================================================================================
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-SB/A
Amendment No. 2
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
CREATIVE VISTAS, INC.
(Name of Small Business Issuer in its charter)
Arizona 86-0464104
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4909 East Mcdowell Road, Suite 100
Phoenix, Arizona 85008
(Address of principal executive offices) (Zip Code)
(602) 225-0504
(Issuer's telephone number)
Securities to be Registered Pursuant to Section 12(b) of the Act:
None
Securities to be Registered Pursuant to Section 12(g) of the Act:
Common Stock, No Par Value
(Title of Class)
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
PART I
Item 1. Description of Business.............................................. 1
Item 2. Plan of Operation.................................................... 3
Risk Factors......................................................... 7
Item 3. Description of Property.............................................. 11
Item 4. Security Ownership of Certain Beneficial Owners and Management....... 11
Item 5. Directors, Executive Officers, Promoters and Control Persons......... 12
Item 6. Executive Compensation............................................... 13
Item 7. Certain Relationships and Related Transactions....................... 14
Item 8. Description of Securities............................................ 14
PART II
Item 1. Market Price of and Dividends on the Registrant's Common
Equity and other Shareholder Matters .............................. 15
Item 2. Legal Proceedings.................................................... 16
Item 3. Changes in and Disagreements with Accountants........................ 16
Item 4. Recent Sales of Unregistered Securities.............................. 16
Item 5. Indemnification of Directors and Officers............................ 16
PART F/S
Financial Statements......................................................... 17
PART III
Item 1. Index to Exhibits.................................................... 18
i
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
Creative Vistas, Inc. (the "Company"), was incorporated on July 18, 1983,
under the laws of the State of Arizona to engage in any lawful corporate
purpose. The Company was originally incorporated under the name Vista Financial
Services, Inc. and was a wholly-owned subsidiary of Century Pacific Corporation
("Century Pacific"). In 1993, the Company filed a petition for reorganization
under Chapter 11 of the United States Bankruptcy Code (Case No.
B93-05704-PHX-GBN). Century Pacific also filed a petition for reorganization
under the Chapter 11 of the United States Bankruptcy Code (Case No.
B96-00935-PHX-GBN). The Company's modified plan of reorganization was confirmed
by the Bankruptcy Court on November 27, 1996, and, in connection therewith, the
Company's Common Stock previously owned by Century Pacific was exchanged for two
and one-half percent (2.5%) of the post-reorganization Common Stock of the
Company. An additional two and one-half percent (2.5%) of the
post-reorganization Common Stock of the Company was distributed under the
Century Pacific plan of reorganization, and the remaining ninety-five percent
(95%) was issued in satisfaction of rent obligations owing by the Company.
Thereafter, on March 12, 1997, the Company changed its name to Creative Vistas,
Inc. Prior to the bankruptcy filing, the Company was engaged in the secondary
market mortgage loan brokerage business. The Company has conducted no ongoing
business activities since 1996 and is currently in the developmental and
promotional stages.
The Company's business plan at this time is to locate and consummate a
merger or acquisition (the "business combination"), with a private entity (the
"business opportunity"). The proposed business activities classify the Company
as a "blank check" or "shell" company. Many states have enacted statutes, rules
and regulations limiting the sale of securities of "blank check" companies in
their respective jurisdictions.
Management does not intend to undertake any efforts to cause a market to
develop in the Company's securities or undertake any offering of the Company's
securities, either debt or equity, until such time as the Company has
successfully implemented its business plan and/or merged or combined with
another company.
The Company is filing this registration statement on a voluntary basis to
make information concerning itself more readily available to the public. The
primary attraction of the Company as a merger partner or acquisition vehicle
will be its status as a public company. Any business combination will likely
result in a significant issuance of shares and substantial dilution to present
stockholders of the Company. As a result of filing this registration statement,
the Company is obligated to file with the Securities Exchange Commission (the
"SEC"), certain interim and periodic reports including an annual report
containing audited financial statements. The Company intends to continue to
voluntarily file these periodic reports with the SEC. Any business opportunity
will become subject to the same reporting requirements as the Company upon
consummation of a business combination with the Company.
<PAGE>
INVESTMENT COMPANY ACT OF 1940
Although the Company will be subject to regulation under the Securities Act
of 1933, as amended, (the "Act"), and the Securities Exchange Act of 1934, as
amended, (the "Exchange Act"), management believes the Company will not be
subject to regulation under the Investment Company Act of 1940, as amended (the
"Investment Act"), insofar as the Company will not be engaged in the business of
investing or trading in securities. In the event the Company engages in a
business combination which results in the Company holding passive investment
interests in a number of entities, the Company may be subject to regulation
under the Investment Act. In such event, the Company would be required to
register as an investment company and may incur significant registration and
compliance costs. The Company has obtained no formal determination from the SEC
as to the status of the Company under the Investment Act and a violation of such
act may subject the Company to material adverse consequences.
INVESTMENT ADVISERS ACT OF 1940
Under Section 202(a)(11) of the Investment Act, an "investment adviser"
means any person who, for compensation, engages in the business of advising
others, either directly or through publications or writings, as to the value of
securities or as to the advisability of investing in, purchasing, or selling
securities, or who, for compensation and as part of a regular business, issues
or promulgates analyses or reports concerning securities. The Company will only
seek to locate a suitable business opportunity and does not intend to engage in
the business of advising others in investment matters for a fee or otherwise.
MARKET MAKERS
The Company has not, and does not intend to enter into discussions with
market makers regarding developing a trading market in its stock until a
qualified business opportunity is identified.
COMPETITION
There are numerous other public companies that are also seeking operating
companies and other business opportunities. The Company will be in direct
competition with these public companies in its search for business
opportunities.
FORWARD LOOKING STATEMENTS
The Company desires to take advantage of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995 and thus cautions readers
regarding forward looking statements found in the following discussion and
elsewhere in this registration statement and in any other statement made by, or
on behalf of the Company, whether or not in future filings with the SEC. Forward
looking statements are statements not based on historical information and which
relate to future operations, strategies, financial results or other
developments. Forward looking statements are necessarily based upon estimates
and assumptions that are inherently subject to significant business, economic
and competitive uncertainties and contingencies, many of which are beyond the
2
<PAGE>
Company's control and many of which, with respect to future business decisions,
are subject to change. These uncertainties and contingencies may affect actual
results and may cause actual results to differ materially from those expressed
in any forward looking statements made by or on behalf of the Company. The
Company disclaims any obligation to update forward looking statements.
EMPLOYEES
As of the date hereof, the Company does not have any employees and has no
plans for retaining employees until such time as the Company's business warrants
the expenses or until the Company successfully consummates a business
combination with an operating company.
ITEM 2. PLAN OF OPERATION
The Company is in a development stage and has very limited assets, capital,
operating expenses, and income. The costs and expenses associated with the
preparing and filing of this registration statement have been paid and all other
necessary capital, prior to locating a business opportunity, shall be provided
by present management with their personal funds as loans to the Company. The
Company anticipates that these loans will be repaid by the Company upon the
consummation of a business combination.
The Company will seek to acquire assets or shares of an entity actively
engaged in a business that generates revenues in exchange for the Company's
securities. The Company has not identified a particular business opportunity and
has not entered into any negotiations regarding any business combination. As of
the date of this registration statement, none of the Company's officers,
directors or affiliates has engaged in any preliminary contact or discussions
with a representative of any other company regarding the possibility of a
business combination between the Company and such other company.
The Company could incur significant legal and accounting costs in
connection with the consummation of a business combination.
Depending upon the nature of the business opportunity and the applicable
state statutes governing the manner in which the transaction is structured, the
Company's Board of Directors may not provide the Company's shareholders with
disclosure documentation concerning a business opportunity and/or the structure
of the proposed business combination prior to consummation of such combination.
While any such disclosure may include financial statements of the company
or companies involved, audited financial statements may not be available. The
Company's Board of Directors intends to obtain certain assurances of the value
of the business opportunity's assets prior to consummating the business
combination, with further assurances that an audited statement will be provided
within sixty days after closing.
As the Company intends to remain a shell corporation until a business
opportunity is identified, the Company's cash requirements will be minimal. The
Company does not anticipate that it will need to raise capital in the next
3
<PAGE>
twelve months. The Company also does not expect to acquire any plant or
significant equipment, or to perform any product research and development.
The Company has no full time employees. The Company does not expect any
significant changes in the number of employees. The President and Secretary of
the Company have agreed to allocate a portion of their time to the activities of
the Company without compensation. These officers anticipate devoting whatever
time may be reasonably required to the business affairs of the Company.
GENERAL BUSINESS PLAN
The following discussion of the Company's proposed business is purposefully
general and is not meant to be restrictive of the Company's discretion to search
for business opportunities and to enter into a business combination.
The Company's purpose is to seek, investigate, and, if such investigation
warrants, acquire an interest in a business opportunity presented to the Company
by persons or firms who or which desire to seek the perceived advantages of a
company registered with the SEC. The Company will not restrict its search to any
specific business, industry, or geographical location. Management anticipates
that it may be able to participate in only one potential business opportunity
because the Company has nominal assets and limited financial resources. This
lack of diversification is a substantial risk to Company shareholders as it will
not permit the Company to offset potential losses from one venture against gains
from another.
The Company may seek a business combination with an entity that is in its
preliminary or development stage, has recently commenced operations, or that
wishes to use the public marketplace in order to raise additional capital to
expand or develop new products, services or markets, or for other corporate
purposes. It is not possible to predict at this time the status of the business
opportunity with which the Company may become engaged. Such business opportunity
may require additional capital, desire to have its shares publicly traded, or
seek other perceived advantages which the Company may offer. The Company may
acquire assets and establish wholly owned subsidiaries in various businesses or
acquire existing businesses as subsidiaries.
The Company does not intend to seek capital to finance the operation of any
acquired business opportunity until such time as the Company has successfully
consummated the business combination. Furthermore, the Company has, and will
continue to have, no capital to provide to the business opportunity. Management
believes the Company will be able to offer owners of the business opportunity
the opportunity to acquire a controlling ownership interest in a publicly
registered company without incurring the cost and time required to conduct an
initial public offering.
The Company anticipates that the selection of a business opportunity in
which to participate will be complex and extremely risky. Due to general
economic conditions, rapid technological advances in some industries, and
shortages of available capital, management believes that there are numerous
firms seeking the perceived benefits of a publicly registered corporation. Such
perceived benefits include facilitating or improving the terms on which
additional equity financing may be sought, providing liquidity for incentive
stock options or similar benefits to key employees, and providing liquidity
4
<PAGE>
(subject to restrictions of applicable statutes) for all shareholders. Available
business opportunities may occur in different industries and at various stages
of development, all of which will make the task of comparative investigation and
analysis of such business opportunities difficult and complex.
The analysis of new business opportunities will be undertaken by, or under
the supervision of, the officers and directors of the Company. Management
intends to concentrate on identifying prospective business opportunities which
may be brought to its attention through present associations of the Company's
officers, directors, or shareholders. In analyzing prospective business
opportunities, management will review the operations of the business opportunity
and focus on such matters as: available technical, financial and managerial
resources; working capital and other financial requirements; history of
operations; prospects for the future; nature of present and expected
competition; quality, experience, and the depth of management services which may
be available; potential for further research, development, or exploration; risk
factors not now foreseeable but which at a later point may be anticipated to
impact the proposed activities of the Company; potential for growth, expansion
or profit; perceived public recognition or acceptance of products, services, or
trades; name identification; and other relevant factors. To the extent possible,
the Company intends to utilize written reports and personal investigations to
evaluate the above factors.
Management of the Company shall rely upon their own efforts and, to a much
lesser extent, the efforts of the Company's shareholders, in accomplishing the
business purposes of the Company. It is not anticipated that any outside
consultant or advisor, except for the Company's legal counsel and accountants,
will be necessary to effectuate the Company's business purposes. If the Company
does retain an outside consultant or advisor, it is likely that any cash fee
earned by such party would be paid by the prospective business opportunity. The
Company has no contracts or agreements with any outside consultant or advisor.
ACQUISITION OF OPPORTUNITIES
In implementing a structure for a particular business combination, the
Company may become a party to a merger, consolidation, reorganization, joint
venture, or licensing agreement with another corporation or entity. It may also
acquire stock or assets of an existing business. Upon the consummation of a
business combination, the present management and shareholders of the Company may
lose control of the Company. The Company's directors may, as part of the terms
of the business combination, sell their stock in the Company, or resign and be
replaced by new directors without a vote of the Company's shareholders. Any and
all such sales will only be made in compliance with the securities laws of the
United States and any applicable state.
It is anticipated that the securities issued in any such reorganization
would be issued in reliance upon an exemption from registration under applicable
federal and state securities laws. However, the Company may agree, as a
negotiated element of its transaction, to register all or a part of such
securities immediately or at specified times after the transaction is
consummated. If such registration occurs, it will be undertaken by the surviving
entity after the Company has successfully consummated a business combination and
the Company is no longer considered a "shell" company. Until such business
combination, the Company will not register any additional securities. The
5
<PAGE>
issuance of additional securities after the business combination and their
potential sale into any trading market which may develop in the Company's
securities, may result in a devaluation of the Company's securities.
While the actual terms of the business combination may not be predicted at
this time, it may be expected that the parties to the business combination will
find it desirable to avoid the creation of a taxable event and thereby structure
the acquisition in a so-called "tax-free" reorganization under Sections
368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to obtain
tax-free treatment under the Code, it may be necessary for the owners of the
acquired business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would retain 20% or less
of the issued and outstanding shares of the surviving entity. The consummation
of a business combination pursuant to such "tax-free" reorganization would
result in significant dilution in the equity of such shareholders.
As part of the Company's "due diligence" investigation of a business
opportunity, officers and directors of the Company may meet with management and
key personnel of the business opportunity, visit and inspect material
facilities, obtain independent analysis of verification of information provided,
check references of management and key personnel, and take other reasonable
investigative measures to the extent of the Company's limited financial
resources and management expertise. The manner in which the Company participates
in a business opportunity depends on the nature of the opportunity, the
respective needs and desires of the Company, the management of the opportunity
and the relative negotiating strength of the Company and such other management.
With respect to any potential business combination, negotiations will take
place concerning the percentage of the Company which the other party's
shareholders or owners would acquire in exchange for their Company's
contribution to the transaction. Depending upon the business opportunity's
assets and liabilities, the Company's shareholders may hold a substantially
smaller percentage ownership interest in the Company following a business
combination. Any business combination could severely dilute the percentage
interest of shares held by the Company's shareholders.
The Company may participate in a business combination only after the
execution of written agreements. Although the terms of such agreements cannot be
predicted, generally such agreements will require some specific representations
and warranties by the parties, specify certain events of default, detail the
terms of closing and the conditions that must be satisfied by each of the
parties prior to and after such closing, outline the manner of bearing costs,
including costs associated with the Company's attorneys and accountants, set
forth remedies on default, and include other miscellaneous terms.
As stated previously, the Company will not consummate a business
combination with an entity that cannot provide independent audited financial
statements within a reasonable period of time after closing of the proposed
transaction. Upon the filing of this registration statement, the Company will
become subject to the reporting requirements of the Exchange Act. Included in
these requirements is the affirmative duty of the Company to file independent
audited financial statements as part of its annual report on Form 10-K (or
10-KSB, as applicable) and as part of its Form 8-K to be filed with the SEC upon
6
<PAGE>
realization of a business combination. If such audited financial statements are
not available at closing, or within the time parameters necessary to ensure the
Company's compliance with the requirements of the Exchange Act, or if the
audited financial statements provided do not conform to the business
opportunity's representations set forth in the closing documents, the proposed
business combination will be voidable at the discretion of the management of the
Company pursuant to provisions in the Closing Documents setting forth such
right. The closing documents will also provide that, if the proposed business
combination is voided, the business opportunity will reimburse the Company for
all costs associated with the proposed transaction.
RISK FACTORS
The Company's business is subject to numerous risk factors, including the
following:
THE COMPANY HAS NO OPERATING HISTORY, REVENUES, OR EARNINGS FROM OPERATIONS
SINCE DECEMBER 1996. The Company faces many of the risks of a new business and
many of the special risks inherent in the investigation, or interest in a new
business opportunity. Moreover, the Company has no significant assets or
financial resources. The Company will, in all likelihood, sustain operating
expenses without corresponding revenues until the consummation of a business
combination. This may result in the Company incurring a net operating loss that
will increase until the Company is able to consummate a business combination
with a profitable business opportunity. There is no assurance that the Company
will be able to identify such a business opportunity and consummate such a
business combination.
THE COMPANY'S PLAN OF OPERATION IS SPECULATIVE AND THE COMPANY MIGHT NEVER
SUCCESSFULLY CONSUMMATE A BUSINESS COMBINATION. The Company may not be
successful in (i) identifying a suitable business opportunity, (ii) consummating
a business combination, or (iii) negotiating a business combination on terms
favorable to the Company. Management has not identified any particular industry
or specific business within an industry for evaluation by the Company.
The Company has not established a specific length of operating history or a
specified level of earnings, assets, net worth, or other criteria which it will
require a business opportunity to have achieved. Accordingly, the Company may
enter into a business combination with a business opportunity having
characteristics that are indicative of development stage companies such as no
significant operating history, losses, limited or no potential for earnings,
limited assets, or negative net worth.
7
<PAGE>
The success of the Company's proposed plan of operation depends on the
operations, financial condition and management of the business opportunity.
While management intends to seek a business opportunity with an established
operating history, the Company may not be successful in locating such a
candidate. In the event the Company consummates a business combination, the
success of the Company's operations may be dependent upon management of the
successor firm or venture partner firm and numerous other factors beyond the
Company's control. As the Company has not identified and has no commitments to
enter into a business combination, the Company is only able to make general
disclosures concerning the risks and hazards of acquiring a business
opportunity.
A BUSINESS COMBINATION COULD RESULT IN A CHANGE IN CONTROL AND MANAGEMENT
OF THE COMPANY. A business combination involving the issuance of the Company's
Common Stock will likely result in shareholders of the business opportunity
obtaining a controlling interest in the Company. Any such business combination
may require management of the Company to sell or transfer all, or a portion of,
the Company's Common Stock held by them, or resign as members of the Board of
Directors of the Company. The resulting change in control of the Company may
result in the removal of one or more of its present officers or directors and a
corresponding reduction in, or elimination of, their participation in the future
affairs of the Company. Such change in control is likely to occur without the
vote or consent of the shareholders of the Company.
A BUSINESS COMBINATION COULD SEVERELY DILUTE THE PERCENTAGE OF SHARE
OWNERSHIP HELD BY SHAREHOLDERS OF THE COMPANY. The Company's primary plan of
operation is based upon a business combination which would likely result in the
Company issuing securities to shareholders of a business opportunity. The
issuance of previously authorized and unissued Common Stock of the Company would
result in the reduction in the percentage of shares owned by present and
prospective shareholders of the Company and may result in a change in control or
management of the Company.
CURRENTLY THERE IS NO TRADING MARKET AND THERE MIGHT NEVER EXIST A TRADING
MARKET FOR THE COMPANY'S SECURITIES. A trading market may not develop and
shareholders may not be able to liquidate their investment without considerable
delay. If a market should develop, the price of the Company's stock may be
highly volatile.
IF AND WHEN THE COMPANY'S SECURITIES BECOME AVAILABLE FOR TRADING, THEY
WILL LIKELY BE SUBJECT TO THE "PENNY" STOCK REGULATION OF RULE 15G-9 OF THE
EXCHANGE ACT. The Rule 15g9 of the Exchange Act is commonly referred to as the
"penny stock" rule and imposes special sales practice requirements upon
broker-dealers who sell such securities to persons other than established
customers or accredited investors. A penny stock is any equity security with a
market price less than $5.00 per share, subject to certain exceptions. Rule
3a51-1 of the Exchange Act provides that any equity security is considered a
penny stock unless that security is: registered and traded on a national
securities exchange and meets specified criteria set forth by the SEC;
authorized for quotation on the Nasdaq Stock Market; issued by a registered
investment Company; issued with a price of five dollars or more; or issued by an
issuer with net tangible assets in excess of $2,000,000. This rule may affect
the ability of broker-dealers to sell the Company's securities.
8
<PAGE>
For transactions covered by Rule 15g-9, a broker-dealer must furnish to all
investors in penny stocks a risk disclosure document, make a special suitability
determination of the purchaser, and receive the purchaser's written agreement to
the transaction prior to the sale. In order to approve a person's account for
transactions in penny stocks, the broker-dealer must (i) obtain information
concerning the person's financial situation, investment experience, and
investment objectives; (ii) reasonably determine, based on that information that
transactions in penny stocks are suitable for the person and that the person has
sufficient knowledge and experience in financial matters to reasonably be
expected to evaluate the transactions in penny stocks; and (iii) deliver to the
person a written statement setting forth the basis on which the broker-dealer
made the determination of suitability stating that it is unlawful to effect a
transaction in a designated security subject to the provisions of Rule
15g-9(a)(2) unless the broker-dealer has received a written agreement from the
person prior to the transaction. Such written statement from the broker-dealer
must also set forth, in highlighted format immediately preceding the customer
signature line, that the broker-dealer is required to provide the person with
the written statement and the person should sign and return the written
statement to the broker-dealer only if it accurately reflects the person's
financial situation, investment experience and investment objectives.
MANAGEMENT WILL DEVOTE A LIMITED AMOUNT OF TIME TO PURSUE COMPANY
OPERATIONS. While seeking a business combination, management anticipates
collectively devoting whatever time may be reasonably required to the business
of the Company.
THE LOSS OF MEMBERS OF MANAGEMENT COULD MAKE IT DIFFICULT FOR THE COMPANY
TO CARRY OUT ITS PLAN OF OPERATION. None of the Company's officers or directors
has entered into a written employment agreement and none is expected to do so in
the foreseeable future. Loss of the services of any of these individuals would
adversely affect development of the Company's business and its likelihood of
continuing operations.
THERE ARE SEVERAL CONFLICTS OF INTEREST WHICH MAY ARISE IN CONNECTION WITH
A BUSINESS COMBINATION. The Company's officers or directors may participate in
other businesses which may have a purpose similar to that of the Company, or be
deemed to compete directly with the Company. Additional conflicts of interest
and non-arms length transactions may also arise in the event the Company's
officers or directors are involved in the management of any firm with which the
Company transacts business. Conflicts of interest may be resolved only through
disclosure to the Company and exercise of judgment in a manner that is
consistent with the officers' and directors' fiduciary duties to the Company.
It is anticipated that the Company's principal shareholders may actively
negotiate or otherwise consent to the purchase of a portion of their Common
Stock as a condition to, or in connection with, a proposed business combination.
In this process, the Company's principal shareholders may consider their own
personal pecuniary benefit rather than the best interest of the other Company
shareholders, and the other Company shareholders are not expected to be afforded
the opportunity to approve of or consent to any particular buy-out transaction.
In addition, upon the consummation of a business combination with an
unaffiliated entity, that entity may desire to employ or retain one or a number
of members of the Company's management or Board of Directors for the purpose of
providing services to the surviving entity. Because of the potential conflict of
interest, and as a practical matter, if each member of the Company's Board of
Directors is offered compensation in any form from any prospective business
combination candidate, the proposed transaction might not be approved by the
Company's Board of Directors unless a determination can be made that the
transaction is inherently fair to the Company's shareholders.
9
<PAGE>
FINANCIAL STATEMENT REQUIREMENTS COULD DELAY OR PRECLUDE A BUSINESS
COMBINATION. Sections 13 and 15(d) of the Exchange Act require reporting
companies to provide certain information about significant acquisitions,
including certified financial statements for the company acquired, covering one,
two, or three years, depending on the relative size of the acquisition. The time
and additional costs that may be incurred by some target entities to prepare
such statements may significantly delay or essentially preclude consummation of
an otherwise desirable business combination. Business opportunities that do not
have or are unable to obtain the required audited financial statements may be
inappropriate for a business combination so long as the reporting requirements
of the Exchange Act are applicable.
THE COMPANY HAS NEITHER CONDUCTED, NOR HAVE OTHERS MADE AVAILABLE TO IT,
MARKET RESEARCH INDICATING THAT MARKET DEMAND EXISTS FOR THE TRANSACTIONS
CONTEMPLATED BY THE COMPANY. Management decisions will likely be made without
detailed feasibility studies, independent analysis, market surveys, and the
like. Moreover, the Company does not have, and does not plan to establish, a
marketing organization.
THE COMPANY BELIEVES IT IS AT A DISADVANTAGE WITH ITS COMPETITORS IN ITS
SEARCH FOR A BUSINESS OPPORTUNITY. A large number of established and
well-financed entities are active in seeking business combinations with
companies that may be desirable business opportunities for the Company. The
Company expects to be at a disadvantage when competing with firms with
significantly greater financial resources, technical expertise and managerial
capabilities than the Company and, consequently, the Company will be at a
competitive disadvantage in identifying possible business opportunities and
successfully consummating a business combination. Moreover, the Company will
compete with numerous small public companies in seeking business combination
candidates. These competitive conditions will exist in any industry in which the
Company may become interested.
A BUSINESS COMBINATION COULD RESULT IN A LACK OF DIVERSIFICATION AND
INCREASED RISKS. The Company's proposed operations, even if successful, will in
all likelihood result in the Company engaging in a business combination with a
single business opportunity. Consequently, the Company's activities may be
limited to those engaged in by the business opportunity. The Company's inability
to diversify its activities into a number of areas may subject the Company to
economic fluctuations within a particular business or industry and therefore
increase the risks associated with the Company's operations.
COMPLIANCE WITH THE INVESTMENT COMPANY ACT OF 1940 OR OTHER GOVERNMENT
REGULATION COULD DELAY OR PRECLUDE A BUSINESS COMBINATION. Although the Company
will be subject to the reporting requirements under the Exchange Act, management
believes the Company will not be subject to regulation under the Investment Act,
insofar as the Company will not be engaged in the business of investing or
trading in securities. In the event the Company engages in business combinations
which result in the Company holding passive investment interests in a number of
entities, the Company may be subject to regulation under the Investment Act.
Under such act, the Company would be required to register as an investment
company and would thereby incur significant registration and compliance costs.
The Company has obtained no formal determination from the SEC as to the status
of the Company under the Investment Act and violation of such Act may subject
the Company to material adverse consequences. See "Description of Business -
Investment Company Act of 1940."
Additionally, the Company may engage in a business combination with a
company that is subject to regulation or licensing by federal, state or local
authorities. Compliance with such regulations and licensing may be a
time-consuming, expensive process and may limit other investment opportunities
of the Company.
10
<PAGE>
A BUSINESS COMBINATION COULD RESULT IN ADVERSE FEDERAL AND STATE TAX
CONSEQUENCES. The Company intends to structure any business combination so as to
result in tax-free treatment or to minimize the federal and state tax
consequences to both the Company and the business opportunity. See "Plan of
Operation-Acquisition of Opportunities." However, such business combination may
not meet the statutory requirements of a tax-free reorganization and the parties
may not obtain the intended tax-free treatment upon a transfer of stock or
assets. A non-qualifying reorganization may result in the imposition of both
federal and state taxes which may have an adverse effect on both parties to the
transaction.
ITEM 3. DESCRIPTION OF PROPERTY
The Company has no properties and at this time has no agreements to acquire
any properties. The Company also has no present plans to acquire any assets or
make any investments prior to completing a business combination.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
MANAGEMENT
The table below lists the beneficial ownership of the Company's voting
securities by each person known by the Company to be the beneficial owner of
more than 5% of such securities, as well as the securities of the Company
beneficially owned by all officers and directors of the Company. Unless
otherwise indicated, the shareholders listed possess sole voting and investment
power with respect to the shares shown.
Title of Name and Address Amount and Nature of Percent of
Class of Beneficial Owner Beneficial Owner Class
----- ------------------- ---------------- -----
Common Ronald E. Warnicke 474,778 (1) 47.5%
Common Rudy R. Miller 419,760 (2) 42.0%
Common Tudor Investments Ltd.
Profit Sharing Plan 474,778 47.5%
Common Miller Capital Corporation 419,760 42.0%
Common Mary A. Nance 25,000 2.5%
Common Officers and Directors
as a Group 919,538 92.0%
- ----------
(1) Represents shares held by Tudor Investments Ltd. Profit Sharing Plan, all
of which are beneficially owned by Mr. Warnicke.
(2) Represents shares held by Miller Capital Corporation, all of which are
beneficially owned by Mr. Miller.
11
<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and officers of the Company are as follows:
Name Age Position
- ---- --- --------
Rudy R. Miller 53 President and Director
Ronald E. Warnicke 60 Vice President, Secretary and
Director
Mary A. Nance 57 Treasurer
The above listed officers and directors will serve until the next annual
meeting of the shareholders or until their death, resignation, retirement,
removal, disqualification, or until their successors have been duly elected and
qualified. Vacancies in the existing Board of Directors will be filled by
majority vote of the remaining directors. Officers of the Company serve at the
will of the Board of Directors.
BIOGRAPHICAL INFORMATION
RUDY R. MILLER is President and a Director of Creative Vistas, Inc. and
also serves as Chairman, President and Chief Executive Officer of Miller Capital
Corporation, a part of The Miller Group, which is involved in private corporate
finance, mergers and acquisitions, and management and investor relations
consulting. He currently serves on the Board of Directors of Directrix, Inc., a
public company headquartered in New York City, that provides television
production and delivery, as well as Internet hosting services, and on the Board
of Directors of Global Entertainment Corporation, a public holding company for
sports and entertainment venues. He is also Vice Chairman of Finance for THE
RITZ-CARLTON(R) MAGAZINE published by SCG, Inc. He is a member of the Institute
of Management Consultants headquartered in New York City. Mr. Miller has
extensive public company board experience having served as a board member and
committee chairman for a dozen public companies, including such national
corporations as America West Airlines, Inc. and Jacor Communications, Inc. He
served as a National Association of Securities Dealers ("NASD") arbitrator for
over twenty years. Mr. Miller received his Bachelors and Masters of Business
Administration degrees from Pacific Western University.
RONALD E. WARNICKE is Vice President, Secretary and a Director of Creative
Vistas, Inc., and since 1989 has been a founding partner in the law firm of
Warnicke & Littler. He also serves as Vice-Chairman of Miller Capital
12
<PAGE>
Corporation and Chairman of Fitness West, Inc. He has served as attorney for
debtors, official creditors committees, and major creditors in a variety of
successful public company reorganizations, including Texscan and Circle K. In
1989, Mr. Warnicke was appointed by Judge Bilby of the United States Federal
Court as the Examiner in the American Continental bankruptcy proceedings
involving Charles Keating. He founded the parent company of Yugo America, where
he negotiated multiple agreements for the sale of the Pininfarina, Bertone, and
Yugo automobiles in the United States. In 1978, he was called upon by Arizona
Governor Bruce Babbitt (currently United States Secretary of the Interior), to
lead Governor Babbitt's staff through an ultimately successful re-election
campaign. Mr. Warnicke has served as President of the Young Lawyers Section of
the Arizona State Bar Association and as one of the four Directors of the
American Bar Association's largest Section. Mr. Warnicke was listed in the 1986
edition of Best Lawyers in America and has long held Martindale Hubbell's
highest attorney rating. He is a member of the Arizona State Bar. Mr. Warnicke
received his Juris Doctor from Harvard Law School.
MARY A. NANCE is Treasurer of Creative Vistas, Inc., and Executive Vice
President and Chief Administrative Officer of Miller Capital Corporation and The
Miller Group, entities that provide diversified financial consulting services
nationwide. She has been associated with The Miller Group since 1977 and has
served as an officer beginning in 1981. She previously served as Executive Vice
President of Administration and Corporate Communications for StatesWest
Airlines, a publicly held, regional airline which operated as a USAir Express
carrier and was Vice President of Administration of Miller Technology &
Communications Corporation. Mrs. Nance currently serves on the Board of
Directors of the Scottsdale Camelback Resort as a Vice President and Treasurer
of the Association and serves on the Board of Grounding Point Dance Company, a
non-profit professional dance company. She attended Arizona State University.
ITEM 6. EXECUTIVE COMPENSATION
The Company's officers and directors do not receive compensation for their
respective services rendered to the Company, nor has any officer or director
received such compensation in the past. The Company's officers and directors
have agreed to act without compensation until authorized by the Board of
Directors. Such authorization is not expected to occur until the Company has
generated revenues from operations after consummation of a business combination.
As of the date of this registration statement, the Company has no funds
available to pay its officers and directors. Further, none of the officers and
directors is accruing any compensation pursuant to any agreement with the
Company. The Company has not adopted any retirement, pension, profit sharing,
stock option or insurance programs or other similar programs for the benefit of
its employees.
Persons associated with management may refer a business opportunity to the
Company. In the event the Company consummates a transaction with an entity
referred by associates of management, such associates may be compensated for
their referral in the form of a finder's fee. It is anticipated that this fee
will be either in the form of restricted Common Stock issued by the Company as
part of the terms of the proposed transaction, or in the form of cash
consideration. However, if such compensation is in the form of cash, such
payment will likely be tendered by the business opportunity, because the Company
has insufficient cash available. The amount of such finder's fee cannot be
determined as of the date of this registration statement, but is expected to be
comparable to consideration normally paid in like transactions.
13
<PAGE>
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There have been no related party transactions, or any other transactions or
relationships required to be disclosed pursuant to Item 404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 1,000,000 shares of
Common Stock, no par value per share. There are 1,000,000 shares of Common Stock
issued and outstanding as of the date of this filing.
COMMON STOCK
All shares of Common Stock have equal voting rights and, when validly
issued and outstanding, are entitled to one vote per share in all matters to be
voted upon by shareholders. The shares of Common Stock have no preemption,
subscription, conversion or redemption rights and may be issued only as fully
paid and nonassessable shares. Cumulative voting in the election of directors is
not permitted. The holders of a majority of the issued and outstanding shares of
Common Stock represented at any meeting at which a quorum is present will be
able to elect the entire Board of Directors if they so choose and, in such
event, the holders of the remaining shares of Common Stock will not be able to
elect any directors. In the event of liquidation of the Company, each
shareholder is entitled to receive a proportionate share of the Company's assets
available for distribution to shareholders after the payment of liabilities and
after distribution in full of preferential amounts, if any. All shares of the
Company's Common Stock issued and outstanding are fully paid and nonassessable.
Holders of the Common Stock are entitled to share pro rata in dividends and
distributions with respect to the Common Stock, as may be declared by the Board
of Directors out of funds available.
14
<PAGE>
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
There is no trading market for the Company's Common Stock at present and
there has been no trading market to date. Management has not undertaken any
discussions, preliminary or otherwise, with any prospective market maker
concerning the participation of such market maker in the aftermarket for the
Company's securities. Management does not intend to initiate any such
discussions until such time as the Company has consummated a business
combination. There is no assurance that a trading market will ever develop or,
if such a market does develop, that it will continue.
MARKET INFORMATION
The Company's Common Stock is not quoted at the present time. If and when
the Company's stock is traded in the over-the-counter market, the shares will
likely be subject to Section 15(g) and Rule 15g-9, commonly referred to as the
penny stock rule, of the Exchange Act. See "Risk Factors - "Penny" Stock
Regulation."
Management intends to consider undertaking a business combination which
will allow the Company's securities to be traded without the penny stock
limitations. However, upon a successful business combination, the Company's
securities may not qualify for listing on Nasdaq or any other national exchange.
Even if the Company's securities do qualify for listing, the Company may not be
able to maintain the criteria necessary to ensure continued listing. The failure
of the Company to qualify its securities or to meet the relevant maintenance
criteria after such qualification may result in the discontinuance of the
inclusion of the Company's securities on a national exchange. In such event,
trading, if any, in the Company's securities may then continue in the
non-Nasdaq, over-the-counter market so long as the Company continues to file
periodic reports with the SEC and there remain sufficient qualified market
makers in the Company's securities. As a result, a shareholder may find it more
difficult to dispose of, or to obtain accurate quotations as to the market value
of, the Company's securities.
There are approximately 635 holders of the Company's Common Stock. All of
the issued and outstanding shares of the Company's Common Stock were issued
pursuant to order of the United States Bankruptcy Court in connection with the
bankruptcy proceedings described herein under "Description of Business."
Pursuant to Section 1145 of the United States Bankruptcy Code, recipients of
securities offered pursuant to a bankruptcy plan are generally not subject to
restrictions on resale of such securities. Since the current holders acquired
the Company's Common Stock pursuant to the Company's and Century Pacific's
respective confirmed plans of reorganization under Chapter 11 of the United
States Bankruptcy Code, such Common Stock may generally be resold without
restriction under the Securities Act in accordance with Section 1145.
15
<PAGE>
In addition, shares of the Company's Common Stock may be eligible for
resale under Rule 144 of the Act subject to certain limitations set forth in
such rule. In general, Rule 144 allows a person (or persons whose shares are
aggregated) who has beneficially owned restricted shares of the Company for at
least one year to sell, within any three-month period, an amount of shares that
does not exceed the greater of (i) one percent of the then outstanding shares or
(ii) the average weekly trading volume during the four calendar weeks prior to
such sale. Rule 144 also generally permits a person who has satisfied a two-year
holding period and who is not, and has not been an affiliate of the Company for
the preceding three months, to sell such shares without regard to the resale
limitations of Rule 144.
DIVIDENDS
The Company has not paid any dividends to date, and has no plans to do so
in the immediate future.
ITEM 2. LEGAL PROCEEDINGS
There is no litigation pending or threatened by or against the Company.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
The Company has not changed accountants since its formation and there are
no disagreements with the findings of the Company's accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company's modified plan of reorganization was confirmed by the
Bankruptcy Court on November 27, 1996, and, in connection therewith, the
Company's Common Stock previously owned by Century Pacific was exchanged for two
and one-half percent (2.5%) of the post-reorganization Common Stock of the
Company. An additional two and one-half percent (2.5%) of the
post-reorganization Common Stock of the Company was distributed under the
Century Pacific plan of reorganization, and the remaining ninety-five percent
(95%) was issued to nominees or transferees 4909 East McDowell Joint Venture in
satisfaction of rent obligations accruing subsequent to September 30, 1996.
Since that time, the Company has not issued any additional shares of Common
Stock.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XIII of the Articles of Incorporation and Article IX of the Bylaws
of the Company, as amended, set forth certain indemnification rights. The
Company's Articles of Incorporation provide for the indemnification of directors
and officers to the full extent permitted by Arizona law.
Arizona law provides that a company may indemnify its directors under
prescribed circumstances, subject to certain limitations, against certain costs
and expenses, including attorneys' fees actually and reasonably incurred in
connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which such person is a party by reason of
being a director of the Company, provided that such director or officer acted in
accordance with the applicable standard of conduct set forth in such statutory
provisions.
16
<PAGE>
PART F/S
FINANCIAL STATEMENTS
The following financial statements are attached to this report and filed as
a part thereof.
Independent Auditor's Report .............................................. F-1
Balance Sheet ............................................................. F-2
Statements of Operations .................................................. F-3
Statements of Changes in Stockholders' Equity.............................. F-4
Statement of Cash Flows.................................................... F-5
Notes to Financial Statements ............................................. F-6
Interim Financial Statements (unaudited):
Balance Sheet as of March 31, 2000......................................... F-9
Income Statement for the six months ended March 31, 2000................... F-10
Statement of Cash Flows for the six months ended March 31, 2000............ F-11
Notes to Financial Statements for the six months ended March 31, 2000...... F-12
17
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibit No. Page Number or Method of Filing
----------- -------------------------------
3.1 Articles of Incorporation *
3.2 Bylaws *
27 Financial Data Schedule **
----------
* Previously filed with the Commission on May 10, 2000, File No. 000-30585
** Filed herewith
19
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
Registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: July 26, 2000 CREATIVE VISTAS, INC.
---------------
By: /s/ Rudy R. Miller
------------------------------------
Name: Rudy R. Miller
----------------------------------
Its: President
----------------------------------
20
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To The Stockholders and Board of Directors of
Creative Vistas, Inc.
We have audited the accompanying balance sheets of Creative Vistas, Inc. as of
September 30, 1999 and 1998, and the related statements of operations, changes
in stockholders' equity, and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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 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 financial position of Creative Vistas, Inc. as of
September 30, 1999 and 1998, and the results of its operations, changes in
stockholders' equity, and its cash flows for the years then ended, in conformity
with generally accepted accounting principles.
/s/ SEMPLE & COOPER, LLP
Phoenix, Arizona
October 13, 1999
F-1
<PAGE>
CREATIVE VISTAS, INC.
BALANCE SHEETS
September 30, 1999 and 1998
ASSETS
1999 1998
------- -------
Current Assets:
Cash and cash equivalents (Note 1) $ 88 $ 403
------- -------
Total Assets $ 88 $ 403
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities $ -- $ --
Stockholders' Equity:
Common stock - no par value;
1,000,000 shares authorized;
issued and outstanding 7,553 7,553
Accumulated deficit (7,465) (7,150)
------- -------
Total Stockholders' Equity 88 403
------- -------
Total Liabilities and Stockholders' Equity $ 88 $ 403
======= =======
F-2
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF OPERATIONS
For The Years Ended September 30, 1999 and 1998
1999 1998
----------- -----------
Sales $ -- $ --
General and Administrative Expenses 315 5,552
----------- -----------
Net Loss from Operations $ (315) $ (5,552)
=========== ===========
Basic loss per share: (Note 1) $ -- $ (.01)
=========== ===========
Weighted Average Common Shares Outstanding 1,000,000 1,000,000
=========== ===========
F-3
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Years Ended September 30, 1999 and 1998
Total
Stock-
Accumulated holders'
Shares Amount Deficit Equity
------ ------ ------- ------
Balance at September 30, 1997 1,000,000 $4,553 $(1,598) $ 2,955
Capital contributions 3,000 -- 3,000
Net loss for the year ended
September 30, 1998 -- -- (5,552) (5,552)
--------- ------ ------- -------
Balance at September 30, 1998 1,000,000 7,553 (7,150) 403
Net loss for the year ended
September 30, 1999 -- -- (315) (315)
--------- ------ ------- -------
Balance at September 30, 1999 1,000,000 $7,553 $(7,465) $ 88
========= ====== ======= =======
F-4
<PAGE>
CREATIVE VISTAS, INC.
STATEMENTS OF CASH FLOWS
For The Years Ended September 30, 1999 and 1998
1999 1998
----- -------
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers $ -- $ --
Cash paid to suppliers and employees (315) (5,552)
----- -------
Net cash used by operating activities (315) (5,552)
----- -------
Cash flows from financing activities:
Capital contributions -- 3,000
----- -------
Net cash provided by financing activities -- 3,000
----- -------
Net decrease in cash and cash equivalents (315) (2,552)
Cash and cash equivalents at beginning of year 403 2,955
----- -------
Cash and cash equivalents at end of year $ 88 $ 403
===== =======
F-5
<PAGE>
CREATIVE VISTAS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies, Nature of Operations and Use of
Estimates:
Operations:
Creative Vistas, Inc., formerly known as Vista Financial Services, Inc., is
a Corporation which was duly formed and organized under the laws of the
State of Arizona on July 18, 1983. The principal business purpose of the
Company was to conduct secondary market mortgage loan brokerage operations
and consulting in the southwestern region of the United States. The Company
has been essentially dormant since approximately December 1996 after filing
for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code
(See Note 2).
Pervasiveness 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 contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Cash and Cash Equivalents:
For financial accounting purposes, cash and cash equivalents are considered
to be all highly liquid investments purchased with an initial maturity of
three (3) months or less.
Deferred Income Taxes
Deferred income taxes are provided on an assets and liability method,
whereby deferred tax assets are recognized for deductible temporary
differences and operating loss carryforwards. Deferred tax liabilities are
recognized for taxable temporary differences. Deferred tax assets are
reduced by a valuation allowance when it is more likely than not that the
carryforwards will not be utilized. Deferred tax assets and liabilities are
adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Basic Loss Per Share:
Basic loss per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of the
Company. Diluted earnings per share are not presented as no dilutive
potential common stock existed as of September 30, 1999 and 1998.
F-6
<PAGE>
2. Reorganization Under Chapter 11:
The Bankruptcy Court confirmed an order approving the Company's Modified
Plan of Reorganization on July 22, 1996. An amended order approving the
Company's Modified Plan of Reorganization was confirmed by the Bankruptcy
Court on November 17, 1996. For financial reporting purposes, however, the
effective confirmation date used was July 22, 1996, as the amendment to the
order approving the Company's Modified Plan of Reorganization did not
materially modify the order.
The amended order approving the Modified Plan of Reorganization provided
for the following:
Assets and Post-Petition Liabilities - The Company transferred all
assets and post-petition liabilities to two (2) individuals in
exchange for $15,000.
Unsecured Creditors - All unsecured creditors received $15,000 in full
satisfaction of all claims, and as such, all pre-petition indebtedness
was fully satisfied and discharged.
Equity Security Holders - All the issued and outstanding common stock,
which was previously wholly-owned by Century Pacific Corporation, was
cancelled in exchange for two and one-half percent (2.5%) of new
common shares issued. Further, additional shares comprising two and
one-half percent (2.5%) of new common shares issued was distributed
under the Century Pacific Plan of Reorganization. The remaining new
shares, ninety-five percent (95%) of new common shares issued, were
issued to 4909 East McDowell Joint Venture in full satisfaction of
rent which accrued after September 30, 1996.
The Company has accounted for its reorganization using fresh-start
accounting. All assets and liabilities have been restated to reflect their
reorganization values, which approximates fair values at the reorganization
date. Total debt forgiven amounted to approximately $74,000. Total
accumulated deficit eliminated upon adoption of fresh-start accounting
amounted to approximately $429,000.
3. Related Party Transactions:
During the year ended September 30, 1998, stockholders of the Company made
capital contributions in the amount $3,000.
4. Income Taxes:
At September 30, 1999 and 1998, deferred tax assets consist of the
following:
F-7
<PAGE>
1999 1998
------- ------
Net operating loss carryforwards $ 1,800 $1,700
Less: valuation allowance (1,800) 1,700)
------- ------
$ -- $ --
======= ======
At September 30, 1999 and 1998, the Company established a valuation
allowance equal to the full amount of the deferred tax assets due to the
uncertainty of the utilization of operating losses in future periods.
At September 30, 1999, the Company had federal and state net operating loss
carryforwards in the approximate amount of $7,465 available to offset
future taxable income through 2019 and 2004, respectively.
5. Year 2000 Issue: (Unaudited)
Like other companies, Creative Vistas, Inc. could be adversely affected if
the computer systems we, our suppliers or customers use do not properly
process and calculate date-related information and data from the period
surrounding and including January 1, 2000. This is commonly known as the
"Year 2000" issue. Additionally, this issue could impact non-computer
systems and devices such as production equipment, elevators, etc. At this
time, because of the complexities involved in the issue, management cannot
provide assurances that the Year 2000 issue will not have an impact on the
Company's operations.
F-8
<PAGE>
INTERIM FINANCIAL INFORMATION
Set forth below are the Company's unaudited Balance Sheet, Income Statement and
Statement of Cash Flows for the six month period ended March 31, 2000. The
Company did not conduct business operations in this period. Expenditures on the
Company's interim financial statements reflect payment of the fees to the
Company's independent auditors and maintenance of the Company's banking account.
The Company borrowed $6,700 from certain of its shareholders to finance these
and other operating expenses.
CREATIVE VISTAS, INC.
BALANCE SHEET
MARCH 31, 2000
(Unaudited)
ASSETS
Current Assets
General Checking $ 895.32
---------
Total Current Assets 895.32
Property and Equipment
---------
Total Property and Equipment 0.00
Other Assets
---------
Total Other Assets 0.00
---------
Total Assets $ 895.32
=========
LIABILITIES AND CAPITAL
Current Liabilities
Payable - Miller Capital $3,350.00
Payable - Tudor Investment 3,350.00
---------
Total Current Liabilities 6,700.00
Long-Term Liabiltites
---------
Total Long-Term Liabilities 0.00
---------
Total Liabilities 6,700.00
Capital
Common Stock 7,553.00
Beginning Balance Equity (7,150.02)
Undistributed Income (314.83)
Net Income (5,892.83)
---------
Total Capital (5,804.68)
---------
Total Liabilities & Capital $ 895.32
=========
F-9
<PAGE>
CREATIVE VISTAS, INC.
INCOME STATEMENT
For the Six Months Ended March 31, 2000
(Unaudited)
Current Month Year to Date
------------- ------------
Revenues
Income $ 0.00 0.00 $ 0.00 0.00
---------- ----------
Total Revenues 0.00 0.00 0.00 0.00
---------- ----------
Cost of Sales
---------- ----------
Total Cost of Sales 0.00 0.00 0.00 0.00
---------- ----------
Gross Profit 0.00 0.00 0.00 0.00
---------- ----------
Expenses
Printing 0.00 0.00 0.00 0.00
Office 0.00 0.00 0.00 0.00
Postage 0.00 0.00 0.00 0.00
Express Mail/Freight 0.00 0.00 0.00 0.00
Legal 0.00 0.00 0.00 0.00
Accounting 5,000.00 0.00 5,810.00 0.00
Fees 0.00 0.00 0.00 0.00
--Stock Certificates 0.00 0.00 0.00 0.00
Telephone 0.00 0.00 0.00 0.00
Miscellaneous 3.29 0.00 82.83 0.00
---------- ----------
Total Expenses 5,003.29 0.00 5,892.83 0.00
---------- ----------
Net Income $(5,003.29) 0.00 $(5,892.83) 0.00
========== ==========
F-10
<PAGE>
CREATIVE VISTAS, INC.
STATEMENT OF CASH FLOWS
For the Six Months Ended March 31, 2000
2000 1999
------- -----
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers $ -- $ --
Cash paid to suppliers and employees (5,893) (156)
------- -----
Net cash used by operating activities (5,893) (156)
------- -----
Cash flows from financing activities:
Advances from officers 6,700 --
------- -----
Net cash provided by financial activities 6,700 --
------- -----
Net increase (decrease) in cash and cash equivalents 807 (156)
Cash and cash equivalents at beginning of period 88 244
------- -----
Cash and cash equivalents at end of period $ 895 $ 88
======= =====
F-11
<PAGE>
Creative Vistas, Inc.
Notes to Financial Statements for the six months ended March 31, 2000
(unaudited)
(1) The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions in Item 310(b) of
Regulation S-B. Accordingly, they do not include all of the information and
notes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been made. Operating results for the six-month period ended March 31, 2000
are not necessarily indicative of the results that may be expected for the year
ending September 30, 2000. For further information, refer to the annual
consolidated financial statements preceding these interim financial statements.
(2) Loss per share is calculated by dividing income available to common
stockholders by the weighted average number of common shares outstanding.
(3) The Company did not conduct business operations in this six month period
ended March 31, 2000.
(4) Expenditures on the interim financial statements reflect payment of the fees
to the Company's independent auditors and maintenance of the Company's banking
account. The Company borrowed $6,700 from certain of its shareholders to finance
these and other operating expenses.
F-12
<PAGE>
