SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
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 No. 33-55254-14
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(Exact name of Registrant as specified in its charter)
NEVADA 87-0438451
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
73 SOUTH PALM AVENUE, SUITE 223
SARASOTA, FLORIDA 34236
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (941) 957-1009
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
As of April, 1997, the aggregate market value of the voting stock held by
non-affiliates of the registrant is approximately $37,500.
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of April, 1997
$.001 PAR VALUE CLASS A COMMON STOCK 1,100,000 SHARES
DOCUMENTS INCORPORATED BY REFERENCE :
None
<PAGE>
PART I
ITEM 1. Business.
The Company was incorporated under the laws of Utah on April 16, 1986
as Zeus Enterprises, Inc. and subsequently reorganized under the laws of Nevada
on December 30, 1993. The Company's reorganization plan was formulated for the
purpose of changing the state of domicile and provided that the Company form a
new corporation in Nevada which acquired all of the contractual obligations,
shareholder rights and identity of the Utah corporation, and then the Utah
corporation was dissolved. The Company is in the developmental stage, and its
operations had been limited to the sale of shares to Capital General Corporation
and the gifts of shares to the giftees. The Company has been in the process of
investigating potential business ventures which, in the opinion of management,
would provide a source of eventual profit to the Company. On May 31, 1996 the
name was changed to Pacific Forest Corporation.
On September 12, 1995, the Company, in consideration of the issuance of
100,000 authorized but unissued shares, acquired $50,000 from Capital General
Corporation for $.50 per share. The price of the shares was arbitrarily decided
upon by both parties. After the completion of the stock purchase, Capital
General became the holder of approximately 30.6% of the issued and outstanding
shares of the Company. Krista Castleton Nielson, former President and Director
of the Company, and David R. Yeaman, former Secretary and Director of the
Company are both officers and directors of Capital General.
During June of 1996, the Company acquired a subsidiary in Fiji and intended to
operate in the timber processing industry. However, the necessary capital could
not be raised and the transactions with the Fijian subsidiary were reversed,
effective December 31, 1996.
The Company will continue to try to expand through future acquisitions
and will be extremely limited in its attempts to locate potential business
situations for investigation. The Company plans to continue on a limited basis,
the process of investigating possible merger and acquisition candidates, and
believes that the Company's status as a publicly-held corporation will enhance
its ability to locate such potential business ventures.
Management anticipates that due to its lack of funds, and the limited
amount of its resources, the Company may be restricted to participation in only
one potential business venture. This lack of diversification should be
considered a substantial risk because it will not permit the Company to offset
potential losses from one venture against gains from another.
The analysis of business opportunities will be undertaken by or under
the supervision of the Company's management, none of whom is a professional
analyst and none of whom have significant general business experience. Among the
factors which management will consider in analyzing potential business
opportunities are the available technical, financial and managerial resources;
working capital and financial requirements; the history of operation, if any;
future prospects; the nature of present and anticipated competition; potential
for further research, development or exploration; growth and expansion
potential; profit potential; the perceived public recognition or acceptance of
products or services; name identification, and other relevant factors.
It is not possible at present to predict the exact manner in which the
Company may participate in future business opportunities. Specific business
opportunities will be reviewed and, based upon such review, the appropriate
legal structure or method of participation will be decided upon by management.
Such structures and methods may include, without limitation, leases, purchase
and sale agreements, license, joint ventures; and may involve merger,
consolidation or reorganization. The Company may act directly or indirectly
through an interest in a partnership, corporation or other form of organization.
However, it is most likely that the Company will acquire a business venture by
involving the issuance of the Company's restricted securities. Such a
reorganization may involve a merger (or combination pursuant to state corporate
statutes, where one of the entities dissolves or is absorbed by the other), or
it may occur as a consolidation, where a new entity is formed and the Company
and such other entity combine assets in the new entity. A reorganization may
also occur, directly or indirectly, through subsidiaries, and there is no
assurance that the Company would be the surviving entity. Any such
reorganization could result in
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additional dilution to the book value of the shares and loss of control of a
majority of the shares. The Company's present directors may be required to
resign in connection with a reorganization.
A reorganization may be structured in such a way as to take advantage
of certain beneficial tax consequences available in business reorganizations, in
accordance with provisions of the Internal Revenue Code of 1986 (as amended).
Pursuant to such a structure, the number of shares held prior to the
reorganization by all of the Company's shareholders might be less than 20% of
the total shares to be outstanding upon completion of the trans action.
Substantial dilution of percentage equity ownership may result to the giftees,
in the discretion of management.
Generally, the issuance of securities in a reorganization transaction
would be undertaken in reliance upon one or more exemptions from the
registration provisions of applicable federal securities laws, including the
exemptions provided for non-public or limited offerings, distributions to
persons resident in only one state and similar exemptions provided by state law.
Shares issued in a reorganization transaction based upon these exemptions would
be considered "restricted" securities under the 1933 Act, and would not be
available for resale for a period of two years, in accordance with Rule 144
promulgated under the 1933 Act. However, the Company might undertake, in
connection with such a reorganization transaction, certain registration
obligations in connection with such securities.
The Company may choose to enter into a venture involving the
acquisition of or merger with a company which does not need substantial
additional capital but desires to establish a public trading market for their
securities. Such a company may desire to consolidate its operations with the
Company through a merger, reorganization, asset acquisition, or other
combination, in order to avoid possible adverse consequences of undertaking its
own public offering. (Such consequences might include expense, time delays, or
loss of voting control.) In the event of such a merger, the Company may be
required to issue significant additional shares, and it may be anticipated that
control over the Company's affairs may be transferred to others. It should also
be noted that this type of business venture might have the effect of depriving
the giftees of the protection of federal and state securities laws, which
normally affect the process of a company's becoming publicly held.
It is likely that the investigation and selection of business
opportunities will be complex, time-consuming and extremely risky. However,
management believes that even though the Company will have limited capital, the
fact that their securities will be publicly-held will make it a reasonably
attractive business prospect for other firms.
As part of their investigation of acquisition possibilities, the
Company's management may meet with executive officers of the business and its
personnel; inspect its facilities; obtain independent analysis or verification
of the information provided, and conduct other reasonable measures, to the
extent permitted by the Company's limited resources and management's limited
expertise. Generally, the Company intends to analyze and make a determination
based upon all available information without reliance upon any single factor as
controlling.
<PAGE>
In all likelihood, the Company's management will be inexperienced in
the areas in which potential businesses will be investigated and in which the
Company may make an acquisition or investment. Thus, it may become necessary for
the Company to retain consultants or outside professional firms to assist
management in evaluating potential investments, and to hire managers to run or
oversee the operations of its acquisitions or investments. The Company can give
no assurance that it will be able to find suitable consultants or managers. The
Company intends not to employ any of its affiliates, officers, directors or
principal shareholders as consultants. The Company has no policy regarding the
use of consultants, however, if management, in its discretion, determines that
it is in the best interests of the Company, management may seek consultants to
review potential merger or acquisition candidates. It is anticipated that the
total amount of fees paid to any consultant would not exceed $5,000 per
transaction. The fee, it is anticipated, would be paid by the Company or by the
potential target company. There are currently no contracts or agreements between
any consultant and any companies that are searching for companies with which to
merge.
It may be anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention, and substantial costs for accountants, attorneys
and others. Should a decision thereafter be made
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not to participate in a specific business opportunity, it is likely that costs
already expended would not be recoverable. It is also likely, in the event a
transaction should eventually fail to be consummated, for any reason, that the
costs incurred by the Company would not be recoverable. The Company's officers
and directors are entitled to reimbursement for all expenses incurred in their
investigation of possible business ventures on behalf of the Company, and no
assurance can be given that if the Company has available funds they will not be
depleted in such expenses.
In addition to the severe limitations placed upon the Company by virtue
of its limited funded status, the Company will also be limited, in its
investigation of possible acquisitions, by the reporting requirements of the
Securities Exchange Act of 1934, pursuant to which certain information must be
furnished in connection with any significant acquisitions. The Company would be
required to furnish, with respect to any significant acquisition, certified
financial statements for the acquired company, covering one, two or three years
(depending upon the relative size of the acquisition). Consequently, acquisition
prospects which do not have the requisite certified financial statements, or are
unable to obtain them, may be inappropriate for acquisition under the present
reporting requirements of the 1934 Act.
The Company does not intend to take any action which would render it an
investment company under The Investment Companies Act of 1940 (the "1940 Act").
The 1940 Act defines an investment company as one which (1) invests, reinvests
or trades in securities as its primary business, (2) issues face-amount
certificates of the installment type or (3) invests, reinvests, owns, holds or
trades securities or owns or acquires investment securities having a value
exceeding 40 percent of the value of its total assets (exclusive of Government
securities and cash items) on an unconsolidated basis. The above 40 percent
limitation may be exceeded so long as a company is primarily engaged, directly
or through wholly-owned subsidiaries, in a business or businesses other than
that of investing, reinvesting, owning, holding or trading in securities. A
wholly-owned subsidiary is defined as one which is at least 95% owned by the
company.
Neither the Company nor any of its officers or directors are registered
as investment advisers under the Investment Advisers Act of 1940 (the "Advisers
Act"), and so there is no authority to pursue any course of business or
activities which would render the Company or its management "investment
advisers" as defined in the Advisers Act. Management believes that registration
under the Advisers Act is not required and that certain exemptions are
available, including the exemptions for persons who may render advice to a
limited number of other persons and who may advise other persons located in one
state only.
The Company expects to encounter intense competition in its efforts to
locate suitable business opportunities in which to engage. The primary
competition for desirable investments may come from other small companies
organized and funded for similar purposes, from small business development
corporations and from public and private venture capital organizations. As the
Company has limited funds and other resources, it can fairly be said that nearly
all of the competing entities will have significantly greater experience,
resources, facilities, contacts and managerial expertise than the Company and
will, consequently, be in a better position than the Company to obtain access
to, and to engage in, business opportunities. Due to its limited funds, the
Company may not be in a position to compete with larger and more experienced
entities for business opportunities which are low-risk. Business opportunities
in which the Company may ultimately participate are likely to be highly risky
and extremely speculative.
ITEM 2. Properties.
The Company owns no properties and utilizes space on a rent-free basis
in the office of its President. This arrangement is expected to continue until
such time as the Company becomes involved in a business venture which
necessitates its relocation, as to which no assurances can be given. The Company
has no agreements with respect to the maintenance or future acquisition of
office facilities, however, if a successful merger/acquisition is negotiated, it
is anticipated that the office of the Company will be moved to that of the
acquired company.
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ITEM 3. Legal Proceedings.
On January 7, 1994, the Bureau of Securities of the State of New Jersey
filed a complaint in the matter of Capital General Corporation, David R. Yeaman
and 74 other named defendants, Nevada and Utah corporations including the
Company, which complaint proposes that civil monetary penalties totaling
$30,000.00 be assessed against Capital General Corporation for alleged
violations of the Uniform Securities Law (1967), N.J.S.A. 49:3-47 et. seq. by
(1) selling to 24 New Jersey residents between April 1986 and May 1991,
securities in 25 of the 74 above referred to respondent corporations named in
the proceeding, including the Company, which were neither registered nor exempt
from registration, and (2) making untrue statements of material fact and
omitting to state material facts in connection with said New Jersey sales in 6
of the 74 above referred to resident corporations named in the proceeding,
including the Company. Also on January 7, 1994, the Bureau of Securities of the
State of New Jersey, based on substantially similar allegations as in the above
referred complaint, issued its Order Denying Exemptions and to Cease and Desist.
This order summarily denied the exemptions contained in N.J.S.A. 49:3-50(b),
(1), (2), (3), (9), (11) and (12) of the securities of Capital General
Corporation and the other 74 respondent corporations, including the Company,
except that excluded from the summary denial of the exemption contained in
N.J.S.A. 49-3- 50(b)(12) is the Offer of Rescission by Capital General
Corporation to 24 New Jersey residents pursuant to the offer of rescission which
began about April 28, 1993. This order also ordered Capital General Corporation
and David Yeaman to Cease and Desist from offering or selling any securities in
blind pool corporations into, or from the State of New Jersey.
Capital General and David Yeaman filed answers denying the material
allegations of said complaint and resisting the imposition of said civil
monetary penalties, and the said Order Denying Exemptions and to Cease and
Desist. Subsequently the issues raised in said complaint and order were settled
by agreement between the said Bureau of Securities and Mr. Yeaman and Capital
General Corporation in a consent order dated July 11, 1994 and approved by an
administrative law judge of the State of New Jersey Office of Administrative Law
September 2, 1994. Under the terms of said consent order, all claims in the
complaint against all named respondents were settled by the payment of $3,000
civil penalty, and the order was modified so that it does not to apply to 27 of
the respondent companies; however said order does still apply to the Company.
During 1986 and 1987, Capital General gifted very small percentages of
stock (usually 100 shares to each giftee) in the following companies, which
includes the Company, to approximately 1,000 persons or entities: Amenity, Inc.,
Dogmatic, Inc., Mystic Industries, Inc., Highland Mfg., Inc., Kowtow, Inc.,
Noble Industries, Inc., Oryan Capital Corporation, Pegasus Star Enterprise,
Inc., Showstoppers, Inc., Hightide, Inc., Grandeur, Inc., Fantastic Industries,
Inc., Jugglar, Inc., Xebec Galleon, Inc., Golden Home Health Care Equipment
Centers, Inc., Nighthawk Capital, Inc., Instrument Development Corporation,
Panther Industries, Inc., Owl Enterprises, Inc., Quail, Inc., GBS Technologies
Corporation, H & B Carriers, Inc., Florida Growth Industries, Inc., Macaw, Inc.,
Longhorn Enterprise, Inc., Koala Corporation, Yahwe Corporation, Star Dolphin,
Inc., Jackal, Inc., Hyena Capital, Inc., Gopher, Inc., Flamingo Capital, Inc.,
Egret, Inc., Cetacean Industries, Inc., Bonito, Inc., Alpaca, Inc., Zeus
Enterprise, Inc., Tamarind, Inc., Saber, Inc., Radar, Inc., Quiescent
Corporation, Vanadium, Inc., Upsilon, Inc., Why Not?, Inc., Bestmark, Inc.,
Missouri Illinois Mining Co., Inc.
Capital General did not register the gifts of shares in these companies
with the Securities Division of the State of Utah or with the Securities
Exchange Commission because it believed these gifts to be outside the scope of
the Utah Uniform Securities Act and the Securities Act of 1933 in as much as
such acts require registration for sales and do not require registration of
gifts. Nevertheless, in connection with the distribution of shares of its
subsidiaries, Capital General was found by the Utah Securities Advisory Board,
in two decisions affirmed by the Utah State Courts, to have violated the
registration provisions of the Utah Uniform Securities Act. See In re Amenity
Inc., No. SD-86-11 (Utah Sec. Adv. Bd. February 18, 1987) aff'd C87-2625 (3d
Dist. Ct. September 18, 1987) aff'd sub nom Capital General Corp. v. Utah Dep't
of Business Reg., 777 P.2d 494, 498 (Utah Ct. App.) cert. denied, 781 P.2d 873
(Utah S. Ct. 1989); In re H&B Carriers Inc., No. 87-09-28-01 (Utah Sec. Adv.
Bd., Apr. 15, 1988) aff'd No. 88-5900053 (3d Dist. Ct. Sept 10, 1990) aff'd sub
nom Capital General Corp. v. Utah Dep't of Business Reg., Case No 91-196 (Utah
Ct. App. February 10, 1992. All of the remaining companies listed above were
parties to the H&B Carriers order.
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Both of these actions sought suspension of transactional exemptions
respecting the shares of these companies pursuant to Section 14 (3) of the Utah
Uniform Securities Act. Capital General defended both actions on the grounds
that the Utah Uniform Securities Act did not apply to gifts of securities, that
the gifts were good faith gifts specifically exempted by the Act, and that in
any event even if it had "sold" shares in violation of the Act, suspension of
transactional exemptions was not an authorized remedy under the statute. These
defenses were rejected at the administrative agency level, and upon judicial
review at the District Court level and by the Utah Court of Appeals.
See also Item 10 regarding legal proceedings against former officers
and directors.
ITEM 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to the Company's security holders for a vote
during the fiscal year ending December 31, 1996.
PART II
ITEM 5. Market for Registrant's Common Equity and Related Stockholders Matters.
The Company's common stock is traded over the counter on the NASD
Bulletin Board. There was no market value for the Company's common stock until
the fourth quarter of 1995, at which time the low bid and the high bid was $.50
per share. During 1996, the stock's price ranged from a low of $.375 to a high
of $6.375. The reported bids for the Company's common stock reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions. The latest price in April, 1997 was a bid of $.125 and ask
of $2.00.
As of April, 1997, there were 759 record holders of the Company's
common stock. The Company has not previously declared or paid any dividends on
its common stock and does not anticipate declaring any dividends in the
foreseeable future.
ITEM 6. Selected Financial Data.
<TABLE>
<CAPTION>
PACIFIC FOREST CORPORATION
SUMMARY OF OPERATIONS
DECEMBER 1996
1996 1995 1994 1993 1992
---------- ---------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Total Assets.............. 39 50,000 0 0 0
Revenues.................. 0 0 0 0 0
Operating Expenses........ 51,186 0 0 0 0
Net Earnings (Loss)..... (51,186) 0 0 0 0
Per Share Data
Earnings (Loss)......... (.05) 0 0 0 0
Average Common Shares
Outstanding............. 1,100,000 1,029,167 1,000,000 1,000,000 1,000,000
</TABLE>
ITEM 7. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Current assets at December 31, 1996 were $39 as compared to net current
assets at December 31, 1995 of $50,000. The decrease in current assets was due
to a decrease in cash of $49,961 related mainly to paying $40,000 for an
advertising program to raise capital for the Fijian operations.
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Net loss for the year was $51,186 which consisted mostly of advertising
expense of $40,000 and other general and administrative expenses of $11,186.
The Company has not received any income as of the year ended December
31, 1996, and has had limited operational history. All risks inherent in new and
inexperienced enterprises are inherent in the Company's business.
The Company has not made a formal study of the economic potential of any
venture.
The Company will continue to try to expand through acquisitions and
will be extremely limited in its attempts to locate potential business
situations for investigation. The Company plans to continue on a limited basis,
the process of investigating possible merger and acquisition candidates, and
believes that the Company's status as a publicly-held corporation will enhance
its ability to locate such potential business ventures.
Management anticipates that due to the limited amount of its resources,
the Company may be restricted to participation in only one potential business
venture. This lack of diversification should be considered a substantial risk
because it will not permit the Company to offset potential losses from one
venture against gains from another.
ITEM 8. Financial Statements and Supplementary Data.
See Item 14.
ITEM 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not Applicable.
PART III
ITEM 10. Directors and Executive Officers of the Registrant.
The following table shows the positions held by the Company's officers
and directors. The directors were appointed at inception and will serve until
the next annual meeting of the Company's stockholders, and until their
successors have been elected and have qualified. The officers were appointed to
their positions, and continue in such positions, at the discretion of the
directors.
Name Age Position
Roger Tichenor 34 President, Director
Roger Tichenor has been the President and sole Director of the Company
since February 24, 1997. Mr. Tichenor is currently President of a private
consulting company, Phoenix Capital, Inc. He is engaged in providing advice and
counsel to small private companies that are seeking to go public. Mr. Tichenor
provides consulting and strategy to public companies concerning business and
financial plans, negotiating with potential merger and acquisition candidates
and introductions into the financial community.
Mr. Tichenor is 34 years of age and has been involved in the securities
business since 1987. He began in the business as a registered representative and
eventually became Branch Manager of a Chicago based stock and commodity firm. In
1993 he resigned his licenses to pursue his current endeavors.
On February 8, 1996, David R. Yeaman, former Secretary/Treasurer and
former Director, was charged in the United States District Court for the Eastern
District of Pennsylvania with conspiracy, wire fraud and fraud in the offer,
purchase and sale of securities, in violation of 18 U.S.C. Sections 2, 371 and
1343; 15 U.S.C. Sections 77q(a), 77x, 78j(b), and 78ff; and Rule 10b-5
promulgated by the Securities and Exchange Commission, Title 17, Code of Federal
Regulations, Section 240.10b- 5 (1986).
On February 22, 1996, Mr. Yeaman entered his not guilty plea to all
charges. The allegations against Mr. Yeaman are based on the government's claims
that he and five of the other defendants named in the proceeding violated the
aforesaid laws by inflating the apparent worth of certain reinsurance companies
by leasing them alleged worthless securities. Specifically, it is alleged that
Mr. Yeaman, with other defendants, engaged in practices which falsely increased
the quoted
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prices of the securities and misrepresented restricted securities as free
trading securities. Based on these allegations, the charges against Mr. Yeaman
include one count of conspiracy, seven counts of wire fraud, six counts of
securities fraud, and aiding and abetting with respect to each count.
The U.S. Securities and Exchange Commission, Securities Act of 1933
Release No. 7008 and Securities Exchange Act of 1934 Release No. 32669 announced
that on July 23, 1993, it ordered David R. Yeaman and Capital General
Corporation to permanently cease and desist from committing or causing further
violations of Section 5(a) and (c) and 17(a) of the Securities Act of 1933 and
Sections 10(b) and 13(g) of the Securities Exchange Act of 1934 and Rules 10b-5,
12b-20 and 13d-1(c) thereunder.
Krista Castleton Nielson , former President and former Director, was
ordered to permanently cease and desist from committing or causing further
violations of Section 17(a) of the Securities Act and Section 10(b) of the
Exchange Act and Rules 10b-5 and 12b-20 thereunder. In addition, the Commission
ordered the revocation of the registration of the common stock of Altara
International, Inc., Arrow Management, Inc., Atlas Equity, Inc., Dynamic
Associates, Inc., Energy Systems, Inc., Four Star Ranch, Inc., Panorama
Industries, Inc., Partisan Corporation, Quiescent Corporation, Saber, Inc.,
Upsilon, Inc., Vicuna, Inc., Why Not?, Inc., Xebec Galleon, Inc., Zebu, Inc.,
and Zeus Enterprises, Inc. pursuant to Section 12(j) of the Exchange Act. The
Commission found that each of the issuers had filed a registration statement on
Form 10 that contained materially false and misleading statements in violation
of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Each of the respondents had submitted an Offer of Settlement consenting
to the entry of the Order without admitting or denying the allegations in the
Order. Prior to the submission of the Offers of Settlement, Capital General, on
behalf of the above mentioned companies, except for Panorama Industries, Inc.,
filed a registration statement on Form S-1 during December of 1992 to register
the common stock of those companies under the Securities Act of 1933.
Concurrently with the signing of the Offers of Settlement, the Registration
Statement was declared effective on June 30, 1993. A Post Effective Amendment
was filed and declared effective September 2, 1993. Although the registration of
the common stock under Section 12(g) of the 1934 Act was revoked on July 23,
1993, the companies are now registered and reporting under the Securities Act of
1933 by virtue of the filing of Form S-1 as indicated by Commission File No.
33-55254.
ITEM 11. Executive Compensation.
The Company has made no arrangements for the remuneration of its
officers and directors, except that they will be entitled to receive
reimbursement for actual, demonstrable out-of-pocket expenses, including travel
expenses if any, made on the Company's behalf in the investigation of business
opportunities. No remuneration has been paid to the Company's officers or
directors prior to the filing of this form. There are no agreements or
understandings with respect to the amount or remuneration that officers and
directors are expected to receive in the future. Management takes no salaries
from the Company and does not anticipate receiving any salaries in the
foreseeable future. No present prediction or representation can be made as to
the compensation or other remuneration which may ultimately be paid to the
Company's management, since upon the successful consummation of a business
opportunity, substantial changes may occur in the structure of the Company and
its management. At such time, contracts may be negotiated with new management
requiring the payment of annual salaries or other forms of compensation which
cannot presently be anticipated. Use of the term "new management" is not
intended to preclude the possibility that any of the present officers or
directors of the Company might be elected to serve in the same or similar
capacities upon the Company's decision to participate in one or more business
opportunities.
<PAGE>
ITEM 12. Security Ownership of Certain Beneficial Owners and Management.
The following table sets forth, as of December 31, 1996, information
regarding the beneficial ownership of shares by each person known by the Company
to own five percent or more of the outstanding shares, by each of the directors
and by the officers and directors as a group.
<TABLE>
<CAPTION>
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
----------------- --------------------------------------- ----------------------- ------------
<S> <C> <C> <C>
Common Stock FYEO AVV 250,000 22.73%
c/o Chancellor Group, Inc.
Level 2, 55 Hunter Street
Sydney, NSW 200 Australia
Common Stock Four Star Ranch1 180,800 16.44%
3098 So. Highland Drive, Suite 460
Salt Lake City, Utah 84106
</TABLE>
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<TABLE>
<CAPTION>
Name and address Amount of Percent
Title of class of beneficial owner beneficial ownership of class
----------------- --------------------------------------- ----------------------- ------------
<S> <C> <C> <C>
Common Stock Roger Tichenor 100,000 9.09%
73 South Palm Avenue, Suite 223
Sarasota, Florida 34246
Common Stock Steve Guarino 100,000 9.09%
73 South Palm Avenue, Suite 223
Sarasota, Florida 34246
Common Stock All Officers and
Directors as a Group (1 person) 100,000 9.09%
</TABLE>
1 Four Star Ranch is controlled by David R. Yeaman, a former
officer and director.
<PAGE>
ITEM 13. Certain Relationships and Related Transactions.
No officer, director, nominee for election as a director, or
associate of such officer, director or nominee is or has been in debt to the
Company during the last fiscal year. However, the Company's officers, directors
and major shareholder, have made an oral undertaking to make loans to the
Company in amounts sufficient to enable it to satisfy its reporting requirements
and other obligations incumbent on it as a public company, and to commence, on a
limited basis, the process of investigating possible merger and acquisition
candidates. The Company's status as a publicly-held corporation may enhance its
ability to locate potential business ventures. The loans will be interest free
and are intended to be repaid at a future date, if or when the Company shall
have received sufficient funds through any business acquisition. The loans are
intended to provide for the payment of filing fees, professional fees, printing
and copying fees and other miscellaneous fees.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
Financial Statements and Financial Statement Schedules.
Financial Statements - December 31, 1996, 1995 and 1994
Exhibit 27
Financial Data Summary
Reports on Form 8-K.
None.
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.
PACIFIC FOREST CORPORATION
Date: April 28, 1997 By: s\ Roger Tichenor
-------------------- --------------------
Roger Tichenor, President and Director
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date: April 28, 1997 By: s\ Roger Tichenor
------------------- --------------------
Roger Tichenor, President and Director
9
<PAGE>
Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Act by Registrants Which Have Not Registered Securities
Pursuant to Section 12 of the Act
No annual report or proxy material has been sent to security
holders for the fiscal year ending December 31, 1996, nor is any such report or
proxy material to be furnished to security holders subsequent to the filing of
the annual report of this Form.
10
<PAGE>
SMITH & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS
MEMBERS OF: CRANDALL BUILDING SUITE 700
AMERICAN INSTITUTE OF 10 WEST 100 SOUTH
CERTIFIED PUBLIC ACCOUNTANTS SALT LAKE CITY, UTAH 84101
UTAH ASSOCIATION OF TELEPHONE: (801) 575-8297
CERTIFIED PUBLIC ACCOUNTANTS FACSIMILE: (801) 575-8306
- ------------------------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Pacific Forest Corporation (A Development Stage Company)
(Formerly Zeus Enterprises, Inc.)
We have audited the accompanying balance sheets of Pacific Forest Corporation
(formerly Zeus Enterprises, Inc.) (a development stage company) as of December
31, 1996 and 1995, and the related statements of operations, changes in
stockholders' equity (deficit), and cash flows for the years ended December 31,
1996, 1995 and 1994 and for the period of April 16, 1986 (date of inception) to
December 31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Pacific Forest Corporation
(formerly Zeus Enterprises, Inc.) (a development stage company) as of December
31, 1996 and 1995 and the results of its operations, changes in stockholders'
equity (deficit) and its cash flows for the years ended December 31, 1996, 1995
and 1994 and for the period of April 16, 1986 (date of inception) to December
31, 1996 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As shown in the financial statements,
the Company has a working capital deficiency of $1,186 at December 31, 1996 and
an accumulated deficit of $53,186. The Company has suffered losses and has a
substantial need for working capital. This raises substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are described in Note 5 to the financial statements. The accompanying
financial statements do not include any adjustments that may result from the
outcome of this uncertainty.
/s/ Smith & Company
CERTIFIED PUBLIC ACCOUNTANTS
Salt Lake City, Utah
April 24, 1997
F-1
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
1996 1995
----------------- -----------------
ASSETS
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 39 $ 50,000
----------------- -----------------
TOTAL CURRENT ASSETS 39 50,000
OTHER ASSETS
Organization costs (Note 1) 0 0
----------------- -----------------
0 0
----------------- -----------------
$ 39 $50,000
================= =================
LIABILITIES & EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 1,225 $ 0
----------------- -----------------
TOTAL CURRENT LIABILITIES 1,225 0
STOCKHOLDERS' EQUITY (DEFICIT) Common Stock $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding
1,100,000 shares 1,100 1,100
Additional paid-in capital 50,900 50,900
Deficit accumulated during
the development stage (53,186) (2,000)
----------------- -----------------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (1,186) 50,000
----------------- -----------------
$ 39 $ 50,000
================= =================
</TABLE>
See Notes to Financial Statements.
F-2
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
4/16/86
(Date of
Year Ended December 31, inception) to
1996 1995 1994 12/31/96
------------ ----------- ----------- --------------
<S> <C> <C> <C> <C>
Net sales $ 0 $ 0 $ 0 $ 0
Cost of sales 0 0 0 0
------------ ----------- ----------- --------------
GROSS PROFIT 0 0 0 0
General & administrative
expenses 51,186 0 0 53,186
------------ ----------- ----------- --------------
NET LOSS $ (51,186) $ 0 $ 0 $ (53,186)
============ ========== =========== ==============
Net income (loss) per weighted
average share $ (.05) $ .00 $ .00
============ ========== ===========
Weighted average number of
common shares used to compute
net income (loss) per weighted
average share 1,100,000 1,029,167 1,000,000
============ ========== ===========
</TABLE>
See Notes to Financial Statements.
F-3
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During
Par Value $0.001 Paid-in Development
Shares Amount Capital Stage
------------- ------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Balances at 4/16/86 (Date of inception) 0 $ 0 $ 0 $ 0
Issuance of common stock (restricted) at
$.002 per share at 4/16/86 1,000,000 1,000 1,000
Net loss for period (1,950)
------------- ------------- ----------------- ------------------
Balances at 12/31/86 1,000,000 1,000 1,000 (1,950)
Net loss for year (10)
------------- ------------- ----------------- ------------------
Balances at 12/31/87 1,000,000 1,000 1,000 (1,960)
Net loss for year (10)
------------- ------------- ----------------- ------------------
Balances at 12/31/88 1,000,000 1,000 1,000 (1,970)
Net loss for year (10)
------------- ------------- ----------------- ------------------
Balances at 12/31/89 1,000,000 1,000 1,000 (1,980)
Net loss for year (10)
------------- ------------- ----------------- ------------------
Balances at 12/31/90 1,000,000 1,000 1,000 (1,990)
Net loss for year (10)
------------- ------------- ----------------- ------------------
Balances at 12/31/91 1,000,000 1,000 1,000 (2,000)
Net income for year 0
------------- ------------- ----------------- ------------------
Balances at 12/31/92 1,000,000 1,000 1,000 (2,000)
Net income for year 0
------------- ------------- ----------------- ------------------
Balances at 12/31/93 1,000,000 1,000 1,000 (2,000)
Net income for year 0
------------- ------------- ----------------- ------------------
Balances at 12/31/94 1,000,000 1,000 1,000 (2,000)
Issuance of common stock (restricted)
at $.50 per share at 9/12/95 100,000 100 49,900
Net income for year 0
------------- ------------- ----------------- ------------------
Balances at 12/31/95 1,100,000 1,100 50,900 (2,000)
Issuance of common stock (Regulation S) at $.9796
per share to acquire subsidiary at 6/28/96 (1) 100,000 100 97,860
Issuance of common stock (Regulation S) at $8.73
per share to retire debt of subsidiary at 6/28/96(2) 45,000 45 392,857
Issuance of common stock (Regulation S) at $10.00
per share to acquire subsidiary at 8/23/96 (3) 200,000 200 1,999,800
Stock canceled (1) (Note 6) (100,000) (100) (97,860)
Stock canceled (2) (Note 6) (45,000) (45) (392,857)
Stock canceled (3) (Note 6) (200,000) (200) (1,999,800)
Net loss for year (51,186)
------------- ------------- ----------------- ------------------
Balances at 12/31/96 1,100,000 $ 1,100 $ 50,900 $ (53,186)
============= ============= ================= ==================
</TABLE>
See Notes to Financial Statements.
F-4
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
4/16/86
(Date of
Year Ended December 31, inception) to
1996 1995 1994 12/31/96
-------------- -------------- -------------- --------------
OPERATING ACTIVITIES
<S> <C> <C> <C> <C>
Net income (loss) $ (51,186) $ 0 $ 0 $ (53,186)
Adjustments to reconcile net
income (loss) to cash used by
cash used by operating activities:
Amortization 0 0 0 50
Changes in liabilities:
Accounts payable 1,225 0 0 1,225
-------------- -------------- -------------- --------------
NET CASH USED BY
OPERATING ACTIVITIES (49,961) 0 0 (51,911)
INVESTING ACTIVITIES
Organization costs 0 0 0 (50)
-------------- -------------- -------------- --------------
NET CASH USED BY
INVESTING ACTIVITIES 0 0 0 (50)
FINANCING ACTIVITIES
Proceeds from sale of
common stock 0 50,000 0 52,000
-------------- -------------- -------------- --------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES 0 50,000 0 52,000
-------------- -------------- -------------- --------------
INCREASE (DECREASE) IN
CASH AND CASH
EQUIVALENTS (49,961) 50,000 0 39
Cash and cash equivalents
at beginning of year 50,000 0 0 0
-------------- -------------- -------------- --------------
CASH & CASH EQUIVALENTS
AT END OF YEAR $ 39 $ 50,000 $ 0 $ 39
============== ============== ============== ==============
</TABLE>
See Notes to Financial Statements.
F-5
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods
The Company recognizes income and expenses based on the accrual
method of accounting.
Dividend Policy:
The Company has not yet adopted any policy regarding payment of
dividends.
Organization Costs:
The Company amortized its organization costs over a five year
period.
Cash and Cash Equivalents
For financial statement purposes, the Company considers all highly
liquid investments with an original maturity of three months or
less when purchased to be cash equivalents.
Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the
reported amount of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Income Taxes:
The Company records the income tax effect of transactions in the
same year that the transactions enter into the determination of
income, regardless of when the transactions are recognized for tax
purposes. Tax credits are recorded in the year realized. Since the
Company has not yet realized income as of the date of this report,
no provision for income taxes has been made.
In February, 1992, the Financial Accounting Standards Board
adopted Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, which supersedes substantially all
existing authoritative literature for accounting for income taxes
and requires deferred tax balances to be adjusted to reflect the
tax rates in effect when those amounts are expected to become
payable or refundable. The Statement was applied in the Company's
financial statements for the fiscal year commencing January 1,
1993.
At December 31, 1996 a deferred tax asset has not been recorded
due to the Company's lack of operations to provide income to use
the net operating loss carryover of $53,186 which expires as
follows:
Year Ended Expires Amount
------------------- ------------------- ----------
December 31, 1986 December 31, 2001 $ 1,950
December 31, 1987 December 31, 2002 10
December 31, 1988 December 31, 2003 10
December 31, 1989 December 31, 2004 10
December 31, 1990 December 31, 2005 10
December 31, 1991 December 31, 2006 10
December 31, 1996 December 31, 2015 51,186
----------
$ 53,186
==========
<PAGE>
A change in control of the Company and a lack of continuity of
operations may reduce or limit the amount of the net operating
loss than can be used in future years.
NOTE 2: DEVELOPMENT STAGE COMPANY
The Company was incorporated under the laws of the State of Utah
on April 16, 1986 as Zeus Enterprises, Inc. and has been in the
development stage since incorporation. On December 30, 1993, the
Company was dissolved as a Utah corporation and reincorporated as
a Nevada corporation. On May 31, 1996, the name was changed to
Pacific Forest Corporation. The Company is currently looking for
business opportunities.
F-6
<PAGE>
PACIFIC FOREST CORPORATION
(Formerly Zeus Enterprises, Inc.)
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1996
NOTE 3: CAPITALIZATION
On the date of incorporation, the Company sold 1,000,000 shares of
its common stock to Capital General Corporation for $2,000 cash
for an average consideration of $.002 per share. On September 12,
1995, the Company sold an additional 100,000 shares of its common
stock to Capital General Corporation for $50,000 cash for an
average consideration of $.50 per share. The Company's authorized
stock includes 100,000,000 shares of common stock at $.001 par
value.
NOTE 4: RELATED PARTY TRANSACTIONS
The Company neither owns or leases any real property. Office
services are provided, without charge, by current management. Such
costs are immaterial to the financial statements, and,
accordingly, have not been reflected therein. 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: GOING CONCERN
The financial statements are presented on the basis that the
Company is a going concern, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of
business over a reasonable length of time. At December 31, 1996,
the Company has a deficit in working capital of $1,186, a loss
from operations for 1996 of $51,186 and an accumulated deficit of
$53,186.
Management feels that loans from related parties will provide
sufficient working capital to allow the Company to continue as a
going concern.
NOTE 6: ACQUISITION AND DISPOSITION OF SUBSIDIARY
On June 28, 1996, the Company issued 100,000 shares of Regulation
S common stock to acquire 67% of Pacific Forest (Fiji) Limited
("Fiji"). On August 23, 1996, 200,000 shares of Regulation S
common stock were issued to acquire the remaining 33% of Fiji. The
Company intended to operate a timber milling operation in Fiji
through the subsidiary. By December 31, 1996, it was evident that
the Company would not succeed in obtaining the necessary capital
to properly fund the Fiji operations. Accordingly, all
transactions related to the subsidiary were canceled, effective
December 31, 1996. The financial statements for 1996 do not
reflect any activities of the former subsidiary. Audited financial
information for the former subsidiary is not available and
management believes the activities are not meaningful as the
operations no longer relate to the Company.
F-7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
Pacific Forest Corporation December 31, 1996 financial statements and
is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000866678
<NAME> Pacific Forest
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 39
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 39
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 39
<CURRENT-LIABILITIES> 1,225
<BONDS> 0
0
0
<COMMON> 1,100
<OTHER-SE> (2,286)
<TOTAL-LIABILITY-AND-EQUITY> 39
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 51,186
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (51,186)
<INCOME-TAX> 0
<INCOME-CONTINUING> (51,186)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51,186)
<EPS-PRIMARY> (.05)
<EPS-DILUTED> (.05)
</TABLE>
