SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the fiscal year ended May 31, 1999
Commission File Number: 0-22814
XCEL MANAGEMENT, INC.
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(Exact name of Registrant as specified in its Charter)
UTAH 87-0363613
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(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
781 East 2300 South
Bountiful, Utah 84010
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number including Area Code: (801) 292-4104
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Palace Casinos, Inc., 1270 Eagle Gate Tower, Salt Lake City, Utah 84111
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Former name, former address and former fiscal year,
if changed since last report.
Securities Registered Pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on which Registered
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None None
Securities Registered Pursuant to Section 12(g) of the Act:
None
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(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB. [ X ]
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Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13, or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes [X] No [ ]
During the most recent fiscal year, the issuer had no revenues.
The aggregate market value of the Registrant's voting stock held by
non-affiliates computed with reference to the bid prices in the
over-the-counter market on December 10, 1999, was $100,800.
As of the date of this report, the Registrant had a total of 1,800,000
shares of its common stock, par value $.001, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE. None.
TABLE OF CONTENTS
PAGE
ITEM NUMBER AND CAPTION NUMBER
PART I
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1. Description of Business 3
2. Description of Property 10
3. Legal Proceedings 10
4. Submission of Matters to a Vote of Security
Holders 10
PART II
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5. Market for Common Equity and
Related Stockholder Matters 10
6. Management's Discussion and Analysis or
Plan of Operation 11
7. Financial Statements 12
8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 13
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PART III
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9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act 13
10. Executive Compensation 14
11. Security Ownership of Certain Beneficial Owners
and Management 14
12. Certain Relationships and Related Transactions 15
13. Exhibits and Reports on Form 8-K 15
Signatures 15
PART I
ITEM 1. DESCRIPTION OF BUSINESS
GENERAL
Xcel Management, Inc., formerly known as "Palace Casinos, Inc." (the
"Company"), has been relatively inactive since approximately the end of 1995.
Over the past two years, the Company, through its new management, has been
undertaking efforts to complete a plan of reorganization confirmed in the
United States Bankruptcy Court under Chapter 11 of the federal bankruptcy
laws, and to take necessary steps to position the Company to seek a new
business enterprise in which it may become involved, either through a merger
or reorganization, or an acquisition transaction.
The Company was incorporated in the state of Utah on May 22, 1980, under
the name "Ward's Gas & Oil," to engage in the oil and gas business. This
business was terminated after a few years of operations.
From November 1992 until approximately the end of 1995, the Company
(which had changed its name to "Palace Casinos, Inc."), was engaged, through
its then wholly-owned subsidiary, Maritime Group, Ltd. (the "Subsidiary"), in
the development of a dockside gaming facility in Biloxi, Mississippi. In
April, 1994, the Subsidiary completed the development of the Biloxi gaming
facility, "Palace Casino," and commenced operations. On December 1, 1994, the
Company and the Subsidiary separately filed voluntary petitions for relief
under Chapter 11 of the federal bankruptcy laws. Although the Company's
original bankruptcy petition was filed in the United States Bankruptcy Court
for the District of Utah, Central Division, the supervision of the Company's
Chapter 11 proceedings was transferred to the United States Bankruptcy Court
for the Southern District of Mississippi (the "Bankruptcy Court"). On
September 22, 1995, the Company, which had been operating as
debtor-in-possession in connection with the bankruptcy proceeding, entered
into an Asset Purchase Agreement under the terms of which it agreed, subject
to the approval of the Bankruptcy Court, to sell substantially all of the
Subsidiary's operating assets. This transaction was
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approved by the Bankruptcy Court, and completed in the end of 1995, with all
of the net proceeds of the transaction being distributed to creditors.
Following the completion of the sale of the Subsidiary's Assets, the Company
had essentially no assets and liabilities and the Company's business
operations essentially ceased, except for efforts to complete a plan of
reorganization, described below.
In February, 1999, Steve Rippon and Edward D. Bagley, the Company's
present management, submitted to the Bankruptcy Court, as plan proponents, a
plan of reorganization (the "Plan"), which was confirmed by the Bankruptcy
Court on June 16, 1999. Under the terms of the Plan: (a) all of the
Company's priority creditors were paid a total of $5,000; (b) unsecured
creditors, holding between $300,000 and $500,000 in claims, were issued pro
rata a total of 90,000 shares of post-bankruptcy common stock in full
satisfaction of such obligations; and (c) all of the equity holders of the
Company's common stock, were issued, pro rata, a total of approximately 90,000
shares of common stock in lieu of a total of 8,794,329 shares of preferred and
common stock issued and outstanding, with the result that .0102 shares of
common stock were issued for each previously outstanding share of common
stock. Under the terms of the Plan, all outstanding warrants and options of
the Company expired. In connection with the Plan, Messrs. Rippon and Bagley,
the plan proponents, were elected as the officers and directors of the
Company, and were issued a total of 1,620,000 shares of common stock (810,000
shares each) of the Company, in consideration of their contributions of
services and approximately $20,000 in cash provided to pay for legal services
and costs incurred in the Plan confirmation process and related activities.
Following the confirmation of the Plan in June, 1999, the Company and the
plan proponents completed the Plan in accordance with its terms. As a result
of the Plan, the Company currently has a total of approximately 1,800,000
shares of common stock, par value $0.001 per share, issued and outstanding.
On December 3, 1999, the Bankruptcy Court, after reviewing the efforts by the
plan proponents, issued an order closing the bankruptcy estate of the Company.
Since the completion of the Plan, the Company and its new management have
undertaken efforts to complete updated financial statements of the Company,
to prepare and file updated reports with the Securities and Exchange
Commission, and to undertake actions so that the Company can seek a business
opportunity which it may acquire or in which it may become engaged. As
indicated, except for the activities described above, the Company has been
inactive since the end of 1995. The Company has no material assets of
liabilities, and has no employees.
GENERAL
The Company has had no operations, or significant assets or liabilities
over the past four (4) years. Accordingly, the Company is dependent upon
management and/or significant shareholders to provide sufficient working
capital to preserve the integrity of the corporate entity during this phase.
It is the present intent of management and significant shareholders to provide
any working capital necessary to support and preserve the integrity of the
corporate entity until such time as additional capital is raised, if ever.
The Company has no operations, or material assets or liabilities and,
accordingly, is fully dependent upon its officers and directors for operating
capital. During the period(s) presented herein,
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the Company was dormant, except for efforts undertaken in connection with a
Chapter 11 bankruptcy proceeding, which was ultimately completed in September
and the bankruptcy estate close in December, 1999.
The Company has been under new management since August 1999. Since that
time, the Company and its officers have been undertaking efforts to update
financials statements over the preceding fiscal quarters, and to put the
Company in a position to begin evaluating a number of business ventures for
possible acquisition or participation by the Company. The Company is
currently reviewing a closely-held company engaged in the development and
commercialization of a package of office productivity software, for a possible
reorganization transaction. The Company has not, however, entered into any
agreement, written or verbal, express or implied, as of the date of this
filing, and it is not known whether the Company's efforts will result in any
agreement or transaction.
The Company intends to investigate, review, and evaluate business
opportunities as they become available and will seek to acquire or become
engaged in business opportunities at such time as specific opportunities
warrant. To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis regarding the quality of
the other firm's management and personnel, the asset base of such firm or
enterprise, the anticipated acceptability of new products or marketing
concepts, the merit of the firms business plan, and numerous other factors
which are difficult, if not impossible, to analyze through the application of
any objective criteria.
Now that the Company has completed necessary preparatory work to update
the Company's financial statements and bring the Company current, the Company
will begin efforts to seek to acquire an interest in a business with long-term
growth potential. It is emphasized that the business objectives discussed
herein are extremely general and are not intended to be restrictive on the
discretion of the Company's management.
Management anticipates that it may be able to participate in only one
potential business venture, due primarily to the Company's limited capital.
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.
In connection with the Company's acquisition of a business, it is
possible that the present shareholders of the Company, may, as a negotiated
element of the acquisition, sell a portion or all of the Company's Common
Stock held by them at a premium over their original investment in the Company.
As a result of such sales, affiliates of the entity participating in the
business reorganization with the Company would acquire a higher percentage of
equity ownership in the Company. Management does not intend to actively
negotiate for or otherwise require the purchase of all or any portion of its
stock as a condition to or in connection with any proposed merger or
acquisition. Although the Company's present shareholders did not acquire
their shares of Common Stock with a view towards any subsequent sale in
connection with a business reorganization, it is not unusual for affiliates of
the entity participating in the reorganization to negotiate to purchase shares
held by the present shareholders in order to reduce the amount of shares held
by persons no longer affiliated with the Company and thereby reduce the
potential adverse impact on the public market in the Company's common stock
that could result from substantial sales of such shares after the business
reorganization. Public investors will not receive any portion of the premium
that may be paid in the foregoing
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circumstances. Furthermore, the Company's shareholders may not be afforded an
opportunity to approve or consent to any particular stock buy-out transaction.
In the event sales of shares by present shareholders of the Company is a
negotiated element of a future acquisition, a conflict of interest may arise
because directors will be negotiating for the acquisition on behalf of the
Company and for sale of their shares for their own respective accounts. Where
a business opportunity is well suited for acquisition by the Company, but
affiliates of the business opportunity impose a condition that management sell
their shares at a price which is unacceptable to them, management may not
sacrifice their financial interest for the Company to complete the
transaction. Where the business opportunity is not well suited, but the price
offered management for their shares is high, Management will be tempted to
effect the acquisition to realize a substantial gain on their shares in the
Company. Management has not adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not intend to obtain an
independent appraisal to determine whether any price that may be offered for
their shares is fair. Stockholders must rely, instead, on the obligation of
management to fulfill its fiduciary duty under state law to act in the best
interests of the Company and its stockholders.
It is anticipated that any securities issued in any such reorganization
would be issued in reliance on exemptions from registration under applicable
federal and state securities laws. In some circumstances, however, as a
negotiated element of the transaction, the Company may agree to register such
securities either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms of such
registration rights and the number of securities, if any, which may be
registered cannot be predicted, it may be expected that registration of
securities by the Company in these circumstances would entail substantial
expense to the Company. The issuance of substantial additional securities and
their potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on such market.
Notwithstanding the fact that the Company is technically the acquiring
entity in the foregoing circumstances, generally accepted accounting
principles will ordinarily require that such transaction be accounted for as
if the Company had been acquired by the other entity owning the business and,
therefore, will not permit a write-up in the carrying value of the assets of
the other company.
The manner in which the Company participates in a business will depend on
the nature of the business, the respective needs and desires of the Company
and other parties, the management of the business, and the relative
negotiating strength of the Company and such other management.
The Company will participate in a business only after the negotiation and
execution of appropriate written agreements. Although the terms of such
agreements cannot be predicted, generally such agreements will require
specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to such
closing, will outline the manner of bearing costs if the transaction is not
closed, will set forth remedies on default, and will include miscellaneous
other terms.
The Company's operation following its acquisition of a business will be
dependent on the nature of the business and the interest acquired. The
Company is unable to predict whether the
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Company will be in control of the business or whether present management will
be in control of the Company following the acquisition. It may be expected
that the business will present various risks, which cannot be predicted at the
present time.
It is impossible to predict the government regulation, if any, to which
the Company may be subject until it has acquired an interest in a business.
The use of assets and/or conduct of businesses which the Company may acquire
could subject it to environmental, public health and safety, land use, trade,
or other governmental regulations and state or local taxation. In selecting a
business in which to acquire an interest, management will endeavor to
ascertain, to the extent of the limited resources of the Company, the effects
of such government regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an interest in a
new or start-up business activity, it may not be possible to predict with any
degree of accuracy the impact of government regulation. The inability to
ascertain the effect of government regulation on a prospective business
activity will make the acquisition of an interest in such business a higher
risk.
FUTURE BUSINESS
The Registrant has not been actively engaged in business for the past
several years, and has only recently undertaken necessary activities to enable
it to become engaged in business operations. The Company plans to seek out,
investigate and acquire, or become engaged in, any business opportunity
management believes has good business potential. No specific business or
industry is presently contemplated.
Management anticipates that it will only acquire businesses which have,
or can generate or provide, audited financial statements. However, management
reserves the right to become engaged in a new business venture or a venture in
its infancy, if management determines such venture holds good business
potential.
The Company recognizes that because of its extremely limited financial,
management and other resources, the number of quality of suitable potential
business ventures available to it may be extremely limited.
The Company's principal business objective will be to seek long-term
growth potential in the business venture in which it participates, rather than
to seek immediate, short-term earnings. In seeking to attain the Company's
business objective, it will not restrict its search to any particular business
or industry, but may participate in business ventures of essentially any kind
or nature, including, but not limited to, finance, high technology,
manufacturing, natural resources, service, research and development,
communications, insurance, transportation and others. Management's discretion
will be unrestricted and it may participate in any business venture
whatsoever, which meets the business objectives discussed herein. It is
emphasized that the business objectives of the Company are extremely general
and are not intended to be restrictive upon the discretion of management.
The Company plans to seek one or more potential business ventures from
its known sources, but will rely heavily on personal contacts of its officers
and directors, as well as indirect associations
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or contacts between them and other business and professional people. It is
not presently anticipated that the Company will engage professional firms or
individuals specializing in business acquisitions or reorganizations.
However, any individual or firm, exclusive of the officers, directors and
principals of the Company who find a venture in which the Company becomes
engaged, may be properly compensated for their efforts.
The Company will not restrict its search to a venture in any particular
stage of development, but may acquire or become engaged in a venture in its
preliminary or development stage, may participate in a business which is
already in operation, or in a business in various stages of it corporate
existence. It is impossible to predict at this stage the status of any
venture in which the Company may participate, in that the venture may need
additional capital, may desire to have its shares publicly traded, or may seek
other perceived advantages which the Company, as a public company, may offer.
In some instances, the business endeavors may involve the acquisition of or
merger or reorganization with a corporation which does not need substantial
additional capital but which desires to establish a public trading market for
it securities.
Firms which seek the Company's participation in their operations through
a reorganization, asset acquisition, or some other means may desire to do so
to avoid what such firms may deem to be adverse factors related to undertaking
a public offering. Such factors include substantial time requirements and
legal and other costs, along with other conditions or requirements imposed by
various state and federal regulatory agencies.
To a large extent, a decision to participate in a specific business
endeavor may be made upon management's analysis of the quality of the other
firm's management and personnel, the anticipated acceptability of new
products, marketing concepts or services, the merit of technological changes,
and numerous factors which may not be reflected on a balance sheet or
operating statement and are difficult, if not impossible, to analyze through
the application of objective criteria. In many instances, it anticipated that
the results of operation of a specific venture may not be indicative of the
potential for the future because of the requirement to substantially shift
marketing approaches, expand significantly, change product emphasis, change or
augment management, and other factors. Because the Company may participate in
business endeavors with newly organized firms or with firms which are entering
a new phase of growth, it should be emphasized that the Company will incur
further risks since management in may instances will not have proved its
abilities or effectiveness, the eventual market of such firm's product or
services will likely not be established, and the profitability of the firm
will be unproved and cannot be accurately predicted.
The analysis and review of new business ventures will be undertaken by or
under the supervision of the officers and directors. It cannot be stated at
this time as to whether management will have any significant business
experience or expertise in any type of business which is likely to be
investigated by the Company. Therefore, management will have to rely on its
common sense and business judgment as well as upon the advice of consultants
to analyze the factors described above. In reviewing prospective business
opportunities, management will consider such matters as the available
technical, financial and managerial resources, the working capital and other
financial requirements, the history of operations, if any; prospects for the
future; the nature of present and expected competition; the quality and
experience of management services available and the depth
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of management; the potential for growth and expansion; risk factors; the
perceived public recognition or acceptance of products, services; and other
factors.
Generally, management will attempt to analyze all available factors in
the circumstances and make a determination based upon a composite of available
facts, without reliance upon any single factor as controlling.
The Company is unable to predict the timing as to when it may participate
in any specific business endeavor. It expects, however, that the review of
business opportunities will commence immediately, and that the analysis and
selection of any given venture may take several months or more.
It is anticipated that business opportunities will be available to the
Company from various sources, including its officers and directors and
shareholders and their business associates, professional advisors, securities
broker-dealers, venture capitalists, members of the financial community, and
others who may present unsolicited proposals. In certain circumstances, the
Company may agree to pay a finder's fee or to otherwise compensate investment
banking or other services provided by persons who are unaffiliated with the
Company but who submit a potential business opportunity in which the Company
elects to participate. No such finder's fee or other fees will be paid to any
person who is an officer, director or principal of the Registrant.
The Company may acquire a business venture by conducting a reorganization
or merger involving the issuance of securities of the Company. Due to the
requirements of certain provisions of the Internal Revenue Code, as amended,
in order to obtain certain beneficial tax consequences in such transactions,
the number of shares held by all of the present shareholders of the Company
prior to such transaction, may be substantially less than the total
outstanding shares held by such shareholders in any reorganized entity. The
result of any such reorganization or merger transaction could be additional
substantial dilution to the shareholders of the Company prior to the
transaction.
It is anticipated that the investigation of specific business endeavors
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. If a
decision is made not to participate in a specific business opportunity under
review, the costs theretofore incurred would not be recoverable. Further,
even if an agreement is reached for the participation in a specific business
venture, the failure to consummate that transaction may result in the loss to
the Company of the related costs incurred.
The Company presently has essentially no assets, and does not currently
have any specific assets, properties or businesses in mind for potential
acquisition or involvement by the Company. Further, the Company does not
presently have any particular areas of business or industry in which it
intends to look for business opportunities.
In connection with a business acquisition or transaction, the Company may
need to raise equity or debt to fund such transaction, or to provide the
business opportunity with necessary
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operating capital. There is no assurance the Company will be able to raise
capital when needed, or on terms which are favorable to the Company.
OFFICES AND EMPLOYEES
The Company presently uses the office of its President, at 781 East 2300
South, Bountiful, Utah, at no charge. At such time as business operations
actively commence, the Company will be required to seek office space and may
be charged a reasonable market rate for its office facilities; however, the
Company may be able to utilize the offices of an entity with which it merges,
or by which it is acquired or which it acquires. The Company has no
employees.
ITEM 2. DESCRIPTION OF PROPERTY
The Company does not hold any properties.
ITEM 3. LEGAL PROCEEDINGS
As described under "ITEM 1. DESCRIPTION OF BUSINESS," in December, 1994,
the Company and its then wholly-owned subsidiary filed voluntary petitions
under Chapter 11 of the Federal Bankruptcy Code. As a result of these
filings, all litigation against the Company was stayed. In June, 1999, a plan
of reorganization submitted by the Company's new management, was confirmed by
the Bankruptcy Court. On December 3, 1999, the Bankruptcy Court issued an
order closing the Company's bankruptcy estate. As a result of these
proceedings, the Company is not a party to any material pending legal
proceedings, and to the best of its knowledge, no such proceedings by or
against the Company have been threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the fourth quarter of the fiscal
year covered by this report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The common stock of the Company has been traded on a limited and sporadic
basis in the over-the-counter market since 1980. Trading activity in the
Company's common stock has been extremely limited over the past two years.
There is currently a very limited trading market for the Company's common
stock.
The Company's shares of common stock are eligible for quotation on the
OTC Bulletin Board under the symbol "XCLL" The following sets forth, for the
respective periods indicated, the high and low bid quotations, as adjusted for
stock splits, as reported and summarized by the OTC Bulletin Board. Such
prices are based on inter-dealer bid and asked prices, without markup,
markdown, commissions or adjustments, and may not represent actual
transactions.
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Calendar Quarter Ended High Bid Low Bid
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August 31, 1997 $ 4.00 $ 4.00
November 30, 1997 4.00 4.00
February 28, 1998 4.00 2.00
May 31, 1998 2.00 2.00
August 31, 1998 2.00 2.00
November 30, 1998 2.00 1.00
February 28, 1999 1.00 0.10
May 31, 1999 0.10 0.10
The above bid prices give effect to a number of stock splits or stock
consolidations effectuated by the Company over the past several years. In
August, 1987, the outstanding common shares of the Company were reverse split
on a 1 for 5 basis. On September 29, 1992, the outstanding common shares were
reverse split on a 1 for 100 basis. On April 19, 1993, the outstanding shares
were forward split on a 1.5 for 1 basis. On January 31, 1994, the Company
effected a forward split of its outstanding common stock on a 2 for 1 basis.
Finally, in connection with the Company's plan of reorganization in its
Chapter 11 bankruptcy proceeding, in July, 1999, each of the holders of
preferred and common stock of the Company received, pro rata, a total of .0102
shares of common stock for each share previously held by such shareholder.
On December 10, 1999, the high and low bid prices quoted by broker-dealer
firms effecting transactions in the Company's common stock, were $0.56 and
$0.56, respectively.
Since inception, no dividends have been paid on the Company's common
stock, and the Company does not anticipate paying dividends in the foreseeable
future.
As of the date of this report, there were approximately 875 holders of
record of the Company's common stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION
PLAN OF OPERATION
The Company has been inactive since the end of 1995, except for efforts
to complete a plan of reorganization in connection with the Company's Chapter
11 bankruptcy proceeding filed in the end of 1994. Accordingly, the Company
has not had any revenues from operations during each of the last two fiscal
years.
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The Company's plan of operations for the next twelve months, is to seek a
business opportunity to acquire, through a merger, reorganization or purchase
transaction. (See "ITEM 1. DESCRIPTION OF BUSINESS: General."). The Company
is currently reviewing certain business opportunities for possible
acquisition, but has no agreement or commitment to enter into any transaction
at the present time. The Company cannot predict at the present time what type
of business, if any, the Company will become engaged, or the terms under which
the Company will be able to consummate a merger, reorganization or acquisition
transaction.
At present, the Company has very limited capital. The Company does not
have adequate capital to conduct any significant business operations, and the
Company's search for a prospective business opportunity, and ability to enter
into a suitable transaction, will in all likelihood be severely limited by
the Company's lack of resources. Accordingly, the Company may be limited or
unable to participate in any business acquisition or opportunity which
requires substantial capital. Alternatively, the Company's ability to enter
into a transaction may be dependent on the Company's ability to raise debt or
equity financing. There can be no assurance the Company will be able to raise
capital when necessary, or on terms favorable to the Company. Management
believes that any business venture which it acquires, through a merger,
reorganization or otherwise, will be made at least in substantial part by
issuing shares of the Company's authorized but unissued common stock. There
can be no assurance, however, that the Company will be able to consummate any
such transaction in this fashion. It is anticipated that the Company's
liquidity, capital resources and financial statements will be significantly
different subsequent to the consummation of any such transaction.
The Company is dependent upon management to provide sufficient working
capital to preserve the integrity of the corporate entity during this phase,
and until the Company is in a position to enter into a business transaction,
of which there can be no assurance. It is the intent of management to provide
sufficient working capital necessary to support and preserve the integrity of
the corporate entity. However, as indicated, if the Company is in need of
additional capital to enter into a business opportunity, the Company may not
be able to obtain sufficient capital from management or other sources when
needed.
RESULTS OF OPERATION
The Company has had essentially no operations during the past two fiscal
years ended May 31, 1999, and from May 31, 1998 to the date of this report.
The Company has assets of $30,437 as of May 31, 1999, and liabilities of
$11,225. During the fiscal year ended May 31, 1999, the Company incurred
expenses of $7,453, resulting from legal and accounting and other costs and
expenses in connection with the Company's efforts to complete its plan of
reorganization and reactivate its business from bankruptcy proceedings.
During the fiscal year ended May 31, 1999, the Company reported net income of
$461,597, which is attributable to $469,050 reflected as a gain on the
extinguishment of debt as the result of a Chapter 11 bankruptcy.
ITEM 7. FINANCIAL STATEMENTS
The financial statements and supplementary data are included beginning at
page F-1.
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JONES, JENSEN & COMPANY, LLC
Certified Public Accountants and Consultants
50 South Main Street, Suite 1450
Salt Lake City, Utah 84144
Telephone (801) 328-4408
Facsimile (801) 328-4461
INDEPENDENT AUDITORS' REPORT
Board of Directors
Xcel Management, Inc.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Salt Lake City, Utah
We have audited the accompanying balance sheet of Xcel Management, Inc.
(formerly Palace Casinos, Inc.) (a development stage company) as of May 31,
1999 and the related statements of operations, stockholders' equity and cash
flows for the years ended May 31, 1999 and 1998 and from the inception of the
development stage on June 1, 1997 through May 31, 1999. These financial
statements are the responsibility of the Company's 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 Xcel Management, Inc.
(formerly Palace Casinos, Inc.) (a development stage company) as of May 31,
1999 and the results of its operations and its cash flows for the years ended
May 31, 1999 and 1998 and from the inception of the development stage on June
1, 1997 through May 31, 1999 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 discussed in Note 4 to the
financial statements, the Company's recurring losses from operations, net
accumulated deficit and recent emergence from bankruptcy, raise substantial
doubt about its ability to continue as a going concern. Management's plans
concerning these matters are also described in Note 4. The financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
December 29, 1999
F-1
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Balance Sheet
ASSETS
------
May 31,
1999
---------------
CURRENT ASSETS
Cash $ 257
Refundable deposit 30,180
---------------
Total Current Assets 30,437
---------------
TOTAL ASSETS $ 30,437
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES
Accounts payable $ 6,225
Priority claims payable (Note 3) 5,000
---------------
Total Current Liabilities 11,225
---------------
STOCKHOLDERS' EQUITY
Series A preferred stock, $0.001 par value, authorized
5,000,000 shares, zero shares issued and outstanding -
Common stock, $0.001 par value, 50,000,000 shares
authorized; issued and outstanding 1,800,000 shares 1,800
Additional paid-in capital 19,471,690
Stock subscription receivable (25,000)
Accumulated deficit prior to the development stage (19,889,690)
Retained earnings accumulated during the development stage 460,412
---------------
Total Stockholders' Equity 19,212
---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 30,437
===============
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
From
Inception of the
Development
Stage on
June 1,
For the Years Ended 1997 Through
May 31, May 31,
1999 1998 1999
-------------- -------------- ---------------
<S> <C> <C> <C>
REVENUES $ - $ - $ -
-------------- -------------- ---------------
EXPENSES
General and administrative 7,453 1,185 8,638
-------------- -------------- ---------------
Total Expenses 7,453 1,185 8,638
-------------- -------------- ---------------
LOSS FROM OPERATIONS BEFORE
EXTRAORDINARY INCOME (7,453) (1,185) (8,638)
-------------- -------------- ---------------
EXTRAORDINARY INCOME
Gain on extinguishment of debt net of
zero tax expense 469,050 - 469,050
-------------- -------------- ---------------
Total Extraordinary Income 469,050 - 469,050
-------------- -------------- ---------------
INCOME TAX EXPENSE - - -
-------------- -------------- ---------------
NET INCOME (LOSS) $ 461,597 $ (1,185) $ 460,412
============== ============== ===============
BASIC INCOME (LOSS) PER SHARE
ATTRIBUTED TO:
Continuing operations $ (0.01) $ (0.03)
Gain on extinguishment of debt 0.76 -
-------------- --------------
$ 0.75 $ (0.03)
============== ==============
WEIGHTED AVERAGE SHARES OUTSTANDING 613,121 38,980
============== ==============
The accompanying notes are an integral part of these financial statements.
F-3
</TABLE>
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Additional Stock
Common Stock Preferred Stock Paid-in Subscription Accumulated
Shares Amount Shares Amount Capital Receivable Deficit
------------- ----------- ------------- ---------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, May 31, 1997 38,980 $ 40 2,602,000 $ 3,000 $ 19,444,551 $ - $(19,889,690)
Net loss for the year ended
May 31, 1998 - - - - - - (1,185)
------------- ----------- ------------- ---------- ------------ ------------ -------------
Balance, May 31, 1998 38,980 40 2,602,000 3,000 19,444,551 - (19,890,875)
Conversion of preferred
stock to common stock 51,020 50 (2,602,000) (3,000) 2,949 - -
Common stock issued for
settlement of debt at
$0.01 per share 90,000 90 - - 810 - -
Common stock issued for
cash at $0.015 per share 1,620,000 1,620 - - 23,380 (25,000) -
Net income for the year
ended May 31, 1999 - - - - - - 461,597
------------- ----------- ------------- ---------- ------------ ------------ -------------
Balance, May 31, 1999 1,800,000 $ 1,800 - $ - $ 19,471,690 $ (25,000) $(19,429,278)
============= =========== ============= ========== ============ ============ =============
The accompanying notes are an integral part of these financial statements.
F-4
</TABLE>
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
From
Inception of the
Development
Stage on
June 1,
For the Years Ended 1997 Through
May 31, May 31,
1999 1998 1999
-------------- -------------- ---------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 461,597 $ (1,185) $ 460,412
Adjustments to reconcile net (loss) to net
cash used in operating activities:
Gain on extinguishment of debt (469,050) - (469,050)
Changes in assets and liabilities:
Increase in current liabilities 6,225 - 6,225
-------------- -------------- ---------------
Net Cash Provided (Used) by
Operating Activities (1,228) (1,185) (2,413)
-------------- -------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES - - -
-------------- -------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES - - -
-------------- -------------- ---------------
NET INCREASE (DECREASE) IN CASH (1,228) (1,185) (2,413)
CASH AT BEGINNING OF YEAR 1,485 2,670 2,670
-------------- -------------- ---------------
CASH AT END OF YEAR $ 257 $ 1,485 $ 257
============== ============== ===============
CASH PAID FOR:
Interest expense $ - $ - $ -
Income taxes $ - $ - $ -
NON-CASH FINANCING ACTIVITIES:
Common stock issued for debt $ 900 $ - $ 900
The accompanying notes are an integral part of these financial statements.
F-5
</TABLE>
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 1999
NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES
Xcel Management, Inc. (the Company) was originally incorporated on May
22, 1980 as Ward's Gas and Oil. On April 16, 1987, the Articles of
Incorporation were amended to change the name to Intercontinental Services
Corporation on May 20, 1988. the name was changed to Maritime Resorts
International. On December 14, 1993, the name was changed to Palace Casinos,
Inc. and on August 16, 1999, the name was changed to Xcel Management, Inc.
The Company was deemed to have entered the development stage per SFAS No. 7 on
June 1, 1997.
A summary of the significant policies consistently applied in the
preparation of the financial statements follows:
a. Accounting Method
The Company's financial statements are prepared using the accrual method
of accounting. The Company has adopted a May 31 year end.
b. Basic Income (Loss) Per Share
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
May 31, 1999 May 31, 1998
---------------------------------------- -----------------------------------------
Loss Shares Per-Share Loss Shares Per-Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
------------- ------------- ------------ ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net Income
(Loss) $ 461,597 613,121 $ 0.75 $ (1,185) $ 38,980 $ (0.03)
</TABLE>
Fully diluted earnings (loss) per share is not presented as any common
stock equivalents are antidilutive in nature.
The computation of basic income (loss) per share of common stock is based
on the weighted average number of shares outstanding at the date of the
financial statements.
c. Income Taxes
Effective June 1, 1993, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 109, the financial accounting and reporting
standards for income taxes. There was no significant effect on the Company's
financial condition or results of operations caused by the adoption of the new
standard.
F-6
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 1999
NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES (Continued)
c. Income Taxes (Continued)
Deferred income tax assets and liabilities have been provided in
recognition of the income tax effect attributable to the difference between
assets and liabilities reported in the tax return and financial statements.
Deferred tax assets or liabilities are provided using the enacted tax rates
expected to apply to taxable income in the periods in which the deferred tax
assets and liabilities are expected to be settled or realized.
As of May 31, 1999, the Company had a net operating loss carryforward of
approximately $8,500 that may be used in future years to affect taxable income
through 2014. The tax benefit of the cumulative carryforward has been offset
by a valuation allowance of the same amount.
d. Cash Equivalents
The Company considers all highly liquid investments and deposits with a
maturity of three months or less when purchased to be cash equivalents.
e. 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
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ form those estimates.
f. Revenue Recognition
The Company currently has no source of revenues. Revenue recognition
policies will be determined when principal operations begin.
g. Recent Accounting Pronouncements
The Financial Accounting Standards Board has issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share" and
Statement of Financial Accounting Standards No. 129 "Disclosures of
Information About an Entity's Capital Structure." SFAS No. 128 provides a
different method of calculating earnings per share than was previously used in
accordance with APB Opinion No. 15, "Earnings Per Share." SFAS No. 128
provides for the calculation of "Basic" and "Dilutive" earnings per share.
Basic earnings per share includes no dilution and is
F-7
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 1999
NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES (Continued)
g. Recent Accounting Pronouncements (Continued)
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted earnings
per share reflects the potential dilution of securities that could share in
the earnings of an entity, similar to fully diluted earnings per share. SFAS
No. 129 establishes standards for disclosing information about an entity's
capital structure. SFAS No. 128 and SFAS No. 129 are effective for financial
statements issued for periods ending after December 15, 1997. In fiscal 1998,
the Company adopted SFAS No. 128, which did not have a material impact on the
Company's financial statements. The implementation of SFAS No. 129 did not
have a material effect on the Company's financial statements.
The Financial Accounting Standards Board has also issued SFAS No. 130,
"Reporting Comprehensive Income" and SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." SFAS No. 130 establishes standards
for reporting and display of comprehensive income, its components and
accumulated balances. Comprehensive income is defined to include all changes
in equity except those resulting from investments by owners and distributions
to owners. Among other disclosures, SFAS No. 130 requires that all items that
are required to be recognized under current accounting standards as components
of comprehensive income be reported in a financial statement that displays
with the same prominence as other financial statements. SFAS No. 131
supersedes SFAS No. 14 "Financial Reporting for Segments of a Business
Enterprise." SFAS No. 131 establishes standards on the way that public
companies report financial information about operating segments in annual
financial statements and requires reporting of selected information about
operating segments in interim financial statements issued to the public. It
also establishes standards for disclosure regarding products and services,
geographic areas and major customers. SFAS No. 131 defines operating segments
as components of a company about which separate financial information is
available that is evaluated regularly by the chief operating decision maker in
deciding how to allocate resources and in assessing performance.
SFAS No. 130 and 131 are effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. Results of operations and financial position
were unaffected by implementation of these standards.
F-8
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 1999
NOTE 1 - ACCOUNTING POLICIES AND PROCEDURES (Continued)
g. Recent Accounting Pronouncements (Continued)
In February 1998, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standard ("SFAS") No 132. "Employers'
Disclosures about Pensions and other Postretirement Benefits" which
standardizes the disclosure requirements for pensions and other postretirement
benefits and requires additional information on changes in the benefit
obligations and fair values of plan assets that will facilitate financial
analysis. SFAS No. 132 is effective for years beginning after December 15,
1997 and requires comparative information for earlier years to be restated,
unless such information is not readily available. The adoption of this
statement had no material impact on the Company's financial statements.
NOTE 2 - REFUNDABLE DEPOSIT
The Company had a deposit paid to the Mississippi Gaming Commission.
This deposit was returned to the Company on September 25, 1999.
NOTE 3 - STOCK TRANSACTIONS
Pursuant to the plan of reorganization under Chapter 11, the following
stock transactions occurred as of February 1, 1999.
1. The 2,602,000 shares of Series A preferred stock were converted
into 5,204,000 pre-split shares of common stock.
2. The 2,205,002 pre-split shares of Series B common stock were
combined with the Series A common stock to leave one class of common stock.
3. The remaining class of common stock was reverse split on a
1-for-102 share basis leaving 90,000 shares of common stock outstanding.
4. The Company issued 90,000 shares of common stock to convert $900
of unsecured claims to equity valued at $0.01 per share.
5. The Company issued 1,620,000 shares of common stock to the plan
of reorganization proponents for cash and services valued at $0.015 per share.
All references to common stock unless specifically noted as pre-split
shares have been retroactively restated to reflect the reverse stock split.
F-9
<PAGE>
XCEL MANAGEMENT, INC.
(Formerly Palace Casinos, Inc.)
(A Development Stage Company)
Notes to Financial Statements
May 31, 1999
NOTE 4 - BANKRUPTCY PROCEEDINGS
On December 1, 1994, the Company filed a voluntary petition for relief
under Chapter 11 of the Federal Bankruptcy Laws in the United States
Bankruptcy Court for the District of Utah, Central Division. In June 1995,
the supervision of the Company's Chapter 11 proceedings was transferred to the
United States Bankruptcy Court for the Southern District of Mississippi.
Under Chapter 11, certain claims against the Company in existence prior to the
filing of the petition for relief are stayed while the Company continues
business operations as debtor-in-possession. On February 1, 1999, the plan
proponents filed a plan of reorganization which was approved on June 15, 1999
which called for the following items:
1. Payment to the priority claimholders of $5,000 cash. Actual
priority claims were $6,060.
2. Issuance of 90,000 shares of common stock to convert the unsecured
claims to equity.
3. The additional stock transactions noted in Note 3.
On December 3, 1999, the bankruptcy proceedings were closed by the United
States Bankruptcy Court, Southern District of Mississippi.
F-10
<PAGE>
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
During the fiscal year ended May 31, 1999, there were no disagreements
with accountants on any matter of accounting principles or practices or
financial statement disclosure as provided in Regulation S-K, Item 304.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The table below sets forth the name, age, and position of each executive
officer and director of the Company.
Officer or
Name Age Position Director Since *
---- --- -------- ---------------
Steve Rippon 54 President and Director August 1999
Edward D. Bagley 60 Secretary and Director August 1999
* These individuals were elected as members of the board of directors
in connection with a plan of reorganization filed by Messrs. Rippon and
Bagley, as plan proponents, in the U.S. Bankruptcy Court, in the Company's
Chapter 11 bankruptcy proceeding. (See "ITEM 1. DESCRIPTION OF BUSINESS.")
All directors and executive officers serve for a term of one year or
until their successors are chosen and qualified.
Set forth below is a brief biographical description of each member of
management:
Steve Rippon. Mr. Rippon has been President and Chairman of the Board
of the Company since August 1999. From 1963-1964 and 1968, he attended the
University of Utah majoring in Business Management. From 1970 to 1980, he was
a securities trader for several Utah brokerage firms. Mr. Rippon has served
as an officer and director of many public blind pool companies, several of
which resulted in reverse mergers. Since 1990, Mr. Rippon has devoted his
full time attention to the management of his family investments. In August
1997, he and Edward D. Bagley, as plan proponents, filed a plan of
reorganization in the Bankruptcy Company in connection with the Chapter 11
bankruptcy petition of the Company, then known as Palace Casinos. By June,
1999, this plan was approved and Mr. Rippon was subsequently elected a
director and President of the Company.
Edward D. Bagley. Mr. Bagley has served as secretary and a director of
the Company since August 1999. Mr. Bagley received a juris doctorate degree
from the University of Utah College of Law, and a license to practice law in
the state of Utah, in 1965. During the past six years, Mr.
13
<PAGE>
Bagley has served as an officer and principal of National Financial, a
closely-held computer backup accounting firm for health clubs. Mr. Bagley is
also currently a director of Tunex International, a publicly-held corporation
that operates or franchises a chain of automotive engine performance and
service centers, and National Environmental Services Company, a publicly-held
Oklahoma corporation. Since April 1994, he has served as a director of
Gentner Communication Corporation, a publicly-held corporation.
ITEM 10. EXECUTIVE COMPENSATION
During the fiscal year ended May 31, 1999, no officer or director
received any compensation from the Company. In connection with the Company's
Chapter 11 plan of reorganization, confirmed by the Bankruptcy Court in June,
1999, Steve Rippon and Edward D. Bagley, the plan proponents and new
management, each received a total of 810,000 shares of the Company's common
stock, par value $0.001 per share.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table shows, as of December 10, 1999, the number of shares
of common stock, par value $.001, of the Company owned of record or
beneficially by each person who owned of record, or was known by the Company
to own beneficially, more than 5% of the Company's common stock, and the name
and shareholdings of each officer and director, and all officers and directors
of the Company as a group:
Name and Address of Amount and nature of Percent of
Title of Class Beneficial Owner Beneficial Ownership* Class
- -------------- ------------------- --------------------- --------
Common Steve Rippon 810,000 45.0
781 East 2300 South
Bountiful, Utah 84010
Common Edward D. Bagley 810,000 45.0
2350 Oakhill Drive
Salt Lake City, Utah 84121
All officers and directors
as a group (2 persons) 1,620,000 90.0
* All ownership includes sole voting and sole investment power.
The Company has no outstanding warrants, options or any other rights to
purchase shares of common stock.
There are no arrangements known to the Company the operation of which may
at a subsequent date result in a change of control of the Company.
14
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As described under "ITEM 1. DESCRIPTION OF BUSINESS," in July and
August, 1999, the Company's current management, Steve Rippon and Edward D.
Bagley, were elected as management of the Company, and were each issued a
total of 810,000 shares of common stock of the Company, in connection with a
plan of reorganization prepared by them, as the plan proponents, and filed in
the U.S. Bankruptcy Court in connection with the Company's Chapter 11
bankruptcy proceeding. The Plan was confirmed by the Bankruptcy Court in
June, 1999. As a result of this transaction, Messrs. Rippon and Bagley own an
aggregate of 1,620,000 shares of common stock, or 90% of the 1,800,000 shares
of common stock issued and outstanding following confirmation of the Plan.
There were no other transactions during the past two years involving the
Company which require disclosure under Item 404 of Regulation S-B.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
Copies of the following documents are included as exhibits to this report
pursuant to Item 601 of Regulation S-B.
Exhibit No. SEC Ref. Title of Document
----------- -------- -----------------
1 (2) Plan of Reorganization dated
February 1, 1999; Order of Confirmation
dated June 16, 1999; and Order Closing
Estate dated December 3, 1999, all in the
United States Bankruptcy Court Southern
District of Mississippi
(3)(i) Articles of Incorporation, as amended
Articles of Incorporation, as amended,
through December 14, 1993*
2 Articles of Amendment dated August 11, 1999
(3)(ii) By-Laws*
3 (27) Financial Data Schedules**
* Filed as Exhibit with corresponding number to Registration Statement on
Form 10-A dated March 29, 1994, or Form 10-K for year ended May 31,
1994.
15
<PAGE>
** The Financial Data Schedule is presented only in the electronic filing
with the Securities and Exchange Commission.
B. REPORTS ON FORM 8-K
During the fiscal year ended May 31, 1999, the Company did not file any
reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has caused this report to be
signed on its behalf by the undersigned, hereunto duly authorized.
REGISTRANT:
XCEL MANAGEMENT, INC.
Date: December 20, 1999 By: /s/ Steve Rippon
---------------------
Steve Rippon, President
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:
/s/ Steve Rippon Director and President Date: December 20, 1999
Steve Rippon (Principal Executive Officer)
/s/ Edward D. Bagley Secretary and Director Date: December 20, 1999
Edward D. Bagley (Principal Financial Officer)
16
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
IN RE:
PALACE CASINOS, INC. NO. 95-08154 SEG
PLAN OF REORGANIZATION
-------------------------
The Plan Proponents, Steve Rippon and Edward D. Bagley, hereby propose
the following Plan of Reorganization for consideration and approval by
creditors and other parties in
interest.
Robert A. Byrd, Esq.
BYRD & WISER
45 Main Street
P.O. Box 1939
Biloxi, Mississippi 39533
Telephone: (228) 432-8123
COUNSEL FOR THE PLAN PROPONENTS
Steven Rippon and Edward D. Bagley
<PAGE>
TABLE OF CONTENTS
DEFINITIONS..............................................................1-4
CLASSIFICATION OF CLAIMS AND INTERESTS...................................4-5
TREATMENT OF CERTAIN UNCLASSIFIED CLAIMS.................................5
DESIGNATION AND TREATMENT OF IMPAIRED CLASSES............................5
MEANS FOR EXECUTION OF THE PLAN..........................................6-7
ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE
OR MORE CLASSES OF CLAIMS OR EQUITY INTERESTS............................8
DISCHARGE................................................................8
EXECUTORY CONTRACTS AND LEASES...........................................9
AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS........................9
REVESTING................................................................9
POST CONFIRMATION ADMINISTRATION AND MANAGEMENT..........................9
MODIFICATION OF THE PLAN.................................................10
RETENTION OF JURISDICTION................................................10-11
<PAGE>
ARTICLE I
DEFINITIONS
A. DEFINED TERMS
The following definitions apply in this Plan.
1. Administrative Expense means a Claim allowed under Sections 503(b) and
507(a)(1) of the Bankruptcy Code and fees and charges assessed against the
Debtors' estates under 28 U.S.C. Section 1930.
2. Allowed Claim, Allowed Secured Claim, Allowed Priority Claim, Allowed
Unsecured Claim, or Allowed Interest frean, respectively, a Claim, Secured
Claim, Priority Claim, Unsecured Claim, or an Interest against or in the
Debtors to the extent that:
(a) a proof of such Claim or Interest was
(i) timely filed;
(ii) deemed filed, pursuant to Section 1111(a) of the
Bankruptcy Code;
(iii) deemed filed as an outstanding security of the Debtors;
or
(iv) late filed with leave of the Bankruptcy Court after
notice and opportunity for hearing given to the Debtors and the creditors; and
(b) (i) which is not a Disputed Claim; or
(ii) which is allowed (and only to the allowed) by a Final
Order.
3. Bankruptcy Code means Title 11 of the United States Code.
4. Bankruptcy Court means the United States Bankruptcy Court for the
Southern District of Mississippi.
5. Bar Date means the date affixed by order of the Bankruptcy Court by
which proofs of claim must be filed against the Debtors.
6. Cash means cash and cash equivalents, including but nolimited to bank
deposits, checks, and other similar items.
7. Claim(s) has the meaning set forth in Section 101(4) of the Bankruptcy
Code.
8. Common Stock means the existing, outstanding shares of stock previously
issued by the Debtor.
9. Confirmation Date means the date on which the Confirmation Order is
entered.
10. Confirmation Order means the entered Order confirming the Plan
pursuant to Section 1129 of the Bankruptcy Code.
11. Convertible Preferred Stock means the 2,602,000 shares of convertible
preferred stock, previously issued and outstanding, by the Debtor.
12. Creditor means the holder of a Claim against a Debtor or the Debtors.
13. Debtor means Palace Casino, Inc.
14. Disclosure Statement shall mean the Disclosure Statement, with respect
to the Plan, that has been approved by order of the Bankruptcy Court pursuant
to Section 1125 of the Bankruptcy Code.
15. Disputed Claim means an asserted Claim against or equity Interest (i)
to which an objection has been filed on or before the Confirmation Date by a
party in interest and which objection is not the subject of a Final Order or
has not been withdrawn on or before the Confirmation Date or (ii) which
b.-a-.been scheduled as disputed contingent or unliquidated and which has not
been resolved or allowed by Final Order, estimation or pursuant to this Plan.
16. Distribution means Cash, and New Common Stock, which are required by
the Plan to be distributed to the holders of Allowed Claims and Allowed
Interests.
17. Effective Date means and the first business day following the
eleventh day after the Confirmation Date.
18. Equity Interests means ownership of the Outstanding Securities of the
Debtors.
19. Final Order means an order of the Bankruptcy Court or the District
Court as to which (a) any appeal that has been takeii has been finally
determined or dismissed; (b) the time for appeal has expired and no appeal has
been filed timely (In the case of an order of the Bankruptcy Court, the time
for appeal, for purposes of this definition, shall be the time permitted for
an appeal to the District Court, unless the Debtor shall have consented in
writing prior to the expiration of such period to a direct appeal to the
United States Court of Appeals) or (c) if an appeal, reargument, certiorari or
rehearing thereof has been sought, such order has not been stayed.
20. Interest means the rights of the owners and holders of the issued and
outstanding common stock, preferred stock, and warrants of the Debtor.
21. New Articles/New Bylaws means the amended and restated Articles of
Incorporation and the Bylaws of the Debtor under the laws of Utah, which shall
become effective on and as of the Effective Date, or immediately thereafter.
22. New Common Stock means the 1,800,000 shares of new stock to be issued
by the Reorganized Debtor pursuant to Sections 1125(e) and 1145 of the
Bankruptcy Code, according to the terms of the Plan.
23. Outstanding Securities mean all of the common stock, and any options,
warrants, and preferred stock of the Debtor, which were issued and outstanding
as of the day preceding the Confirmation Date.
24. Plan means this "Plan of Reorganization" together with any
modifications thereto, which Plan shall also constitute a plan of
reorganization within the meaning of Section 368(a)(l) of the Internal Revenue
Code, as amended.
25. Plan Proponents means Steve Rippon and Dal Bagley, residents of the
State of Utah.
26. Priority Claims mean Claim specified in Section 507 (a)(2), (3), (4),
(6) and (8) of the Bankruptcy Code.
27 . Pro rata means proportionately so that the ratio of the amount of
consideration distributed on account of a particular claim or interest to the
total amount of Allowed Claims or Allowed Interest of a class is the same as
the ratio of the amount of consideration distributed on account of all Allowed
Claims or Allowed Interests of the class in which the particular Claim or
Interest is included to the amount of all Allowed Claims or Allowed Interests
of that class.
28. Reorganized Debtor means the Debtor, Palace Casino, Inc., as provided
herein following the Effective Date.
29. Secured Claim means any Claim in respect of which a valid perfected
lien, security interest or encumbrance is held in or on any of the Debtors'
assets, to the extent of the value of the particular asset against which such
lien, security interest, or encumbrance is held.
30. Taxing Authority obligation means an obligation of the Debtor, under
this Plan to a governmental unit in the amount of the Allowed Priority Claim
therefor and in full satisfaction of all Priority Claims specified in Section
507(a)(8) of the Bankruptcy Code, the terms of which shall meet the
requirements of Section 1129(a)(9)(C) of the Bankruptcy Code or as agreed to
by the governmental unit holding the Claim. Any Taxing Authority Obligation
may be prepaid in part or in full at any time without penalty.
31. Unsecured Claim means any Claim against the Debtors that is not a
Secured Claim or a Priority Claim.
32. Warrants shall mean any warrants which were previously issued by the
Debtor.
B. UNDEFINED TERMS
A term used in the Plan and not defined herein but that is defined in the
Bankruptcy Code has the meaning assigned to the term in the Bankruptcy Code.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
All Allowed Claims and Allowed Interests are placed in the following
classes:
A. PRIORITY CLAIMS: CLASS I
1. CLASS 1A: Class 1A consists of all Allowed Priority Claims against
the Debtors entitled to priority pursuant to Section 507(a)(2)(8) of the
Bankruptcy Code (gap claims, wages, etc.)
Allowed Priority claims will be paid from a pool of funds not to exceed
$5,000.00. To the extent the pool is exceeded by the amount of allowed
priority claims, such claims will receive a pro-rata distribution in
satisfaction of their claims.
B. SECURED CLAIMS: CLASS 2
The Debtor has no known secured claims. To the extent the Plan
Proponents hold any claims that are deemed secured, such claims shall be
extinguished and satisfied through the issuance of 1,620,000 shares of common
stock in the reorganized Debtor in satisfaction to the Plan Proponents of any
secured claim. Any other secured claims shall be satisfied by Abandonments,
upon the Effective Date, of the affected creditor's collateral.
<PAGE>
C. UNSECURED CLAIMS: CLASS 3
The Debtor estimates allowed unsecured claims, exclusive of claims held
or controlled by the Plan Proponents, will total between $300,000.00 and
$500,000.00. Holders of allowed unsecured claims will receive, in satisfaction
of their claims, 90,000 shares of new common stock, on a pro-rata basis.
D. EQUITY INTERESTS: CLASS 4
Upon the Effective Date of the Plan, all existing warrants and options
shall expire. The Debtor's 2,602,000 in outstanding convertible preferred
shares shall be deemed converted 5,204,000 shares of common stock, generating
an outstanding pool 8,794,329 shares of common stock. Upon the effective date
all outstanding common stock shall be cancelled, and the reorganized Debtor
will issue new common stock on the basis of .0102 shares of new common stock
for each share of old common stock. 90, 000 shares of new common stock will be
distributed to this Class,
E. EXECUTORY CONTRACTS: CLASS 5
The Debtor has no known executory contracts. To the extent any exist,
they will be deemed rejected pursuant to Section 365 at confirmation.
ARTICLE III
TREATMENT OF CERTAIN UNCLASSIFIED CLAIMS
The holders of an Administrative Expense Claim entitled to priority under
Section 507 (a) (1) of the Bankruptcy Code, including entitities entitled to
payment pursuant to Section 503 of the Bankruptcy Code, shall be treated as
follows. Allowed administrative expenses and claims will be paid from a pool
of funds not to exceed $ 5,000.00. To the extent the pool is exceeded by the
amount of allowed administrative claims, such claims will receive a pro rata
distribution in satisfaction of their claims. Pursuant to 28 USC Section 1930
all fees payable to the United States Trustee shall be paid in full.
ARTICLE IV
DESIGNATION AND TREATMENT OF IMPAIRED CLASSES
All classes are impaired under Plan. In the event controversy as to
whether any class of Claims or Interests is impaired under the Plan, the
Bankruptcy Court, after notice and an opportunity for a hearing, shall
determine such controversy. All impaired classes of Claims and Interests
shall receive the Distributions set forth in this Plan on account of and in
complete satisfaction of all Claims and Interests against the Debtor, and
shall have no further rights or remedies against the Debtor or any of its
assets, except as specifically set forth in the Plan.
ARTICLE V
MEANS FOR EXECUTION OF THE PLAN
A. NEW VALUE INVESTORS
The Plan Proponents have agreed to provide the funds necessary to
implement and consummate the Plan. The Proponents have also agreed to pay for
legal fees incurred in the Plan confirmation process and for legal services
relating to any necessary amendments to the Debtor's charter or by-laws in
addition, the Proponents have agreed to accept new common stock, as provided
for herein, in satisfaction of the claims held by the Proponents.
B. REORGANIZED DEBTOR'S NEW COMMON STOCK
The provisions of the Reorganized Debtor's New Common Stock to be 11
issued pursuant to Sections 1125 (e) and 1145 of the Bankruptcy Code launder
the Plan are as follows:
1. Authorization.
-------------
Common Stock. The New Articles of the Reorganized Debtor shall
authorize the issuance of fifty million (50,000,000) shares of the Reorganized
Debtor's New Common Stock.
2. Par Value.
----------
Common Stock. The Reorganized Debtor's New Common Stock shall have
a par value per share as determined by the Bond of the Reorganized Debtor.
3. Rights.
------
Common Stock. The Reorganized Debtor's New Common Stock shall be
deemed fully paid and non-assessable and shall have such rights with respect
to dividends, liquidation voting, and other matters as are set forth in the
New Articles of the Reorganized Debtor, and as are otherwise provided by Utah
law.
C. MOTION UNDER SECTION 506(a) OF THE BANKRUPTCY CODE AND BANKRUPTCY
RULE 3012
The Plan shall constitute a motion to determine the amount and value of
the Allowed Secured Claims and Allowed Unsecured Claims, if any, of all
parties claiming a lien on and/or security interest in any of the Debtors,
assets, and a hearing hereon shall take place prior to the commencement of the
Confirmation Hearing. The Debtor reserves the right to file a separate
Bankruptcy Rule 3012 Motion and to have such motion considered prior to the
Confirmation Hearing.
D. DISTRIBUTIONS AND CONDITIONS PRECEDENT
On the Effective Date, or as soon thereafter as practical, the
Reorganized Debtor shall take such action as may be necessary to issue or
cause to be issued the New Common Stock, and make the other Distributions in
accordance with the terms of the Plan.
E. UNCLAIMED DISTRIBUTIONS
For a period of one (1) year following the Effective Date, the
Reorganized Debtor shall retain any unclaimed Distributions for the benefit of
the holders of Allowed Claims entitled thereto under the Plan which have
failed to claim such property. At the end of one (1) year following the
Effective Date, the holders of such Claims theretofore entitled to
Distributions shall cease to be entitled thereto and thereupon such
Distributions shall become property of the Reorganized Debtor.
F. OTHER PROVISIONS OF THE PLAN
1. EXCULPATION
The Plan provides that the Reorganized Company, and its respective
officers, directors, employees, or agents and the Plan Proponents (including
any professionals retained by such persons) shall have no liability to any
holder of a Claim or Equity Interest for any act or omission in connection
with, or arising out of, the pursuit of approval of the Disclosure Statement,
the Plan, or the administration of the Plan or the property to be distributed
under the Plan, except for willful misconduct or gross negligence.
2. GOVERNING LAW
The Plan will provide that unless a rule of law or procedure is supplied
by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws
of the State of Utah shall govern the construction and implementation of the
Plan and any agreements, documents, and instruments executed in connection
with the Plan.
3. SEVERABILITY
The Plan provides that, should any provisions in the Plan determined by
the Court or any appellate court to be unenforceable following the Effective
Date, such determination will in no way limit the enforceability and operative
effect of any and all other provisions of the Plan.
ARTICLE VI
ACCEPTANCE OR REJECTION OF THE PLAN;
EFFECT OF REJECTION BY ONE OR MORE
CLASSES OF CLAIMS OR EQUITY INTERESTS
A. CLASSES ENTITLED TO VOTE
Each impaired class of Claims shall be entitled to vote separately to
accept or reject the Plan. Any unimpaired class of Claims shall, be deemed to
have accepted the Plan.
B. CLASS ACCEPTANCE REQUIREMENT
A class of Claims shall have accepted the Plan if it is accepted by at
least two-thirds (2/3) in amount and more than one-half in number of the
Allowed Claims in such class that have voted on the Plan.
C. CRAMDOWN
If any class of Claims shall fail to accept the Plan in accordance with
Section 1126(c) of the Bankruptcy Code, at the request: of he Debtors, the
Bankruptcy Court may confirm the Plan in accordance with Section 1129(b) of
the Bankruptcy Code. In the event that confirmation is required under Section
1129(b) of the Bankruptcy Code, the Debtors reserve the right to amend or
otherwise modify the Plan in accordance with Section 1129(b)(2) of the
Bankruptcy Code.
ARTICLE VII
DISCHARGE
Except as otherwise provided in the Plan or Confirmation Order, entry of
the Confirmation Order acts as a discharge effective as of the Effective Date
of any and all debts of and Claims against the Debtors of any kind whatsoever
that arose at any time before the entry of the Confirmation Order, including
but limited to all principal. and any and all interest accrued thereon,
pursuant to Section 1141(d) (1) of the Bankruptcy Code. The discharge of the
Debtors shall be effective as to each Claim, regardless of whether a proof of
claim therefor was filed, whether the Claim is an Allowed Claim, or whether
the holder thereof thereof votes to accept the Plan.
ARTICLE VIII
EXECUTORY CONTRACTS AND LEASES
Except as hereinafter provided, all executory contracts and unexpired
leases ("Agreements") not heretofore assumed by the Debtor (whether or not the
subject of an order by the Bankruptcy Court) are intended to be rejected by
the Reorganized Debtor, from and after the Effective Date; provided that the
Debtor reserves the right and privilege to assume any additional Agreements up
to the time of entry of the Confirmation Order, absent other arrangements
between the Debtor and the other parties to any Agreement so assumed. The
Claim for any deficiency, loss or damage realized or sustained by reason of
such rejection and which is allowed as a Claim in this case, shall be entitled
to be treated as, and shall have the same rights and privileges as unsecured
creditors whose Claims are dealt with as Class 3. Such creditors shall file
proof of the general Unsecured Claim and appropriate elections within such
time as is fixed by the Bankruptcy Court.
ARTICLE IX
AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS
On the Effective Date or as soon thereafter as reasonably practicable, the
Debtor shall file under the laws of the State of Utah amended and restated New
Articles.
ARTICLE X
REVESTING
On the Effective Date, the Reorganized Debtor and shall be vested with
full ownership of, dominion, and control over the respective assets included
in the estate, of every kind whatsoever and wherever located, free and clear
of all Claims, liens, mortgages, security interests, charges and other
interests of creditors arising prior to the respective filing date of each
petition herein. Upon the Effective Date, the Reorganized Debtor shall
operate its business free of any restrictions of the Bankruptcy Code, the
Bankruptcy Court or the United States Trustee.
ARTICLE XI
POST CONFIRMATION ADMINISTRATION AND MANAGEMENT
The Reorganized Debtor shall designate a new board of directors of the
Reorganized Debtor. The boards of directors shall meet immediately after the
Effective Date for the purpose transacting such business as may properly come
before said board, including the election of officers of the Reorganized
Debtor.
ARTICLE XII
MODIFICATION OF THE PLAN
The Plan Proponents may propose amendments and modifications of this Plan
through the Confirmation Date, with leave of the Bankruptcy Court upon
appropriate notice. After the Confirmation Date, the Plan Proponents may,
with approval of the Bankruptcy Court, and so long as it does not materially
or adversely affect 11 the interest of the Creditors, remedy any defect or
omission, or reconcile any inconsistencies in this Plan, or in the Order of
Confirmation in such a manner as may be necessary to carry out the intentions
of this Plan.
ARTICLE XIII
RETENTION OF JURISDICTION
The Bankruptcy Court shall retain Jurisdiction over these jointly
administered Chapter 11 cases for the following purposes:
1. To determine any and all objections and proceedings involving the
allowance estimation, classification, and subordination of Claims and
Interests;
2. To determine any and all applications for allowances of
compensation and reimbursement of expenses and any other fees or expenses
authorized to be paid or reimbursed under the Bankruptcy Code or Plan;
3. To determine any and all applications pending on the Effective
Date for the rejection or assumption of executory contracts or unexpired
leases,
4. To determine any and all applications, adversary proceedings, and
contested or litigated matters that may be pending on the Effective Date;
5. To consider any modifications of the Plan, remedy any defect or
omission or reconcile any inconsistency in any order of the Bankruptcy Court,
including the Confirmation Order, to the extent authorized by the Bankruptcy
Code;
6. To determine all controversies, suits, and disputes that may arise
in connection with the interpretation, enforcement, or consummation of the
Plan or any obligations thereunder;
7. To consider and act on the compromise and settlement of any Claim
against or cause of action by or against the Debtor or the Reorganized Debtor;
8. To determine asset values for property tax purposes;
9. To determine federal tax issues affecting the Debtor and the
Reorganized Debtor arising from the Plan;
10. To enter any necessary order binding upon any federal, state or
local taxing authorities adjudicating any tax liability as to the Debtor or
the Reorganized Debtor herein, whether any such tax obligation shall have
arisen pre-petition, post-petition or subsequent confirmation;
11. To stay the enforcement of any lien or Claim until consummation
of the Plan or entry of a Final Order with respect thereto;
12. To object and/or defend as to any Claim or Claims filed as to the
Debtor, whether arising pre-petition or postpetition, which respect to which
the Debtor and the Reorganized Debtor hereby specifically reserve any and all
rights;
13. To have such orders issued confirming that confirmation of this
Plan will constitute a finding of fact and conclusion of law by the Bankruptcy
Court that the Reorganized Debtor is entitled to a discharge pursuant to
Section 727 and Section 1141 of the Bankruptcy Code and that no debts have
been excepted from discharge; and that pursuant to Section 1141 of the
Bankruptcy Code, the Debtor shall be discharged and released from any and. all
debts and liabilities, except those expressly provided for and assumed under
the Plan, which obligations shall be binding upon the Reorganized Debtor
hereunder and arty creditors or claimants and affected parties; and
14. To issue such orders in aid of execution of the Plan to the
extent authorized by Section 1142 of the Bankruptcy Code.
Date: February 1, 1999 Respectfully submitted,
STEVE RIPPON AND
EDWARD D. BAGLEY
Plan Proponents
BY: BYRD & WISER
Counsel for Proponents
/s/ Robert A. Byrd
Robert A. Byrd
CERTIFICATE
I, ROBERT ALAN BYRD, counsel for Steven Rippon and Edward Bagley, do
hereby certify that I have this date mailed a true and correct copy of the
above and foregoing Plan of Reorganization, postage prepaid, by means of
United States Mail to T. Glover Roberts, Esq., 1700 Pacific Avenue, Suite
4400, Dallas, TX 75201; Eileen Shafer Bailey, Attorney for the Debtor, at PO
Box 1177, Jackson, MS 39215-1177; and Ronald H. McAlpin, Assistant U.S.
Trustee, Suite 1232, A. H. McCoy Federal Bldg., 100 West Capital Street,
Jackson, MS 39269.
This the 1st day of February, 1999.
/s/ Robert A. Byrd
Robert A. Byrd
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF MISSISSIPPI
IN RE: CASE NUMBER: 95-08154-SEG
PALACE CASINOS, INC.
AKA TRANS. JE ADV 9500884 06-14-95
SSN: NA 87-0363613
NOTICE OF ENTRY OF ORDER OF CONFIRMATION
NOTICE IS HEREBY GIVEN in accordance with Federal Rule of Bankruptcy
Procedure 2002(f)(7) that an Order was entered on JUNE 15, 1999, confirming
the debtor(s) Plan.
The Order confirming plan is on file and available for inspection in the
office of the Clerk of the United States Bankruptcy Court at 725 Washington
Loop, Suite 117, Biloxi, Mississippi.
DATED: June 16, 1999
CHARLENE J. PENNINGTON, CLERK
UNITED STATES BANKRUPTCY COURT
725 WASHINGTON LOOP
SUITE 117
BILOXI, MS 39530-2267
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
SOUTHERN DIVISION
IN RE:
PALACE CASINOS, INC. NO. 95-08154 SEG
ORDER CONFIRMING PLAN
Hearing was held on June 15, 1999, on the Confirmation of the Plan of
Reorganization under Chapter 11 of the Bankruptcy Code filed by the Plan
Proponents, Steven Rippon and Edward D. Bagley on February 1, 1999, and the
Court finding that the Plan was duly submitted to affected creditors and
parties in interest, after notice and hearing as required by law, and after
consideration of the evidence presented and the record in this cause the Court
finds as follows:
1. The Plan has been accepted in writing, or by consent, or said
Class is not impaired by the Creditors in Classes 1, 2, 3, and 4, and equity
security holders whose acceptance is required by law; and
2. The provisions of chapter 11 of the Bankruptcy Code have been
complied with; and
3. That the Plan has been proposed in good faith and not by any means
forbidden by law; and
4. That each holder of a claim or interest in Classes 2, 3, and 4
that is deemed impaired has accepted the Plan, or the Court having
specifically found that with respect to each class of impaired claims or
interests that the plan does not discriminate unfairly and is fair and
equitable; and
5. All payments made or promised by the Debtor or by a person issuing
securities or acquiring property under the Plan or by any other person for
services or for costs and expenses in, or in connection with, the Plan and
incident to the case, have been fully disclosed to the Court and are
reasonable or, if to be fixed after confirmation of the Plan, will be subject
to the approval of the Court; and
6. The identity, qualifications, and affiliations of the persons who
are to be directors, officers, or employees of the Debtor, after
confirmation of the Plan, have been fully disclosed, and the appointment of
such persons to such offices, or their continuance therein, is equitable, and
consistent with the interests of the creditors and equity security holders and
with public policy; and
7. The identity of any insider that will be employed or retained by
the Debtor and his compensation, if any, have been fully disclosed; and
8. The Court further finds that the Debtor has requested confirmation
pursuant to 11 U.S.C. Section 1129(b), which has been rendered moot by the
Debtor's compliance with Section 1129(a)(1) - (13) of the Bankruptcy Code.,
9. Pursuant to Bankruptcy Code, Section 1106, the Plan Proponents on
behalf of the Debtor and their attorney must file with this Court within 180
days from the date hereof a report of distributions under the confirmed
Chapter 11 Plan on Form BC 100B.
10. Pursuant to Federal Rules of Bankruptcy Procedure, Rule 2015 and
3022 the Plan Proponents on behalf of the Debtor and their attorney must file
with this Court within 60 days from the date of this order the application for
final decree setting forth the information required by said Rules.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Plan Proponents or
the reorganized Debtor shall pay to the United States Trustee, the appropriate
sum required by 28 U.S.C. Section 1930(a)(6) within ten (10) days of the entry
of this Order, and simultaneously provide the United States Trustee an
appropriate affidavit indicating the cash disbursements for any relative
period in which the Plan Proponents has failed to file monthly operating
reports.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Plan Proponents
shall timely pay to the United States Trustee, any and all post confirmation
quarterly fees as required by 28 U.S.C. Section 1930(a)(6) until such time as
this case is converted, dismissed or closed by the court. Additionally, the
Plan Proponents shall submit to the United States Trustee post confirmation
monthly operating reports in the format prescribed by the United States
Trustee until such time as this case is converted, dismissed or closed by the
court.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Plan of
Reorganization filed by the Plan Proponents Steven Rippon and Edward D. Bagley
on February 1, 1999, is hereby confirmed.
SO ORDERED this the 15th day of June, 1999.
/s/ Edward R. Gaines
UNITED STATES BANKRUPTCY JUDGE
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF MISSISSIPPI
IN THE MATTER OF: BANKRUPTCY NO.:
PALACE CASINOS, INC. 95-08154 SEG
ORDER CLOSING ESTATE
It appearing to the Court that a Motion to Close Case was filed November
24, 1999 by Steven Rippon and Edward Bagley, Plan Proponents:
IT IS ORDERED that the said estate be and is hereby closed.
DATED: December 3, 1999.
By the Court
/s/ Edward R. Gaines
Edward R. Gaines
United States Bankruptcy Judge
ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF PALACE CASINOS, INC.
The undersigned hereby submits these Articles of Amendment of the Articles
of Incorporation of Palace Casinos, Inc., a Utah corporation, pursuant to Utah
Cod Annotated, Section 16-10a-1006.
1. The name of the corporation is Palace Casinos, Inc.
2. The corporation's Articles of Incorporation are amended so that
ARTICLE ONE is restated to read in its entirety as follows:
ARTICLE ONE
CORPORATE NAME
The name of the Corporation is Xcel Management, Inc.
3. The amendment was adopted by the shareholders of the corporation on
August 3, 1999, at a special meeting of shareholders held on that date (the
"meeting").
4. The corporation has only one class of voting shares that being
common shares. There are no separate voting groups within that class. The
corporation has 1,800,000 common shares outstanding all of which were entitled
to appear and vote at the meeting. Of the total common shares outstanding,
1,620,000 were represented at the meeting, all of which voted in favor of the
amendment.
These Articles of Amendment are hereby executed upon the affirmation of
the undersigned under penalty of perjury that the facts stated in this
instrument are true and that the execution hereof is the act of the
corporation as of this 11th day of August, 1999.
/s/ Steve Rippon
Steve Rippon, President
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> MAY-31-1999
<CASH> 30,437
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30,437
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,437
<CURRENT-LIABILITIES> 11,225
<BONDS> 0
0
0
<COMMON> 1,800
<OTHER-SE> 17,412
<TOTAL-LIABILITY-AND-EQUITY> 30,437
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,453
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (7,453)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,453)
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<EXTRAORDINARY> 469,050
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<EPS-BASIC> 0.75
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