Century Laboratories, Inc.
Delaware 72-0510027
720 2nd Street
Santa Rosa, CA 95402
Tel. 818-242-1490
Fax. 818-905-1404
copies to:
Lance N. Kerr Law Office
155 W. Washington Blvd.
Suite 1995
Los Angeles, CA 90015
Tel. 213.741.1790
Fax. 213.741.1792
AMENDMENT TWO
INFORMATION STATEMENT
INTRODUCTION
This information statement is being mailed on or before May 4, 2002 to
holders of record on April 22, 2002 of Century Laboratories, Inc., a Delaware
corporation (the "Company") in connection with an anticipated change in the
members of the Board of Directors. The information contained in this
Information Statement regarding the persons designated to become directors of
the Company has been furnished to the Company by third parties and the Company
assumes no responsibility for its accuracy or completeness.
This Information Statement is being delivered to provide information
regarding anticipated changes in the members of the Board of Directors as a
result of completion of an reorganization of the business of the Company.
This statement is for informational purposes only. You are urged to read this
Information Statement carefully. No action on your part is sought or required.
On April 4, 2002 Century Laboratories, Inc.,("CYLI"), the shareholders
of Century Laboratories, Inc. who are or will be the owners of or otherwise
represent at least fifty one per cent (51%) of all the issued and outstanding
common stock (the "Shareholders") and Vista Continental Corp, a Nevada Corp.
("VCC") entered into a reorganization and stock purchase agreement (the
"Reorganization Agreement").
CYLI was incorporated in Delaware on June 16, 1958. Its authorized
capital consists of 65,000,000 shares of common stock, par value $.001 and
10,000,000 shares of preferred stock, par value $.001. As of the date of the
reorganization agreement CYLI had issued and outstanding 4,108,982 common
shares and no shares of preferred stock issued and outstanding. CYLI had no
outstanding options, warrants, rights or other contractual arrangements
relating to the issuance of any additional common or preferred shares.
At the closing the shareholders of VCC will exchange all of their issued
and outstanding shares for 39,837,355 common shares of CYLI issued by CYLI for
purposes of the transaction. These newly issued shares of CYLI will be issued
pursuant to Section 4(2) of the Securities Act of 1933 and any related state
securities law exemptions. The closing date is scheduled for May 15, 2002. The
transaction will result in VCC becoming a wholly owned subsidiary of CYLI.
Following the closing the total issued and outstanding shares of CYLI will
total 43,946,337 common shares. No preferred shares will be outstanding. The
closing is subject to certain due diligence by both parties to the agreement
and may be changed by mutual agreement but in no event may it be extended
beyond June 4, 2002.
VCC is a natural resource company currently engaged in the acquisition,
exploration and development of mineral resource properties. VCC was formed in
1999 and acquired several mineral resource properties in Peru.
In conjunction with the reorganization plan the Company will seek
written consent of the shareholders to amend the certificate of incorporation
of CYLI to change its name to Vista Continental Corporation. The current
officer and director will resign and appoint a new board of directors. These
new directors will appoint new executive officers for the Company.
The following table contains information regarding the Executive
Officers and Directors of our Company:
Name Age Position Director since:
- ---------------------------------------------------------------------------
Robert Bryan 51 President, Secretary, August 18, 2000
Treasurer & Director
The following is a brief description of the business experience for the
past five years of our Company's Executive Officers and Directors:
Robert Bryan, a native of St. Louis, Missouri and attended Florissant
Valley Jr. College from 1969-1971, where he studied art and graphic design.
Mr. Bryan currently resides in the San Francisco, California area, has been a
professional studio artist for over 20 years and founded his own art studio,
Bryan Design, in 1989. Mr. Bryan's studio produces fine and commercial art
products, including sculpture and paintings.
CHANGE IN MANAGEMENT
Upon closing the officers and directors of CYLI shall become:
Directors:
Steven Hegedus
Richard Smythe
Ashak Rustom
Takao Nishimura
Dennis Hare
Officers:
President Larry Nash
Vice President Ashak Rustom
Secretary Howard Rubinoff
Treasurer Ashak Rustom
The background and experience for the proposed officers and directors of
the surviving corp is as follows:
Larry Nash, DDS
President
Dr. Nash, age 59, a doctor of dental surgery, has received a national
award in Canada for his service club administration excellence and has acted
as Chief of his department at the Welland County Hospital. He is past Vice
President of strategic planning for Nova Continental Development Corporation,
a land development company in Nevada, and is past CEO of West Nevada Precious
Metals of Nevada, a company engaged in precious metals testing.
Ashak Rustom
Vice President, Treasurer and a Director
Mr. Rustom, age 51, is the Vice President, Chief Financial Officer,
Treasurer and a Director for Nova Continental Development Corporation, a real
estate land development company. He has an extensive background in project
management, contract administration, financing, cash flow projections,
property valuations, cost control as well as forecasts, and financial
planning. Mr. Rustom has over 40 years experience in corporate finance and
management of risk capital investments.
Howard Rubinoff
Secretary
Mr. Rubinoff, age 45, a partner at the law firm Fogler/Rubinoff, is a
lawyer with over 15 years experience in corporate and commercial law with an
emphasis on mergers and acquisitions and financing. A graduate of Windsor Law
School, Mr. Rubinoff has traveled extensively assisting clients in their
global expansions and has been involved in the purchase and financing of many
hydroelectric power plants. Mr. Rubinoff's firm is the Canadian member of the
International Lawyers network.
Steven Hegedus, DDS
Director
Dr. Hegedus, age 67, received his Doctor of Dental Surgery in 1952 from
the University of Toronto, and has thriving orthodontic practices in Welland
and Niagara Falls, Ontario. Dr. Hegedus has an extensive background in real
estate holdings, development and business ventures as the owner of Helubar
Corporation, an Ontario real estate holdings corporation and as the President
of Villa Mora Corporation, an Ontario real estate development company.
Richard Smythe, Ph.D.
Director
Dr. Smythe, age 56, has 25 years experience working with gas emissions
and gas study research and testing technique development. Dr. Smythe received
his Ph.D. in Analytical Chemistry at the University of Waterloo (Ontario). His
doctoral dissertation dealt with the application of high resolution gas
chromatography and mass spectrometry to the analysis of engine exhaust
emissions. Dr. Smythe then did a post-doctoral fellowship in electro-
analytical chemistry at the State University of New York at Buffalo.
Since his post-doctoral work, Dr. Smythe has acted as adjunct research
supervisor at Brock University in St. Catherines, Ontario, advising and
supervising Master's in Science candidates in analytical chemistry. He also
has lectured at Brock and other universities in the fields of industrial
chemistry and environmental toxicology.
Dr. Smythe has operated his own testing and analysis laboratory and continues
to act as consulting senior scientist for Walker Industries.
A forensic scientist, Dr. Smythe is qualified as an expert witness in
the fields of chemistry, toxicology, physics, mathematics, computer science,
electronics and forensic science in all levels throughout the court system of
the province of Ontario and the states of New York and Pennsylvania. He is a
member of the American Chemical Society; Chemical Institute of Canada, Niagara
Section (past Chairman); Chemical Advisory Board, Niagara College of Applied
Arts and Technology (past Chairman); Society for Applied Spectroscopy;
American Society for Materials; and Canadian Association of Fire
Investigators.
Dr. Smythe's journal publications are as follows:
A Gas Chromatographic-Mass Spectrographic Study of Organic Compounds
Absorbed on Particulate Matter from Diesel Exhaust, F.W. Karasek, R.J. Smythe
and R.J. Laub, Journal of Chromatography, 101, (1), 125-136 (1974)
Preparation of High Capacity High Resolution Open Tubular Columns, F.W.
Karasek, R.J. Smythe and R.J. Laub, Journal of Chromatography, 97, (2) 151-154
(1974)
The Analysis of Diesel Engine Exhausts for Low Molecular Weight Carbonyl
Compounds, R.J. Smythe and F.W. Karasek, Journal of Chromatography, 86, (1),
228-231 (1973)
Trapping System and Technique for Indirect Gas Chromatographic Mass
Spectrometry Interfacing, F.W. Karasek and R.J. Smythe, A.C. 43, 2008 (1971)
The Reaction of Hydroperoxide with Triphenylphosphine, R. Hiatt, R.J.
Smythe and Christine McColeman, Canadian Journal of Chemistry, 49 (10) 1707
(1971)
Dennis Hare
Director
Mr. Hare, age 70, is past Vice-President and Director of International
Operations for Acres International, a worldwide engineering consulting firm.
He also served as Acres International's board member for Various Joint
Ventures and Consortia, responsible for executing hydroelectric, irrigation
and mining projects in Iran, India and China. As Vice-President, Hydro
Division for Acres International, Mr. Hare had corporate responsibility for
business development and operations relating to all hydroelectric, irrigation,
water resource projects and agriculture activities overseas, including
management of major projects in Pakistan, Ghana, Iran, China, Laos, Cambodia,
Argentina, Colombia and Canada. Mr. Hare was also Founding Director of Canada
China Power Inc. (CIPM).
Mr. Hare received his degree in Civil Engineering from the University of
Wales in Cardiff (UK) and is a member of both the Professional Engineers of
Ontario and the Institution of Civil Engineers, UK. Mr. Hare is fluent in
English and Spanish.
Takao Nishimura
Director
Mr. Nishimura, age 48, graduated with a bachelor's from Kyoto University
of Foreign Studies in 1977, and is an executive member of the Asian Pacific
Alliance of YMCAs and an executive member of the alliance of YMCAs in Japan,
as well as being District Governor of Y's Men's Club of Toshin District in
Japan. Mr. Nishimura is president of Netwest USA, Inc. of Nevada and also
president of Ebiyusa Co. of Osaka, Japan.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the numbers of shares of common stock
that are owned of record of the Company prior to closing of the reorganization
plan.
Name and Address Number of Shares Percent
Owned Beneficially of Class
Robert Bryan 2,646,698 64.4
P.O. Box 3588
Santa Rosa, CA 95402
Amanda Whipp 500,000 12.2
P.O. Box 1465
Agoura Hills, CA 91365
Edwin Mendlinger 262,225 6.4
160 East 65th Street,
Apt. 12F
New York, New York 10021
All Directors and Officers 2,646,698 64.4
The following table sets forth the numbers of shares of common stock
that will be owned of record or beneficially following the closing of the
transaction including the expected future officers and directors.
Name and Address Number of Shares Percent
Owned Beneficially of Class
Steve Hegedus 200,000 .005
851 S. Ramprt Blvd. # 150
Las Vegas, NV 89128
Ashak Rustom 205,800 .005
851 S. Ramprt Blvd. # 150
Las Vegas, NV 89128
Takao Nishimura 327,500 .007
851 S. Ramprt Blvd. # 150
Las Vegas, NV 89128
Alberto Docouto 32,997,528 75.09
851 S. Ramprt Blvd. # 150
Las Vegas, NV 89128
Robert Bryan 2,646,698 6.02
P.O. Box 3588
Santa Rosa, CA 95402
Proposed officers
and directors as a
group 733,300 1.67
Executive Compensation
The current officer and director of the Company, Robert Bryan, does not
draw a salary from the Company.
Once the reorganization plan closes Dr. Larry Nash will be the new
President of the Company. His compensation will be set at the rate of $ 93,000
per annum. He will received no other forms of compensation or stock options.
No other compensation is currently planned for the other exptected officers
and directors.
Legal Proceedings
The Company is not a party to any pending legal proceedings, and no such
proceedings are known to be contemplated. No director, officer of affiliate of
the Company, and no owner of record or beneficial owner of more than five
percent (5%) of the securities of the Company, or any associate of any such
director, officer or security holder is a party adverse to the Company or has
a material interest adverse to the Company in reference to pending litigation.
FINANCIAL INFORMATION.
Century Laboratories, Inc. is a reporting company. We incorporate by
reference our latest filed report which is Form 10-KSB for the period ended
December 31, 2001.
Audited financial information for Vista Continental Corporation follows:
VISTA CONTINENTAL CORPORATION
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As of September 30, 2001
ASSETS
Cash $ 13,764
Prepaid rent 10,782
Property & equipment, net of $2,463
accumulated depreciation 932,038
Rental houses in Las Vegas, NV
net of $7,084 accumulated depreciation 1,260,416
Mining concessions 9,775
Deposits 500
----------
$2,227,275
==========
LIABILITIES
Accounts payable $ 2,949
Advance payable to an officer 100
Tenant security deposits 3,345
----------
Total Liabilities 6,394
----------
Minority interest 12,418
Commitments
STOCKHOLDERS' EQUITY
Common stock, $.001 par, 75,000,000 shares
authorized, 36,810,300 shares issued
and outstanding 36,810
Additional paid in capital 3,220,426
Deficit accumulated during
the development stage (1,048,773)
----------
Total Stockholders' Equity 2,208,463
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,227,275
==========
VISTA CONTINENTAL CORPORATION
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
For the years ended September 30, 2001 and 2000 and
the Period from July 1, 1998 (Inception)
Through September 30, 2001
Inception
Through
2001 2000 2001
--------- -------- ---------
Mining operating expenses $ 87,605 $ 21,494 $ 135,883
Administrative expenses 886,148 1,390 887,538
Depreciation 2,463 2,463
--------- --------- ---------
Net loss from operations ( 976,216) ( 22,884) (1,025,884)
Other income
- rental house expenses,
net of rental house
receipts ( 21,057) ( 21,057)
- minority interest portion of
net rental house expenses 211 211
- foreign currency loss ( 2,043) ( 2,043)
----------- --------- ---------
Net loss $( 999,105) $( 22,884) $(1,048,773)
=========== ========= =========
Per share, basic and diluted:
Net loss per common share $(.03) $(.00)
Weighted average
common shares outstanding 36,263,346 34,930,000
VISTA CONTINENTAL CORPORATION
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from July 1,1998 (Inception)
Through September 30, 2001
Deficit
Accumulated
During
Common Stock Paid in Development
Shares $ Capital Stage Totals
---------- ------- ---------- --------- ----------
Incorporation of:
Vista Continental
Corporation 1,430,000 $1,430 $ 1,430
Incorporation of
Quillabamba
Mining, S.A.C. 23,500,000 23,500 $( 22,521) 979
Shareholder contributions
to capital 29,248 29,248
Net loss $( 26,784) (26,784)
---------- ------- -------- -------- ----------
Balances,
September 30, 1999 24,930,000 24,930 6,727 ( 26,784) 4,873
Shares issued in exchange
for mining equipment
on October 1, 1999 10,000,000 10,000 30,000 40,000
Shareholder contributions
to capital 32,290 32,290
Net loss ( 22,884) ( 22,884)
------ ------- ---------- --------- ----------
Balances,
September 30,2000 34,930,000 34,930 69,017 ( 49,668) 54,279
Services at $.004
per share in
December 2000 1,620,000 1,620 4,860 6,480
7 rental properties on
March 29, 2001 114,000 114 1,117,497 1,117,611
Cash at $10 per share
on May 22, 2001 100,000 100 999,900 1,000,000
1 rental property on
June 7, 2001 13,000 13 132,647 132,660
Cash at $10 per share
from June 2001 through
September 2001 33,300 33 332,967 333,000
Options issued to employees 373,750 373,750
Shareholder contributions
To capital 189,788 189,788
Net loss ( 999,105) (999,105 )
---------- ------- ---------- ----------- ----------
Balances,
September 30, 2001 36,810,300 $36,810 $3,220,426 $(1,048,773 $2,208,463
========== ======= ========== =========== ==========
VISTA CONTINENTAL CORPORATION
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended September 30, 2001 and 2000 and
the Period from July 1, 1998 (Inception)
Through September 30, 2001
Inception
Through
2001 2000 2001
----------- --------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net deficit accumulated during the
development stage $ (999,105) $(22,884) $(1,048,773
)
Adjustments to reconcile net deficit
to cash used by operating activities:
Depreciation 9,548 9,548
Stock and options issued
for services 380,230 1,280 380,230
Income assigned to minority interest ( 211) ( 211)
Increase in prepaid rent ( 10,525) ( 10,782)
Increase in accounts payable 2,440 (599) 2,949
Decrease in tenant security deposits( 1,255) (1,255)
---------- ---------- ----------
NET CASH USED BY OPERATING ACTIVITIES (618,878) (22,203) (667,014)
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property & equipment (893,710) ( 791) (894,501)
Acquisition of mining concessions ( 8,115) ( 9,775)
Increase in deposits ( 500) ( 500)
---------- ---------- ----------
(894,210) ( 8,906) (904,776)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable to founder 100 100
Contributions to capital
by founding shareholder 189,788 32,290 252,305
Sale of stock 1,333,000 150 1,333,150
---------- --------- ----------
NET CASH FLOWS FROM
FINANCING ACTIVITIES 1,522,888 32,440 1,585,555
---------- ---------- ----------
NET CHANGE IN CASH 9,800 1,331 13,765
Cash balance, beginning 3,965 2,634 0
---------- ---------- ----------
Cash balance, ending $ 13,765 $ 3,965 $ 13,765
========== ========== ==========
Noncash Transactions:
Purchase of rent houses with stock $1,250,271 $1,250,271
Purchase of equipment with stock $ 40,000 40,000
VISTA CONTINENTAL CORPORATION
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business. A predecessor entity, Quillabamba Mining, S.A.C., was
organized as a Peruvian corporation on July 1, 1998 (see Note 2). The Norsoca
Trust was created as a California Business Trust on July 25, 1998. 35
shareholders contributed a total of $1,430 for 1,430,000 shares. The proceeds
were used to incorporate Vista Continental Development Corp., ("Vista
Development") in Nevada on September 24, 1999. The Norsoca shareholders
swapped their shares one for one for 1,430,000 shares of Vista and Norsoca was
dissolved. Vista Development changed its name to Vista Continental
Corporation ("Vista") on December 16, 1999. Vista is developing a mining
concession in Peru that it acquired in October 2000. Vista also owns rent
houses contributed by non-control shareholders. See Note 2.
Principles of consolidation. The consolidated financial statements include the
accounts of Vista and its subsidiaries. All significant intercompany
transactions and balances have been eliminated.
Cash and cash equivalents. For purposes of the statements of cash flows,
Vista considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
Use of estimates. In preparing financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheet and revenue and expenses in the income
statement. Actual results could differ from those estimates.
Revenue recognition. Vista has no revenues to date from its mining
operations. Rental house income is included in other income.
Long lived assets. Property, plant and equipment are stated at cost less
depreciation beginning when the assets are placed in service. Major renewals
and improvements are capitalized; minor replacements, maintenance and repairs
are charged to current operations.
Depreciation is computed by applying the straight-line method over the
estimated useful lives of the machinery and equipment. Vista performs reviews
for the impairment of long-lived assets whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable.
A summary of property and equipment as of September 30, 2001 is as follows:
Cost Depr. lives
---------- -----------
Mining equipment not yet in service $ 912,331 4 years
Office computers and equipment 15,070 3 years
Vehicles 7,100 3 years
Accumulated depreciation ( 2,463)
----------
$ 932,038
==========
Income taxes. Vista accounts for income taxes using the asset and liability
approach which is used to recognize deferred tax assets and liabilities for
the expected future tax consequences of temporary differences between the
carrying amounts and the tax bases of assets and liabilities. Vista records a
valuation allowance to reduce the deferred tax assets to the amount that is
more likely than not to be realized.
Foreign currency. Vista's foreign subsidiary has the U.S. dollar designated as
their functional currency. Financial statements of these foreign subsidiaries
are remeasured to U.S. dollars for consolidation purposes using current rates
of exchange for monetary assets and liabilities and historical rates of
exchange for nonmonetary assets and related elements of expense. Revenue and
other expense elements are remeasured at rates that approximate the rates in
effect on the transaction dates. Remeasurement gains and losses are included
in other income and expense.
Earnings per common share. Basic earnings (loss) per common share is computed
using the weighted average number of common shares outstanding during the
period. Diluted earnings per common share is computed using the combination of
dilutive common share equivalents and the weighted average number of common
shares outstanding during the period.
Stock options. Vista accounts for stock options issued to employees in
accordance with Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees. For financial statement disclosure purposes and
issuance of options and warrants to non-employees for services rendered, the
Company follows statement of Financial Accounting Standards No. 123,
Accounting for Stock-Based Compensation.
NOTE 2 - SUBSIDIARIES AND PROPERTY AND EQUIPMENT
In October 2000, Alberto Docouto contributed $40,000 in mining equipment
valued at his original cost for 10,000,000 shares of Vista.
Quillabamba Mining S.A.C. ("Quillabamba") was formed as a Peruvian corporation
on July 1, 1998. This entity controlled 7 mining leases in Peru. In October
2000, a 1% shareholder returned his share to Quillabamba and Mr. Docouto, a
98% shareholder, contributed his now 99% ownership of Quillabamba with Vista
for 23,500,000 shares of Vista. Because both companies are and have been
controlled by Mr. Docouto since their inceptions, these financial statements
are shown as having been combined since the inception of each. The remaining
1% of Quillabamba is owned by a Peruvian citizen, as required by Peruvian law.
In March 2001, 7 rent houses in Las Vegas valued at $1,117,611 were
contributed by an investor for 114,000 shares of Vista. These houses were
contributed by Vista to Vista Management Holdings Co. LLC ("VMH I") in
exchange for a 99% ownership interest in VMH I.
In June 2001, one rent house in Las Vegas valued at $132,660 was contributed
by an investor for 13,000 shares. This house was contributed by Vista to
Vista Management Holdings Co. II LLC ("VMH II") in exchange for a 99%
ownership interest in VMH II.
The other 1% of each rent house LLC is controlled by Mr. Docouto through
another entity.
NOTE 3 FURNITURE AND ARTWORK
Vista has furniture and artwork in its office with an original cost of
$242,000. This furniture and artwork has not been purchased and is on loan
from an unrelated party for the time being. There is no obligation to
purchase it.
NOTE 4 - TENANT SECURITY DEPOSITS
Each of the eight rental properties require a security deposit from the
tenant. In the acquisition of the rental properties, Vista assumed $4,600 of
tenant security deposits. Balances as of September 30, 2001 and 2000 were
$3,345 and $0 respectively.
NOTE 5 - MINORITY INTEREST
Vista owns 99% of each of its three subsidiaries. The remaining one percent
minority interest in each subsidiary is held by another entity controlled by
Mr. Docouto.
NOTE 6 - COMMON STOCK ISSUANCES
FOR SERVICES
In December 2000, Vista issued 1,500,000 shares of common stock to directors
and employees for a fair value of $.004 per share for a total value of $6,000.
FOR CASH
In May 2001, Vista sold 100,000 shares of common stock for $10 per share for
total proceeds of $1,000,000. From June 2001 through September 2001, Vista
sold 33,300 shares of common stock for $10 per share for total proceeds of
$333,000.
NOTE 7 - INCOME TAXES
Deferred tax assets $ 175,994
Less: valuation allowance (175,994 )
---------
Net deferred taxes $ 0
=========
Vista has net operating losses of $27,784, $22,884, and $467,962 at September
30, 1999, 2000 and 2001 respectively which each can be carried forward 20
years.
NOTE 8 NET ROYALTY AGREEMENT
As compensation for initial corporate organizational efforts, on October 18,
2000 Vista agreed to grant an entity controlled by him a 10% net revenue
interest in all future production from Vista's 7 mining leases (see Note 2).
This interest is defined as all gross receipts less operating expenses.
Because production has not begun and there are no proven mining reserves,
Vista will record this compensation expense as saleable production occurs.
NOTE 9 - STOCK OPTIONS AND WARRANTS
Vista's Stock Option Plan provides for the grant of up to 600,000 shares of
non-qualified options to directors, officers and employees of Vista, and
opportunities for directors, officers, employees and consultants of Vista to
make purchases of stock in Vista. The plan's issuances are administered by
the Board of Directors of Vista, who have substantial discretion to determine
the recipients, amounts, time, price, exercise terms, and restrictions, if
any. 29,000 shares have been issued under this plan as of January 11, 2002
(see Note 11).
During the year ended September 30, 2001, Vista issued stock options to
employees and directors. Vista uses the intrinsic value method of calculating
compensation expense, as described and recommended by APB Opinion 25, and
allowed by FASB Statement 123. During the year ended September 30, 2001, the
difference between the current cash selling price of $10 per share and the
option exercise price of $5 per share, for 431,000 shares is $215,500, which
will be recognized as compensation expense for the issuance of these options.
$178,000 was recognized in 2001 and $12,500 will be recognized in each of
2002, 2003 and 2004 as the options become exercisable. Had compensation cost
for Vista's stock-based compensation plan been determined based on the fair
value at the grant dates for awards under those plans consistent with the
Black-Scholes option-pricing model suggested by FASB Statement 123, Vista's
net losses and loss per share would not have changed.
Summary information is as follows:
No. of Exercise
Options Price
------- --------
Options outstanding at September 30, 2000 none
Options granted in the current year 810,000 $ 5.00
Options forfeited during the current year (100,000) 5.00
-------- -------
Options outstanding at September 30, 2001 710,000 5.00
Weighted average grant-date fair value of
options granted during the year $2,550,000
Total compensation cost to be recognized in 2001: 373,750
Additional disclosures as of September 30, 2001 are:
Options
At $5.00
---------
Number of shares 710,000
Weighted average remaining life 54 months
Currently exercisable share options 400,000
NOTE 10 - COMMITMENTS AND CONTINGENCIES
Vista has two offices, one in Las Vegas and one in Toronto. The lease for the
Las Vegas office expires on January 31, 2003 with a monthly rent of $10,800.
The Toronto office lease is $2,525 per month and the term is month-to-month.
Rent expense in 2001 and 2000 was $66,791 and $0 respectively.
Vista has employment agreements with 4 senior management personnel, which vary
from 3 to 5 years in total length. As of January 11, 2002, the following are
the minimum salary commitments.
Year ended September 30, 2002 $ 286,600
2003 302,200
2004 302,200
2005 302,200
2006 277,200
- thereafter 7,800
----------
Total $1,478,200
==========
In connection with these employment agreements, Vista will owe 6 months'
salary to two of these individuals if they are terminated by Vista. If Larry
Nash, CEO beginning November 5, 2001, is terminated for any reason, his full
salary, currently at $93,600 per year, is payable through November 5, 2006.
Two consultants are due 250,000 shares each when the company obtains a listing
for trading of its shares on NASDAQ.
NOTE 11 - RENT HOUSE ACQUISITION PRO FORMA
The following table reflects the unaudited pro forma results of operations for
the year ended September 30, 2001 and 2000, as if the 2001 acquisition had
been completed on October 1, 1999. The pro forma results include estimates
and assumptions which management believes are reasonable. However, pro forma
results may not be indicative of the results which would have occurred if the
business combination had been in effect on the dates indicated, or which may
result in the future.
2001 2000
--------- ---------
Net loss from operations (447,115) (22,884)
Other income
- rental house expenses, net of
rental house receipts ( 39,589) 18,415
- minority interest portion of
net rental house expenses 396 ( 184)
--------- ---------
Net loss $(486,308)$ ( 4,653)
========= =========
Per share, basic and diluted:
Net loss per common share $(.01) $(.00)
NOTE 12 SUBSEQUENT EVENTS
In early January 2002, the Company issued an additional 29,000 options to two
of its employees.
INDEPENDENT AUDITORS REPORT
To the Board of Directors
Vista Continental Corporation
(formerly Vista Continental Development Corp.)
(A Development Stage Company)
Houston, Texas
We have audited the accompanying balance sheets of Vista Continental
Corporation, as of September 30, 2001 and 2000, and the related statements of
expenses, stockholders equity, and cash flows for each of the two years then
and for the period from September 24, 1999 (Inception) through September 30,
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. 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 Vista Continental
Corporation, as of September 30, 2001 and 2000, and the results of its
operations and its cash flows for the periods described in conformity with
accounting principles generally accepted in the United States.
MALONE & BAILEY, PLLC
www.malone-bailey.com
Houston, Texas
January 11, 2002
VISTA CONTINENTAL CORPORATION
(A Development Stage Company)
CONSOLIDATED BALANCE SHEET
As of March 31, 2002
<table>
<c>
ASSETS <s>
Cash $3,981
Prepaid rent 10,782
Property & equipment, net of $7,390 accumulated depreciation 927,111
Rental houses in Las Vegas, NV
net of $14,254 accumulated depreciation 1,253,246
Mining concessions 409,775
Deposits 500
----------
$2,605,395
==========
LIABILITIES
Accounts payable $ 4,949
Advance payable to an officer 100
Tenant security deposits 4,695
----------
Total Liabilities 9,744
----------
Minority interest 12,362
Commitments
STOCKHOLDERS' EQUITY
Common stock, $.001 par, 75,000,000 shares
authorized, 40,237,355 shares issued
and outstanding 40,237
Additional paid in capital 7,997,195
Deficit accumulated during the development stage (5,454,143
)
----------
Total Stockholders' Equity 2,583,289
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,605,395
==========
</table>
VISTA CONTINENTAL CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF EXPENSES
For the Six and Three Month Periods ended March 31, 2002 and 2001 and
the Period from July 1, 1998 (Inception)
Through March 31, 2002
<table>
<c> <s> <s> <s> <s> <s>
Inception
6 and 3 Mo. Ended 6 and 3 Mo. Ended Through
2002 2002 2001 2001 2002
----------- ----------- --------- --------- -----------
Mining operating expenses $ 77,555 $ 43,450 $ 213,438
Administrative expenses 4,317,323 169,797 5,204,861
Depreciation 4,927 2,464 7,390
----------- ----------- --------- --------- -----------
Net loss from operations (4,399,805) (215,711) (5,425,689)
Other income
- rental house expenses,
net of rental house
receipts ( 5,621) (3,637) ( 26,678)
- minority interest
portion of net rental
house expenses 56 36 267
- foreign currency loss ( 2,043)
----------- --------- --------- -------- -----------
Net loss $(4,405,370 )$(219,312) $(5,454,143)
=========== =========== ========= ======= ===========
Per share, basic and diluted:
Net loss per common share $(.12) $(.01)
Weighted average
common shares
outstanding 37,523,828 39,523,828
</table>
VISTA CONTINENTAL CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Month Periods ended March 31, 2002 and 2001 and
the Period from July 1, 1998 (Inception)
Through March 31, 2002
<table>
<c> <s> <s> <s>
Inception
Through
2002 2001 2002
----------- ----------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net deficit accumulated during the
development stage $(4,405,370) $(5,454,143 )
Adjustments to reconcile net deficit
to cash used by operating activities:
Depreciation 12,096 21,644
Stock and options issued for services 4,000,000 4,381,510
Loss assigned to minority interest ( 56) ( 267)
Increase in prepaid rent ( 10,782)
Increase in accounts payable 2,000 4,948
Decrease in tenant security deposits 1,350 95
----------- ----------- -----------
NET CASH USED BY OPERATING ACTIVITIES (389,980) (1,056,995)
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property & equipment (894,501)
Acquisition of mining concessions ( 9,775)
Increase in deposits ( 500)
----------- ----------- -----------
( 904,776)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from note payable to founder 100
Contributions to capital
by founding shareholder 109,646 360,962
Sale of stock 270,550 1,603,700
----------- ----------- -----------
NET CASH FLOWS FROM FINANCING ACTIVITIES 380,196 1,965,752
----------- ----------- -----------
NET CHANGE IN CASH ( 9,784) 3,981
Cash balance, beginning 13,765 0
----------- ----------- -----------
Cash balance, ending $ 3,981 3,981
=========== =========== ===========
</table>
VISTA CONTINENTAL CORPORATION
(A Development Stage Company)
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim financial statements of Vista
Continental Corporation have been prepared in accordance with
accounting principles generally accepted in the United States
of America and should be read in conjunction with the audited
financial statements and notes thereto contained elsewhere in this
Form 14C. In the opinion of management, all adjustments, consisting
of normal recurring adjustments, necessary for a fair presentation of
financial position and the results of operations for the interim periods
presented have been reflected herein. The results of operations for
interim periods are not necessarily indicative of the results to be
expected for the full year. Notes to the financial statements which
would substantially duplicate the disclosure contained in the audited
financial statements for the most recent fiscal year 2001, as reported
elsewhere in this Form 14C, have been omitted.
NOTE 2 - COMMON STOCK ISSUANCES
In the six months ended March 31, 2002, Vista issued 27,055 shares for $10 per
share or $270,550 in cash, 400,000 shares for services valued at $10 per share
or $4,000,000 and 3,000,000 shares to the founder and majority shareholder for
two new mining concessions in Peru. These shares have been valued at the
shareholder's original cost of these mining concessions, or $400,000.
Pro Forma Consolidated Condensed Balance Sheet:
The following pro forma balance sheet has been derived from the balance sheet
of Century Laboratories, Inc. ("CYLI") at December 31, 2001 and, adjusts such
information to give effect to the acquisition of Vista Continental Corporation
("VCC"), as if the acquisition had occurred at each company's fiscal year-end
as indicated. This pro forma balance sheet is presented for informational
purposes only and does not purport to be indicative of the financial condition
that would have resulted if the acquisition had been consummated at each
company's fiscal year-end as indicated. The pro forma balance sheet should be
read in conjunction with the notes thereto and CYLI's financial statements and
related notes thereto contained in CYLI's latest annual report filed with the
SEC, and VCC's consolidated financial statements and related notes thereto
enclosed with this filing.
<c> <s> <s> <s> <s>
12/31/01 9/30/01 10/31/01
CYLI VCC Adjustments Pro Forma
---------- ---------- ------------ ----------
Cash $ 36 $ 13,764 $ 13,800
Accounts receivable, net 0 10,782 10,782
---------- ---------- ----------
Total current assets 36 24,546 24,582
Property and equipment, net 0 932,038 932,038
Rental houses in Las Vegas 0 1,260,416 1,260,416
Mining concessions 9,775 9,775
Deposits 0 500 500
---------- ---------- ----------
Total assets $ 36 $2,227,275 $2,227,311
========== ========== ==========
Accounts payable and
accrued expenses $ 0 $ 6,394 $ 6,394
Note payable to shareholder 25,800 25,800
---------- ---------- ----------
Total current liabilities 25,800 6,394 32,194
Minority interest 12,418 2,418
Stockholders' Equity
Common stock, $.001 par value,
65,000,000 shares authorized,
3,217,204 and 40,027,504
shares issued and
outstanding 3,217 (1) 36,811 40,028
Common stock, $.001 par value,
75,000,000 shares authorized,
36,810,300 shares issued and
outstanding 36,810 (1) ( 36,810)
Additional paid in capital 7,708,666 3,220,426 (1) (7,737,648) 3,191,444
Retained deficit (7,737,647) (1,048,773) (1) 7,737,647 (1,048,773)
---------- ---------- ----------
( 25,764) 2,208,463 2,182,699
---------- ---------- ----------
$ 36 $2,227,275 $2,227,311
========== ========== ==========
Notes to Pro Forma Consolidated Condensed Balance Sheet
(1) Century Laboratories, Inc. will issue (a) 39,837,355 shares of its common
stock in exchange for 100% of the outstanding stock of Vista Continental
Corporation. As of the merger date, CYLI has 4,108,982 shares outstanding and
VCC has 39,837,355 shares outstanding, so the total combined outstanding
shares will be their sum, or 43,946,337. However, as of their respective
year-ends, CYLI has 3,217,204 shares outstanding and VCC has 36,810,300 shares
outstanding, so the pro forma shows a combined total of only 40,027,504 shares
outstanding.
The combination is accounted for as a recapitalization of VCC. All recorded
values of assets and liabilities continue in the combined entity.
(2) VCC audited financial statements as of September 30, 2001 and for the two
years then ended are included in this filing.
THIS AMENDMENT TWO TO INFORMATION STATEMENT IS PROVIDED TO YOU FOR
INFORMATION PURPOSES ONLY. NO ACTION ON YOUR PART IS SOUGHT OR REQUIRED.
June 3, 2002