until altered, amended, or repealed, or until new bylaws shall be
adopted in accordance with the provisions of law, the Articles, and the
Restated Bylaws.
CONVERSION OF UAC'S STOCK AND OTHER SECURITIES
UAC shareholders will surrender one hundred percent (100%) of their issued and
outstanding common and preferred shares to Providence on the date of execution
of the Agreement. In exchange for receipt of one hundred percent (100%) of UAC
shares, Providence, on the terms and subject to the conditions herein set
forth, shall issue and deliver to UAC shareholders:
On the Closing Date, 13,500,000 Common Shares, no par value ("Providence
Common Stock"), of Providence, on a share-for-share basis, registered in the
name of each UAC shareholder or its nominee.
--Providence Common Stock
None of the currently issued and outstanding shares of Providence Common
Stock, no par value, issued and outstanding at the effective time of the UAC
Merger shall be converted as a result of the UAC Merger;
--Fractional Interests
No fractional shares of preferred or common stock of Providence or certificate
or scrip representing the same shall be issued. In lieu thereof each holder of
UAC shares having a fractional interest arising upon such conversion will be
rounded up into one full additional share of common stock of Providence;
--Status of Common Stock
All shares of common stock of Providence into which UAC shares are converted
as herein provided shall be fully paid and non-assessable and shall be issued
in full satisfaction of all rights pertaining to such Providence Common Stock;
--Independent Appraisal, Right to Dissent and Obtain Payment for Shares
Procedures for Protection of Dissenter's Rights. In order to establish a "fair
value" for the UAC shares which are paid in cash in lieu of conversion into
the shares of Providence, as provided in this Article VI, the Board of
Directors of UAC shall establish the value of UAC shares prior to the UAC
Merger, and shall afford to such shareholders of UAC all of the rights, and
implement the procedures for protection of dissenters' rights, pursuant to the
provisions of the North Carolina Business Corporation Act, as amended, the
terms and provisions of which are hereby incorporated by reference and made a
part hereof.
UAC SHAREHOLDER DISSENTER'S RIGHTS
The Board of Directors of UAC shall establish the value of UAC's shares prior
to the UAC Merger, and shall afford to the shareholders of UAC all of the
rights, and implement the procedures for protection of dissenters' rights,
pursuant to the provisions of the North Carolina Business Corporation Act. The
capital surplus and retained earnings accounts of UAC shall be determined, in
accordance with generally accepted accounting principles, by the board of
directors of UAC. Nothing herein shall prevent the board of directors of UAC
from making any future changes in its accounts in accordance with law.
INVESTMENT REPRESENTATION LETTER
At the Closing, each of the UAC shareholders shall execute and deliver to UAC
an investment representation letter statement in such form as may be
reasonably requested by counsel.
Amendment to Articles of Incorporation
The Board of Directors and shareholders have unanimously approved for the
restatement and amendment of the Company's Articles of Incorporation in order
to change Providence's name to "UNITED AMERICAN COMPANIES, INC.".
Approval of the restatement and amendment will not result in any other
material amendment or change to the Registrant's Articles of Incorporation.
The restatement and amendment is required to effect Providence's acquisition
of UAC.
MARKET RISKS AND OTHER BUSINESS FACTORS
In passing the Private Securities Litigation Reform Act of 1995 (the "Reform
Act"), Congress encouraged public companies to make "forward looking
statements" by creating a safe harbor to protect companies from securities
law liability in connection with forward-looking statements. We intend to
qualify both our written and oral forward-looking statements for protection
under the Reform Act and any other similar safe harbor provisions.
Generally, forward-looking statements include expressed expectations of future
events and the assumptions on which the expressed expectations are based. All
forward looking statements are inherently uncertain as they are based on
various expectations and assumptions concerning future events and they are
subject to numerous known and unknown risks and uncertainties which could
cause actual events or results to differ materially from those projected.
Due to those uncertainties and risks, the investment community is urged not to
place undue reliance on our written or oral forward looking statements. We
undertake no obligation to update or revise our for forward looking statements
to reflect future developments. In addition, we undertake no obligation to
update or revise forward looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes to future operating results
over time.
Item 5. Other Information
BUSINESS DESCRIPTION
UAC CORPORATION-
DESCRIPTION OF THE BUSINESS
UNITED AMERICAN COMPANIES, INC.
United American Companies, Inc. ("UAC"), is a newly formed North Carolina
corporation. Its primary purpose is to become a public company specializing in
asset evaluation, acquisition, finance of liquidation and management and by
seizing undervalued opportunities in the retail, wholesale, distribution
and manufacturing sectors with the strategy of UAC being two-fold; creating
high current returns and income by liquidating assets and creating equity value
over a period of time by purchasing operating companies at value and increasing
that value over time and selling those companies for a significant return on
investment. This purpose is partly based upon the following factors:
* Domestic retail capacity is four times the level needed for US consumers
* Periodic declines in consumer spending result in more retail
failures
* Dominant retailers like Wal-Mart and Home Depot accelerate the
pace of retail failures
* E-commerce and e-tailing will increase failures of traditional
retailers
* Middle Market default rates indicate higher defaults among retailers
* In 1999, major principal liquidations exceeded an estimated $15
Billion
* Brands like London Fog and Bonwit Teller have been liquidated and
are therefore gone from the retail market
* In 1999, assets of companies filing bankruptcy exceeded $30
billion.
* Opportunities exist for brand licensing and exporting of liquidated
assets.
* Opportunities exist for purchasing old world economy companies
applying new world economy strategies and e-commerce at below
enterprise value.
To realize the opportunities from conditions in the economic market place
and to effectively enter the comprehensive asset management industry, UAC
is acquiring in an exchange of common stock, either complete ownership or
control of several entities comprising the Craven Companies (the "Craven
Group" or "Craven") -- a nationally recognized liquidator of consumer product
inventories, thereby making UAC a fully-integrated asset management company.
The Craven Group has antecedents dating back to 1993. Craven's principals
and senior management have over 100 years experience in retail sales, marketing,
distribution, finance, management and in the liquidation of retail inventory and
assets. In the last seven years, the Craven Group has liquidated over
$1 billion in assets. The Craven Group has served hundreds of clients and has
liquidated close to 1,000 wholesale and retail units.
To become a fully integrated asset management company specializing in
evaluation, acquisition, financing, liquidation, management and positioning of
assets, company, in November 1999, the Craven Group's activities were structured
as several Delaware limited liability companies -- each containing the name
"Fox." However, this designation was recently changed to "Craven" to
reflect certain internal changes and to take advantage of the widely known
and respected name of the Craven Chairman -- Mark Craven, an established
expert in the liquidation of retail inventories. The Craven Group is comprised
of the following affiliate entities:
* Craven and Ruth, Inc. - merchandise sales, factoring, distribution
* The Craven Companies, LLC- management services to Craven Group Companies
* Craven and Ruth Promotions, LLC. - retail and wholesale liquidations
* High Point Furniture Liquidators, LLC - retail and wholesale
liquidations
* Craven Merchandise Distributors, LLC- furniture factoring and distribution
* Craven Advisory Group, LLC - business consulting services
* Craven Valuation Services, LLC - retail inventory valuations and
appraisals
* Craven Capital Partners, LLC - principal purchasers of retail
inventory and assets from distressed retailers (inventory liquidated
by other Craven entities)
* Promo Services, LLC - provider of sign materials and promotion
advertising preparation and placement of advertising
* CrossStone Capital Group, LLC - investment and merchant banking.
The Craven Group employs seven full-time professionals who have extensive
financial, retail, and liquidation experience. Craven also has 50 professionals
who are contracted with on an as needed basis to assist in Craven's
implementation of its liquidation methodology. These contracted human resources
assist with appraisals and evaluations, liquidations, and marketing activities.
As additional support, Craven has an adequate back-office staff of four to
handle the collective activities of the group.
Craven uses a proprietary financial model and analysis to value inventories. The
model incorporates many variables including US economic indicators and industry
information such as gross profit margins, turnover, age, product mix,
distribution channels, computability, seasonality, and market values, then
compares the results to data of competitive retailers, manufacturers, or
wholesales. In the past, the Craven model has been applied in its "fee-based
liquidation" business - i.e., where clients retain Craven to conduct liquidation
sales and promotions. While Craven will continue operating a fee-based
practice, it intends to become an "equity" liquidator - i.e., where Craven, as a
principal, acquires the assets and then determines the most appropriate
means of liquidation, disposition, or positioning of the assets.
Though Craven, as an equity liquidator, would initially be the smallest
of 8 national liquidators of consumer products inventories, the potential
returns are expected to be quite significant - far surpassing the income
potential of fee-based business. In many instances, the larger liquidators form
joint ventures to acquire large inventories (at auctions, in bankruptcies,
etc.). These arrangements reduce competition and, in turn, improve profit
potential. To date, Craven has lacked the necessary capital to participate as a
principal in such transactions. However, UAC is presently pursuing a placement
of $100,000,000 via a debt securities offering and/or by securing a revolving
line of credit. To date, in preliminary discussions with institutional funders,
UAC's proposal has been very well received.
UAC shall have has its initial directors:
* Mark Craven, Chairman of the Board of Directors
* Arnold E. Pitoniak, Chief Executive Officer
* William F. Ruth, Executive Vice President,
Retail Liquidation Services
* Michael Gilbert, Chief Financial Officer and Treasurer
of UAC
* Timothy A. Holly, Director of UACI
* Nicholas J. Coolidge, Director of UACI
---------------------------------------
The Craven Companies LLC and Affiliates
12 Months projected 2001
Total Revenues $ 49,192,000
Operating Costs/Expenses 41,006,000
EBITDA 8,186,000
UAC currently derives its income via fee-based litigation consulting, small
"equity" liquidation transactions where the company, as a principal, acquires
the assets and then determines the most appropriate means of liquidation,
disposition or positioning of those assets, and consulting fees from services
to liquidation clients including valuations, financing, marketing and
advertising. However, with a large line of credit facility which the company is
currently negotiating of $100,000,000, UAC would be able to participate in much
larger "equity" principal liquidation transactions. Although there is no
guarantee of this funding, several institutional investors have expressed a
strong interest in a preferred offering or debt instrument financing in the form
of a secured line of credit.
However, these pro forma numbers post-closing reflect certain financings
and other assumptions which are not the control of management or the company.
Certain statements, estimates and forward-looking projections prepared by the
company may not be representative of future outcome. The company makes no
representation as to their attainability, nor can any such representation be
implied. In addition, because the estimates and assumptions underlying such
projections are inherently subject to significant economic, market, and
regulatory uncertainty and contingencies, which are difficult or impossible to
predict accurately and are beyond the company's control, there is significant
risk that the projections will not be realized. Accordingly, actual results may
be materially different from those projected.
Legal Proceedings
Neither the Company nor any of our affiliates are a party, nor is any of their
property subject, to material pending legal proceedings or material proceedings
known to be contemplated by governmental authorities. The Company is expected
to be involved from time to time in various claims, actions and lawsuits
incidental to its business. The Company believes the ultimate liability there
under, if any, will not have a material affect on the financial condition of the
Company.
Item 7. Financial Statements, Pro-Forma Financial Information and Exhibits.
(a) Financial Statements of Business to be acquired.
<TABLE>
CRAVEN & RUTH, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)
Total
Receivable Retained Shareholders'
Common Stock From Earnings Equity
Shares Amount Shareholders (Deficit) (Deficiency)
<S> <C> <C> <C> <C> <C>
INITIAL CAPITALIZATION OF
THE COMPANY (Feb. 1, 1998) 1,000 $ 1,000 $ 1,000
Receivable from
shareholders $ (1,000) $ (1,000)
Distributions to
shareholders $ (17,000) $(17,000)
Net Income 14,080 14,080
------- -------- ------------- ---------- ------------
BALANCE (DEFICIENCY)AT
DEC. 31, 1998 1,000 1,000 (1,000) (2,920) (2,920)
Distributions to
shareholders ------- -------- ------------ (75,000) (75,200)
Net Income 83,702 83,702
BALANCE (DEFICIENCY) AT
DEC. 31, 1999 1,000 (1,000) 5,582 5,582
ACTIVITY JANUARY 1, 2000 THROUGH
JUNE 30, 2000
Distributions to
shareholders (40,200) (40,200)
Net Income -------- -------- ------------ 50,400 50,400
BALANCE AT JUNE 30, 2000 $ 1,000 $(1,000) $ 15,782 $ 15,782
</TABLE>
<PAGE>
CRAVEN & RUTH, INC.
BALANCE SHEETS
(Unaudited)
<TABLE>
December 31, December 31, June 30,
1998 1999 2000
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,787 $ 7,493
Accounts receivable $ 3,633 24,966 49,134
Prepaid expenses and other
current assets 184 473 0
Total Current Assets 4,017 30,226 56,627
PROPERTY AND EQUIPMENT, NET 7,848 45,069 39,654
TOTAL ASSETS $ 11,865 $ 75,295 $ 96,281
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES
Accounts payable and
other accrued expenses $ 14,785 $ 43,802 $ 58,100
Current maturities of
long-term debt 6,994 7,096
Total current liabilities 14,785 50,796 65,196
LONG-TERM DEBT 18,917 15,303
SHAREHOLDERS' EQUITY (DEFICIENCY)
Common stock $1 par value,
100,000 shares authorized;
1,000 shares issued and
outstanding 1,000 1,000 1,000
Receivable from shareholders (1,000) (1,000) (1,000)
Retained earning (deficit) (2,920) 5,582 15,782
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIENCY) $ 11,865 $ 75,295 $96,281
</TABLE>
<PAGE>
CRAVEN & RUTH, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
From
February 1, 1998 Six-month
(Date of Inception) Year Ended Period Ended
To December 31, 1998 December 31, 1999 June 30, June 30,
2000 2000
<S> <C> <C> <C> <C> December 31,
June
REVENUES $ 211,287 $ 2,073,145 $ 486,279 $1,141,908
COST OF REVENUES 46,827 1,493,441 222,506 659,203
GROSS PROFIT 164,460 579,704 263,773 482,705
OPERATING EXPENSES 148,562 487,758 103,875 425,231
DEPRECIATION 1,479 7,980 3,990 6,719
OPERATING INCOME 14,419 83,966 155,908 50,755
INTEREST EXPENSE 339 264 355
NET INCOME $ 14,080 $ 83,702 $ 155,908 $ 50,400
</TABLE>
<PAGE>
CRAVEN & RUTH, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
Period From
February 1, 1998 Year Ended Six-Month Period Ended
(Date of Inception)To December 31, June 30, June 30,
December 31, 1998 1999 1999 2000
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 14,080 $ 83,702 $ 155,908 $ 50,400
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation 1,479 7,980 3,990 6,719
Changes in operating assets
and liabilities:
Accounts receivable and
other accrued expenses (3,833) (21,133) (21,635) (24,188)
Prepaid expenses and other
current assets (184) (289) 184 473
Accounts payable and other
accrued expenses 14,785 29,017 (5,864) 14,298
---------- ------------ ----------- -----------
Net cash provided by operating
activities 26,327 99,277 132,583 47,722
INVESTING ACTIVITIES - Purchases of
property and equipment (9,327) (16,365 (4,164) (1,304)
FINANCING ACTIVITIES:
Proceeds from long-term debt 4,018
Principal repayments on long-term debt (4,018) (2,925) (3,512)
Distributions to shareholders (17,000) (75,200) (28,000) (40,200)
Net cash used in financing
activities (17,000) (78,125) (28,000) (43,712)
NET INCREASE IN CASH AND CASH EQUIVALENT 4,787 100,419 2,706
CASH AND CASH EQUIVALENTS
Beginning of period 4,787
End of period 4,787 100,419 7,493
SUPPLEMENTAL DISCLOSURES
Cash paid for interest 339 264 355
Receivable from shareholders for
purchase of common stock 1,000 1,000 1,000 1,000
</TABLE>
<PAGE>
(b) Pro-Forma Financial Information
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL
INFORMATION OF THE COMPANY
The following unaudited pro forma consolidated financial information gives
effect to the acquisition of United American Companies, Inc. and its
subsidiaries ("UAC") by Providence Capital I, Inc. ("PCI") as if it had occurred
on January 1, 1999 and January 1, 2000, respectively, in the case of the
unaudited pro forma consolidated statements of income of the company and on
June 30, 2000 in the case of the unaudited pro forma consolidated balance sheet
of the company.
The acquisition will be accounted for as a reverse acquisition whereby UAC
(Oldco) will be treated as if it acquired PCI in an exchange of stock, whereby
PCI was the surviving organization, followed by a recapitalization. The book
values of the assets and liabilities of UAC (Oldco) remain the same and
carryforward, with no goodwill being recorded, Subsequent to the transaction,
PCI changed its name to United American Companies, Inc. (Newco).
The pro forma consolidated financial data is presented for illustrative purposes
only and is not necessarily indicative of what the company's financial position
or results of operations would have been had the transaction occurred as of the
above referenced dates or of the financial position or results that may be
reported by the company in the future.
The pro forma consolidated financial information should be read in conjunction
with the historical statements of Craven and Ruth, Inc. and PCI and the related
notes thereto.
<PAGE>
UNITED AMERICAN COMPANIES, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF INCOME (FOR THE ACQUISITION)
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
United
Historical Proforma American
Craven and Providence Adjustments Companies, Inc.
Ruth, Inc. Capital I, Inc.
<S> <C> <C> <C> <C>
REVENUES $ 2,073,145 $ 2,073,145
COST OF REVENUES $ 1,493,441 $ 1,493,441
----------- --------------- ------------ ------------
GROSS PROFIT $ 579,704 579,704
OPERATING EXPENSES 487,758 18,414 506,172
DEPRECIATION 7,980 7,980
----------- --------------- ------------ ------------
OPERATING INCOME 83,966 (18,414) 65,288
INTEREST EXPENSE 264 264
----------- --------------- ------------ ------------
INCOME BEFORE INCOME
TAXES 83,702 (18,414) 65,288
INCOME TAXES 15,117 15,117
----------- --------------- ------------ ------------
NET INCOME 83,702 (18,414) (15,117) 50,171
</TABLE>
See Notes to unaudited financial statements
Notes to Unaudited Proforma Financial Statements
(1) To reflect federal and state income taxes due on taxable income, if the
corporation, formerly an "S" corporation whereby income was taxed to the
shareholders, were to be liable for such taxes at the corporate level.
<PAGE>
UNITED AMERICAN COMPANIES, INC AND SUBSIDIARIES
PROFORMA CONSOLIDATED STATEMENT OF INCOME (FOR THE ACQUISITION)
FOR THE SIX MONTHS ENDED JUNE 30, 2000
(Unaudited)
<TABLE>
Historical United
The Craven American
Craven And Companies, Providence Proforma Companies, Inc.
Ruth, Inc. LLC Capital I, Inc. adjustments Proforma
<S> <C> <C> <C> <C> <C>
REVENUES $1,141,908 $1,141,908
COST OF REVENUES 659,203 659,203
---------- ---------- --------------- ----------- ----------
GROSS PROFIT 482,705 482,705
OPERATING EXPENSES 425,231 $ 47,106 $ 5,371 477,708
DEPRECIATION 6,719 6,719
---------- ---------- -------------- ---------- ----------
OPERATING INCOME
(LOSS) 50,755 $ (47,106) (5,371) (1,722)
INTEREST EXPENSE 355 355
INCOME (LOSS) BEFORE
TAXES 50,400 (47,106) (5,371) (2,077)
INCOME TAX PROVISION--------- ---------- --------------(1) ----------- -----------
NET INCOME (LOSS) $ 50,400 $ (47,106) $ (5,371) $ (2,077)
</TABLE>
See notes to unaudited proforma financial statements
Notes to Unaudited Proforma Financial Statements
(1) No provision for income taxes in made due to absence of proforma
consolidated taxable income
<PAGE>
<TABLE>
<CAPTION>
UNITED AMERICAN COMPANIES, INC. AND SUBSIDIARIES
PROFORMA CONSOLIDATED BALANCE SHEET (FOR THE ACQUISITION)
AS OF JUNE 30, 2000
(Unaudited)
Historical
United United American
Craven and The Craven American Providence Proforma Companies, Inc.
Ruth, Inc. Companies, LLC Companies, Inc. Capital I, Inc. Adjustments Proforma
<S> <C> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS
Cash and Cash equivalents $ 7,493 698 $ 8,191
Accounts receivable 49,134 49,134
Total Current Assets 56,627 57,325
PROPERTY AND EQUIPMENT, NET 39,654 39,654
Total Assets 96,281 698 96,979
LIABILITIES AND
SHAREHOLDERS' EQUITY
(DEFICIENCY)
CURRENT LIABILITIES
Accounts Payable and other
accrued expenses 58,100 47,106 17,325 (17,325)(1) 105,206
Curent maturities of long-
term debt 7,096 7,096
Total Current Liabilities 65,196 47,106 17,325 (17,325) 112,302
LONG TERM DEBT 15,303 15,303
SHAREHOLDERS' EQUITY
(DEFICIENCY)
Preferred stock, $.001 par
value, 50,000,000 shares
authorized and
outstanding: none
Common stock, $.001 par
value, 50,000,000 shares
authorized and 15,000,000
outstanding 1,000 698 1,500 11,802(2) 15,000
Paid in Capital 4,960 (4,960)(2)
Receivable from shareholders (1,000) (1,000)
Retained earnings (deficit) 15,782 (47,106) 698 (23,785) 10,483 (2) (44,626)
Total shareholders' equity
(deficiency) 15,782 (47,106) 698 (17,325) 17,325 (30,626)
Total liabilities and
shareholders' equity
(deficiency) 96,281 698 96,979
</TABLE>
(c) Exhibits.
1. Plan of Merger, dated as of August 16, 2000, by and among Providence
Capital I, Inc, and United American Companies, Inc.
SIGNATURE
Pursuant to the requirements 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.
UNITED AMERICAN COMPANIES, INC.
By: /s/ Arnold E. Pitoniak
Arnold E. Pitoniak, Chief Executive Officer
Dated: November 8, 2000
