SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 10-K
(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, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________ to _________
Commission file number 0-16075
CENTURY PACIFIC FINANCIAL CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 86-0449546
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(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
1422 N. 44th Street, #211, Phoenix, AZ 85008
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
602-267-7007
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(Issuer's Telephone No. Including Area Code
Securities Registered Pursuant to Section 12(b) of the Exchange Act: None
Securities Registered Pursuant to Section 12(g) of the Exchange Act:
13,316,894 Common Stock .0400 par value
Check whether the issuer (1) has 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 issuer was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes [ ] No [X]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-X contained in this form, and no disclosure will be
contained, to the best of the 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 issuer's revenues for the fiscal year ended September 30, 1998 were
$42,855.
The aggregate market value of the common equity stock held by
non-affiliates of the registrant based on the average bid and asked price of the
common stock on September 30, 1998 was UNKNOWN. Directors, officers and ten
percent or greater shareholders are considered affiliates for purposes of this
calculation but should not necessarily be deemed affiliates for any other
purpose.
The number of shares outstanding of the issuer's common equity as of
September 30, 1998 was as follows: 13,316,894 shares of common stock.
Transitional Small business Disclosure Format (check one): Yes [ ] No [X]
<PAGE>
TABLE OF CONTENTS
Page
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PART I
Item 1 - Description of Business 3
Item 2 - Properties 7
Item 3 - Legal Proceedings 7
Item 4 - Submission of Matters to a vote of Security Holders 7
PART II
Item 5 - Market for the Registrant's Common Equity Securities
and Related Stockholder Matters 8
Item 6 - Management's discussion of Plan of Operation and
Analysis of Selected Financial Data 8
Item 7 - Capital Resources and Liquidity 10
Item 8 - Audit Committee 10
Item 9 - Disagreements on Accounting and Financial Disclosure 10
PART III
Item 10 - Directors, Executive Officers and Control Persons;
Compliance with Section 16(a) of the Exchange Act 11
Item 11 - Executive Compensation 11
Item 12 - Security Ownership of Certain Beneficial Owners
and Management 12
Item 13 - Certain Relationships and Related Transactions 12
PART IV
Item 14 - Exhibits, Financial Statement Schedules and Reports
on Form 8-K 12
SIGNATURES 13
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS 14
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PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Century Pacific Financial Corporation (the "Company" or "Century") is a
holding company that was formed in 1982 and commenced operations in 1984. It
provides through its principal subsidiaries a range of financial and personal
services. Century and its two subsidiaries are hereinafter referred to as the
"Company". The remaining subsidiaries of Century include Century Pacific
Fidelity Corporation (Fidelity) and Century Pacific Investment Management
Corporation (Century Management).
Century has received revenue from a regional investment banking and
securities brokerage business operated under its principal officer's license
through an independent contractor agreement with a regional securities firm. Its
principal officer is registered as a securities registered representative and
principal in 16 states and primary activities include acting as a stock broker
in most types of investment securities and options .
The Company maintains its corporate headquarters in a leased office located
at 1422 N. 44th Street, Suite 211, Phoenix, AZ 85008. Approximately 300 accounts
are serviced by account executives. No single client accounts for a material
percentage of the total revenue.
REVENUES BY SOURCE
SECURITIES ACTIVITIES
The Company's revenues since inception have been derived principally from
commissions on transactions in exchange-listed and over-the-counter stocks,
options, and corporate and government bonds. Markups are also earned as a result
of principal transactions in exchange-listed and over-the-counter stocks,
municipal, corporate and government bonds. Investment banking participations
also result in revenue from dealer reallowances.
Century's business activities were sharply curtailed by the closure of all
business activities maintained by several previously existing subsidiaries and
their subsequent filings for either Chapter 7 or 11 bankruptcy protection.
Century itself has been operating under Chapter 11 administrative surveillance
since January 29, 1996, however, the recent filing of a Disclosure statement and
a Plan of Reorganization with the Federal Bankruptcy Court, Arizona District,
initiates action that should result in release from bankruptcy and settlement of
all existing debts within a reasonable period of time. During the bankruptcy
term, the Company has been able to pay current expenses from existing revenues.
Management has been approached with merger and or acquisition proposals several
times, however, actions regarding such proposals will be postponed until
successful release from Chapter 11 protection.
Plans for the future are targeted for growth and profitability in the areas
of financial services and reestablishment of a subsidiary to export and import
"big ticket" machinery and electronic equipment.
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The following table shows revenues by source for the Company's last fiscal
year.
<TABLE>
<CAPTION>
Century Pacific Financial Corporation
Revenues by Source
Year Ended Year Ended
September 30, 1998 September 30, 1997
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<S> <C> <C>
SECURITIES ACTIVITIES:
Commissions & principal transaction markups 42,292 38,755
INSURANCE ACTIVITIES:
Commissions 363 1,221
SECURITIES OWNED:
Interest, dividends and proceeds from trading activities None 1,897
OTHER:
Export-import activities None None
TOTAL REVENUES: 42,855 41,873
</TABLE>
REVENUES BY SEGMENT (DISCUSSION)
Because of the interdependence of the Company's various subsidiaries and
since the Company relies upon substantially the same personnel and facilities in
connection with all of its revenue-producing operations and does not maintain
separate accounting for expenses shared by the various subsidiaries, the company
does not believe that a meaningful allocation of expenses can be made among the
company's business segments so as to reflect the percentage contribution to
consolidated net income of each component of the Company's operations. Fidelity
and Century Management were dormant during this fiscal year.
COMMISSIONS
Securities transactions for individuals and institutional investors, where
the registered broker acts on an agency basis, generate securities commission
revenues. Commissions are charged on both exchange and over-the-counter agency
transactions for individual customers in accordance with an established
schedule, which may change from time to time. In certain cases, discounts from
the schedule may be granted to customers. Securities commissions result in part
from executing transactions in listed stocks and bonds and the company also
realizes commission revenue when the trade is executed on an agency basis in
over-the-counter securities. A substantial portion of the commission revenues
generated by the company is attributable to individual investors.
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The independent contractor office operated and managed by Mr. Phillips
under his license has a policy of charging a $50 minimum commission on equity
trades and a $75 minimum on bond trades. These minimums tend to limit the number
of trades in small quantities or small dollar amounts. It is a matter of policy
not to effect transactions in commodity or financial futures contracts.
Reduced volume on the securities, and options markets typically results in
lower commissions generated. Since the level of fixed costs is relatively
insensitive to the level of revenues on a short-term basis, profitability can be
dramatically affected in periods of greater or reduced market volume.
Securities transactions with clients are generally made on either a cash or
a margin basis. In a margin transaction, the client is loaned part of the total
purchase price of the securities. Minimum initial and maintenance margin
requirements are prescribed by Federal Reserve Board and are enforced by
Securities and Exchange Commission regulation.
PRINCIPAL TRANSACTIONS AND TRADING PROFITS
The level of positions carried in Century's trading account may fluctuate
significantly. The size of the securities positions on any one date may not be
representative of the Company's exposure on any other date because the
securities positions vary substantially depending upon economic and market
conditions, the allocation of capital among types of inventories, and general
capital availability.
COMPETITION
The Company is engaged in highly competitive businesses. Its services and
potential products are similar to those supplied or capable of being supplied by
a number of companies, some of which have substantially greater financial and
technological resources, and production and marketing capabilities. Principal
competitive factors include (1) size of the firm, (2) the capability of
technical and sales staff, (3) the capacity to be innovative and (4) quick
response time. Each of the Company's competitors are directly competitive with
most of the Company's services or products.
EMPLOYEE HIRING PRACTICES, ADMINISTRATION, AND OPERATIONS
EMPLOYEE HIRING PRACTICES
The company has two employees, of whom one has managerial responsibilities,
while the other has administrative duties only. Two account executives that work
as independent contractors under Mr. Phillips' supervision also generate some
revenue.
The Company considers its employee relations to be good and believes that
its compensation and employee benefits are competitive with those offered by
other firms.
The Company functions as an equal opportunity employer.
ADMINISTRATION
YEAR 2000 ISSUE: The Company recognizes that the arrival of the Year 2000
poses a unique challenge to the ability of all computerized data processing
systems to recognize the date change from December 31, 1999, to January 1, 2000,
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and, like other companies, has assessed its computer applications and business
procedures to provide for their continued functionality. An assessment of the
readiness of external entities which it interfaces with, such as vendors,
counterparties, payment systems, and other, is ongoing. Initial contact with
these external entities is expected to be completed by the fourth quarter of
1998. The company does not expect the cost to address the Year 2000 will be
material and has determined that the software it utilizes in its operations is
compatible with the Year 2000. If future testing of existing software reveals
inadequacies, it will be replaced.
Administrative activities though sharply curtailed are operating
efficiently through the utilization of outside staff for accounting requirements
while normal management and administrative duties are performed to fulfill
corporate needs at existing levels.
OPERATIONS
Century filed a petition for Chapter 11 bankruptcy with the United States
Bankruptcy Court, District of Arizona, Phoenix Division, and was assigned Case
Number 96-00935-PHX-RTB. Historical events leading toward this action commenced
during November of 1991. The single event that created a substantial lessening
of cash flow and the ability to maintain payables on a current basis was the
decision by the Board of Directors (Board) to dispose of certain assets and
client accounts, to a large degree, and the Board authorized making an agreement
with a newly established securities firm to make available subject to their
screening of producing and certain management personnel records and production
statistics, the major portion of CENPAC Securities staff. CENPAC Securities
(CENPAC) was the major producing subsidiary of Century and normally
approximately 80% of revenues were derived from CENPAC's activities. The
aforementioned assets and personnel were transferred under terms of an agreement
whose effective date was February 29, 1992. The sudden diminshment of cash flow
created an atmosphere of panic and mass defection among the managing executives
of other operating subsidiaries of Century, being by name Century Pacific Global
Commerce, Inc., (Global), Century Pacific Insurance Group, Inc., (Insurance
Group), and Century Pacific International Corporation (International). This
state of affairs resulted in the final closure of the named subsidiaries over a
period of several months.
Century and its subsidiaries had incurred the normal expenses during their
period of full operations and the abrupt closure of operations depleted cash
flows quickly and substantially and as a result the Board being unable to
continue profitable operations due to a lack of remaining management personnel
and adequate cash flows reached the decision to file Chapter 7 bankruptcy
petitions for each of these subsidiaries with the Federal Bankruptcy Court.
The sudden departure of key management professionals and corporate officers
made it impossible for the remaining few members of Century's management to
adequately control even the holding company's record keeping activities and a
result was the failure to continue to file on a timely basis the reports
required by the Securities Act of 1933 as amended.
Vista Financial Services, Inc., (Vista), Century's mortgage lender
subsidiary, continued to operate well beyond the closure of the subsidiaries
named above, however, management decided because of rapidly mounting pressures
from creditors of the parent company and inactive subsidiaries to seek
protection by filing with the United States Bankruptcy Court, District of
Arizona, Phoenix Division, for Chapter 11 protection for Vista during late 1993.
On February 4, 1994, the Debtor-In-Possession filed a Disclosure Statement and
Plan of Reorganization. On September 30, 1996, terms of the Plan as amended were
fully met and these involved the disposal of Vista as a going concern. This
action further depleted cash flows which had been maintaining Vista's continued
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lending activities and modest occasional profit contributions that were of some
assistance to Century. Current operations of Century though relatively small
compared to those of prior years have been sufficient for Century now devoid of
its former operating subsidiaries and operating at substantially lower expense
levels under Chapter 11 protection to generate sufficient cash flow to meet
current expenses. Century Pacific Corporation, the publicly traded parent of the
several subsidiaries named in the preceding paragraphs, filed for Chapter 11
bankruptcy protection on January 29, 1996. Management of Century provided a
Disclosure Statement and proposed Plan of Reorganization to its bankruptcy
counsel during the late autumn of 1996 and proceedings related to and amendments
thereof are ongoing as of the end of this fiscal year, September 30, 1997.
On July 22, 1998, THE UNITED STATES BANKRUPTCY COURT, FOR THE DISTRICT OF
ARIZONA approved the AMENDED JOINT PLAN OF REORGANIZATION and authorized Century
to commence implementation measures to fulfill the allowed terms of the Plan of
Reorganization.
ITEM 2. PROPERTIES.
The Company operates principally from one location in Phoenix, Arizona
leased under its managing principals name. It owns no real property.
ITEM 3. LEGAL PROCEEDINGS.
None are in existence, pending or threatened, at this time to the knowledge
of its presiding officer or employees.
The Company Chapter 11 bankruptcy case is ongoing, but appears to be
approaching toward successful termination during 1998. Filing of this action
took place on January 29, 1996, in the United States Bankruptcy Court, District
of Arizona, Phoenix Division, Case Number: 96-00935-PHX-RTB.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None were submitted to shareholders during this fiscal year as the Company
was in operation under the jurisdiction of federal bankruptcy officials. Such
matters will be submitted to a vote of securities holders within a reasonable
time after release from bankruptcy.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY SECURITIES AND RELATED
STOCKHOLDER MATTERS.
Price Range of Common stock during this fiscal year. It is management's
recollection that stock may have traded sporadically in pennies or mills,
however, no official record of such transactions appears to be available.
The Company's Common stock has been inactive or very limited in trading
during the last several years. Subsequent to the company's initial public
offering effective November 12, 1986, for approximately a year and a half, the
Company's Common Stock traded on the NASDAQ Stock Market under the symbol
"CEPA". Later, as the company requested delisting, the issue continued trading
on the "Pink Sheet" market or through the "Bulletin Board" system.
Fiscal 1998 Price
----------- -----
First Quarter Unknown
Second Quarter Unknown
Third Quarter Unknown
Fourth Quarter Unknown
As of September 30, 1998, there were 261 shareholders of record.
DIVIDEND POLICY
The Company has not paid cash dividends on its common shares since its
inception. The Company currently intends to retain all of its earnings, if any,
to finance the development and growth of its business and does not anticipate
paying any cash dividends in the foreseeable future.
ITEM 6. MANAGEMENT'S DISCUSSION OF PLAN OF OPERATION AND ANALYSIS OF SELECTED
FINANCIAL DATA
The following selected data of the Company is qualified by reference to and
should be read in conjunction with the consolidated financial statements,
including the notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included elsewhere in this
report.
This form 10-K includes "forward looking statements" concerning the future
operations of the Company. It is management's intent to take advantage of the
"safe harbor" provision of the Private Securities Litigation Reform Act of 1995.
This statement is for the express purpose of availing the Company of the
protections of such safe harbor with respect to all "forward looking statements"
contained in this Form 10-KSB. We have used "forward looking statements" to
discuss future plans and strategies of the Company. Management's ability to
predict results or the effect of future plans is inherently uncertain. Factors
that could effect results include, without limitation, competitive factors,
general economic conditions, customer relations, relationships with vendors, the
interest rate environment, governmental regulation and supervision, seasonality,
distribution networks, product introductions, acceptance, technological change,
changes in industry practices and one-time events. These factors should be
considered when evaluating the "forward looking statements" and undue reliance
should not be placed on such statements. Should any one or more of these risks
or uncertainties materialize, or should any underlying assumptions prove
incorrect, actual results may vary materially from those described herein.
Management of Century has been approached with merger and/or acquisition
proposals, however, commitment to any course of such action has been avoided
prior to Court approval of Century's Plan as submitted and as amended.
Management is very confident that Century will be able to increase its
activities in the fields of financial services, insurance and export/import
marketing. Future plans most assuredly will involve actively seeking bridge
financing and ultimately future offerings of securities.
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CENTURY PACIFIC FINANCIAL CORPORATION
SELECTED FINANCIAL DATA
STATEMENT OF INCOME
Year Ended Year Ended
Statement of Operations Data September 30, 1998 September 30, 1997
- ---------------------------- ------------------ ------------------
Total Revenues $ 42,855 $ 41,873
Total Expenses $ 43,233 $ 45,166
Provision for Income Taxes $ 0 $ 0
Net Income (Loss) $ (378) $ (3,293)
Weighted Average Number of Common
Shares Outstanding 13,316,894 13,316,894
BALANCE SHEET
AS OF SEPTEMBER 30, 1998
September 30, 1998 September 30, 1997
------------------ ------------------
ASSETS
Cash $ 106
-----------
Total Assets $ 106
===========
LIABILITIES
Payables $ 508,933 $ 508,661
----------- -----------
Total Current Liabilities $ 508,933 $ 508,661
=========== ===========
STOCKHOLDERS EQUITY
Preferred Stock
5,000,000 shares authorized,
no shares outstanding,
par value $0.05
Common stock
100,000,000 shares authorized,
13,316,894 shares
outstanding, par value $0.04 $ 532,676 $ 532,676
Paid In Capital 2,823,536 2,823,536
Retained Earnings (Loss) (3,865,145) (3,864,767)
----------- -----------
Total Stockholders Equity $ (508,933) $ ( 508,555)
----------- -----------
Total Liabilities & Stockholders Equity $ 106
=========== ===========
STATEMENT OF CASH FLOWS
AS OF SEPTEMBER 30, 1998
September 30, 1998 September 30, 1997
------------------ ------------------
CASH FROM OPERATIONS
Net Income $(378) $(3,293)
Net Change in Payables 272 622
----- -------
Cash from Operations (106) (2,671)
Cash Used for Investing 0 0
Cash from Financing 0 0
----- -------
Net Change in Cash (106) (2,671)
Beginning Cash 106 2,777
----- -------
Ending Cash Balance $ 106
===== =======
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ITEM 7. CAPITAL RESOURCES AND LIQUIDITY
The Company has operated during the fiscal year on a minimal revenue base,
however, this base was adequate to pay current expenses. Assets owned by the
Company are relatively illiquid and consist mainly of fully depreciated
furnishings, computer equipment, and other office machines. Successful
completion and release from bankruptcy status will prompt management to seek
financing most probably through private sources to expand or restart traditional
business activities. The Company has no material current financial commitments
or accrued capital expenses.
ITEM 8. AUDIT COMMITTEE
The directors of the Company have established an audit committee, however,
due to bankruptcy filings its chairman, an outside director, and other members
are no longer associated with the Company. A reconstituted Board of Directors,
to include one or more "outside" directors, will be formed subsequent to release
of Century's bankruptcy estate. An "outside" director will be nominated to chair
this required audit committee.
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements of the type required to be recorded under this
item between the Company and its independent accountants during the fiscal year.
However, its independent accountants terminated their practice of auditing
publicly held companies during 1991 and subsequent to this date, during the
period which saw the closing of Century's major operating subsidiaries, no
further relationships with independent auditors were established until the
latter part of 1998.
On December 31, 1998 an engagement letter was executed with Mark Shelley,
CPA, to conduct audits covering fiscal years 1997 and 1998. It is management's
intent to renew this agreement to cover subsequent years.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS; COMPLIANCE WITH
SECTION 16(a) OF THE EXCHANGE ACT
NAME - Carlton V. Phillips Mr. Phillips has been a securities
industry professional for more than 38
POSITION WITH COMPANY - years, having served as a broker,
Director, Chief Executive Officer analyst and investment banking
specialist. For the past 32 years he has
DATE ELECTED DIRECTOR - March 1996 occupied management positions in the
securities industries and is currently
TERM OF OFFICE - 3 years the president, chief executive Officer
and a director of the Company and of its
AGE - 74 wholly owned subsidiaries, positions he
has held since 1984. Before assuming his
current position Mr. Phillips served for
13 years as an officer and director of
Continental American Securities, Inc.,
where he rose to be president and chief
executive officer. Mr. Phillips holds a
bachelor's degree in economics from
Brown University and a master's degree
in management from St. Mary's of
California. He retired from the Army
of the United States with the rank of
colonel.
ITEM 11. EXECUTIVE COMPENSATION
SUMMARY COMPENSATION LIST
The following list sets forth information concerning the compensation of
the Company's Executive Officer whose compensation exceeded $100,000 for the
fiscal year ending September 30, 1998
None
STOCK OPTION GRANTS IN LAST FISCAL YEAR
None
AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR ENDED SEPTEMBER 30, 1997 AND
FISCAL YEAR END OPTION VALUES
None
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information concerning all persons known to the
Company to be the beneficial owners of more than 5% of the Company's Common
Stock, (ii) the ownership interest of each director and nominee, and (iii) by
all directors and executive officers as a group calculated as of September 30,
1997.
Carlton V. Phillips Director, Chief Executive Officer 2,226,000 16.71%
Gerald N. Bovee Shareholder 1,152,475 8.65%
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None
The information required to be presented in Part III of this report is
hereby incorporated by reference to the Company's definitive Proxy Statement to
be prepared for the first Annual Meeting of Stockholders subsequent to the
discharge of Century's bankruptcy estate by the Federal Bankruptcy Court,
Arizona District. This information will be prepared in accordance with Schedule
14A and filed with the Securities and Exchange Commission as soon as practicable
after release from bankruptcy.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) Financial Statements
The following financial statements of the Company and its subsidiaries
are included in Part II, Item 6 of this report:
Page
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Independent Auditors' Report 15
Consolidated Statements of Financial Condition for the
year ended September 30, 1998 and 1997 16
Consolidated Statements of Income (Loss) for the
year ended September 30, 1998 and 1997 17
Consolidated Statements of Cash Flowsfor the
year ended September 30, 1998 and 1997 18
Consolidated Statements of Changes in Stockholders'
Equity for the year ended September 30, 1998 19
Notes to Consolidated Financial Statements 20
(a)(2) Financial Statement Schedules
All schedules are inapplicable or the required information is
otherwise included in the consolidated financial statement and the
notes thereto, and, therefore, have been omitted.
(a)(3) and (c) Exhibits
The following Exhibits are filed herewith pursuant to Rule 601 of the
Regulation S-K and paragraph (C) of this Item 14.
No. Description
--- -----------
2 Court Order
2.1 First Amended and Modified Joint Plan of Reorganization
4 Form of Century Pacific Stock Certificate
(b) Form 8-K
No reports on Form 8-K were filed during the last quarter of the year
ended September 30, 1997.
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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.
CENTURY PACIFIC FIDELITY CORPORATION
Dated: January 12, 2000 By /s/ Carlton V. Phillips
---------------------------------
Carlton V. Phillips
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities and on the date indicated.
Signature and Title Date
------------------- ----
/s/ Carlton V. Phillips January 12, 2000
- ---------------------------
Carlton V. Phillips
Treasurer and Director
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INDEX TO FINANCIAL STATEMENTS
Page
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Independent Auditors' Report 15
Consolidated Statements of Financial Condition for the
year ended September 30, 1998 and 1997 16
Consolidated Statements of Income (Loss) for the
year ended September 30, 1998 and 1997 17
Consolidated Statements of Cash Flowsfor the
year ended September 30, 1998 and 1997 18
Consolidated Statements of Changes in Stockholders'
Equity for the year ended September 30, 1998 19
Notes to Consolidated Financial Statements 20
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<PAGE>
M. A. SHELLEY INTL. CPA
4445 E. HOLMES, SUITE 101
MESA, AZ 85206
(602) 654-2307
INDEPENDENT CERTIFIED ACCOUNTANT'S REPORT
To the Board of Directors
Century Pacific Financial Corporation
I have audited the accompanying balance sheet of Century Pacific Financial
Corporation as of September 30, 1998 and 1997 and the related statements of
stockholders' equity, income, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. 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 Century Pacific Financial
Corporation as of September 30, 1998 and 1997 and the related statements of
stockholders' equity, operations, and cash flows for years then ended in
conformity with generally accepted accounting principles.
The statements are based on the assumption that the Company will continue
in existence. The Company has very little activity. No adjustments have been
made to the financial statements for this contingency.
/s/ M.A. Shelley Intl. CPA
March 19, 1999
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CENTURY PACIFIC FINANCIAL CORPORATION
Balance Sheet
as of September 30, 1998 and 1997
9/30/98 9/30/97
------- -------
ASSETS
Cash $ -- $ 106
----------- -----------
Total Assets $ -- $ 106
=========== ===========
LIABILITIES
Payables $ 508,933 $ 508,661
----------- -----------
Total Current Liabilities $ 508,993 $ 508,661
=========== ===========
STOCKHOLDERS' EQUITY
Preferred Stock
5,000,000 shares authorized, no shares
outstanding, par value $0.05
Common Stock
100,000,000 shares authorized
13,316,894 shares outstanding
for 1997, par value $0.04 $ 532,676 $ 532,676
Paid in Capital 2,823,536 2,823,536
Retained Earnings (Loss) (3,865,145) (3,864,767)
----------- -----------
Total Stockholders' Equity (508,933) (508,555)
----------- -----------
Total Liabilities and Stockholders' Equity $ -- $ 106
=========== ===========
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CENTURY PACIFIC FINANCIAL CORPORATION
Statement of Income
for the Years Ended September 30, 1998 and 1997
9/30/98 9/30/97
------- -------
Financial Services $ 42,855 $ 41,873
------------ ------------
Total Revenue 42,855 41,873
------------ ------------
Expenses
Insurance 1,277
Legal and Accounting 1,369 1,362
Maintenance & Repairs 2,044
Office Expense 6,000 3,001
Advertising and Promotion 3,307 3,475
Rent 11,340 12,994
Telephone 5,095 5,073
Payroll and Taxes 16,122 15,940
------------ ------------
Total Expenses 43,233 45,166
------------ ------------
Income before Taxes
Provision for Income Taxes -- --
------------ ------------
Net Income (Loss) $ (378) $ (3,293)
============ ============
Basic Earnings per Common Share -- --
Basic Weighted Average Number of Shares 13,316,894 13,316,894
Diluted Earnings per Share -- --
Diluted Weighted Average Number of Shares 13,316,894 13,316,894
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CENTURY PACIFIC FINANCIAL CORPORATION
Statement of Cash Flows
For the Years Ended September 30, 1998 and 1997
9/30/98 9/30/97
------- -------
Cash from Operations
Net Income (Loss) $(378) $(3,293)
Net Changes in Payables 272 622
----- -------
Cash from Operations (106) (2,671)
----- -------
Cash used for Investing -- --
Cash from Financing -- --
Net Change in Cash (106) (2,671)
Beginning Cash 106 2,777
----- -------
Ending Cash Balance -- 106
===== =======
No significant non cash transactions for the year
-18-
<PAGE>
CENTURY PACIFIC FINANCIAL CORPORATION
Statement of Stockholders' Equity
For the Year Ended September 30, 1998 and 1997
<TABLE>
<CAPTION>
Preferred Stock Common Stock
--------------- -------------------- Paid in Retained
Shares Amount Shares Amount Capital Earnings Total
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, 9/30/96 -- -- 13,316,894 532,676 2,823,536 (3,861,474) (505,262)
Retained Earnings (Loss) (3,293) (3,293)
------ ------ ---------- ------- --------- ---------- --------
Balance 9/30/97 -- -- 13,316,894 532,676 2,823,536 (3,864,767) (508,555)
------ ------ ---------- ------- --------- ---------- --------
Retained Earnings (Loss) (378) (378)
------ ------ ---------- ------- --------- ---------- --------
Balance 9/30/98 13,316,894 532,676 2,823,536 (3,865,145) (508,933)
====== ====== ========== ======= ========= ========== ========
</TABLE>
-19-
<PAGE>
CENTURY PACIFIC FINANCIAL CORPORATION
(formerly known as Century Pacific Corporation)
NOTES TO FINANCIAL STATEMENTS
NOTE 1. GENERAL BUSINESS AND ACCOUNTING PRINCIPLES
Business
Century Pacific Financial Corporation (the Company) was organized as a
Delaware corporation on December 29, 1982. Originally it was known as Century
Pacific Corporation. The Company was organized to provide financial services.
Basis
The financial statements are prepared following generally accepted
accounting principles.
Concentration of Credit Risk
Periodically during the year, the Company may maintain its cash in
financial institutions in excess of amounts insured by the US federal
government, or in financial institutions which are not insured by the US federal
government. For the current period the company has had limited or no cash.
Cash Equivalents
The Company considers all highly liquid debt instruments purchased with
maturities of three months or less to be cash equivalents.
Revenue
The Company's revenue consists of financial services.
Income Taxes
The provision for income taxes is the total of the current taxes payable
and the net of the change in the deferred income taxes. Provision is made for
deferred income taxes where differences exist between the period in which
transactions affect current taxable income and the period in which they enter
into the determination of net income in the financial statements.
Earnings (Loss) per Share
The basic earnings (loss) per share is calculated by dividing the Company's
net income (adjusted for certain dividends when paid) by the weighted average
number of common shares during the year. The diluted earnings (loss) per share
is calculated by dividing the Company's net income (loss) (adjusted for certain
dividends and certain interest when expensed) by the diluted weighted average
number of shares outstanding during the year. The diluted weighted average
number of shares outstanding is the basic weighted number of shares adjusted as
of the first of the year for any potentially dilutive debt or equity.
Basic weighted average number of shares 13,316,894
Additional shares added due to conversions 0
Diluted weighted average number of shares 13,316,894
-20-
<PAGE>
Advertising and Promotion
All costs of advertising and promotion are expensed in the period incurred.
Inventory
The Company carries no inventory at this time.
NOTE 2. BANKRUPTCY
In May 1996 the Company filed bankruptcy, No. 96-09598-PHX-GBN.
NOTE 3. EQUIPMENT AND FURNITURE
The Company currently has no equipment. It is using, at no cost, equipment
controlled by the president.
NOTE 4. NOTES PAYABLE/DEBT
The debt listed on the balance sheet is within the bankruptcy proceedings
and is considered short term.
NOTE 5. INCOME TAXES
Deferred income tax benefit with valuation account 0
Current income taxes payable 0
Provision for Income Taxes 0
NOTE 6. LEASES AND OTHER CONTINGENCIES
The Company has no leases outstanding or other financial contingencies.
NOTE 7. SUBSEQUENT EVENTS
The Company is currently seeking a merger candidate or financing to begin
operations. No guarantee can be made that the company will be successful. If the
company is not successful, then there is reasonable doubt that the Company will
continue in existence.
NOTE 8. RELIANCE ON MAJOR SHAREHOLDER
The Company is relying on its president and major shareholder for any fund
raising or merger.
NOTE 9. STOCKHOLDERS' EQUITY
The Company has one class of preferred stock. There are 5,000,000 shares
authorized and no shares outstanding as of September 30, 1977.
The Company has one class of common stock. The rights of this class of
stock are all the same. The common stock has all of the rights afforded Delaware
shareholders.
-21-
<PAGE>
INDEX TO EXHIBITS
2 - Court Order
2.1 - First Amended and Modified Joint Plan of Reorganization
4 - Form of Century Pacific Stock Certificate
JAMES M. LAGANKE PC.
202 E EARLL, #340 U.S. BANKRUPTCY COURT SEAL AFFIXED
PHOENIX,ARIZONA 85012
(602)279-6399 I HEREBY CERTIFY THAT THE ANNEXED INSTRUMENT
FAX (602)279-5509 IS A TRUE AND CORRECT COPY OF THE ORIGINAL
ON FILE IN THE OFFICE OF THE BANKRUPTCY CLERK.
James M LaGanke/SBN 006913 DATED: 7/22/98 /s/
Attorney for the Debtors ---------------------------------------
AUTHORIZED DEPUTY CLERK
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISIRICT OF ARIZONA
IN RC: NO. 96-09598-PHX-GBN
CENTURY PACIF1C GLOBAL CHAPTER II PROCEEDING
COMMERCE, LTD.,
DEBTOR.
IN RE: NO. 96-00935-PHX-RTB
CENTURY PACIFIC CORORATION, CHAPTER 11 PROCEEDING
Debtor. ORDER CONFIRMING DEBTOR'S
AMENDED JOINT PLAN OF
REORGANIZATION
HEARING DATE: JULY 22, 1998
HEARING TIME: 1:30 P.M.
This matter came before the Court on July22. 1998, for a confirmation
hearing on the Debtors Amended Joint Plan of Reorganization (as modified) (the
"Plan"), which was approved by the Court on JULY 18, 1998. Unless stated
otherwise. all terms defined in the Plan will have that same meanings when used
in this Order. with respect to the Plan the Court finds and concludes as
follows: 1. By an Order dated June 18, 1998, the Court approved the Debtors'
Disc!osure Statement (the "Disclosure Statement") related to the First Amended
and Modified Joint Plan alter circulation of the Disclosure Statement and Plan
to the United States Trustee and the Securities Exchange Commission whose
comments were resolved in the approved Disclosure Statement, said Order fixed
the procedures related to the solicitation of votes on the Plan. Following the
Court's entry of the Order
<PAGE>
approving the Disclosure Statement plan solicitation packages. Including the
Disclosure Statement, were timely transmitted to the creditors and other
interested parties in accordance with Bankruptcy Rule 307(d) and other
applicable procedural rules.
- - Voting on the Joint Plan is summarized in the "BALLOT REPORT" (the "Ballot
Report") filed by the Debtors with the Court on July 21, 1998. Each class
of creditors accepted the plan in the requisite percentages and the Plan is
fully consensual except for the objection filed by Terry A. Dake.
3. Only one objection to the Joint Plan was filed. The objection was filed
by Terry A. Dake, attorney for the trustee of the Century Pacific Global
Commerce, Ltd. Debtor seeking that the Plan not be confirmed unless arrangements
for payment of his attorney's fee be made. The modifications provide for payment
to Mr. Dake satisfying the condition established by the objection. The court
finds that the Plan attached hereto, being the First Amended Joint Plan as
modified, has been accepted and approved by Mr. Dake and that Mr. Dake's
objection is deemed withdrawn in favor of the First Amended Joint Plan as
modified.
- - At the confirmation hearing. The Debtors gave notice of the modifications
to the Plan.
- - On July 22, 1998, the Court conducted the confirmation hearing on the Joint
Plan (as modified), at which time the Court considered all pleadings and
other documents related to plan confirmation, including but not limited to:
(I) the Plan terms as modified in the First Amended Joint Plan, as
modified, and as attached hereto as Exhibit I; (ii) the objection of Mr.
Dake; and (iii) oral argument by counsel and parties in interest appearing
at the confirmation hearing. The Court also considered any prior testimony,
evidence and motions that have been presented or filed in these cases, and
the entire record before the Court.
6. The Court expressly finds and concludes that modifications to the Plan
attached hereto as Exhibit I do not materially or adversely change the treatment
of any creditor or party-in-interest who has previously cast a ballot to either
accept or reject the Plan and that the principal purpose of the
Page 2
<PAGE>
modifications to the Joint Plan is to pay administrative expenses for which the
Debtors have no funds and to satisfy the objection filed by Mr. Dake and the
objection that would otherwise have been filed by Mr. LaGanke.. Accordingly, no
further disclosure of information solicitation of creditors and parties in
interest, or voting is required with respect to the modifications of the First
Amended Joint Plan, as modified, and attached hereto as Exhibit "I." The term
"plan" used in thus Order shall hereinafter include the First Amended Joint Plan
as modified by this Order and as attached hereto.
7. Confirmation of the Plan is a core proceeding under 28 U.S.C.
ss.l57(b)(2). Pursuant to U.S.C. ss.l57(b)(2) and 1334, this Court has the
jurisdiction to enter a final order confirming the Plan.
8. The Plan and this Court's hearing thereon were filed in good faith, duly
and properly noticed to all creditors and parties in interest in the Debtors'
Chapter II cases. The Court has determined that the Plan (as modified and
attached hereto as Exhibit "1") satisfies the requirements for confirmation set
forth in the Bankruptcy Code ~l 129(a) through (d).
Based on the foregoing findings and conclusions and the entire record
before the Court and good cause appearing.
IT IS HEREBY ORDERED as follows:
A. The plan, attached hereto as Exhibit 1, shall be, and hereby is,
confirmed pursuant to Bankruptcy Code ss.1129 and the modifications
contained in Exhibit 1 shall be, and hereby are, expressly approved as
part of said confirmation.
B. All objections to confirmation of the Plan that have not been
withdrawn, waived, or settled (if any), shall be, and hereby are,
overruled on the merits.
C. The Debtors and all other necessary parties are authorized, empowered,
and directed, without further Order of this Court and pursuant to
Bankruptcy Code ss.ss. 1142 and 1145, to execute and deliver any
instrument, any shares of free trading stock pursuant to paragraph VF)
of the Plan any
Page 3
<PAGE>
deed of trust. Security agreement or other document, and to perform
any act, that is necessary, desirable, or required for the
consummation of the Plan. Pursuant to Bankruptcy Code ss.1141, and
except as otherwise provided in the Plan or this Order, entry of this
Order discharges any and an Claims against the Debtors, including, but
not limited to, any Claim which arose at any time before the entry of
the Order and any Claim of a kind described in Bankruptcy Code
ss.502(g), (h) and (I). On and after the Confirmation Date, and as to
every discharged Claim, every holder of a Claim shall be precluded
from asserting against the Debtors, and any assets of the Debtors, any
such discharged Claim and any rights, remedies, demands, damages, or
liabilities of any kind arising from or related to any such discharged
Claim. Debtors as used in this paragraph of this order includes all
successors.
D. Congress has amended the Bankruptcy Code requiring Chapter II debtors
fees to the Office of the U.S. Trustee after confirmation of a plan of
reorganization. The Debtors shall be, and hereby are, directed to
continue paying in cash the U.S. Trustee fees from and after the
Confirmation Date as such fees become due until lie Debtors' cases are
closed
E. This Court shall retain jurisdiction in accordance with the terms of
Article 10 of the Plan. This retention of jurisdiction shall not. And
does not, affect the finality of this Order. The Court hereby
expressly directs that this Order shall be entered forthwith and shall
be effective immediately.
DATED this 22 day of July 1998.
/s/ Redfield T. Baum
-----------------------------------
THE HONORABLE REDFIBLD T. BAUM
UNITED STATES BANKRUPTCY JUDGE
Page 4
<PAGE>
DATED: July 22 , 1998
JAMES M. LAGANKE, PC CENTURY PACIFIC CORPORATION, AKA
202 E. Earll Dr. CENTURY PACIFIC FINANCIAL
Suite 34O CORPORATION
By /s/ Carlton V. Phillips
-------------------------------
Carlton V. Phillips, President
/s/ James M. LaGanke
- ------------------------------
James M. LaGanke
CENTURY PACIFIC GLOBAL COMMERCE, LTD.
By /s/ Ronald E. Warnicke
----------------------------------
Page 5
JAMES M. LAGANKE P.C.
202 E. EARLL, #340
PHOENIX, ARIZONA 85012
(602) 279-6399
FAX (602)279-5509
James M. LaGanke SBN 006913
Attorney for the Debtors
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ARIZONA
IN RE, No. 96-09598-PHX-GBN
CENTURY PACIFIC GLOBAL Chapter II Proceeding
COMMERCE, LTD.
Debtor.
In re, No. 96-00935-PHX-RTB
Chapter II Proceeding
CENTURY PACIFIC
CORPORATION.
Debtor.
FIRST AMENDED AND MODIFIED JOINT PLAN OF REORGANIZATION
Debtors propose the following First Amended and Modified Joint Plan
Reorganization:
I.
DEFINITIONS
The following terms when used in this Plan of Reorganization have the
following meanings:
1. BANKRUPTCY CODE: shall mean the Bankruptcy Code as set forth in Title 11
of the United States Code.
2. CLAIM: shall mean an allowed claim. If it is one which requires an
application, hearing, court order and/or other Procedure to be followed by the
claimant in order to be allowed, "claim" shall mean "allowed claim" only to the
extent the Proper procedure has been followed.
3. CONFIRMATION OF THE PLAN: shall mean the entry of an order by the Court
confirming this joint Plan.
<PAGE>
4. COURT: shall mean the United States Bankruptcy Court for the District of
Arizona.
5. CREDITORS; SHALL MEAN ALL creditors of each debtor holding claims for
DEBTS, liabilities, demands. or claims of anY character WHATSOEVER AGAINST other
debtor.
6. DEBTOR: shall mean both Century Pacific Corporation. AKA Century Pacific
Financial Corporation and Century Pacific Global COMMERCE, Ltd. wHERE ONLY one
of the debtors is meant the term "Century Pac(pound)ic" Debtor IS USED, it shall
mean "Century Pacific Corporation, AKA Century Pacific FINANCIAL Corporation",
only, and when THE TERM "GLOBAL DEBTOR" is USED IT shall mean "Century PACIFIC
GLOBAL COMMERCE, LTD."
7. DISCLOSURE STATEMENT shall mean the written Disclosure Statement filed
in this case pursuant to 1125 of the Bankruptcy CODE, APPROVED, AFTER NOTICE AND
HEARING, BY THE COURT AS CONTAINING ADEQUATE INFORMATION TO ENABLE A
HYPOTHETICAL, REASONABLE INVESTOR TO MAKE AN INFORMED JUDGEMENT ABOUT THE PLAN.
8. EFFECTIVE DATE: shall mean that date on which the order confirming the
Plan becomes final and non-appealable.
9. PLAN: shall mean THIS JOINT Plan of Reorganization in its present form
or as it may bE amended. modified or supplemented.
10. CENTURY PACIFIC DEBTOR STOCK: shall mean common shares of stock in the
Century Pacific Debtor, as modified In name to Century Pacific Financial
Corporation.
11. GLOBAL DEBTOR STOCK: shall mean common shares of stock in Century
Pacific Global Commerce, Ltd.
II.
TREATMENT OF UNCLASSIFIED CLAIMS
(ADMINISTRATIVE EXPENSES AND PRIORITY CLAIMS)
A. The holders of unsecured priority claims against the debtor existing on the
filing date which have not been paid previously (excluding claims DESCRIBED in
U.S.C 507(a)(7), and all expenses of preserving Debtor other than those claims
of professionals included in Class I, will be paid in cash in full within 30
days of the effective date of the Plan or within thirty (30) days following the
allowance of the claims, whichever is later, or at such other times as may be
mutually agreed upon by The Debtor and such claimants. All trade and service
debts and obligations incurred in the normal course of the Debtor's business
during the Chapter II proceetdings shall be paid when due in the ordinary course
of business.
B. Each holder of an allowed priority claim as specified in 507(l)(7) of the
Bankruptcy Code shall receive the amount of such claim based on the sole
discretion of the Debtor, either (l) cash in full amount of the allowed claim on
the Effective Date, or (2 deferred cash payments, payable annually beginning one
hundred eighty (180) days after the effective date of the plan and made during a
period not exceeding six (6) years after the date of assessment of such claim,
or a value as of the effective date of the plan, equal to the allowed amount of
such claim, which payment shall include interest on the allowed claim at the
appropriate rate.
C. The payment of Century Pacific Debtor's claims in this Section II shall be
made from the assets of the Century Pacific Debtor and the payment of the Global
Debtor's claims in this Section II shall be made as hereafter set forth.
Page 2
<PAGE>
III.
CLASSIFICATION OF CLAIMS
A. The claim against thee Century Pacific Debtor are divided into the
following classes:
CLASS I: Attorney's Fees Claims. The following claimants have agreed to
separate treatment from other administrative expense claimants:
James M. LaGanke, PC
For services rendered. Shares in Global II shall be issued as set forth in
paragraph V(F), INFRA.
Terry A. Dake
For services rendered to the chapter 7 Trustee. Shares in Global III shall
be issued as set forth in paragraph V(F), INFRA.
CLASS 2: Wages Claims
CLASS 3: Unsecured Tax Claims
CLASS 5(A): THE allowed unsecured claims under $200.00. Class two (2)
claims total approximately $400.00.
CLASS 5(B): THE allowed unsecured claims of $200.00 and over. These include
claims arising out of rejected executory contracts and leases, the unsecured
portion of secured creditors' claims under 506(1), contingent claims, and the
claims of unsecured holders of subordinated debentures totaling approximately
$1,634,408. The individual debentures range in amounts from $5,000.00 to
$139,000 with the majority being $10,000.00 each. Class three (3) claims total
approximately $1,634,408.
CLASS 5(C); EXISTING noteholders consisting of several groups would
exchange their senior position in the capital structure of the Century Pacific
Debtor into common stock in the amount of 17,065,727 shares thereby relieving
the Century Pacific Debtor of the burden of interest and principal payments. The
amount of common stock to be issued has been computed using the same formula as
was used in compiling the number of shares to be awarded other creditors.
CLASS 6: Holders of Century Pacific common stock, of which there are
approximately 727 as OF January 29, 1996. THESE investors hold approximately
13,317,894 shares.
B. The claims against thc Global DEBTOR are divided into the following
classes:
CLASS 1: James M.L LaGanke for services rendered prior to the conversion to
Chapter II.
CLASS 2: ALL claims that are not Class I or Class 3 claims
CLASS 3: Holders of common stock.
Tudor Investments, Ltd. Employee Profit Sharing Plan 48.75%
Miller Capital 48.75%
The Century Pacific Debtor 2.5%
Page 3
<PAGE>
IV.
TREATMENT OF CLASSES AND INTERESTS
IMPAIRED UNDER THE PLAN
A. Century Pacific Debtor:
CLASS 1: Class I claims are impaired under the Plan because the holders of
Class I claims will not receive cash equivalent to the allowed amount of their
claims on the effective date of the Plan. Class I claims will be paid in full
over six months following the effective date of the Plan.
CLASS 2:
CLASS 3:
CLASS 5(a): CLASS 2 CLAIMS OF $200.00 OR LESS WILL BE paid in cash on the
Effective Date of the Plan or as soon as practicable thereafter. The source of
funds for payment of these claims will be current operating revenues of Century
Pacific Financial and affiliates.
CLASS 5(b): Class 3 claims are impaired under the Plan because holders of
class 3 claims will not receive cash equivalent to the allowed amount of their
claim on the effective date of the Plan. 3,743,181 million shares of stock in
Company will be made available to pay Class 3 claims. Company's stock will be
issued and divided pro rata among Class 3 claimants. The Company's twenty five
thousand shares in Creative Vistas, Inc. shall be held by the Century Pacific
Debtor and will not be distributed pursuant to the Joint Plan.
CLASS 3 claimants may elect to be treated as a Class 2 claim, by electing
such treatment in writing on or before the effective date of the Plan. Class 3
claimants exercising this election shall receive $200.00 in cash within 30 days
of the effective date, in full payment of their claim.
CLASS 6: Current Stockholders. Current stockholders will retain their
shareholdings and will keep all their legal and equitable rights there under.
All existing warrants and options are canceled under the Plan.
CLASS 5(c): Debt instrument holders - Harris vs. Century Pacific
Corporation, et al.
B. Global Debtor:
1. Class 1: Claims shall be paid in full in cash on confirmation.
2. Class 2: Claimants shall receive 2.5% of the outstanding shares
(25,000 shares) of common stock which shall be divided and distributed pro rata
among all allowed creditors according to the amount of each claim as allowed.
3. Class 3: Four Hundred seventy-five thousand (475,000) shares of
stock shall be issued to Miller Capital and four Hundred seventy-five Thousand
(475,000) shares of stock shall be issued to Tudor Investments, Ltd. Profit
Sharing Plan. Each existing shareholder of the Century Pacific Debtor shall
receive approximately thirty-four (34) shares, each, which is each shareholder's
distribution per capita from the 25,000 shares to be distributed to said
shareholder group in exchange for cancellation of the Century Pacific Debtor
stock in the Global Debtor. All existing certificates shall be canceled in
exchange for the certificates to be issued pursuant to the Plan. Brokerage firms
holding stock in street names shall be issued approximately thirty-four (34)
shares for each separate person in whose name they hold stock as of the date the
petition was filed so as to treat such persons owning stock in "street name"
like all other shareholders.
Page 4
<PAGE>
V.
MEANS OF IMPLEMENTATION
A. Source of Funds as to Century Pacific Debtor.
Unclassified and Class 1. The source of funds for unclassified and
Class 1 claims is operating revenues of Century Pacific Corporation as of the
effective date of the Plan.
Class 2. The source of funds for Class 5(a) payments will be the
existing operating revenues of Century Pacific Corporation as of the effective
date of the Plan.
Class 5(b). The source of funds to pay these claims is newly-issued
stock of Century Pacific Corporation. 3,743,181 million shares of century
Pacific Corporation will be issued for the purpose of paying unsecured claims.
Each claimant will receive a pro rata share of the stock. There is sufficient
stock authorized to cover the claims. Class 6. No added stock is to be issued to
current stockholders.
Class 5(C). 17,065,727 shares of stock will be issued to satisfy Class
5 creditors. Said creditors shall also be issued shares of creative Vistas, Inc.
that are owned by the company. Each claimant will receive such shares pro rata.
B. Source of Funds as to Global Debtor.
1. All cash required will be contributed by Miller Capital and/or by
the tudor Investment, Ltd. Employee Profit Sharing Plan.
2. No cash is required; stock will be issued.
3. No cash is required; stock will be issued.
4. Disbursing agent--Each Debtor shall act as disbursing agent under
the respective portion or the Joint Plan. A Stock Transfer Agent shall be
employed to transfer the stock certificates.
C. Property.
I. Century Pacific Debtor
Debtor's only real, personal. or tangible assets. are furniture and
office equipment and miscellaneous penny stocks and the Creative Vistas. Inc.
stock. Debtor has intangible assets in the form of good will and a substantial
client base. These intangible assets have little or no salable value, and no
value if Debtor does not continue as a business entity. If the Debtor were to
liquidate, creditors would receive no more than $.001 mils on a dollar.
2. Global Debtor
Global Debtor has no tangible or intangible assets. If global were to
liquidate, creditors would receive nothing at all.
Page 5
<PAGE>
D. Acquisition (Century Pacific Debtor only)
Tempe Medical Equipment, a divsion of Natural Techno!ogies Inc. has
agreed to be acquired by the Century Pacific Debtor for a further issuance of
common stock. This company is a refurbishing and re-seller of "high tech"
medical equipment such as magnetic resonance imaging (MRI) systems, respiratory
care equipment and electronically operated diagnostic instruments. This
organization also serves as a distributor organization for a wide variety of
medical expendables Century will issue 20,873,198 shares of stock for the hard
assets of Tempe Medical Equipment.
E. Change in Management
1. Century Pacific Debtor.
a. Carlton V. Phillips has agreed to remain as Chairman of the Board
of Directors
b. David L. Hadley. Director of all refurbishing and remarketing
operations of Tempe Medical Equipment has agreed to become President of the
corporation.
c. Carlton V. Phillips and David L. Hadly have agreed to provide
operations, new product development advertising, accounting and market
development support on a regular and as-needed basis to meet the goals described
herein. Carton V. Phillips, Jr., Esq. has agreed to join the Board of Directors
and become Managing Director of mortgage lending activities. He may also serve
as corporate counsel. Regina M Phillips has agreed to join the Board of
Directors and serve as a consultant regarding loan processing activities.
d. Management has agreed to comply with all Securities and Exchange
Commission reporting and accounting requirements in a timely fashion.
i. The previously named corporate officers will be beneficiaries
of an incentive stock option plan enabling them to purchase common stock at
prices to be determined utilizing generally accepted standards for such awards.
Outside directors are expected to join this Board and will be paid for
attendance at each board meeting. Employee board members will receive no
payment. Outside directors will also be provided stock option opportunities
through a stock option plan
ii. Century Pacific Debtor shall indemnify new board members and
newly appointed corporate officers from any pre petition acts by its directors,
stockholders or officers.
e. All operating interim revenues of Century Pacific Debtor, after
expenses and sums to be paid pursuant to this Plan, shall be reinvested in
Century Pacific debtor or its affiliates during the period of this Plan.
2. Global Debtor:
a. Ronald E. Warnicke and Robert C. Warnicke will be the initial
officers and directors. Each is an attorney in good standing with the Arizona
State Bar Association. No salaries have been paid nor will be paid until assets
are acquired after confirmation.
b. Management has agreed to comply with all Securities and Exchange
Commission reporting and accounting requirements in a timely fashion. The
corporation shall reincorporate in Nevada upon confirmation and prior to
issuance of any stock.
Page 6
<PAGE>
F. Incorporation in Nevada
The Global Debtor shall be reincorporated in Nevada as set forth in
paragraph 3-2 of the Disclosure Statement. Global II and Global III shall each
be incorporated in Nevada with the same officers and directors as the Global
Debtor. Stock in Global II and stock in Global III shall be issued to the
shareholders of the Global Debtor in the same proportions as for the Global
Debtor. The stock issued to Tudor Investrnents Ltd Profit Sharing Trust and
Miller Capital shall be in exchange for the administrative claims rising from
payment of James LaGanke as to Global II and payment of Terry A. Dake as to
Global III . Said shares shall be issued as free trading stock pursuant to 1145
of the Bankruptcy Code, said shares being issued in exchange for an
administrative claim, said claims to be paid by Tudor Investments, Ldt. Employee
Profit Sharing Plan
VI.
MANAGEMENT AND REMUNERATTON OF OFFICERS AND DIRECTORS
A. CENTURY PACIFIC DEBTOR:
The following officers and directors are currently serving at the
following annual salaries.
Carlton V. Phillips - President - Chairman $18,000
Debtor has no provisions in its charter for non-voting securities.
Carlton V. Phillips will remain as Chairman of the Board of Directors and David
L. Hadley will become President of Company, as of the effective date of this
Plan.
There shall be no salary paid until the company acquires assets.
B. GLOBAL DEBTOR:
There will be no salary paid unless and until the company acquires
assets.
VII.
PROVISIONS FOR THE EXECUTION OF THE PLAN WHICH MAY
AFFECT, ALTER OR MODIFY THE RIGHTS OF ALL CLASSES
AND CLAIMANTS
A. As of the effective date of the Plan. each reorganized company
shall retain and be vested with all of its its respective assets, which shall no
longer be considered property of the estate, as defined in 11 U.S.C. 541, and
all of each Debtor's assets shall be free and clear of liens, claims and
interest of creditors except as specifically provided in this Plan.
B. After the effective date of the Plan, each reorganized company
shall continue its business and manage its affairs without supervision of the
Bankruptcy Court and may enter into such agreements and transfer, convey,
encumber, use and lease its assets as it deems appropriate under the
circumstances. without the requirement of seeking approval from the Bankruptcy
Court.
C. The holders of secured claims in any of the classes shall
terminate, relinquish and reconvey, and shall be deemed to have terminated,
relinquished and reconveyed any security, beneficial, or ownership interest
which they may
Page 7
<PAGE>
have in any of the assets of either Debtor upon the payment. pursuant to this
plan, of the allowed amount of such claims.
D. The distributions to holders of claims pursuant to this plan are
minimum distributions only, and the Debtor shall have the right and discretion
to negotiate and pay in installments the specified sums without penalty.
E. Upon the effective date of the Plan, unless a stay has been entered
relating to the Order of Confirmation, the automatic stay described in 362(1) of
the Bankruptcy Code shall terminate; provided, however. that all creditors and
claimants shall be enjoined from continuing with or commencing any action or
proceeding against the company as long as the company complies with the terms of
the plan.
F. All distributions of money under the Plan which are returned by the
Post Office undelivered or which cannot be delivered due to lack of a current
address will be retained by the company in trust in a federally insured bank for
the distributee; after the expiration of six (6) months from the date of the
first attempted distribution, the unclaimed moneys, stock and all future
distributions will vest in the company, fee of any claim by the distributee.
G. No creditor or claimant, whether secured, unsecured, priority, or
nonpriority, shall be entitled to any fine, penalty, exemplary or punitive
damages, late charges, default interest, or any other monetary charge relating
to or arising from any default or breach by the Debtor and any claim for such
sums shall be deemed disallowed whether or not an objection is filed thereto.
Creditors with allowed secured claims shall be entitled to reasonable attorneys'
fees and nondefault interest as provided by Section 506 of the Bankruptcy Code.
H. No distribution shall be made hereunder or on account of and no
allowed claim shall include. interest thereon whether provided for in any
agreements after the commencement of the Debtors' Chapter II case, nor shall any
claimant be allowed any costs, expenses, attorneys' fees or awards of securities
except as provided under 506(b) of the Bankruptcy Code.
I. The Debtor shall maintain insurance on all of its property (if any)
sufficient to cover the replacement value of these assets and shall keep its
property in good repair, reasonable wear and tear excepted
J. Upon the entry of the Order of Confirmation, the plan shall bind
the Debtor, any entity acquiring or being distributed any property under the
Plan, any creditor, and any equity security holder, whether or not their claims
and interests are impaired under the plan and whether or not they have accepted
the Plan.
K. The entry of the Order of Confirmation shall permanently bar the
filing and asserting of any claims against the Debtor which arose or relate to
the period of time prior to the date of such confirmation, which were listed by
the Debtor in its Schedules and Statement of Affairs filed with the Bankruptcy
Court or were not evidenced by timely and proper Proofs of Claim filed with the
Bankruptcy Court.
L. Upon the entry of an Order of Confirmation, any and all payments to
secured creditors for adequate protection shall be terminated.
M. If the Debtor fails to comply with the terms of its respective
Plan. the holders of claims in any class materially harmed thereby may proceed
against said Debtor (and under said Debtors) and its property in order to
enforce the plan and collect the obligations of the company hereunder by
bringing or taking any appropriate action under federal or state law, in
Bankruptcy Court or other court or competent jurisdiction and in the case or a
secured claimant, in accordance with any applicable and existing mortgage, deed
of trust, security agreement, or other instrument evidencing a lien or
encumbrance. No rights shall exist against one Debtor by reason of any post plan
action or default of the other and neither Debtor shall have any responsibility
for any representations of the other in the Joint Disclosure Statement.
Page 8
<PAGE>
VIII.
DISPUTED CLAIMS; OBJECTIONS TO CLAIMS
The Debtor its attorneys and any party in interest may file (a) an
objection to any cIaim, (b) a motion to determine the extent ,priority, or
amount of any secured or other claim, or (c) a complaint to determine the
validity, priority, or extent of a lien or other interest in property. Copies of
all objections, motions, or complaints must be served timely upon the Century
Pacific Debtor's attorney, James M. LaGanke, PC 202 E Earll Drive, Suite 340,
Phoenix, AZ 85012 and upon Global Debtor's President, Ronald E. Warnicke, 2020
N. Central Avenue, 5th Floor, Phoenix, AZ 85004.
IX.
MODIFICATION OF PLAN
Prior to The Order of Confirmation, the Debtor may propose amendments
or modifications of this Plan in accordance with Section 1127(a) of the
Bankruptcy Code. After confirmation, the Debtor may amend this Plan in the
manner provided by Section 1127(b) of the Bankruptcy Code. The Bankruptcy Court
may, at any time, so long as it does not materially or adversely affect the
interest of the creditors, remedy any defects or omissions or reconcile any
inconsistencies in the Plan or in the Order of Confirmation , and in such manner
as may be necessary to carry out the purposes and effect of this Plan
X.
EXECUTORY CONTRACTS
Debtors reject all exectuory contracts not previously assumed, or
assumed herein whether or not specifically listed herein. Any entity asserting a
claim arising in connection with such a rejection shall be required to file a
proof of claim relating thereto within 10 days of the entry of an order
approving the disclosure statement filed in conjunction with this Plan.
XI.
RETENTION OF JURISDICTION
The Court shall retain jurisdiction over this estate to ensure that
the purpose and intent of this Plan is carried out, to modify this Plan, to
correct any defect, to cure any omission or reconcile any inconsistencies in
this Plan or the order of confirmation, to enter any order necessary to carry
out the Plan, to enter an order terminating this case, and for any other
purposes deemed appropriate by the Court.
Page 9
[CENTURY PACIFIC CORPORATION LOGO]
NUMBER COMMON STOCK SHARES
Century Pacific Corporation has been modified in name to CENTURY PACIFIC
FINANCIAL CORPORATION under the terms of release form Chapter 11 Reorganization
dated July 22, 1998. Federal Tax ID #, Delaware Corporate File # and CUSIP #
remain the same. Tender of previously issued certificates is unnecessary.
SEE REVERSE
FOR CERTAIN CUSIP
DEFINITIONS
THIS CERTIFIES THAT
is the record holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $.04 PER
SHARE, OF
CENTURY PACIFIC CORPORATION,
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated November 6, 1998
Countersigned and registered: [SEAL] President
Authorized Signature Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR THE 12 MONTHS ENDED SEPTEMBER 30, 1998 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 508,933
<BONDS> 0
0
0
<COMMON> 532,676
<OTHER-SE> (1,041,609)
<TOTAL-LIABILITY-AND-EQUITY> 508,953
<SALES> 42,855
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 43,233
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (378)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (378)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
