<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
--------------------------------------------------
FORM 10-KSB/A
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998
COMMISSION FILE NO. 2-91651-D
PEACOCK FINANCIAL CORPORATION
COLORADO 87-0410039
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
248 E. MAIN STREET SAN JACINTO, CA 92583
(ADDRESS AND ZIP CODE OF PRINCIPAL EXECUTIVE OFFICES)
(909) 487-8911
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO .
--- ---
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OR REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K.
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT AS OF DECEMBER 31, 1998, WAS $1,176,012.
THE NUMBER OF SHARES OF CLASS A COMMON STOCK OUTSTANDING AS OF DECEMBER 31,
1998, WAS 20,750,370.
DOCUMENTS INCORPORATED BY REFERENCE: NONE.
<PAGE>
ITEM 1 - BUSINESS
On September 15, 1998, Peacock Financial Corporation filed with the Securities
and Exchange Commission to become a Business Development Corporation as defined
under the Investment Act of 1940. Simultaneously, the Company registered an
offering circular with the SEC for 13,000,000 shares under Regulation E of the
Investment Act to raise capital and to make investments in real estate and in
"eligible portfolio companies" as defined under the Investment Act of 1940.
Prior to filing to become a Business Development Corporation, Peacock Financial
Corporation was primarily involved in real estate development in Southern
California and had anticipated an equity fund of $10,000,000 through the
Hawthorne Group, Ltd. On August 11, 1998, the Company announced that the
Hawthorne Group, Ltd. transaction had been cancelled and that it was seeking
other opportunities.
Peacock Financial Corporation reported a net loss of $1,533,436 and revenues of
$609,811 for the year ending December 31, 1998 versus net income of $222,009 and
revenues of $2,075,386 for the year ending December 31, 1997. The net loss and
reduction of revenues was due primarily to the repositioning of the real estate
operation to receive the anticipated $10,000,000 capital infusion from the
Hawthorne Group, Ltd. which did not materialize.
The Company currently employs 4 people. The Company uses independent
consultants for a variety of tasks, including engineering and architecture for
real estate development, shareholder relations and financial management. Its
principal executive offices are located at 248 East Main Street, San Jacinto,
California 92583.
ITEM 2 - INVESTMENTS
Apart from the Discontinued Operations, the Company's properties are comprised
of $1,216,036 in land development costs, a $1,224,292 investment in limited
partnerships, $200,000 in other investments and $366,310 in the corporate
headquarters.
INVESTMENTS IN LIMITED PARTNERSHIPS
1. Riverside Park Apartments - The Company formed a limited partnership
in June 1992 and acquired two apartment buildings for $3,350,000 to be
repaired, developed and managed. During the year ending 1992, the
Company reduced its interest to 1% and has remained a general partner
with a 1% interest, receiving a property management fee.
2. Canyon Shadows Apartments - The Company acquired a 120-unit apartment
complex in April 1995 for $875,000. The Company received a $975,000
loan that converts to a grant from the City of Riverside for the
purpose of acquisition
2
<PAGE>
and rehabilitation and, in 1996, the Company was awarded $2,200,000 in
Federal Tax Credits for the project. In December 1996, the project was
sold to a tax credit partnership in which the Company retains a $905,000
capital account, as well as a 1% interest as the general partner for which
it receives a management fee and 80% of the project cash flow.
3. St. Michel, LLC - In 1995, the Company formed a limited liability
company to acquire a 63-lot residential subdivision in the San Jacinto
Valley, In March 1996, the limited liability company acquired an
additional 110-lot subdivision also in the San Jacinto Valley. The
Company retains a 50% ownership in the limited liability company and
has recently signed a joint venture agreement to build homes on these
existing lots.
4. PR Equities, Ltd. - In 1987, the Company formed a limited partnership
to acquire and develop approximately 500 acres in San Jacinto,
California. The partnership currently owns approximately 285
residential lots, 30 acres of commercially zoned property and 11 acres
zoned for high density senior apartments all within the master planned
community of Rancho San Jacinto. The Company retains a 15% ownership
position and has recently entered into certain joint venture
agreements to build out these properties.
OTHER INVESTMENTS
As a Business Development Corporation, the Company made certain non-real estate
investments in the fourth quarter of 1998.
1. San Diego Soccer Development Corporation (SDSDC) - The Company
acquired an approximate 5% ownership position (200,000 shares) for
stock in Peacock Financial Corporation as part of an agreed plan to
take SDSDC public in 1999 through a process known as "spin off". The
transaction included an option for the Company to acquire an
additional 5% of SDSDC and to receive an investment banking fee for
the "spin off" process.
2. Linzy Capital - The Company acquired a non-exclusive right to the use
of a proprietary option trading program from Linzy Capital for stock
in Peacock Financial Corporation. This program utilizes real-time
tracking data which is fed into an "on-screen" spreadsheet that
monitors all aspects of targeted options and equities. The Company
has contracted with a professional trading company to manage an
investment acount on behalf of Peacock Financial Corporation using the
option trading program and other investment strategies to create
substantial monthly yields on invested capital.
3. IPO/Emerging Growth, LLC - The Company acquired an investment position
in IPO/Emerging Growth, LLC valued at $100,000 for stock in Peacock
Financial
3
<PAGE>
Corporation. This investment was part of a strategy to become affiliated
with Capital Asset Management of Temecula, California, the managing partner
of the LLC, to raise capital to acquire positions in emerging growth
companies and to take them public through the process known as "spin-off".
ITEM 3 - LEGAL PROCEEDINGS
The Company is not presently involved in any material litigation nor, to its
knowledge, is any material litigation threatened against the Company or its
properties, other than routine litigation arising in the ordinary course of
business which is expected to be covered by the Company's liability insurance.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth quarter
of the fiscal year covered by this report.
ITEM 5 - MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
Common Stock of the Company is traded in the over-the-counter market, and quoted
on the Electronic Bulletin Board. During the fiscal year ending December 31,
1998, the Company's common stock traded between $1.44 and $.02 per share. The
Company has not yet adopted any policy regarding payment of dividends.
<TABLE>
<CAPTION>
Quarter Ended Low High
- ------------- --- ----
<S> <C> <C>
March 31, 1998 $0.25 $1.44
June 30, 1998 0.19 0.36
September 30, 1998 0.07 0.19
December 31, 1998 0.02 0.07
</TABLE>
At December 31, 1998, there were approximately 378 holders of record of the
Company's stock.
ITEM 6 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See index to financial statements included herein.
4
<PAGE>
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Fiscal year 1998 was the Company's third year as a public company. It was a
year of substantial change in the structure of the Company due to the failure of
the Hawthorne Group, Ltd. to fund its $10,000,000 commitment as anticipated. In
September 1998, the Company filed with the Securities and Exchange Commission to
become a Business Development Corporation under the Investment Act of 1940 as
part of management's strategy to seek diversification in its operations and to
become less dependent on its real estate operations for revenues.
The Company continues to believe that it will benefit substantially from its
position in the San Jacinto Valley where a $3 billion recreational lake is
currently under construction and is expected to be completed in 1999. All
economic indicators show a marked increase in home sales and land values in the
area and the Company expects to place several of its real estate projects into
development through joint ventures with builders and investors in the coming
year.
Through utilization of the option trading program and investments in emerging
growth companies, management believes that it has positioned itself to increase
shareholder value through diversification as well as to take advantage of the
economic boom that will come to the San Jacinto Valley over the next 10 years as
a result of completion of the Eastside Reservoir in 1999.
RESULTS OF OPERATIONS
Revenues totaled $609,811 for the fiscal year ending December 31, 1998. For the
year ending December 31, 1997, revenues were $2,075,386. The decrease was due
to the reduction and repositioning of the home-building operation.
General and administrative expenses for the year ended December 31, 1998 were
$1,089,130, as compared to $770,094 for the year ended December 31, 1997. The
increase was related to an increase in consulting services.
Depreciation and amortization expenses was $43,319 for the year ended
December 31, 1998 as compared to $14,385 for the year ended December 31, 1997.
The increase was due to corporate headquarters increased depreciation.
Interest expense was $132,912 for the year ended December 31, 1998 as compared
to $173,431 for the year ended December 31, 1997. The decrease was primarily
due to the paydown of existing loans.
5
<PAGE>
ITEM 8 - CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTION AND CONTROL PERSONS,
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
<TABLE>
<CAPTION>
NAME AGE POSITION PERIOD OF SERVICE
<S> <C> <C> <C>
Steven R. Peacock 53 President, Chief Since 1986
Executive Officer,
and Director
James S. Upton 50 Vice President Since 1997
of Development
</TABLE>
All directors hold office until the next annual shareholders meeting or until
their death, resignation, and retirement or until their successors have been
elected and qualified.
Mr. Steven R. Peacock, 53, is President, Chief Executive Officer, and a Director
of Peacock Financial Corporation. He has broad experience in real estate
development, property management and construction experience.
Mr. James S. Upton, 50, is Executive Vice President of Development of Peacock
Financial Corporation. He has over 25 years of real estate development and
construction experience.
The Securities Exchange Act of 1934 requires all executive officers and
directors to report any changes in ownership of common stock of the Company to
the Securities and Exchange Commission and the Company.
ITEM 10 - EXECUTIVE COMPENSATION
The following table shows the amount of compensation earned for services in all
capacities to the Company for the last fiscal year for the executive officers at
December 31, 1998.
6
<PAGE>
<TABLE>
<CAPTION>
NAMES AND POSITION YEAR SALARY OTHER TOTAL
<S> <C> <C> <C> <C>
Steven R. Peacock, President and
Chief Executive Officer and Director 1998 $96,000 None $96,000
James S. Upton, Vice President of
Development 1998 $68,800 None $48,000
</TABLE>
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At the close of business on December 31, 1998, the Company had 20,750,370 shares
outstanding. The beneficial owner of more than five percent of any class of the
Company's voting securities are as follows:
<TABLE>
<CAPTION>
NAME AND
ADDRESS OF
BENEFICIAL NUMBER OF
TITLE OF CLASS OWNER SHARES PERCENT OF CLASS
<S> <C> <C> <C>
Common Stock Steven R. Peacock 2,630,174 12.7%
248 East Main St.
San Jacinto, Ca. 92583
Common Stock Byron Radaker 2,010,048 9.7%
248 East Main St.
San Jacinto, Ca. 92583
</TABLE>
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Patricia Peacock, Mother of Steven R. Peacock, President, has advanced the
Company working capital. The balance outstanding as of December 31, 1998 was
$860,000.
ITEM 13 - EXHIBITS AND REPORTS ON FORM 8-K
Audited Financial Statements and Notes thereto are filed as part of this report.
On February 8, 1996, the Company filed Form 8-K containing its merger.
7
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
PEACOCK FINANCIAL CORPORATION
By: /s/ Steven R. Peacock
---------------------------------------------
Steven R. Peacock
President and Chief Executive Officer
Date: May 5, 1999
-------------------------
In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Steven R. Peacock
- ------------------------- May 5, 1999
Steven R. Peacock President, Chief Executive -----------
/s/ Lisa L. Martinez Secretary May 5, 1999
- ------------------------- -----------
8
