U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[x] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For The Fiscal Year Ended: September 30, 1999
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-730
PENN-PACIFIC CORPORATION
(Name of small business issuer in its charter)
Delaware 95-3227748
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
4525 W. Hacienda Ave, Ste 12H, Las Vegas, Nevada 89118
(Address of principal executive offices)(Zip code)
Issuer's telephone number (800) 868-7233 ext 228
Securities registered under Section 12(b) of the Act: NONE
Securities registered under Section 12(g) of the Act:
Common Stock Par Value $.10
(Title of Class)
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Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing required for the past 90 days. Yes No X
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained in this form, and no disclosure will 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-KSB
or any amendment to this form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: None
To the best knowledge and belief of management there has been no trading,
therefore the aggregate market value is not known.
(ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDING DURING THE PRECEDING FIVE YEARS)
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes X No
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practical date: December 28, 1999 951,082
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) Into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"):
None
Transitional Small Business Disclosure Format (check one): Yes NO X
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TABLE OF CONTENTS
Item Number and Caption Page
PART I
Item 1. Description of Business............................................. 4
Item 2. Description of Property............................................. 4
Item 3. Legal Proceedings................................................... 4
Item 4. Submission of Matters to a Vote of Security Holders................. 5
PART II
Item 5. Market for Common Equity and Related Stockholder Matters............ 5
Item 6. Management's Discussion and Analysis or Plan of Operations.......... 6
Item 7. Financial Statements................................................ 8
Item 8. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 8
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act................... 8
Item 10. Executive Compensation.............................................. 9
Item 11. Security Ownership of Certain Beneficial Owners and Management...... 9
Item 12. Certain Relationships and Related Transactions......................10
Item 13. Exhibits and Reports on form 8-K....................................11
3
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PART I
ITEM I DESCRIPTION OF BUSINESS
General
The Company intends to acquire interests in various business
opportunities, which in the opinion of management will provide a profit to the
Company.
History
The Company was incorporated under the laws of the state of Delaware
on May 18, 1971. From 1979 to 1991 the primary business of Penn Pacific and its
subsidiaries was the acquisition, exploration, development, production and
operation of oil and gas properties. Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United States Bankruptcy Code on January 27, 1994. On January 13, 1997, the
Company emerged from bankruptcy pursuant to a final decree of the United States
Bankruptcy Court for the Northern District of Oklahoma. The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.
ITEM 2 DESCRIPTION OF PROPERTY
The Company at this time has no properties. As of September 30, 1999
and 1998 all activities of the Company have been conducted by corporate officers
from either their homes or business offices. Currently, there are no outstanding
debts owed by the company for the use of these facilities and there are no
commitments for future use of the facilities.
ITEM 3 LEGAL PROCEEDINGS
The Company is not presently involved in any legal proceedings.
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ITEM 4 SUBMISSION OF MATTERS TO A
VOTE OF SECURITY HOLDERS
No Matters were submitted to a vote of security holders during the
last quarter of the fiscal year ended September 31, 1999
PART II
ITEM 5 MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The stock is traded on the Internet with the trading symbol "PENNC".
The following high and low bid information was provided by NIPHIX Investments
Inc. The quotations provided reflect inter-dealer prices, without retail
mark-up, mark-down or commission and may not represent actual transactions.
1999 HIGH BID LOW BID
(To the best knowledge of
management, there was no
trading of shares for fiscal
1999 and 1998.)
The number of shareholders of record of the Company's common stock as
of December 28, 1999 was approximately 6607.
The Company has not paid any cash dividends to date and does not
anticipate paying dividends in the foreseeable future. It is the present
intention of management to utilize all available funds for the development of
the Company's business.
Recent Sales of Unregistered Securities.
The Company over the past three years has sold 3,750,000 shares of
common stock. The stock was not sold through an underwriter and was not sold
through a public offer. A summary of the transactions follows:
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Common Stock
Shares Amount
November 11, 1995 shares issued
to an officer/director for services at
$0.10 per share ................................. $ 200,000 $ 20,000
October 1, 1996 shares issued
to officers/directors for services at
$0.10 per share ................................. 2,850,000 285,000
December 19, 1996 shares issued
to officers/directors for promissory notes at
$0.10 per share ................................. 500,000 50,000
April 17, 1997 shares issued
to officers/directors for cash at
$0.01 per share ................................. 200,000 2,000
Total .............................................. $3,750,000 $ 357,000
These sales are exempt under Regulation D Rule 506 of the Securities
Act of 1933.
ITEM 6 MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATIONS
Plan of Operations
The planned operations of the company during the next twelve months
are as follows:
The Company intends to seek an acquisition of a larger and
potentially more profitable business. The Company intends to focus on
opportunities to acquire new products or technologies in development as well as
those currently planned, including a complete operating business that has
demonstrated long-term growth potential, strong marketing presence, and the
basis for continuing profitability. The Company has not identified any specific
target or possible acquisition. As the Company pursues its acquisition program,
it will incur costs for ongoing general and administrative expenses as well as
for identifying, investigating, and negotiating a possible acquisition.
Results of Operations - The Company filed a voluntary petition of reorganization
under Chapter 11 of the United States Bankruptcy Code on January 27, 1994. On
January 13, 1997, the Company emerged from bankruptcy pursuant to a final decree
of the United States Bankruptcy Court for the Northern District of Oklahoma. The
Company is in the development stage since January 13, 1997 and has not commenced
planned principal operations.
Liquidity and Capital Resources - The Company requires working capital
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principally to fund its current operating expenses for which the Company has
relied on short-term borrowings and the issuance of restricted common stock.
There are no formal commitments from banks or other lending sources for lines of
credit or similar short-term borrowings, but the Company has been able to borrow
any additional working capital that has been required. From time to time in the
past, required short-term borrowings have been obtained from a principal
shareholder or other related entities.
Cash flows. Operating activities used cash of $7,000 for 1997 to pay
Chapter 11 administrative fees. Financing activities provided cash of $7,000 for
1997 from the sale of the Company's restricted stock and issuance of notes
payable to stockholders..
In order to complete any acquisition, the Company may be required to
supplement its available cash and other liquid assets with proceeds from
borrowings, the sale of additional securities, including the private placement
of restricted stock and/or a public offering, or other sources. There can be no
assurance that any such required additional funding will be available or
favorable to the Company.
Because management controls 47.68 % of voting rights, management may
actively negotiate or otherwise consent to the purchase of any portion of their
common stock as a condition to or in connection with a proposed merger or
acquisition. Furthermore, management could consent or approve any particular
stock buy-out transaction without shareholder approval. In the event that an
appropriate merger candidate is located, the Company may need to pay cash
finder's fees or may issue securities (debt or equity) as a finders's fee.
Finder's fees or other acquisition related compensation may be paid to officers,
directors, promoters or their affiliates. Any such finder's fee paid to an
officer, director, promoter, or affiliate may present a conflict of interest
because of the non-arms length nature of such transaction. There are no such
negotiations in progress or contemplated.
There are no arrangements or understandings between non-management
shareholders and management under which non-management shareholders may directly
or indirectly participate in or influence the management of the Company's
affairs.
The Company may be required to supplement its available cash and
other liquid assets with proceeds from borrowing, the sale of additional
securities, or other sources. There can be no assurance that any such required
additional funding will be available or, if available, that it can be obtained
on terms favorable to the Company.
Year 2000 Compliance
The Company has made an effort to insure that the software components
of its information and billing systems are Year 2000 compliant. Management has
confirmed that all of such systems are Year 2000 compliant. Upon such
confirmation, management believes that, after January 1, 2000, the Company will
be able to accurately track and bill for its services and products. At the same
time, it is likely that the operations of a number of the Company's vendors rely
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on software that is not Year 2000 compliant.
ITEM 7 FINANCIAL STATEMENTS
The financial statements of the Company and supplementary data are
included beginning immediately following the signature page to this report. See
Item 13 for a list of the financial statements and financial statement schedules
included.
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are not and have not been any disagreements between the Company
and its accountants on any matter of accounting principles, practices or
financial statements disclosure.
PART III
ITEM 9 DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND
CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
THE EXCHANGE ACT
Directors and Executive Officers.
Director's Name Age Office Term of Office
James O'Brien 61 President and CEO/Director February 23, 1998
Rose Fischer 45 Secretary/Treasurer/Director February 23, 1998
Business Experience
James O'Brien, CEO/President, founded Optimum Source International Ltd., during
8
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the past five years Mr. O'Brien developed software, established trade and
countertrade exchanges for Optimum Source International, Ltd.
Rose Fischer, Secretary/Treasurer/Director, with an associate degree in
accounting, has been Director and Operations Facilitator for Optimum Source
International, Ltd. ("OSI") for the past two years, which includes finalization
and implementation of all electronic commerce. Prior to OSI, Ms. Fischer's
experience was as a financial consultant with a privately held firm since 1985.
Compliance With Reporting Requirements.
Based upon a review of Forms 3, 4, and 5 furnished to the Company
during or with respect to the preceding fiscal year and written representations
from certain reporting persons, the Company is not aware of any failure by any
reporting person to make timely filings of those forms as required by Section
16(a) of the Securities Exchange Act of 1934.
ITEM 10 EXECUTIVE COMPENSATION
There has been no executive compensation.
ITEM 11 SECURITY OWNERSHIP OF BENEFICIAL OWNERS
AND MANAGEMENT
Principal Shareholders
The table below sets forth information as to each person owning of
record or who was known by the Company to own beneficially more than 5% of the
951,082 shares of issued and outstanding Common Stock, including options to
acquire stock of the Company as of December 28, 1999 and information as to the
ownership of the Company's Stock by each of its directors and executive officers
and by the directors and executive officers as a group. Except as otherwise
indicated, all shares are owned directly, and the persons named in the table
have sole voting and investment power with respect to shares shown as
beneficially owned by them.
9
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# of
Name and Address Nature of Shares
of Beneficial Owners Ownership Owned Percent
Directors
- --------------------------------------------------------------------------------
Principal Shareholders
John Allison ...................... Common 71,500 7.51
Alpha Beta LLC .................... Common 90,945 9.56
Celex-Nevada ...................... Common 97,750 10.27
Wayne H. Creasy ................... Common 66,063 6.94
Edwin K. Hiseroot ................. Common 45,250 4.75
George White ...................... Common 70,500 7.41
------- -----
Total .................... 442,008 46.44
Directors and Executive Officers
James O'Brien ..................... Common 11,860 1.247
All Executive Officers and
Directors as a Group (3
persons) .......................... Direct 679,514 47.68%
................................. Options None None %
................................. Total 679,514 47.68%
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1999 an officer and director loaned the Company $3,000. The
note is payable on demand plus interest. During 1997 various officers and
directors loaned the Company $5,000. The notes are payable on demand plus
interest. During 1998 the note holders agreed to accept 10,000 pre split shares
of common stock in exchange for the debt. The balance due as of September 30,
1998 is $-0-.
As of September 30, 1999 and 1998 all activities of the Company have
been conducted by corporate officers from either their homes or business
10
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offices. Currently, there are no outstanding debts owed by the company for the
use of these facilities and there are no commitments for future use of the
facilities.
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements Page
Report of Robison, Hill & Co., Independent Certified Public Accountants.....F-1
Balance Sheets
September 30, 1999, and 1998...............................................F-2
Statements of Operations
For the Years Ended September 30, 1999, and 1998..........................F-3
Statements of Changes in Stockholders' Equity
For the Years Ended September 30, 1999, and 1998..........................F-4
Statements of Cash Flows
For the Years Ended September 30, 1999, and 1998..........................F-5
Notes to Financial Statements
September 30, 1999 and 1998................................................F-6
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
3. Exhibits
The following exhibits are included as part of this
report:
Exhibit
Number Title of Document
3.01 Articles of Incorporation and Bylaws of the registrant(1)
3.02 Amendments to Article IV and IX of the Articles of Incorporation of the
Registrant, as filed with the Delaware Secretary of State on October 5,
1988(1)
4 Instruments defining the rights of security holders (Certificate of
Designation of Preferences of Series C preferred Stock), as filed with
the Delaware Secretary of State on October 5, 1988(1)
Other
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23.01 Consent of Accountants(1)
(1) Incorporated by Reference
(b) No reports on Form 8-K were filed.
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
PENN-PACIFIC CORPORATION
Dated: December 29, 1999 By /S/ James O'Brien
--------------------------------
James O'Brien
President and CEO
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons on behalf
of the Registrant and in the capacities indicated on this 29 th day of December
1999.
Signatures Title
/S/ James O'Brien
James O'Brien President, C.E.O., Director
(Principal Executive, Financial
and Accounting Officer)
/S/ Rose Fischer
Rose Fischer Secretary, Treasurer and Director
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INDEPENDENT AUDITOR'S REPORT
Board of Directors
Penn Pacific Corporation
Las Vegas, Nevada
Board Members:
We have audited the accompanying balance sheets of Penn Pacific
Corporation (a development Stage Company), 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 audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that 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 Penn Pacific
Corporation (a development Stage Company), as of December 31, 1999 and 1998 and
the results of its operations, and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
Respectfully submitted,
/s/ Robison, Hill & Co.
Certified Public Accountants
Salt Lake City, Utah
December 28, 1999
F - 1
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PENN PACIFIC CORPORATION
(A Development Stage Company)
BALANCE SHEETS
September 30,
----------------------------
1999 1998
------------ ------------
ASSETS ......................................... $ -- $ --
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable ............................. $ 16,309 $ 11,523
Accrued expenses ............................. 16,775 11,757
Notes payable - stockholders ................. 3,000 --
------------ ------------
Total Liabilities ......................... 36,084 23,280
------------ ------------
Stockholders' Equity
Preferred stock (par value $1.00),
50,000,000 shares authorized,
no shares issued at September 30, 1999
and 1998 ..................................... -- --
Common stock to be issued ...................... 8,154 8,154
Common stock (par value $.10),
100,000,000 shares authorized,
951,082 shares issued and outstanding
September 30, 1999 and 1998 .................. 95,108 95,108
Capital in excess of par value ................. 35,686,105 35,683,105
Retained deficit ............................... (35,735,361) (35,735,361)
Deficit accumulated during development stage ... (90,090) (77,286)
------------ ------------
Total Stockholders' Equity ................ (36,084) (23,280)
------------ ------------
Total Liabilities and Stockholders' Equity $ -- $ --
============ ============
The accompanying notes are an integral part of these financial statements.
F - 2
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Cumulative
Since
For the Year Ended Inception of
September 30, Development
--------------------------
1999 1998 Stage
----------- ----------- -----------
<S> <C> <C> <C>
Revenues ..................................... $ -- $ -- $ --
----------- ----------- -----------
Expenses
Selling, general and administrative expenses 8,835 14,020 26,524
----------- ----------- -----------
Operating Loss ............................... (8,835) (14,020) (26,524)
Other income (expense):
Interest expense .......................... 3,969 1,411 55,380
Reorganization items:
Administrative fees ....................... -- -- 8,186
----------- ----------- -----------
Loss before taxes ............................ (12,804) (15,431) (90,090)
Income taxes ................................. -- -- --
----------- ----------- -----------
Net Loss .............................. $ (12,804) (15,431) $ (90,090)
=========== =========== ===========
Per Share Amounts
Net Income (Loss) ............................ $ (0.01) $ (0.01)
=========== ===========
Weighted Average Shares Outstanding .......... 1,032,619 1,032,619
</TABLE>
The accompanying nots are an integral part of these financial statements.
F - 3
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Deficit
Common Stock Accumulated
Preferred To be Issued Common Excess of Accumulated During
Stock Shares Amount Shares Amount Par value Deficit Stage
----- ---------- ---------- ------------ ---------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
October 1, 1996 as
originally reported .. -- 3,263,128 $ 326,313 15,389,053 $1,538,905 $ 33,807,923 $(35,735,361) $ --
Retroactive adjustment
for 1 for 20 reverse
stock split
February 23, 1998 .... -- (3,099,970) (309,997) (14,615,471) (1,461,547) 1,893,182 -- --
----- ---------- ---------- ------------ ---------- ------------ ------------ ----------
Restated Balance
October 1, 1996 ...... -- 163,158 16,316 773,582 77,358 35,701,105 (35,735,361) --
Issuance of stock .... -- (142,500) (14,250) 142,500 14,250 -- -- --
Issuance of
stock for cash ....... -- -- -- 35,000 3,500 (18,000) -- --
Stock to be issued
in exchange for debt
(bankruptcy claims) .. -- 29,019 2,901 -- -- -- -- --
Net Loss ............. -- -- -- -- -- -- -- (61,855)
----- ---------- ---------- ------------ ---------- ------------ ------------ ----------
Balance
September 30, 1997 ... -- 49,677 4,967 951,082 95,108 35,683,105 (35,735,361) (61,855)
Stock to be issued
in exchange for debt . -- 31,860 3,187 -- -- 3,000 -- --
Net Loss ............. -- -- -- -- -- -- -- (15,431)
----- ---------- ---------- ------------ ---------- ------------ ------------ ----------
Balance
September 30, 1999 ... -- 81,537 8,154 951,082 95,108 35,686,105 (35,735,361) (77,286)
Net Loss ............. -- -- -- -- -- -- -- (12,804)
----- ---------- ---------- ------------ ---------- ------------ ------------ ----------
Balance
September 30, 1998 ... -- 81,537 $ 8,154 951,082 $ 95,108 $ 35,686,105 $(35,735,361) $ (90,090)
===== ========== ========== ============ ========== ============ ============ ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 4
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative
Since
For the Year Ended Inception of
September 30, Development
--------------------
1999 1998 Stage
--------- -------- ---------
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Cash paid to suppliers and employees ........... $ -- $ -- $ --
--------- --------- ---------
Net cash used by operating activities before
reorganization items ..................... -- -- --
--------- --------- ---------
Reorganization Items:
Chapter 11 administrative fees ............... -- -- (7,000)
--------- --------- ---------
Net cash used in operating activities ...... -- -- (7,000)
--------- --------- ---------
Cash Flows from Investing Activities: ............ -- -- --
--------- --------- ---------
Cash Flows from Financing Activities:
Proceeds from common stock ..................... -- -- 2,000
Issuance of notes payable-stockholders ......... -- -- 5,000
--------- --------- ---------
Net cash provided by financing activities .. -- -- 7,000
--------- --------- ---------
Net change in cash and cash equivalents .......... -- -- --
Cash and cash equivalents at beginning of year ... -- -- --
--------- --------- ---------
Cash and cash equivalents at end of year ......... $ -- $ -- $ --
========= ========= =========
Reconciliation of Net Loss to Net Cash
Used in Operating Activities:
Net loss ......................................... $ (12,804) $ (15,431) $ (90,090)
Adjustments used to reconcile net loss to Net
cash used in operating activities:
Common stock issued for expenses ................. -- 6,187 114,226
Increase in accounts payable ..................... 4,787 11,523 16,310
Increase accrued expenses ........................ 5,017 2,721 12,592
(Increase) Decrease in
Notes payable - stockholders .................. 3,000 (5,000) (2,000)
Decrease in liabilities not subject to
compromise:
Administrative fees .......................... -- -- (52,181)
Decrease in liabilities subject to compromise:
Priority claims .............................. -- -- (4,277)
Unsecured non-priority claims ................ -- -- (1,580)
--------- --------- ---------
Net cash used in operating activities ............ $ -- $ -- $ (7,000)
========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F - 5
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES
This summary of accounting policies for Penn Pacific Corporation is
presented to assist in understanding the Company' financial statements. The
accounting policies conform to generally accepted accounting principles and have
been consistently applied in the preparation of the financial statements.
Organization and Basis of Presentation
The Company was incorporated under the laws of the state of Delaware
on May 18, 1971. From 1979 to 1991 the primary business of Penn Pacific and its
subsidiaries was the acquisition, exploration, development, production and
operation of oil and gas properties. Penn Pacific has been inactive since 1991.
The Company filed a voluntary petition of reorganization under Chapter 11 of the
United States Bankruptcy Code on January 27, 1994. On January 13, 1998, the
Company emerged from bankruptcy pursuant to a final decree of the United States
Bankruptcy Court for the Northern District of Oklahoma. The Company is in the
development stage since January 13, 1997 and has not commenced planned principal
operations.
Nature of Business
The Company intends to acquire interests in various business
opportunities, which in the opinion of management will provide a profit to the
Company.
Cash Equivalents
For the purpose of reporting cash flows, the Company considers all
highly liquid debt instruments purchased with maturity of three months or less
to be cash equivalents to the extent the funds are not being held for investment
purposes.
Pervasiveness of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles required 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.
F - 6
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(Continued)
NOTE 1 - ORGANIZATION AND SUMMARY OF ACCOUNTING POLICIES (continued)
Net Loss per Common Share
The effect of outstanding common stock equivalents are antidilutive
for 1999 and 1998 and are thus not considered.
The reconciliations of the numerators and denominators of the basic
EPS computations are as follows:
<TABLE>
<CAPTION>
1999 1998
-------------------------------------- --------------------------------------
Number Loss Number Loss
of Per of Per
Loss Shares Share Loss Shares Share
(numerator) (denominator) (numerator) (denominator)
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Loss to Common
Shareholders $ (12,804) 1,032,619 $ (0.01) $ (15,431) 1,032,619 $ (0.01)
=========== =========== =========== =========== =========== ===========
</TABLE>
NOTE 2 - INCOME TAXES
The Company has accumulated tax losses estimated at $15,000,000
expiring in years 2000 through 2013. Current tax laws limit the amount of loss
available to be offset against future taxable income when a substantial change
in ownership occurs. Therefore, the amount available to offset future taxable
income may be limited. No tax benefit has been reported in the financial
statements, because the Company believes there is a 50% or greater chance the
carryforwards will expire unused. Accordingly, the potential tax benefits of the
loss carryforwards are offset by a valuation allowance of the same amount
NOTE 3 - DEVELOPMENT STAGE
The Company has not begun principal operations and as is common with
a development stage company, the Company has had recurring losses during its
development stage.
F - 7
<PAGE>
PENN PACIFIC CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
(Continued)
NOTE 4 - COMMITMENTS
As of September 30, 1999 and 1998 all activities of the Company have
been conducted by corporate officers from either their homes or business
offices. Currently, there are no outstanding debts owed by the company for the
use of these facilities and there are no commitments for future use of the
facilities.
NOTE 5 - 1 FOR 20 STOCK SPLIT
On February 23, 1998 the Board of Directors approved a 1 for 20
reverse stock split. The financial statements have been retroactively adjusted
to reflect the stock split as if it had happened effective on the earliest
period presented.
F - 8
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
BALANCE SHEET OF PENN-PACIFIC CORPORATION AS OF SEPTEMBER 30, 1999 AND THE
RELATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE YEAR THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000077140
<NAME> PENN-PACIFIC CORPORATION
<MULTIPLIER> 1000
<CURRENCY> U.S DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> SEP-30-1999
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<CASH> 0
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0
0
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<OTHER-SE> (44)
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<INCOME-PRETAX> (13)
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<NET-INCOME> (13)
<EPS-BASIC> (0.01)
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</TABLE>
