FORM 12b-25
NOTIFICATION OF LATE FILING
Form 10-KSB For The Period Ended April 30, 1997
Part I - Registrant Information
Finet Holdings Corporation
3021 Citrus Circle, Suite 150
Walnut Creek, CA. 94509
Part II - Rules 12b-25 (b) and (c)
(a) The reasons for the delay in filing as described in reasonable
detail in Part III of this form could not be eliminated without
unreasonable effort or expense;
(b) The subject annual report on Form 10-KSB will be filed on or
before the fifteenth calendar day following the prescribed due date;
(c) The primary reason the subject report cannot be filed in a
timely manner is the result of the inability of the Registrant's
independent accountant to furnish an opinion and audited financial
statement in the time requesed. Accordingly, an explanatory independent
accountants statement is included as Exhibit 99 .
Part III - Narrative
A series of events that have combined to cause a delay in Registrant's
receipt of audited financial statements upon which to base and file its
Form 10-KSB for the year ended April 30, 1997. These events include:
1. The Registrant's operations were dormant through most of
calendar 1996 and, as a result, placed many of its records in storage and
had no full time accounting personnel on staff. Furthermore, the
Registrant moved its administrative offices to a new location. The lack
of accounting staff and challenge of locating, assembling and entering
all the Company's accounting information after the move delayed closure
of the company accounting records as of April 30, 1997.
2. Between December 1996 and April 1997 the Company raised
additional equity capital, restructured its liabilities, and also
completed an acquisition of one company (Preference America Mortgage
Network) and a reverse triangular merger with a second company (Monument
Mortgage, Inc.) as of December 31, 1996. The resources required to
complete these activities severely limited the Company's ability to deal
with issues of year end accounting activity.
3. The acquisition and merger transactions described above
involved complex legal, accounting and tax issues for which little
precedent authority was available. The Registrant experienced material
delays in obtaining clear authoritative source information to assure
proper recording these transactions. The Company and its independent
accountants were able to reach interpretative consensus among FASB and
SEC staff only after considerable dialogue as to the appropriate
accounting methodology. The time required to resolve these complex
issues further delayed completion of the Form 10-KSB.
4. Both of the companies acquired by the Registrant were on an
April 30 fiscal year end. The fiscal year end of the Registrant was
changed from December 31 to April 30th in order to conform to the fiscal
year of the subsidiary upon which its report will be based. Prior to the
acquisitions, the Registrant's independent accountant had no experience
with the subsidiaries. The additional procedures involved in any first
year audit, combined with the short time to complete the audit engagement
upon resolution of merger accounting methodology and delays in closing
the Registrant's accounting books for the reasons above, has prevented
completion of the annual audit in the time allowed.
Part IV - Other Information
(1) Name and telephone number of person to contact in regard to
this notification
Mr. Jan Hoeffel (510) 988-6555
(2) Have all other periodic reports required under section 13 or
15(d) of the Securities Exchange Act of 1934 or section 30 of the
Investment Company Act of 1940 during the preceding 12 months or for such
shorter period that the registrant was required to file such report(s)
been filed? If the answer is no, identify reports(s).
[ ] Yes [ X ] No
Form 10-QSB for the quarter ended January 31, 1997 has not been
filed. It will be filed concurrently with the Form 10-KSB for which
this late filing notification has been submitted.
(3) Is it anticipated that any significant change in results of
operations from the corresponding period for the last fiscal year will be
reflected by the earnings statements to be included in the subject report
or portion thereof?
[ X ] Yes [ ] No
During the fiscal year ended April 30, 1997, the Registrant was
operationally, dormant, completed a significant recapitalization
involving four private placements, a voluntary debt restructuring
and the acquisition of two companies. One of these acquisitions will
be reported as a reverse acquisition for accounting purposes, so the
books of the acquired company will become the books of the
Registrant. In addition, the fiscal year end of the registrant has
been changed from December 31 to April 30. As a result, the current
period's operations and results will bear little or no resemblance
to the prior period's operations or results. Given these
significant and material differences, the provision of general
information at this time would be confusing and potentially
misleading without extensive explanation and analysis. For this
reason, a reasonable estimate of the results, either narratively or
quantitatively, cannot be provided at this time.
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FINET HOLDINGS CORPORATION
has caused this notification to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: July 29, 1997 By: /s/ Jan Hoeffel
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Jan Hoeffel, President
REUBEN E. PRICE & CO.
PUBLIC ACCOUNTANCY CORPORATION
703 MARKET STREET
SAN FRANCISCO, CA 94103
We have been engaged to audit consolidated balance sheets of Finet
Holdings Corporation and subsidiaries as of April 30, 1997 and 1996, and
the related consolidated statements of operations, stockholders' equity
and cash flows for the years April 30 , 1997, 1996 and 1995. We have
incurred unanticipated delays in completing this engagement that, for the
following reasons, could not be eliminated without unreasonable effort or
expense:
1. Due to the Registrant's minimal operating activity and staffing
during most of calendar 1996, the relocation of its administrative office
and the storage of most of its records, locating, assembling and
reviewing the Company's accounting information required more time than
anticipated.
2. Between December 16, 1996 and April 30, 1997, the Company
raised additional equity capital, restructured its liabilities, completed
an acquisition of one company and a reverse triangular merger with a
second company, and began continuing mortgage banking operations. These
activities materially increased the time and audit staff resources
required to complete the engagement in comparison to prior years.
3. The acquisition and merger transactions described above
involved complex legal, accounting and tax issues for which little
precedent authority was available. Material delays were incurred in
obtaining clear authoritative source information to assure proper
treatment of these transactions. Considerable dialogue and analysis was
required to reach consensus among the acquiree's prior independent
accountants, FASB and SEC staff as to the appropriate accounting
methodology and determination of independent accountant status. It was
eventually determined that, although the Registrant legally acquired the
subsidiary through a reverse merger, the subsidiary acquired the
Registrant for accounting purposes and Reuben E. Price & Co. continued as
the Registrant's independent accountant throughout the affected periods.
The time required to resolve these complex issues delayed our audit
activities.
4. As a result of the Registrant's change of fiscal year end from
December 31 to April 30, the period to be audited became sixteen months
rather than twelve. Additionally, we were not previously the independent
accountants of the acquired subsidiaries upon which the audit would be
based. The additional procedures involved in any first year audit,
combined with the extended audit period and short time to complete the
audit engagement after resolution of merger accounting methodology
prevented completion of the audit in the time requested by the
Registrant.
/s/ REUBEN E. PRICE & CO.
REUBEN E. PRICE & CO.
San Francisco, CA
July 29, 1997
