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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) MAY 22, 1998
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PAN ENVIRONMENTAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-19471 91-1632888
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
19239 AURORA AVENUE NORTH, SHORELINE, WASHINGTON 98133
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(Address of Principle Executive Offices) (Zip Code)
Registrant's telephone number, including area code (206) 546-9660
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 22, 1998, PAN Environmental Corporation, a Delaware Corporation
("PAN"), acquired all of the issued and outstanding capital stock of Whitfield
Holdings, Ltd., an Antigua, West Indies corporation ("Whitfield"), pursuant to
an Agreement and Plan of Business Combination, effective as of April 17, 1998,
in exchange for a maximum of 12,800,000 shares of common stock of PAN, subject
to earn-out provisions. The amount of common stock payable by PAN to Whitfield
is subject to earn-out provisions based on the achievement of certain betting
volume, resulting in licensing fees to Whitfield, over a one year period. The
amount and type of consideration was determined on the basis of negotiations
between PAN and Whitfield.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Audited interim financial statements for Whitfield Holdings, Ltd. for the
period ended May 22, 1998 are attached.
(b) Pro Forma Financial Information.
A consolidated pro forma financial statement for PAN Environmental
Corporation for the period ended May 22, 1998 is attached.
(c) Exhibits.
10.1 Agreement and Plan of Business Combination by and between PAN and
Whitfield, dated as of April 17, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PAN Environmental Corporation
Date: August 28, 1998 By /s/ JERRY CORNWELL
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Jerry Cornwell, President
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EXHIBIT 10.1
WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
AUDITED INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED MAY 22, 1998
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TABLE OF CONTENTS
<TABLE>
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Page
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Accountant's Report 1
Financial Statements
Balance Sheet 2
Statements of Loss and Accumulated Deficit 3
Statements of Cash Flows 4
Statements of Changes in Stockholders' Equity 5
Notes to Financial Statements 6-7
</TABLE>
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[WILLIAM L. BUTCHER LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders of
Whitfield Holdings, Ltd.
St. John's, Antigua, West Indies
I have audited the accompanying Balance Sheet of Whitfield Holdings, Ltd. as of
May 22, 1998 and the related Statements of Loss and Deficit, Statement of Cash
Flows for the periods then ended, and the Statement of Changes in Shareholders'
Equity. My responsibility is to express an opinion on these financial statements
based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Whitfield Holdings, Ltd. as of May
22, 1998, and the results of its operations and its cash flows for the periods
then ended in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that Whitfield
Holdings, Ltd. will continue as a going concern. As discussed in Note 3 to the
financial statements, Whitfield Holdings, Ltd. is engaged in new operations, and
the ability to continue to exist as a going concern relies on the company's
ability to retain adequate financing and to generate sufficient sales.
Management plans in this regard are also described in Note 3. The financial
statements do not include any adjustment that might result from the outcome of
the uncertainty of future agreements, financings or sales.
/s/ WILLIAM L. BUTCHER
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WILLIAM L. BUTCHER, CPA P.S.
Everett, Washington
August 26, 1998
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WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
BALANCE SHEET
MAY 22, 1998
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<TABLE>
<CAPTION>
ASSETS
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<S> <C>
5/22/98
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CURRENT ASSETS
Cash $ -0-
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Total Current Assets -0-
FIXED ASSETS
Gaming System - Hardware 47,030
Gaming System - Software 52,970
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Total Fixed Assets 100,000
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TOTAL ASSETS $100,000
========
LIABILITIES AND STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY
Common Stock, $10.00 par value;
10,000 shares authorized;
10,000 shares issued and outstanding
at May 22, 1998 100,000
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Total Stockholders' Equity 100,000
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TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $100,000
========
</TABLE>
See accompanying notes and independent auditor's report.
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WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
STATEMENT OF LOSS AND ACCUMULATED DEFICIT
INCEPTION TO MAY 22, 1998
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<TABLE>
<CAPTION>
Interim
Period Ended
5/22/98
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<S> <C>
REVENUE $ -0-
COST OF SALES -0-
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GROSS PROFIT (LOSS) -0-
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OPERATING EXPENSES
General & Administrative -0-
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Total Operating Expenses -0-
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(LOSS) FROM OPERATIONS -0-
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NET INCOME (LOSS) $ -0-
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NET INCOME (LOSS) PER SHARE $ .0000
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NUMBER OF COMMON SHARES
OUTSTANDING 10,000
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</TABLE>
See accompanying notes and independent auditor's report.
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WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
STATEMENT OF CASH FLOWS FOR THE PERIOD ENDING
MAY 22, 1998
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<TABLE>
<CAPTION>
Interim
Period Ended
5/22/98
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<S> <C>
Cash Flows From
Operating Activities:
Net Loss $ -0-
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Adjustments to Reconcile
Net Loss to Net Cash
Provided by Operating Activities
Net Cash Provided by
Operating Expenses:
(Increase) Decrease In:
Gaming System - Hardware (47,030)
Gaming System - Software (152,970)
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Total Adjustments (100,000)
Net Cash Provided by
Operating Activities: -0-
Cash Flows From
Financing Activities:
Common Stock 100,000
Paid In Capital -0-
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Net Cash Received From
Financing Activities: 100,000
Cash Beginning of Periods -0-
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Cash End of Periods -0-
========
</TABLE>
See accompanying notes and independent auditor's report.
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WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
MAY 22, 1998
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<TABLE>
<CAPTION>
Common Stock
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Paid In Accum.
Shares Amount Capital Deficit Balance
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<S> <C> <C> <C> <C> <C>
April 28, 1998 -
Corporate Formation 10,000 $100,000 $ -0- -0- $100,000
BALANCE, MAY 22, 1998 10,000 $100,000 $ -0- -0- $100,000
</TABLE>
See accompanying notes and independent auditor's report.
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<PAGE> 8
WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MAY 22, 1998
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Note 1. The Company
Whitfield Holdings, Ltd. (the "Company") was formed on April 28, 1998 under the
laws of the Government of Antigua and Barbuda, West Indies. On May 20, 1998 the
Company entered into an agreement with United RSB, Inc. to purchase and license
back its race and sports book gaming system including hardware and software for
$100,000 through the issuance of 10,000 shares of its common stock, having a par
value of $10.00 per share (100% of its authorized, issued and outstanding common
stock).
The license-back agreement provides for the payment to the Company of 2.4% of
gross annual betting volume which for 1997 was $83,000,000, which would have
generated 2.4% of $83,000,000, or $1,992,000 revenues to Whitfield.
On May 22, 1998 PAN Environmental Corporation ("PAN") symbol: "PANE" NASD:OTCBB
acquired the Company as a wholly owned subsidiary by issuing 3,200,000 shares of
its common stock into escrow, in a stock for stock acquisition, for 10,000
shares (100%) of Whitfield common stock. The 3,200,000 shares will be
distributed out of escrow to Whitfield's shareholders on a quarterly basis based
on Tropical's achieving $83,000,000 in gross annual betting volume or portion
thereof.
Note 2. Summary of Significant Accounting Policies
Company has not determined its accounting policies and procedures, except as
follows: 1) The Company uses the accrual method of accounting; and 2) the
Company has not yet adopted any policy regarding payment of dividends and no
dividends have been paid since inception.
Note 3. Going Concern
The Company's financial statements are prepared using the generally accepted
accounting principles applicable to a going concern, which contemplates the
realization of assets and liquidation of liabilities and realization of revenues
in the normal course of business.
Note 4. Related Party Transactions
The officers and directors of the Company are involved in other business
activities and may, in the future, become involved in other business
opportunities. If a specific business opportunity becomes available, such
persons may face a conflict in selecting between the Company and their other
business interests. The Company has not formulated a policy for the resolution
of such conflicts.
Note 5. Warrants and Options
There are no warrants or options outstanding to issue any additional shares of
common stock of the Company.
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WHITFIELD HOLDINGS, LTD.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
MAY 22, 1998
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Note 7. Company Facilities
The Company currently sub-leases furnished office space from its gaming system
licensee, Tropical International Sports, Inc., successor to United RSB, Inc.,
for $1,000 per month.
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<PAGE> 10
PAN ENVIRONMENTAL CORPORATION
AND WHOLLY OWNED SUBSIDIARY, WHITFIELD HOLDINGS, LTD.
CONSOLIDATED PRO FORMA BALANCE SHEET
MAY 22, 1998
<TABLE>
<CAPTION>
As of
May 22
1998
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<S> <C>
ASSETS
OTHER ASSETS
Investment - Whitfield Holdings, Ltd. $ 100,000
Settlement agreement - principals 360,000
Escrowed shares for debt, Millard account 225,000
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Total other assets 685,000
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TOTAL ASSETS $ 685,000
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 228,101
Taxes payable 18,795
Judgment payable 200,909
Accrued judgment interest 94,902
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Total current liabilities 542,707
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STOCKHOLDERS' EQUITY
Common stock, $.001 par value;
3,188,163 issued and outstanding
at December 31, 1997, and
7,218,163 issued and outstanding
at May 22, 1998 7,218
Additional paid-in capital 1,529,405
Accumulated deficit (1,394,330)
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Total stockholders' equity 142,293
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 685,000
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</TABLE>
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PAN ENVIRONMENTAL CORPORATION
AND WHOLLY OWNED SUBSIDIARY, WHITFIELD HOLDINGS, LTD.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE INTERIM PERIOD ENDED MAY 22, 1998
<TABLE>
<CAPTION>
May 22
1998
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<S> <C>
Sales and Service Revenue $ -0-
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Costs and Expenses
Materials, supplies and operating expenses 20,175
Interest and other debt expense -0-
Taxes other than income taxes -0-
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Total Costs and Expenses $ 20,175
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Other Expense $ 5,000
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Net Income (Loss) $ (25,175)
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Net Income (Loss) per Common Share (1) $ (0.00)
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Dividends per Common Share $ -0-
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Notes:
(1) Based on net income, divided by
average number of common shares
outstanding of 7,218,163
</TABLE>
