As filed with the Securities and Exchange Commission on November 30, 2001
Securities Act File No. 333-65708; Exchange Act File No. 27321
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VISTA EXPLORATION CORPORATION
formerly known as Bail Corporation
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Colorado 1311 84-1493152
------------------------------ -------------------------- ------------------
(State or other jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
11952 Farley
Shawnee Mission, KS 66213
(913) 814-8313
-----------------------------------------------------------
(Address and telephone number of principal executive offices
and principal place of business)
Charles A. Ross, Sr.
11952 Farley, Shawnee Mission, KS 66213
(913) 814-8313
-------------------------------------------------------
(Name, address and telephone number of agent for service)
Copies of Communications to:
Roger V. Davidson
Ballard, Spahr, Andrews & Ingersoll, LLP
1225 17th Street, Suite 2300, Denver, Colorado 80202
(303) 292-2400
Approximate date of commencement of proposed sale to public: as soon as
practicable after the registration statement becomes effective.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box. [X]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
-------------------------- ----------------------- ----------------------- ------------------------ ------------------
Proposed Maximum Proposed Maximum Amount of
Title of Securities to Amount to be Offering Price per Aggregate Offering Registration
Be Registered Registered(1) Share(2) Price Fee(3)
-------------------------- ----------------------- ----------------------- ------------------------ ------------------
-------------------------- ----------------------- ----------------------- ------------------------ ------------------
Common stock, no par 1,440,000 shares $0.25 $360,000 $90(4)
value
-------------------------- ----------------------- ----------------------- ------------------------ ------------------
(1) This registration statement covers an additional indeterminate number of
shares of the Registrant's common stock which may be issued in accordance
with Rule 416.
(2) Solely for purpose of computing the registration fee in accordance with
Rule 457(c), the price shown is based upon the price of $0.25 per share.
The Registrant's common stock is not currently listed or quoted on any
quotation medium. The price of the shares was determined by the Registrant
on the basis of the last sale price received by the Registrant for shares
of its common stock.
(3) Calculated under Section 6(b) of the Securities Act as $.000250 of the
aggregate offering price.
(4) Previously paid.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
ii
Subject to Completion - - Dated November 29, 2001
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PROSPECTUS
Vista Exploration Corporation
1,440,000 Shares of Common Stock
The shares of our common stock covered by this prospectus are being sold by
the security holders listed under the heading "Selling Security Holders." We
will not receive any of the proceeds from the sales of the shares of common
stock by the selling security holders. The selling security holders may sell
these shares from time to time in over the counter market transactions, in
regular brokerage transactions, in transactions directly with market makers or
in privately negotiated transactions.
Our common stock is not currently listed or quoted on any quotation medium.
There are certain risks involved with the ownership of our common stock,
including risks related to our new business and the market for our common stock.
(See "Risk Factors" beginning on page 2.)
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
The information in this prospectus is not complete and may be changed. The
selling security holders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
The date of this prospectus is _________, 2001
Table of Contents
Page
----
PROSPECTUS SUMMARY.............................................................1
RISK FACTORS...................................................................2
USE OF PROCEEDS................................................................6
FORWARD-LOOKING STATEMENTS ....................................................6
ABOUT US AND OUR CURRENT PLAN OF OPERATION.....................................7
MANAGEMENT....................................................................13
EXECUTIVE COMPENSATION........................................................14
SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT...........................15
SELLING SECURITY HOLDERS......................................................16
PLAN OF DISTRIBUTION..........................................................18
CERTAIN TRANSACTIONS..........................................................19
DESCRIPTION OF OUR STOCK......................................................20
SHARES ELIGIBLE FOR FUTURE SALE...............................................21
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS.......................21
LEGAL MATTERS.................................................................22
EXPERTS ......................................................................22
SECURITIES AND EXCHANGE COMMISSION POSITION ON CERTAIN INDEMNIFICATION........22
WHERE YOU CAN FIND MORE INFORMATION...........................................22
INDEX TO FINANCIAL STATEMENTS................................................F-1
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PROSPECTUS SUMMARY
This is only a summary and does not contain all the information that
may be important to you. You should read the more detailed information contained
in this prospectus, including but not limited to, the risk factors beginning on
page 2.
About Us
We were formed as a development stage (blank check) company on April
9, 1998, with the purpose of acquiring or merging with a privately owned
company. In March 2001 we became active in the oil and gas business. We
currently are leasing oil and gas properties in southeast Kansas to drill for
coal bed methane gas. Our principal business office is located at 11952 Farley,
Shawnee Mission, Kansas 66213, and our telephone number at that address is (913)
814-8313.
Capital Structure
Shares of common stock authorized: 20,000,000
Shares of common stock outstanding prior to this offering: 5,640,000
Shares of preferred stock authorized: 5,000,000
Shares of preferred stock outstanding prior to this offering: 0
The Offering
1,440,000 shares of common stock outstanding prior to this offering
are being offered for resale pursuant to this prospectus. While presently there
is no market for our securities, our management intends to establish trading of
our common stock through the over-the-counter bulletin board, or OTC Bulletin
Board, established by the National Association of Securities Dealers, Inc. The
selling security holders may sell these shares from time to time in over the
counter market transactions, in regular brokerage transactions, in transactions
directly with market makers or in privately negotiated transactions.
Summary Financial Information
The following tables set forth summary financial information and other
equity information about us. You should read this summary information in
conjunction with "About Us and Our Current Plan of Operation" which includes a
discussion of factors materially affecting the comparability of the information
presented, and in conjunction with our financial statements included elsewhere
in this prospectus.
Fiscal Year Ended Fiscal Year Ended Six Months Ended
April 30, 2000(1) March 31, 2001(1) September 30, 2001
----------------- ----------------- ------------------
Statement of Operations Data
----------------------------
Income (from interest) $57 $8 $0
Net Loss (5,269) (6,438) (119,141)
Loss per Share -- (2) -- (2) (0.03)
Weighted Average Shares Outstanding 1,230,000 1,230,000 4,749,071
(1) On April 18, 2001, we changed our fiscal year-end from April 30 to March 31.
(2) Less than $0.01 per share.
Balance Sheet Data
------------------
Cash $161 $73 $11,654
Total Assets $267 $10,073 $66,849
Total Liabilities $3,471 $18,615 $27,094
Stockholders' Equity (Deficit) (3,204) (8,542) 39,755
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RISK FACTORS
The purchase of our common stock is a substantial transaction
involving a high degree of risk. Prior to making an investment decision, you
should carefully consider, together with the other information contained in this
prospectus, the following risk factors. The order in which these risk factors
are presented is not necessarily indicative of the magnitude of the risk
described.
Our limited operating history makes it difficult for investors to evaluate our
business.
Although we have been in business since April 1998, we have been
essentially dormant since then and only recently have developed a new plan of
operation to acquire and develop oil and gas leases, production and/or related
assets. Thus, we have a very limited operating history upon which an evaluation
of our business and prospects can be based.
If we cannot continue as a business, our shareholders may lose their entire
investment in us.
Our auditors have included an explanatory paragraph in their opinion
on our financial statements for the year ended March 31, 2001, to state that our
losses since inception and our net capital deficit at March 31, 2001 raise
substantial doubt about our ability to continue as a going concern. Our ability
to continue as a going concern is dependent upon raising additional capital and
achieving profitable operations through the acquisition and development of oil
and gas producing properties. We cannot assure you that our business plans will
be successful in addressing this issue. If we cannot successfully continue as a
going concern, our shareholders may lose their entire investment in us.
Our management's lack of experience in the oil and gas industry may hinder our
ability to implement our plan of operation.
Mr. Ross, our President and sole officer, does not have direct
experience in the oil and gas industry and thus is relying on the oil and gas
expertise of various consultants. His lack of experience and/or his reliance on
these third parties may hinder our ability to implement our plan of operation.
If we do not obtain additional financing needed to implement our business plan,
we may be forced to curtail or suspend our operations.
Our capital requirements will be significant as we continue to
redefine our business from a position where we have no revenue producing assets,
no significant assets or financial resources, and no revenues or earnings from
operations since our formation. We do not expect to have any revenues from
operations prior to acquiring and developing suitable oil and gas properties.
At September 30, 2001, we had cash of $11,654 and current liabilities
of $27,094. As of November 1, 2001, we had leased approximately 14,990 acres in
southeast Kansas for purposes of drilling for coal bed methane gas, which we
believe is enough acres to move forward with drilling activities. We anticipate
that each well in our leased area will cost approximately $40,000 to explore,
drill, test and complete. Consequently, we will need to raise additional funds
to explore, drill, test and complete wells on the oil and gas properties that we
have acquired to date. We currently do not have any binding commitments for, or
readily available sources of, additional financing.
If we do not obtain additional financing we will be forced to curtail
or suspend our future operational plans. We cannot assure you that additional
financing will be available to us when needed or, if available, that it can be
obtained on commercially reasonably terms.
2
Additional infusions of capital may have a dilutive effect on your investment.
To finance our operations we may sell additional shares of our stock.
Any additional equity financing that we receive may involve substantial dilution
to our then-existing shareholders. Furthermore, we may issue stock to acquire
properties, assets, or businesses. In the event that any such shares are issued,
the proportionate ownership and voting power of other shareholders will be
reduced.
If we are not successful in profitably developing our oil and gas properties,
our operations may be curtailed or suspended.
Our ability to operate profitably will depend, in part, on our success
in leasing appropriate properties and drilling and completing wells that produce
commercial quantities of gas. The successful development of oil and gas
properties requires an assessment of recoverable reserves, future oil and gas
prices and operating costs, potential environmental and other liabilities and
other factors. Such assessments are necessarily inexact. As a result, we may not
discover any recoverable reserves, may not recover the acquisition price of a
property from the sale of production from that property, or may not recognize an
acceptable return from properties we acquire. In addition, the costs of
exploitation and development may materially exceed initial estimates. If we are
not successful in profitably developing our oil and gas properties for any of
the foregoing reasons, or otherwise, we will not be profitable and may be forced
to curtail or suspend our operations.
A substantial or extended decline in the price of oil or natural gas could cause
us to curtail or suspend our operations.
Our ability to operate profitably also will depend on the prices that
we receive for any gas that we produce. Historically, oil and gas prices and
markets have been volatile and are likely to continue to be volatile in the
future. Prices for oil and gas are subject to wide fluctuations in response to
relatively minor changes in supply of and demand for oil and gas, market
uncertainty, and a variety of additional factors that are beyond our control.
These factors include:
o international political conditions (including wars and civil unrest),
o the domestic and foreign supply of oil and gas,
o the level of consumer demand,
o weather conditions,
o domestic and foreign governmental regulations and other actions,
o actions taken by the Organization of Petroleum Exporting Countries
(OPEC),
o the price and availability of alternative fuels, and o overall
economic conditions.
Any substantial or extended decline in the price of oil and/or natural gas could
negatively affect our revenues and profits. If the decrease in revenues causes
or contributes to our operations being unprofitable, we may curtail or suspend
our operations.
Volatility in oil and gas prices could cause volatility in the market price for
our common stock.
We expect that our quarterly operating results may fluctuate
significantly due to the fluctuation of oil and gas prices. It is likely that if
a market develops for our common stock, the market value of our stock will
fluctuate with our quarterly results which, in turn, may be driven by the prices
we receive for any gas that we produce.
Information in this prospectus regarding our future exploration and development
activities reflects our current intent and is subject to change.
As described in this prospectus, we believe that we have leased enough
land in southeast Kansas to move forward with drilling activities. See "About Us
and Our Current Plan of Operation." Whether we ultimately undertake exploitation
or exploration on our leased acres within the Shiloh Project will depend on the
following factors:
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o availability and cost of capital,
o current and forecasted oil and gas prices,
o the costs and availability of drilling rigs and other equipment,
supplies and personnel necessary to conduct these operations,
o success or failure of other exploration and development projects
within the Cherokee Basin, and
o changes in the estimates of the costs to explore, drill, test and
complete wells on our leased properties.
We will continue to gather data about our proposed plan of operation, and it is
possible that additional information may cause us to alter our plan. You should
understand that our plans regarding the Shiloh Project are subject to change.
If we incur unexpected costs because of government regulations applicable to the
oil and gas industry, we may have to curtail or suspend our operations.
The production and sale of oil and gas are subject to a variety of
federal, state and local government regulations including regulation of the
following:
o the prevention of waste,
o the discharge of materials into the environment,
o the conservation of oil and natural gas,
o pollution,
o price controls,
o restrictions on the rate of flow for oil and gas wells,
o permits for drilling operations,
o drilling bonds,
o reports concerning operations,
o the spacing of wells,
o the unitization and pooling of properties, and
o state energy taxes.
There can be no assurance that we will not incur significant costs in
the future to comply with laws passed by federal, state and local governments
relating to our oil and gas business. If we fail to comply with existing or
future laws and regulations, we could be liable for a variety of costs and
penalties, including personal injury damages, clean-up costs, environmental
damages, and property damages, as well as administrative, civil and criminal
penalties. If these costs are significant, we may have to curtail or suspend our
operations.
The occurrence of drilling risks associated with oil and gas operations could
result in significant losses to us and cause us to curtail or suspend our
operations.
The drilling of oil and gas wells involves a high degree of risk,
especially the risk of dry holes or of wells that are not sufficiently
productive to provide an economic return on the capital expended to drill the
wells. In addition, our drilling operations may be curtailed, delayed or
cancelled as a result of numerous factors, including the following:
o fires, explosions, cratering, or blow-outs,
o unexpected formations or pressures that could cause environmental
damage, personal injury or damage to equipment,
o title problems,
o weather conditions,
4
o compliance with governmental requirements,
o equipment failure or shortages in the delivery of equipment, and
o unavailability of third parties to conduct our drilling operations.
If any of theses risks occur, and our resulting losses are
significant, we may have to curtail or suspend our operations.
If we incur uninsured losses, we may have to curtail or suspend our operations.
We have limited capital and we have not established any reserves for
contingent liabilities. Although we will maintain insurance coverage against
some risks associated with our oil and gas operations in amounts that we believe
to be reasonable and in accordance with customary industry practices, the
occurrence of an event that is not fully insured could result in losses to us.
If any uninsured losses are significant, we may have to curtail or suspend our
operations.
Investor profits, if any, will likely be limited for the near future.
Because we do not anticipate paying any dividends in the near future,
investors in our common stock probably will not derive any profits from their
investment in us for the foreseeable future, other than through price
appreciation of our common stock. Given current market conditions, it is
unlikely that the price of our common stock will appreciate as long as we
continue to have operating losses. We have not been profitable since our
inception and we incurred a net loss of $119,141 through the six months ended
September 30, 2001. To date we have not had any revenue or earnings from
operations and we will continue, in all likelihood, to sustain operating
expenses without corresponding revenues until we are able to successfully
implement our new plan of operation, if ever. Thus, it is likely that investor
profits, if any, will be limited for the near future.
If our common stock remains inactively traded, our shareholders may have
difficulty reselling their shares.
While our common stock is held by approximately 60 shareholders,
currently there is not an active trading market for our common stock and our
common stock currently has no trading symbol. Although our management intends to
establish trading of our common stock through the OTC Bulletin Board
(established by the NASD) by applying for a trading symbol and pre-clearing our
shares for trading, we do not intend to undertake any other efforts to cause a
market to develop in our securities. There can be no assurance that if an active
trading market for our common stock develops, that it can be maintained. If our
common stock remains inactively traded, our shareholders may have difficulty
liquidating their investment in us.
Trading on the OTC Bulletin Board may not increase shareholder liquidity.
To the extent that there will be trading in our common stock, of which
there is no assurance, our common stock will trade in the over-the-counter
market and will be quoted on the OTC Bulletin Board. Our common stock will not
be quoted on the Nasdaq system or any exchange for the foreseeable future. It
should be assumed that even with the OTC Bulletin Board quote of our common
stock, there will be an extremely limited trading market and very little
liquidity for our common stock.
Because our common stock will be subject to the "penny stock" regulations for
the foreseeable future, its liquidity will be reduced.
Generally, penny stocks are equity securities with a price of less
than $5.00 which are not quoted on the national exchange or the Nasdaq system.
Our common stock currently does not qualify for any exemption to the penny stock
regulations because it will be quoted on the OTC Bulletin Board, if it is quoted
at all. The penny stock rules require a broker/dealer to deliver, prior to a
transaction in a penny stock, a standardized risk disclosure document prescribed
by the SEC and to provide the potential purchaser of penny stock with the
following information:
5
o information about penny stocks,
o the nature and level of risk in the penny stock market,
o the bid and offer quotations for the stock, and
o other burdensome and detailed information.
Those delivery and disclosure requirements tend to reduce the level of interest
of broker/dealers in dealing with penny stocks, which could have the effect of
reducing the level of trading activity in the secondary market for our common
stock during the time that the price of our common stock remains below $5.00. If
the price of our common stock remains below $5.00, the penny stock regulations
could reduce the liquidity of our common stock and make it more difficult for
investors to sell our common stock.
Shares eligible for future sale by our current shareholders may impair our
ability to raise capital through the sale of our stock.
We currently have 5,640,000 shares of common stock outstanding, of
which 1,440,000 shares are being registered for resale under this prospectus.
All of the 4,200,000 outstanding shares of common stock not registered for
resale hereunder are "restricted securities" as that term is defined under Rule
144 of the Securities Act of 1933. Those restricted securities may only be sold
by a registration statement under the Securities Act or under another exemption
under the Securities Act. See "Shares Eligible for Future Sale." The possibility
that substantial amounts of shares of our common stock may be sold in the public
market may cause prevailing market prices for our common stock to decrease and
thus could impair our ability to raise capital through the sale of our equity
securities.
If our controlling shareholders vote together, they likely will be able to
determine the actions we take.
Gary J. Grieco directly owns 22.2% of our outstanding common stock and
Jeffrey P. Frazier and Terrie L. Pham each directly own 17.7% of our outstanding
common stock. Charles Ross, our sole officer and director, directly owns 16% of
our outstanding common stock. See "Security Ownership of Certain Owners and
Management." Although we are not aware of any written or oral agreements
relating to the voting of any of our shares, if Mr. Grieco, Mr. Frazier, Ms.
Pham and/or Mr. Ross vote together on an issue requiring the approval of our
shareholders, they will be able to determine the issue regardless of the vote of
any other shareholder, unless unanimous consent is required.
The loss of our President's services could prevent us from fully implementing
our new plan of operation.
Mr. Ross, our President and sole officer, has not entered into a
written employment agreement with us and he is not expected to do so in the
foreseeable future. We have not obtained key man life insurance on Mr. Ross. The
loss of Mr. Ross' services could adversely affect our ability to implement our
business plan and continue our operations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the selling security holders.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that concern our
business. Such statements are not guarantees of future performance and actual
results or developments could differ materially from those expressed or implied
in such statements as a result of certain factors, including those factors set
forth in "About Us and Our Current Plan of Operation," "Risk Factors" and
elsewhere in this prospectus. All statements, other than statements of
historical facts, included in this prospectus that address activities, events or
developments that we expect, believe, intend or anticipate will or may occur in
the future, including the following matters, are forward looking statements:
6
o our ability to acquire and develop valuable oil and gas properties,
o future capital costs of acquisitions and exploration,
o the size of various markets,
o market share,
o project margins,
o business strategies, and
o expansion and growth of our operations.
These statements are based on certain assumptions and analyses made by us in
light of our experience and our perception of the following:
o historical trends,
o current conditions,
o expected future developments, and
o other factors we believe are appropriate under the circumstances.
Such statements are subject to a number of assumptions including the following:
o risks and uncertainties, including the risk factors in this
prospectus,
o general economic and business conditions,
o the business opportunities that may be presented to and pursued by us,
o changes in laws or regulations and other factors, many of which are
beyond our control, and
o ability to obtain financing on favorable conditions.
The cautionary statements contained or referred to in this prospectus should be
considered in connection with any subsequent written or oral forward-looking
statements that may be issued by us or persons acting on our behalf. We
undertake no obligation to release publicly any revisions to any forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
ABOUT US AND OUR CURRENT PLAN OF OPERATION
Our History
We were incorporated in Colorado on April 9, 1998, as a "blank check"
company for the purpose of evaluating, structuring, and completing a merger
with, or acquisition of, a privately owned corporation. Our purpose was to
provide a method for a foreign or domestic private company to become a reporting
(or public) company whose securities would be qualified for trading in the
United States secondary market. In furtherance of these goals, on September 13,
1999, our management voluntarily filed a registration statement on Form 10-SB
with the Securities and Exchange Commission and we became a reporting company.
Our management also actively sought a suitable acquisition or merger candidate
but did not find one. Consequently, we have not had a source of cash flow or
income since our inception.
On or about March 3, 2001, we and our largest shareholder, Corporate
Management Services, Inc. or CMS, entered into an Agreement for the Purchase of
Common Stock whereby CMS sold a controlling interest to Mr. Charles A. Ross, Sr.
in order to change us from an inactive company to a company active in the oil
and gas business. Prior to entering into the stock purchase agreement, Mr. Ross
was not affiliated with us and did not own any of our common stock.
In connection with Mr. Ross' acquisition of a controlling interest,
our then sole officer and director, Mr. George Andrews, resigned and Mr. Ross
became our President and sole director. We moved our principal place of business
from Littleton, Colorado, to Shawnee Mission, Kansas, and we changed our fiscal
year end from April 30 to March 31.
7
In furtherance of our plan to become active in the oil and gas
business, in March 2001 we attempted to acquire interests in 125,000 acres in
the northeast region of Alabama for the purpose of conducting pre-drilling
activities to determine the prospects for drilling or farming out our interest.
However, these negotiations failed because we could not obtain adequate
guarantees of good title and because we felt there was insufficient historical
engineering and geological information regarding prior drilling activities on
the property.
Subsequently we attempted to acquire drilling interests on
approximately 3,500 acres in Unitah County, Utah, from a Denver-based oil and
gas exploration company. Our management determined that the available seismic
data was not adequate to determine appropriate drilling locations and therefore
a seismic 3-D analysis would be appropriate. However, our management estimated
that the cost of such analysis, together with other appropriate pre-drilling
activities, would have been approximately $250,000. Based on our financial
situation, we determined that we did not have adequate financial resources to
pursue these interests.
Our Current Plan of Operation
We intend to acquire and develop coal bed methane gas producing
properties in the United States. This may be accomplished by way of leasing oil
and gas interests and drilling the leased property to prove reserves or by
acquiring working interests in production or reserves.
In June 2001 we retained a geological consultant to identify areas in
southeast Kansas suitable for coal bed methane exploration and development. We
are interested in properties lying in the Cherokee Basin which contain
Pennsylvanian age coal beds. These coal beds are believed to be contiguous from
the northern part of the basin that runs from the Bourbon Arch in the north to
the state border with Oklahoma to the south.
Historically, coal bed methane gas wells have been completed in the
Cherokee Basin south of Miami and Johnson Counties in Kansas and south of
Jackson County in Missouri into coal seams or black shale averaging four feet in
thickness. Water production from these wells generally has been less than 50
barrels per day initially, eventually dropping to below 10 barrels per day.
Other wells drilled in the Cherokee Basin within the last 15 years have reported
similar reservoir thickness and production in Labette, Wilson, Neosho and
Cherokee Counties, Kansas.
In July 2001 we opened an office in Burlington, Kansas for $350.00 per
month and started leasing land in the south half of Coffey County, Kansas and
the southeast portion of Lyon County, Kansas (the "Shiloh Project"), which is in
the Cherokee Basin, to drill for coal bed methane gas. In August 2001 we changed
our name from "Bail Corporation" to "Vista Exploration Corporation" to reflect
our new plan of operation.
As of November 1, 2001, we had executed 123 separate leases totaling
14,990 acres, of which approximately 13,676 acres are in Coffey County and
approximately 1,314 acres are in Lyon County, which adjoins Coffey County. We
intend to continue to lease available land within the Shiloh Project to the
extent that we believe such land will further our exploration and development
activities. Because we believe that we can continue to successfully lease land
without having our office in Burlington, Kansas, we closed that office in
November 2001.
We believe that we have leased enough land to move forward with
drilling activities. Our initial intent is to drill and, if commercial
quantities of gas is produced, to complete the drilled wells. If this phase is
successful, we may determine to perform core drilling activities to prove up
reserves. If we take this action and we are able to prove up reserves that merit
additional drilling activity, our management may determine to raise additional
funds to expand drilling, to partner or farm out certain parcels to rapidly
develop our leases, or to sell some or all of the fields if we receive an
appropriate offer for them.
8
We anticipate that each well in the Shiloh Project will cost
approximately $25,000 to drill and test and an additional $15,000 to complete.
We intend to hire third parties to perform our drilling activities. We will need
to raise additional funds to commence drilling operations.
To date we have not commenced any drilling or other exploration
activities on the properties that we have leased and thus we do not have any
estimates of oil and gas reserves on such properties. Consequently we have not
reported our reserve estimates to any state or federal authority.
All of the oil and gas property that we have leased to date is
considered "undeveloped acreage" which the Securities and Exchange Commission
defines as "lease acreage on which wells have not been drilled or completed to a
point that would permit the production of commercial quantities of oil and gas
regardless of whether such acreage contains proved reserves." We own a working
interest in 14,990 gross undeveloped acres (100% of each leased acre) and
12,809.77 net undeveloped acres (between 84.5% and 87.5% of each leased acre) in
southern Kansas. A "working interest" is the operating interest that gives us,
as the operator, the right to drill, produce and conduct operating activities on
the property and a share of production. A "net acre" (or net well) is deemed to
exist when the sum of the fractional working interest owned in gross acres or
gross wells equals one. The number of net acres or net wells is then expressed
as a whole number and fractions thereof. A "gross acre" (or gross well) is the
total acres or wells, as the case may be, in which a working interest is owned.
All of our oil and gas properties are held in the form of mineral
leases which grant us the exclusive right to explore for and develop oil, gas
and other hydrocarbons and minerals that may be produced from wells drilled on
the leased property. Regardless of whether or not we are producing oil and gas
from a leased property or acres pooled therewith, on the one-year anniversary of
each lease we will be required to pay the lessor $10 per leased acre to continue
the term of the mineral lease.
There are several existing gas pipelines in southern Kansas and at
least one pipeline crosses acres that we have leased. We currently are exploring
a hook-up to the low-pressure pipeline that supplies gas to Burlington, Kansas.
We believe that the owner of this pipeline may be interested in purchasing any
gas that we may produce from our operations in the Shiloh Project. Given the
close proximity of various pipelines to the Shiloh Project, we do not anticipate
any difficulties or any significant costs in transporting our products to
existing pipelines.
The prices obtained for oil and gas are dependent on numerous factors
beyond our control, including domestic and foreign production rates of oil and
gas, market demand and the effect of governmental regulations and incentives. We
do not have any delivery commitments with respect to any oil or gas produced
from any properties that we acquire. However, due to the demand for natural gas,
we do not anticipate any difficulties in selling any oil and gas that we
produce, once it has been delivered to a distribution facility.
In addition to our activities in Kansas, in June 2001 we acquired an
option for a lease on 4,560 acres in Blaine County, Montana from Geominerals
Corp. for $1,400. Geominerals Corp. is controlled by George Andrews, our former
president and director.
Liquidity and Capital Resources
During March 2001, we spent approximately $6,000 pursuing potential
oil and gas properties and approximately $10,000 in legal fees in connection
with negotiating potential acquisitions and preparing investment documents in
connection with our capital raising efforts. These funds were advanced to us by
Mr. Charles Ross, currently our sole officer and director. At March 31, 2001, we
had cash of $73, a decrease of $740 from March 31, 2000.
In April and June of 2001 we concluded three private placements of our
common stock, selling 4,410,000 shares of our common stock and raising $198,000.
We used $16,615 of the proceeds to repay advances to us by Mr. Charles Ross in
March 2001. We spent approximately $36,000 pursuing potential oil and gas
properties and approximately $55,000 in legal fees in connection with
negotiating potential acquisitions, preparing investment documents in connection
with our capital raising efforts, and preparing and filing the registration
statement of which this prospectus is a part.
9
At June 30, 2001, we had cash of $120,154, an increase of $120,081 from
March 31, 2001. At June 30, 2001, we had current liabilities of $34,014, which
liabilities have since been paid.
During the three months ended September 30, 2001, we spent
approximately $97,000 pursuing oil and gas leases in the Shiloh Project,
including $15,000 in compensation paid to our president and approximately
$23,000 in legal and accounting fees. At September 30, 2001, we had cash of
$11,654, a decrease of $108,500 from June 30, 2001, and current liabilities of
$27,094.
We will need to raise additional funds to continue leasing land and to
commence drilling operations. We intend to use most of our remaining cash to get
our registration statement effective and to fund our operations.
As a result of our changed plan of operation, we have not yet
developed a formal budget for the balance of the fiscal year. Our budget is
almost entirely discretionary and therefore our inability to finance operations
will slow our progress but should not cause us to cease operations. However, if
we were unable to meet a required payment for land leased for our oil and gas
operations or lack the resources necessary to move forward with our drilling
activities, we could suffer a substantial loss of a business opportunity.
Employees
We currently have no full time employees except our president who is
devoting his full-time to our activities. In July 2001 we retained two
independent leasing consultants to help us lease land for our oil and gas
operations.
Competition
Competition in the oil and gas business is intense, particularly with
respect to the acquisition of producing properties, proved undeveloped acreage
and leases. Major and independent oil and gas companies actively bid for
desirable oil and gas properties and for the equipment and labor required for
their operation and development. Many of our competitors have substantially
greater market share, greater financial and other resources, better name
recognition and longer operating histories than we do, which may adversely
affect our ability to compete. Because of this competition, we may not be able
to acquire or lease desirable oil and gas properties or to hire third parties to
drill our properties.
Government Regulation
Our oil and gas business will be subject to various federal, state and
local laws and governmental regulations which may be changed from time to time
in response to economic or political conditions.
Federal Regulation of First Sales and Transportation of Natural Gas
Historically, natural gas producers sold gas at the wellhead to
interstate pipelines, which in turn delivered gas to local distribution
companies, or LDCs. The transportation and sale of natural gas in U.S.
interstate commerce has been regulated pursuant to several laws enacted by
Congress and the regulations promulgated under these laws by the Federal Energy
Regulatory Commission, or FERC. The FERC regulates the transportation and sale
for resale of natural gas in interstate commerce pursuant to the Natural Gas Act
of 1938, or NGA, and the Natural Gas Policy Act of 1978, or NGPA. In the past,
the federal government has regulated the prices at which oil and gas could be
sold. While "first sales" by producers of natural gas and all sales of crude
oil, condensate and natural gas liquids can currently be made at uncontrolled
market prices, Congress could reenact price controls in the future. Deregulation
of wellhead sales in the natural gas industry began with the enactment of the
NGPA in 1978. In 1989, Congress enacted the Natural Gas Wellhead Decontrol Act,
which removed all NGA and NGPA price and non-price controls affecting wellhead
sales of natural gas effective January 1, 1993. FERC jurisdiction over
transportation and sales other than "first sales" has continued.
10
Commencing in the mid-1980s, FERC promulgated a series of orders
designed to correct market distortions and to make gas markets more competitive
by removing the transportation barriers to market access. These orders have had
a profound influence upon natural gas markets in the United States and have,
among other things, fostered the development of new wholesale markets, including
a large spot market for gas. The following is a brief description of the most
significant of those orders and is not intended to constitute a complete
description of those orders or their impact.
In April 1992, FERC issued Order No. 636, which restructured both the
sales and transportation services provided by interstate natural gas pipelines.
The purpose of Order No. 636 is to improve the competitive structure of the
pipeline industry and maximize consumer benefits from the competitive wellhead
gas market. The major function of Order No. 636 is to assure that the services
non-pipeline companies can obtain from pipelines are comparable to the services
pipeline companies offer to their gas sales customers. One of the key features
of the Order is the "unbundling" of services that pipelines offer their
customers. This means that pipelines must offer transportation and other
services separately from the sale of gas. The courts have largely affirmed the
significant features of Order No. 636 and numerous related orders pertaining to
individual pipelines, although certain appeals remain pending and FERC continues
to review and modify their open access regulations. These initiatives may affect
the intrastate transportation of gas under certain circumstances.
FERC continues to review its regulatory policies and regulations
related to the natural gas market and transportation. In February 2000, FERC
issued Order No. 637 amending certain regulations governing interstate natural
gas pipeline companies in response to the development of more competitive
markets for natural gas and natural gas transportation. The goal of Order No.
637 is to "fine tune" the open access regulations promulgated by Order No. 636
to accommodate subsequent changes in the market. Key provisions of Order No. 637
include: (1) waiving the price ceiling for short-term capacity release
transactions until September 30, 2002, subject to review and possible extension
of the program at that time; (2) permitting value-oriented peak/off peak rates
to better allocate revenue responsibility between short-term and long-term
markets; (3) permitting term-differentiated rates, in order to better allocate
risks between shippers and the pipeline; (4) revising the regulations related to
scheduling procedures, capacity, segmentation, imbalance management, and
penalties; (5) retaining the right of first refusal, or ROFR, and the 5 year
matching cap for long-term shippers at maximum rates, but significantly
narrowing the ROFR for customers that FERC does not deem to be captive; and (6)
adopting new web site reporting requirements that include daily transactional
data on all firm and interruptible contracts and daily reporting of scheduled
quantities at market points or segments. The new reporting requirements became
effective September 1, 2000.
As a result of the restructuring of the natural gas industry, active
wholesale markets have developed in production areas and downstream in order for
producers and gas marketers to serve LDCs and other customers. We cannot predict
what action FERC will take on all these matters in the future as it continues to
review its regulatory policies, nor can we accurately predict whether FERC's
actions will, over the long term, achieve the goal of increasing competition in
markets in which our natural gas may be sold. We do not believe that we will be
affected by any action taken materially differently than other natural gas
producers, gatherers and marketers with which we will compete.
FERC regulates the rates and services of "natural-gas companies,"
which the NGA defines as persons engaged in the transportation of gas in
interstate commerce for resale. As previously discussed, the regulation of
producers under the NGA has been phased out. Interstate pipelines, however,
continue to be regulated by FERC under the NGA. Various state commissions also
regulate the rates and services of pipelines whose operations are purely
intrastate in nature, although generally sales to and transportation on behalf
of other pipelines or industrial end-users are not subject to material state
regulation.
There are many legislative proposals pending in Congress and in the
legislatures of various states that, if enacted, might significantly affect the
petroleum industry. It is impossible to predict what proposals will be enacted
and what effect, if any, such proposals would have on us and our proposed
operations.
11
State and Local Regulation of Drilling and Production
State and local statutory and regulatory schemes govern various
aspects of oil and gas drilling, exploration and production, including
regulatory approvals required prior to drilling and associated construction
activities, oversight of drilling operations and abandonment of wells,
regulation of production levels, operator licensing and reporting, and
environmental and conservation issues associated with drilling and production
activities. More specifically, such schemes may include restrictions on the
number and location of wells ("well-spacing" regulations), limitations on the
production volume per set time period ("proration" regulations), requirements
that oil/gas be purchased from common supply sources to prevent discrimination
against select producers ("ratable-take orders"), and oil/gas production ratios
designed to conserve naturally occurring reservoir of energy and prolong the
life of pools. Further, to consolidate oil and gas rights in the interest of
cooperative development and sharing of production among members of the oil and
gas drilling and production industry, states also may require unitization
(integration or consolidation of oil and gas interests into an area for the
production of hydrocarbons from an entire unit and the regulation of costs and
operation of the unit) and compulsory pooling (consolidation of oil and gas
rights in multiple tracts to a defined unit for drilling of, and production
from, a single well or a limited number of single well units in a reservoir).
Initially, our gas production activities will be focused in the State
of Kansas. State regulations in Kansas require that we obtain prior regulatory
approval before commencing drilling or exploratory activities in Kansas and for
intended deviations in drilling specifications, such as horizontally-drilled
holes. We also are subject to several well-spacing and proration regulations,
including sanctions for violations thereof. In addition, we are subject to the
assessment of penalties (such as orders to seal wells or produce at a reduced
rate, or monetary fines) for overproduction.
Environmental Regulations
Our gas exploration activities will be subject to numerous
environmental and conservation laws and regulations governing almost all facets
of these activities, including the discharge of regulated effluents into the
environment, or otherwise related to environmental protection. For example, the
states in which we operate may require approval or permit before drilling
commences, and also to plug and abandon wells already drilled. Further, they may
define the scope of permissible drilling and exploration activities to prevent
pollution by the migration of extracted materials into the environment, the
depletion of reservoirs, the drilling of unnecessary wells, and damage to
neighboring property caused by blowouts.
Our operations also may be subject to federal laws and regulations,
such as those of the Environmental Protection Agency, which, among other things,
would restrict the emission of air, water, or other pollution resulting from our
operations, and impose substantial liability for the remediation of
contamination resulting from drilling operations. Some of the major laws that
may apply to our gas drilling and production activities include the Federal
Water Pollution Control Act (commonly known as the "Clean Water Act"), the
Resource Conservation and Recovery Act of 1976, the Comprehensive Environmental
Response, Compensation, and Liability Act (commonly known as "Superfund"), and
the Clean Air Act. Moreover, environmental laws and regulations, both federal
and state, are subject to periodic revisions, which in many instances may lead
to even more stringent regulation of the oil and gas drilling and production
industry.
Operational Hazards and Insurance
Our operations will be subject to the usual hazards incident to the
drilling and production of oil and gas, such as blowouts, cratering, explosions,
uncontrollable flows of oil, gas or well fluids, fires, pollution, releases of
toxic gas and other environmental hazards and risks. These hazards can cause
personal injury and loss of life, severe damage to and destruction of property
and equipment, pollution or environmental damage and suspension of operations.
We will obtain and maintain general liability insurance in amounts and
on terms that we consider to be reasonable for our operations and in accordance
with customary industry practices. Such insurance will not cover every potential
12
risk associated with the drilling, production and processing of oil and gas. In
particular, coverage is not obtainable for all types of environmental hazards.
The occurrence of a significant adverse event, the risks of which are not fully
covered by insurance, could have a material adverse effect on our financial
condition and results of operations. Moreover, no assurance can be given that we
will be able to obtain or maintain adequate insurance at rates we consider
reasonable.
Our Headquarters
Prior to April 2001, we occupied offices in the home of our former
president in Littleton, Colorado. During that period we incurred a rent expense
of $100 per month to Corporate Management Services, Inc. which also occupies
offices in the same location.
In April 2001, we moved our headquarters to 11952 Farley, Shawnee
Mission, Kansas 66213, where we occupy offices in the home of our sole officer
and director at no cost to us. Mr. Ross has agreed to continue this arrangement
until we make other arrangements.
In July 2001 we rented an approximately 200 square foot office on a
month-to-month basis for $350.00 per month in Burlington, Kansas, near our
leased oil and gas properties. Because we believe that we can continue to
successfully lease land without having our office in Burlington, Kansas, we
closed that office in November 2001.
Litigation
We do not know of any pending or threatened legal proceedings to which
we are a party. We also are not aware of any proceedings being contemplated by
governmental authorities against us.
MANAGEMENT
Directors and Officers
The following table sets forth the name, age and position of each of
our officers and directors as of the date of this prospectus.
Name Age Position Term
---- --- -------- ----
Charles A. Ross, Sr. 61 President and Director April 2001 to August 2004
Charles A. Ross, Sr. has been our President and a Director since April
10, 2001. Mr. Ross has agreed to devote as much time to our activities as is
required to implement our new plan of operation.
From January 2001 through March 2001, Mr. Ross was exploring
opportunities in the oil and gas business, which led to his investment in us.
From July 1999 until December 2000, he owned and operated a business that
supplied recruiting and business cards to a number of multi-level marketing
companies. From June 1998 through July 1999, Mr. Ross was self-employed
designing musical instrument amplifiers, an industry in which he has been
involved since the 1960's.
From August 1995 until May 1998, he was the President and CEO and a
director of Edgerton Technology, Inc. and from July 1996 until May 1998 he was
the Chairman of the Board, President, CEO and Treasurer of Edgerton Musical
Amplifiers, Inc. From August 1992 to August 1995, Mr. Ross was a self-employed
consultant and investor.
Other public companies in which Mr. Ross served as an officer or
director include Copilot Electronic Products, Inc. from 1989 to 1992, Birdview
Satellite Communications, Inc. from 1981 to 1986, and Kustom Electronics, Inc.
from 1965 to 1973. In 1968 he was named Kansas Small Businessman of the Year by
the Small Business Administration.
13
Our board of directors consists of three directors and we currently
have two vacancies. Mr. Ross is actively seeking additional qualified
individuals to serve as directors on our board.
At our annual shareholders meeting on August 10, 2001, our
shareholders voted to amend our Articles of Incorporation to provide for a
staggered board of directors. Under our Articles of Incorporation, as amended,
our board is evenly divided into three classes, Class A, Class B and Class C.
The initial Class A director is elected for 3 years, the initial Class B
director for 2 years, and the initial Class C director for 1 year. Upon the
expiration of the initial staggered terms, directors will be elected for terms
of three years, to succeed those whose terms have expired. At the annual
shareholders meeting our shareholders elected Mr. Ross as the Class A director,
to serve a three-year term.
Staggered terms tend to protect against sudden changes in management
and may have the effect of delaying, deferring or preventing a change in our
control without further action by our shareholders, such as removing directors
from our board as provided under Colorado law. Having a staggered board may have
other anti-takeover effects as well, both favorable and unfavorable to our
shareholders.
Our officers are elected by the board of directors at the first board
of directors meeting after each annual meeting of our shareholders and hold
office until their successors are duly elected and qualified in accordance with
our Bylaws. Our next annual meeting of shareholders is scheduled for July 19,
2002.
There are no agreements or understandings for our sole officer and
director to resign at the request of another person nor is he acting on behalf
of or at the direction of any other person.
EXECUTIVE COMPENSATION
The following table sets out the annual compensation paid to our sole
officer for the last three completed fiscal years. No executive officer of ours
received annual compensation in excess of $100,000 during the last three
completed fiscal years.
Summary Compensation Table
Long-Term Compensation
--------------------------------------------------------
Annual Compensation Awards Payouts
------------------------------------- ---------------------------- ---------------------------
Securities
Fiscal Other Restricted Underlying
Name and Year Annual Stock Options/ LTIP All Other
Principal Position Ending Salary ($) Bonus ($) Comp. Awards ($) SARs (#) Payouts ($) Comp.($)
------------------ ------ ---------- --------- ----- ---------- -------- ----------- --------
George Andrews, 3/31/01 0 0 0 0 0 0 0
former President 4/30/00 0 0 0 0 0 0 0
4/30/99 0 0 0 0 0 0 0
Officer Compensation
In September 2001, we paid our president $15,000 in compensation for
his efforts during the period July 2001 through September 2001 in implementing
our plan to acquire coal bed methane producing properties in southeast Kansas.
As of the date hereof, no other compensation has been paid to any executive
officer for services rendered to us nor has any executive officer accrued any
compensation pursuant to any agreement with us.
Option Exercises and Values
None of our executive officers holds any stock options to purchase our
common stock.
14
Long-Term Incentive Plans
We do not have any long-term incentive plans. No retirement, pension,
profit sharing, stock option, insurance programs or other similar programs have
been adopted by us for the benefit of our employees.
Employment Contracts and Termination of Employment Arrangements
There are no other compensatory plans or arrangements, including
payments to be received from us, with respect to the resignation, retirement or
other termination of the employment of any executive officer or related to a
change in control in us.
Director Compensation
None of our directors received any compensation during our most recent
fiscal year for serving in their position as directors. If we do have funds
available in the future, we likely will reimburse our directors for expenses
incurred by them in their duties as a director.
Limitation of Liability and Indemnification
Our Articles of Incorporation contain a provision eliminating our
directors' liability to us or our shareholders for monetary damages for a breach
of their fiduciary duty. However, a director's liability is not eliminated in
circumstances involving certain wrongful acts, such as the breach of a
director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. Our Articles of Incorporation also
obligate us to indemnify our directors and officers to the fullest extent
permitted under Colorado law. While we believe that these provisions are very
standard and necessary to assist us in attracting and retaining qualified
individuals to serve as directors, they could also serve to insulate our
directors against liability for actions which damage us or our shareholders.
Furthermore our assets could be used or attached to satisfy any liabilities
subject to such indemnification.
SECURITY OWNERSHIP OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth information as of November 29, 2001,
concerning the beneficial ownership of our common stock: by each of our
executive officers, directors and director nominees; by all executive officers,
directors and director nominees as a group; and by each person who beneficially
owns more than 5% of our common stock (each a "Principal Stockholder").
Name and Address of Common Stock Percent of Class
Beneficial Owner Beneficially Owned Beneficially Owned
---------------- ------------------ ------------------
Charles A. Ross, Sr., Director and President 900,000 16 %
11952 Farley
Shawnee Mission, KS 66213
All directors and executive officers as a group (1 900,000 16 %
person):
Jeffrey P. Frazier, Principal Stockholder 1,000,000 17.7 %
2956 Nova Road
Pine, CO 80470
Gary J. Grieco, Principal Stockholder 1,250,000 22.2 %
2856 La Casita Avenue
Las Vegas, NV 89120
Terrie L. Pham, Principal Stockholder 1,000,000 17.7 %
16511 E. 27 Terrace
Independence, MO 64055
The Hedge Fund, LLC, Principal Stockholder 360,000 6.4 %
Brad Beveri, Managing Member
15139 W. 119th
Overland Park, KS 66062
15
Rule 13d-3 under the Securities Exchange Act of 1934 provides the
determination of beneficial owners of securities. That rule includes as
beneficial owners of securities, any person who directly or indirectly has, or
shares, voting power and/or investment power with respect to such securities.
Rule 13d-3 also includes as a beneficial owner of a security any person who has
the right to acquire beneficial ownership of such security within sixty days
through any means, including the exercise of any option, warrant or conversion
of a security. Any securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the class owned by such
person. Those securities are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person.
SELLING SECURITY HOLDERS
The following table shows for each selling security holder:
o the number of shares of common stock beneficially owned by him or her
as of November 29, 2001,
o the number of shares of common stock covered by this prospectus, and
o the number of shares of common stock to be retained after this
offering, if any, assuming the selling security holder sells the
maximum number of shares (and percentage of outstanding shares of
common stock owned after this offering, if more than 1%).
The selling security holders are not required, and may choose not, to sell any
of their shares of common stock.
Number of Shares of Number of Shares of
Common Stock Number of Shares of Common Stock
Beneficially Owned Common Stock Beneficially Owned After
Name Before the Offering to Be Sold the Offering
---- ------------------- ---------- ------------
Corporate Management Services, Inc. 100,000 100,000 0
(1), (2)
George Andrews (1) 5,000 5,000 0
Joan Andrews (1) 5,000 5,000 0
Barbara Davidson (1) 5,000 5,000 0
Arnold L. Weyand Trust 5,000 5,000 0
Bradford & Nancy Oesch 5,000 5,000 0
Douglas H. Willson 5,000 5,000 0
Alan J. Woydziak 5,000 5,000 0
Ronald Sauter 5,000 5,000 0
Raymond A. Ritter Trust 5,000 5,000 0
James A. Christy 5,000 5,000 0
16
William N. Gunderson 5,000 5,000 0
Boxer Capital Ltd. 5,000 5,000 0
Donald A. Christensen 5,000 5,000 0
Robert & Jane Hooper 5,000 5,000 0
L. A. Wuischpard 5,000 5,000 0
Anthony Clanton 5,000 5,000 0
Britt Clanton 5,000 5,000 0
Leigh Shelley Clanton 5,000 5,000 0
Barbara & Michael Sauter 5,000 5,000 0
Jeffrey & Christa Sauter 5,000 5,000 0
William & Joanna Woodward 5,000 5,000 0
Kathleen Cavanaugh 5,000 5,000 0
Emprise, Inc. 5,000 5,000 0
Don Kramer 5,000 5,000 0
Robert B. Reed 5,000 5,000 0
Jolaine Roth 5,000 5,000 0
John K. Zerwick 5,000 5,000 0
Bruce C. Carey 5,000 5,000 0
Carol L. Curtiss 5,000 5,000 0
Dennis E. & Katherine Nattress 5,000 5,000 0
Betty Crowley 5,000 5,000 0
Jim Hesselgrave 5,000 5,000 0
Andrew & Gigi Pidcock 5,000 5,000 0
Gary N. TenEyck 5,000 5,000 0
Colorado Resorts, Inc. 5,000 5,000 0
Dacono Park, LLC 5,000 5,000 0
Paul B. Knight 5,000 5,000 0
Transwestern Mortgages, Inc. 5,000 5,000 0
Stephen Co 5,000 5,000 0
Karla M. Alvarez 5,000 5,000 0
Natalie R. Shields 5,000 5,000 0
Randolph S. Julian 5,000 5,000 0
Devon Golding 5,000 5,000 0
Paul & Margaret McManigal 5,000 5,000 0
Thomas G. Ispas 5,000 5,000 0
Charles A. Baird 5,000 5,000 0
17
Gary J. Grieco 1,250,000 250,000 1,000,000 (17.7%)
Harvey M. Burstein 250,000 250,000 0
Mallard Management Inc. 250,000 250,000 0
The Hedge Fund, LLC (3) 360,000 360,000 0
(1) From April 11, 1998, to April 10, 2001, Corporate Management Services, Inc.
or CMS owned approximately 81% of our issued and outstanding common stock. See
"Certain Transactions" below regarding transactions between us and CMS during
this period. George Andrews is the sole director and a 50% shareholder of CMS
and was our sole officer and director until April 10, 2001. Barbara Davidson is
a 50% shareholder of CMS.
(2) As part of the sale of a controlling interest to Mr. Ross, CMS agreed not to
sell 50% of its shares for a period of 180 days after the effective date of the
resale registration statement of which this prospectus is a part.
(3) The Hedge Fund, LLC has agreed to limit the number of shares that it may
sell in any six month period to 250,000.
PLAN OF DISTRIBUTION
We are registering the shares of our common stock covered by this
prospectus.
As used in this prospectus, selling security holder includes any
donees, pledgees, transferees or other successors in interest who will hold the
selling security holders' shares after the date of this prospectus. We are
paying the costs, expenses and fees of registering the common stock, but the
selling security holders will pay any underwriting or brokerage commissions and
similar selling expenses relating to the sale of the shares of common stock.
The selling security holders may sell our common stock at market
prices prevailing at the time of the sale, at prices related to the prevailing
market prices, at negotiated prices or at fixed prices, which may be changed.
The selling security holders may sell some or all of their common stock through:
o ordinary brokers' transactions which may include long or short sales;
o transactions involving cross or block trades or otherwise;
o purchases by brokers, dealers or underwriters as principal and resale
by those purchasers for their own accounts under this prospectus;
o market makers or into an existing market for our common stock;
o other ways not involving market makers or established trading markets,
including direct sales to purchasers or sales effected through agents;
o transactions in options, swaps or other derivatives; or
o any combination of the selling options described in this prospectus,
or by any other legally available means.
The selling security holders may enter into hedging transactions with
broker-dealers who may engage in short sales of our common stock in the course
of hedging the positions they assume. The selling security holders also may
enter into option or other transactions with broker-dealers that require the
delivery by those broker-dealers of the common stock. Thereafter, the shares may
be resold under this prospectus.
In their selling activities, the selling security holders will be
subject to applicable provisions of the Securities Exchange Act of 1934 and the
Exchange Act's rules and regulations, including Regulation M, which may limit
the selling security holders' timing of purchases and sales of our common stock.
The selling security holders and any broker-dealers involved in the
sale or resale of our common stock may qualify as "underwriters" within the
meaning of Section 2(11) of the Securities Act of 1933. In addition, the
broker-dealers' commissions, discounts or concessions may qualify as
underwriters' compensation under the Securities Act. If any selling security
18
holders or any broker-dealer qualifies as an "underwriter," then they will be
subject to the prospectus delivery requirements of Section 153 of the Securities
Act, which may include delivery through the facilities of the NASD.
In the event that any selling security holder sells any of his common
stock to a broker, dealer or underwriter as principal, such shares may be resold
by the broker, dealer or underwriter only under an amended prospectus that
discloses the selling security holder's arrangements with the broker/ dealer/
underwriter participating in the offering and identifies the participating
broker/ dealer/ underwriter. Any participating brokers/ dealers will be
considered as an "underwriter" and will be identified in the amended prospectus
as such.
In conjunction with sales to or through brokers, dealers or agents,
the selling security holders may agree to indemnify them against liabilities
arising under the Securities Act. We know of no existing arrangements between
the selling security holders, any other shareholder, broker, dealer, underwriter
or agent relating to the sale or distribution of our common stock.
In addition to selling their shares of common stock under this
prospectus, the selling security holders may:
o transfer their common stock in other ways not involving market makers
or established trading markets, including by gift, distribution, or
other transfer; or
o sell their common stock under Rule 144 of the Securities Act, if the
transaction meets the requirements of Rule 144.
The selling security holders have been advised by us that during the
time each is engaged in distribution of the securities covered by this
prospectus, each must comply with Rule 10b-5 and Regulation M under the Exchange
Act. They must do all of the following under those rules:
o not engage in any stabilization activity in connection with our
securities;
o furnish each broker through which securities covered by this
prospectus may be offered the number of copies of this prospectus
which are required by each broker; and
o not bid for or purchase any securities of ours or attempt to induce
any person to purchase any of our securities other than as permitted
under the Exchange Act.
Any selling security holders who may be "affiliated purchasers" of
ours, as defined in Regulation M, have been further advised that they must
coordinate their sales under this prospectus with each other and us for purposes
of Regulation M.
We will amend or supplement this prospectus as required by the
Securities Act.
CERTAIN TRANSACTIONS
On April 11, 1998, we issued a total of 1,000,000 shares of our common
stock to Corporate Management Services, Inc., or CMS, in exchange for services
related to management and organization costs of $500. Mr. George Andrews, our
sole officer and director until April 2001, is the sole director and a 50%
shareholder of CMS. From April 11, 1998, to April 10, 2001, CMS provided us with
administrative and marketing services on an as-needed basis without additional
charge.
Additionally, from our inception to March 31, 2001, we incurred an
expense of $100 per month for rent and other administrative services which were
performed by CMS on our behalf. As of March 31, 2001, we had incurred rent and
administrative service expenses totaling $3,600, which amount has been credited
to additional paid-in capital on our financial statements.
From April 11, 1998, to April 10, 2001, CMS advanced to us any
additional funds which we needed for operating capital and for costs in
connection with searching for or completing an acquisition or merger. Such
19
advances were made without expectation of repayment (other than offsets of
earned interest) unless the owners of a business which we acquired or merged
with agreed to repay all or a portion of such advances. As of March 31, 2001,
CMS had advanced a total of $5,155 to us for legal, accounting, general and
administrative expenses, which amount was treated as an accrued liability on our
financial statements but which was forgiven by CMS as of April 30, 2001.
On or about March 3, 2001, we and CMS entered into an Agreement for
the Purchase of Common Stock with Charles A. Ross, Sr. pursuant to which CMS
sold 900,000 shares of our common stock to Mr. Ross for $1,000. Pursuant to that
agreement, on April 10, 2001, Mr. Andrews resigned as our sole officer and
director and Mr. Ross became our sole officer and director.
DESCRIPTION OF OUR STOCK
We are authorized to issue 20,000,000 shares of common stock, no par
value, and 5,000,000 shares of non-voting preferred stock, no par value. There
are 5,640,000 shares of common stock currently outstanding and no shares of
preferred stock outstanding.
Common Stock
Holders of common stock are entitled to dividends when declared by our
board of directors. Dividends on our common stock will be subject to any
priority as to dividends for any preferred stock that may be outstanding.
Holders of our common stock are entitled to cast one vote for each share held at
all shareholder meetings for all purposes, including the election of directors.
Cumulative voting for the election of directors is not permitted. The holders of
a majority of our common stock entitled to vote constitute a quorum at meetings
of shareholders. The vote of the holders of a majority of common stock present
at such a meeting will decide any question brought before such meeting.
Upon our liquidation or dissolution, the holder of each outstanding
share of common stock will be entitled to share ratably in our net assets after
the payment of all debts and other liabilities. No holder of common stock has
any preemptive or preferential rights to purchase or subscribe for any part of
any unissued or any additional authorized stock or any of our securities
convertible into shares of our stock. No holder of common stock has redemption
or conversion rights. Our outstanding shares of common stock are fully paid and
nonassessable.
Preferred Stock
Our board of directors is authorized by our Articles of Incorporation
to provide for the issuance of shares of preferred stock in series and, by
filing a certificate pursuant to Colorado law, to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof without any further
vote or action by our shareholders. Any shares of preferred stock so issued
would have priority over our common stock with respect to dividend or
liquidation rights. Any future issuance of preferred stock may have the effect
of delaying, deferring or preventing a change in our control without further
action by our shareholders and may adversely affect the voting and other rights
of the holders of our common stock. At present we have no plans to issue any
preferred stock nor to adopt any series, preferences or other classification of
preferred stock.
The issuance of shares of preferred stock, or the issuance of rights
to purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For instance, the issuance of a series of preferred stock might impede
a business combination by including class voting rights that would enable a
holder to block such a transaction. In addition, under certain circumstances,
the issuance of preferred stock could adversely affect the voting power of
holders of our common stock. Although our board of directors is required to make
any determination to issue preferred stock based on its judgment as to the best
interests of our stockholders, our board could act in a manner that would
discourage an acquisition attempt or other transaction that some, or a majority,
of our stockholders might believe to be in their best interests or in which such
stockholders might receive a premium for their stock over the then market price
of such stock. Our board presently does not intend to seek stockholder approval
prior to the issuance of currently authorized stock, unless otherwise required
by law or applicable stock exchange rules.
20
Transfer Agent and Registrar
The transfer agent for our common stock is Computer Share Investor
Services, 12039 West Alameda Parkway, Suite Z-2, Lakewood, Colorado 80228.
SHARES ELIGIBLE FOR FUTURE SALE
We currently have 5,640,000 shares of common stock outstanding, of
which 1,440,000 shares are being registered for resale pursuant to the
registration statement of which this prospectus is a part. The 1,440,000 shares
of common stock registered for resale hereunder will be freely tradable without
restriction or further registration under the Securities Act to the extent that
a market develops for our securities. All of the 4,200,000 outstanding shares of
common stock not registered for resale hereunder are "restricted securities."
Any shares purchased by an affiliate of ours will be subject to the
resale limitations of Rule 144 under the Securities Act. An affiliate of ours is
a person who has a control relationship with us, which generally includes our
executive officers, directors and 10% or more stockholders.
"Restricted securities" may only be sold as follows:
o pursuant to a registration statement under the Securities Act,
o in compliance with the exemption provisions of Rule 144, or
o pursuant to another exemption under the Securities Act.
In general, Rule 144 requires that affiliates and persons owning
restricted securities hold their securities for a minimum of one year, limits
the number of securities that may be sold within any 3 month period, requires
that sales must be made through unsolicited brokers' transactions or in
transactions directly with a market maker, and requires the filing of a Form 144
if the securities to be sold during any three-month period exceeds 500 shares or
has a total sales price over $10,000. Rule 144 limits the number of shares of
our common stock that may be sold within any 3 month period to the greater of:
o one percent of the outstanding shares of our common stock, and
o the average weekly trading volume of our common stock during the four
calendar weeks prior to such sale.
Sales under Rule 144 are also subject to the availability of current
public information about us. However, persons who are not affiliated with us and
who have held their restricted securities for at least two years may resell
their shares without regard to the foregoing requirements of Rule 144.
A sale of shares by our current shareholders, whether pursuant to Rule
144 or otherwise, may have a depressing effect upon the market price of our
common stock. To the extent that these shares enter the market, the value of our
common stock in the over-the-counter market may be reduced.
MARKET FOR COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Market Information
There is no public market for our common stock. Our common stock does
not have a trading symbol and is not currently listed or quoted on any quotation
medium. Once we have applied for a trading symbol and pre-cleared our shares for
trading, our common stock may be traded in the over-the-counter market. However,
there can be no assurance of whether, when or at what price trading in our stock
will occur.
21
In June 2001 we completed a private placement of 360,000 shares of our
common stock at a price of $0.25 per share. The offering price of the shares was
arbitrarily determined by us and bears no relationship to our assets, book
value, earnings or other generally accepted criteria of value. Furthermore, the
offering price provides no indication of the value of our common stock.
Holders
As of November 29, 2001, we had approximately 57 beneficial owners of
our common stock. We do not have outstanding any options or warrants to acquire,
or any securities convertible into, any shares of our common stock.
Dividends
Holders of our common stock are entitled to receive such dividends as
may be declared by our board of directors. We have not declared any cash
dividends on our common shares for the last two fiscal years and we do not
anticipate paying any cash dividends in the foreseeable future. We currently
intend to use all available funds for the development of our business. We are
not currently a party to any agreement restricting the payment of dividends.
LEGAL MATTERS
Ballard Spahr Andrews & Ingersoll, LLP will pass upon the validity of
the common stock offered by this prospectus. Barbara Davidson, the wife of a
partner in the Denver office of Ballard Spahr Andrews & Ingersoll, LLP is a
selling security holder and is a 50% shareholder of Corporate Management
Services, Inc.
EXPERTS
Our financial statements for the year ended April 30, 2000, and the
eleven months ended March 31, 2001, in this prospectus have been audited by
Cordovano & Harvey, P.C., independent certified public accountants, to the
extent and for the periods set forth in their report, and are set forth in this
prospectus in reliance upon such report given upon the authority of them as
experts in auditing and accounting.
SECURITIES AND EXCHANGE COMMISSION POSITION ON CERTAIN INDEMNIFICATION
The Colorado Business Corporation Act provides for indemnification by
a corporation of costs incurred by directors, employees, and agents in
connection with an action, suit, or proceeding brought by reason of their
position as a director, employee, or agent. The person being indemnified must
have acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation.
Our Articles of Incorporation obligate us to indemnify our directors
and officers to the fullest extent permitted under Colorado law.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling us
pursuant to the foregoing provisions, we have been informed that, in the opinion
of the SEC, such indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a Registration Statement on Form SB-2 that
we filed with the Securities and Exchange Commission. Certain information in the
Registration Statement has been omitted from this prospectus in accordance with
the rules of the SEC.
22
We file annual reports, quarterly reports and current reports, proxy
statements and other information with the SEC. Our file number is 27321. We are
required to file electronic versions of these documents with the SEC. Those
documents may be accessed through the SEC's Internet site at http://www.sec.gov.
You may read and copy materials that we have filed with the SEC,
including the Registration Statement, at the SEC public reference room located
at 450 Fifth Street, N.W., Room 1024, Washington, DC 20549. You can call the SEC
at 1-800-732-0330 for further information about the public reference room.
23
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Index to Financial Statements
Page
----
Independent auditors' report...............................................F-2
Balance sheet, March 31, 2001 and September 30, 2001 (unaudited)...........F-3
Statements of operations, for the eleven months ended March 31, 2001
and 2000 (unaudited), for the year ended April 30, 2000, from April 9,
1998 (inception) through March 31, 2001, for the six months ended
September 30, 2001 (unaudited) and 2000 (unaudited), and from
April 9, 1998 (inception) through September 30, 2001 (unaudited)......F-4
Statement of shareholders' equity (deficit), from April 9, 1998
(inception) through March 31, 2001 and April 1, 2001 through
September 30, 2001 (unaudited).........................................F-5
Statements of cash flows, for the eleven months ended March 31, 2001
and 2000 (unaudited), for the year ended April 30, 2000, from April 9,
1998 (inception) through March 31, 2001, for the six months ended
September 30, 2001 (unaudited) and 2000 (unaudited), and from
April 9, 1998 (inception) through September 30, 2001 (unaudited)......F-6
Notes to financial statements..............................................F-7
F-1
Independent Auditors' Report
To the Board of Directors and Shareholders
Vista Exploration Corporation (formerly Bail Corporation)
We have audited the balance sheet of Vista Exploration Corporation (formerly
Bail Corporation) (a development stage company) as of March 31, 2001 and the
related statements of operations, shareholders' deficit and cash flows for the
eleven months ended March 31, 2001, for the year ended April 30, 2000, and for
the period from April 9, 1998 (inception) through March 31, 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 audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audits 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 Exploration Corporation
as of March 31, 2001, and the related statements of operations and cash flows
for the eleven months ended March 31, 2001, for the year ended April 30, 2000,
and for the period from April 9, 1998 (inception) through March 31, 2001 in
conformity with accounting principles generally accepted in the United States.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note A to the financial
statements, the Company has incurred losses since inception and has a net
capital deficit at March 31, 2001. These factors raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans
regarding those matters are also described in Note A. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
Cordovano and Harvey, P.C
Denver, Colorado
July 3, 2001
F-2
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Balance Sheets
March 31, September 30,
2001 2001
------------ -----------
(Unaudited)
ASSETS
Current assets:
Cash ........................................................................... $ 73 $ 11,654
Advance to officer (Note B) .................................................... -- 12,687
--------- ---------
Total current assets 73 24,341
Oil and gas properties, at cost (Note A) ............................................. -- 42,508
Deferred offering costs .............................................................. 10,000 --
--------- ---------
$ 10,073 $ 66,849
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accrued liabilities ............................................................ $ 2,000 $ 27,094
Accounts payable, related party (Note B) ....................................... 6,115 --
Due to officer (Note B) ........................................................ 10,500 --
--------- ---------
Total current liabilities 18,615 27,094
--------- ---------
Shareholders' equity (Note D):
Preferred Stock, no par value, 5,000,000 shares authorized,
-0- and -0- (unaudited) shares issued and outstanding, respectively .......... -- --
Common stock, no par value, 20,000,000 shares authorized,
1,230,000 and 5,640,000 (unaudited) shares issued and
outstanding, respectively ................................................... 2,673 170,111
Additional paid-in capital ..................................................... 3,600 3,600
Deficit accumulated during the development stage ............................... (14,815) (133,956)
--------- ---------
Total shareholders' equity (deficit) (8,542) 39,755
--------- ---------
$ 10,073 $ 66,849
========= =========
See accompanying notes to financial statements
F-3
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Statements of Operations
April 9, 1998 April 9, 1998
Eleven Months Ended (Inception) Six Months Ended (Inception)
March 31, Year Ended Through September 30, Through
---------------------- April 30, March 31, ---------------------- September 30,
2001 2000 2000 2001 2001 2000 2001
--------- --------- ---------- --------- --------- --------- ---------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Costs and expenses:
Legal fees .......................... $ 1,492 $ 2,097 $ 2,097 $ 3,895 $ 48,268 $ 778 $ 52,163
Accounting fees ..................... 2,750 751 2,001 5,751 3,550 1,500 9,301
Travel .............................. 5,339 -- -- 5,339 14,990 -- 20,329
General and administrative .......... 920 21 28 999 8,431 42 9,430
Compensation ........................ -- -- -- -- 15,000 -- 15,000
Project evaluation costs ............ -- -- -- -- 28,902 -- 28,902
Rent, related party (Note B) ........ 1,100 1,100 1,200 3,600 -- 600 3,600
Organizational costs ................ -- -- -- 500 -- -- 500
--------- --------- --------- --------- --------- --------- ---------
Operating loss ................... (11,601) (3,969) (5,326) (20,084) (119,141) (2,920) (139,225)
Interest income ......................... 8 49 57 114 -- 8 114
-------- --------- ---------- --------- --------- --------- ---------
Loss before income taxes
and extraordinary item ....... (11,593) (3,920) (5,269) (19,970) (119,141) (2,912) (139,111)
Provision for income taxes (Note C) ..... -- -- -- -- -- -- --
-------- --------- --------- --------- --------- -------- ---------
Loss before extraordinary item .... (11,593) (3,920) (5,269) (19,970) (119,141) (2,912) (139,111)
Extraordinary gain on extinguishment
of debt, net of income taxes
of $-0- (Note A) .................... 5,155 -- -- 5,155 -- -- 5,155
-------- --------- --------- --------- --------- -------- ---------
Net loss ....................... $ (6,438) $ (3,920) $ (5,269) $ (14,815) $(119,141) $ (2,912) $(133,956)
======== ========= ========= ========= ========= ======== =========
Basic and diluted loss per common share:
Before extraordinary item .......... $ * $ * $ * (0.03) $ *
======== ========= ========== ========= ========
Gain on extinguishment of debt ..... $ * $ * $ * $ * $ *
======== ========= ========== ========= ========
Net loss ........................... $ * $ * $ * $ (0.03) $ *
======== ========= ========== ========= ========
Basic and diluted weighted average
common shares outstanding .......... 1,230,000 1,230,000 1,230,000 4,749,071 1,230,000
========= ========= ========= ========= =========
* Less than $.01 per share
See accompanying notes to financial statements
F-4
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Statement of Shareholders' Equity (Deficit)
April 9, 1998 (inception) through March 31, 2001 and
April 1, 2001 through September 30, 2001 (Unaudited)
Deficit
Accumulated
Preferred Stock Common Stock Additional During
-------------------- ------------------------ Paid-In Development
Shares Amount Shares Amount Capital Stage Total
-----------------------------------------------------------------------------------------------
Beginning balance,
April 9, 1998 ............... -- $ -- -- $ -- $ -- $ -- $ --
April 1998, common stock
issued in
exchange for services
and organizational
costs (Note B) .............. -- -- 1,000,000 500 -- -- 500
Contributed rent (Note B) ....... -- -- -- -- 100 -- 100
Net loss for the period ended
April 30, 1998 ................. -- -- -- -- -- (688) (688)
--------- --------- ----------- ----------- ----------- ----------- -----------
BALANCE,
APRIL 30, 1998 ........ -- -- 1,000,000 500 100 (688) (88)
May 1998, sale of common
stock, net of
$127 of offering costs
(Note B) ....................... -- -- 230,000 2,173 -- -- 2,173
Contributed rent (Note B) ....... -- -- -- -- 1,200 -- 1,200
Net loss for year ended
April 30, 1999 ................. -- -- -- -- -- (2,420) (2,420)
--------- --------- ----------- ----------- ----------- ----------- -----------
BALANCE,
APRIL 30, 1999 ........ -- -- 1,230,000 2,673 1,300 (3,108) 865
Contributed rent (Note B) ....... -- -- -- -- 1,200 -- 1,200
Net loss for year ended
April 30, 2000 ................. -- -- -- -- -- (5,269) (5,269)
--------- --------- ----------- ----------- ----------- ----------- -----------
BALANCE,
APRIL 30, 2000 ........ -- -- 1,230,000 2,673 2,500 (8,377) (3,204)
Contributed rent (Note B) ....... -- -- -- -- 1,100 -- 1,100
Net loss for eleven months
ended March 31, 2001 ........... -- -- -- -- -- (6,438) (6,438)
--------- --------- ----------- ----------- ----------- ----------- -----------
BALANCE,
MARCH 31, 2001 ........ -- -- 1,230,000 2,673 3,600 (14,815) (8,542)
April 2001, sale of common stock,
$.01 per share (Note D)
(unaudited) .................... -- -- 3,300,000 33,000 -- -- 33,000
June 2001, sale of common stock,
$.10 per share (Note D)
(unaudited) .................... -- -- 750,000 75,000 -- -- 75,000
June 2001, sale of common stock,
$.25 per share (Note D)
(unaudited) .................... -- -- 360,000 90,000 -- -- 90,000
Offering costs incurred (Note D)
(unaudited) .................... -- -- -- (30,562) -- -- (30,562)
Net loss for the six months ended
September 30, 2001 (unaudited) -- -- -- -- -- (119,141) (119,141)
--------- --------- ----------- ----------- ----------- ----------- -----------
BALANCE,
SEPTEMBER 30, 2001
(Unaudited) ........... -- $ -- 5,640,000 $ 170,111 $ 3,600 $ (133,956) $ 39,755
========= ========= =========== =========== =========== =========== ===========
See accompanying notes to financial statements
F-5
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Statements of Cash Flows
April 9, 1998 April 9, 1998
Eleven Months Ended (Inception) Six Months Ended (Inception)
March 31, Year Ended Through September 30, Through
---------------------- April 30, March 31, ----------------------- September 30,
2001 2000 2000 2001 2001 2000 2001
----------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Cash flows from operating activities:
Net loss ........................... $ (6,438) $ (3,920) $ (5,269) $ (14,815) $(119,141) $ (2,912) $(133,956)
Transactions not requiring cash:
Common stock issued
for services ................... -- -- -- 500 -- -- 500
Contributed rent (Note B) ....... 1,100 1,100 1,200 3,600 -- 600 3,600
Gain on extinguishment of
debt (Note A) .................. (5,155) -- -- (5,155) -- -- (5,155)
Changes in operating
assets and liabilities:
Receivables and advances ...... 106 (49) (57) -- (12,687) (8) (12,687)
Accounts payable and
accrued liabilities .......... 9,799 1,598 2,203 13,270 18,979 1,633 32,249
--------- --------- --------- --------- --------- --------- ---------
Net cash used in
operating activities ......... (588) (1,271) (1,923) (2,600) (112,849) (687) (115,449)
--------- --------- --------- --------- --------- --------- ---------
Cash flows from investing activities:
Investment in oil and
gas properties .................... -- -- -- -- (42,508) -- (42,508)
--------- --------- --------- --------- --------- --------- ---------
Net cash used in
financing activities ......... -- -- -- -- (42,508) -- (42,508)
--------- --------- --------- --------- --------- --------- ---------
Cash flows from financing activities:
Advances from officer (Note B) ..... 10,500 -- -- 10,500 (10,500) -- --
Sale of common stock ............... -- -- -- 2,300 198,000 -- 200,300
Offering costs incurred ............ (10,000) -- -- (10,127) (20,562) -- (30,689)
--------- --------- --------- --------- --------- --------- ---------
Net cash provided by
financing activities ......... 500 -- -- 2,673 166,938 -- 169,611
--------- --------- --------- --------- --------- --------- ---------
Net change in cash ...................... (88) (1,271) (1,923) 73 11,581 (687) 11,654
Cash, beginning of period ............... 161 2,084 2,084 -- 73 813 --
--------- --------- --------- --------- --------- --------- ---------
Cash, end of period ........... $ 73 $ 813 $ 161 $ 73 $ 11,654 $ 126 $ 11,654
========= ========= ========= ========= ========= ========= =========
Supplemental disclosure
of cash flow information:
Cash paid during the period for:
Interest ........................ $ -- $ -- $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= ========= ========= =========
Income taxes .................... $ -- $ -- $ -- $ -- $ -- $ -- $ --
========= ========= ========= ========= ========= ========= =========
See accompanying notes to financial statements
F-6
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
Note A: Organization and summary of significant accounting policies
Organization
Vista Exploration Corporation (the "Company") (formerly Bail Corporation) was
incorporated under the laws of Colorado on April 9, 1998 to engage in any lawful
corporate undertaking. The Company is a development stage enterprise in
accordance with Statement of Financial Accounting Standard (SFAS) No. 7. The
Company was originally formed as a "blank check" company with the purpose to
evaluate, structure and complete a merger with, or acquisition of, a privately
owned corporation. Effective March 3, 2001, 900,000 shares (approximately 73
percent) of the Company's issued and outstanding common stock was sold,
resulting in a change in control of the Company. The Company's new business plan
is to engage in the oil and gas business by acquiring oil and gas properties and
developing those properties and/or purchasing producing properties principally
located in the mid-western and western United States.
The Company's management is currently seeking to acquire oil and gas leases in
portions of southeast Kansas to drill for coal bed methane gas. The Company
opened an office in Burlington, Kansas and plans to lease land in the south half
of Coffey County, Kansas with the help of its geological consultant. If the
Company is successful at leasing enough land to move forward with drilling
activities, the Company will need additional capital to develop the properties.
It is the Company's intent to complete drilled wells; however, the Company may
have acquire a partner or out-source certain properties to rapidly develop
leases.
Following the change in control, the Company sold 4,410,000 shares of its no par
value common stock through three private offerings for net proceeds of $167,438
(unaudited) after deducting offering costs of $30,562 (unaudited). The Company
intends to use the net proceeds from those offerings for administrative and
professional fees required to transition the business and to acquire oil and gas
properties and develop a drilling program. The Company will require additional
funds to commence drilling operations and there are no commitments in place for
any additional funds.
During August 2001, the Company changed its name from Bail Corporation to Vista
Exploration Corporation.
During the period from April 9, 1998 (inception) through February 28, 2001,
Corporate Management Services, Inc. ("CMS"), an affiliate and previous majority
shareholder, paid professional fees and administrative expenses on behalf of the
Company totaling $5,155, which were unpaid as of February 28, 2001. As part of
the stock purchase agreement that resulted in the change in control, CMS
released the Company from its obligation to repay the $5,155. The $5,155 is
included in the accompanying statements of operations as extraordinary gain on
extinguishment of debt.
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company is in the development
stage. It has incurred losses since inception and has a net capital deficit at
March 31, 2001. These factors, among others, may indicate that the Company will
be unable to continue as a going concern for reasonable period of time.
F-7
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
The financial statements do not include any adjustments relating to the
recoverability and classification of liabilities that might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going concern is dependent upon its ability to generate sufficient cash
flow to meet its obligations on a timely basis and ultimately to attain
profitability. The Company raised gross proceeds of $198,000 (unaudited) through
private stock offerings subsequent to March 31, 2001 (see Note E), to fund its
operations. However, the Company believes it will need additional capital to
develop the property leases discussed above. There is no assurance that the
Company will obtain the additional capital or that it will attain profitability.
Summary of significant accounting policies
Basis of presentation
On April 18, 2001, the Company changed its year-end from April 30 to March 31.
The accompanying statements of operations, shareholders' deficit and cash flows
reflect the eleven-month transition period ended March 31, 2001 and the
historical fiscal year results for April 30, 2000. The comparative figures for
the eleven months ended March 31, 2000 have been included in the accompanying
statements of operations and cash flows on an unaudited basis.
Cash equivalents
For financial accounting purposes and the statement of cash flows, cash
equivalents include all highly liquid debt instruments purchased with an
original maturity of three months or less. The Company had no cash equivalents
at March 31, 2001.
Fair value of financial instruments
The Company has determined, based on available market information and
appropriate valuation methodologies, the fair values of its financial
instruments approximate carrying values. The carrying amounts of cash, accounts
payable, and other current liabilities approximate fair value due to the
short-term maturity of the instruments.
Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principals requires management to make estimates and
assumptions that affect certain reported amounts of assets and liabilities;
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. Accordingly, actual results could differ from those estimates.
Organization costs
Costs related to the organization of the Company have been expensed as incurred.
Deferred offering costs
Costs related to common stock offerings are recorded initially as a deferred
asset until the offering is successfully completed, at which time they are
recorded as a reduction of gross proceeds in shareholders' deficit. If an
offering is not successful, the costs are charged to operations at that time.
F-8
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
Oil and gas properties
The Company follows the full cost method of accounting for oil and gas
properties. Accordingly, all costs associated with acquisition, exploration, and
development of oil and gas reserves, including directly related overhead costs,
are capitalized. No internal overhead costs have been capitalized to date.
All capitalized costs of oil and gas properties, including the estimated future
costs to develop proved reserves, are amortized on the unit-of-production method
using estimates of proved reserves. Investments in unproved properties and major
development projects are not amortized until proved reserves associated with the
projects can be determined or until impairment occurs. If the results of an
assessment indicate that the properties are impaired, the amount of the
impairment is added to the capitalized costs to be amortized.
The capitalized costs are subject to a "ceiling test," which limits capitalized
costs to the aggregate of the "estimated present value," discounted at a
10-percent interest rate, of future net revenues from proved reserves (based on
current economic and operating conditions), plus the lower of cost or fair
market value of unproved properties.
Sales of proved and unproved properties are accounted for as adjustments of
capitalized costs with no gain or loss recognized, unless such adjustments would
significantly alter the relationship between capitalized costs and proved
reserves of oil and gas, in which case the gain or loss is recognized in income.
Abandonments of properties are accounted for as adjustments of capitalized costs
with no loss recognized.
Loss per common share
The Company reports loss per share using a dual presentation of basic and
diluted loss per share. Basic loss per share excludes the impact of common stock
equivalents. Diluted loss per share uses the average market price per share when
applying the treasury stock method in determining common stock equivalents.
However, the Company has a simple capital structure for the period presented
and, therefore, there is no variance between the basic and diluted loss per
share.
Income taxes
The Company reports income taxes in accordance with SFAS No. 109, "Accounting
for Income Taxes", which requires the liability method in accounting for income
taxes. Deferred tax assets and liabilities arise from the difference between the
tax basis of an asset or liability and its reported amount on the financial
statements. Deferred tax amounts are determined by using the tax rates expected
to be in effect when the taxes will actually be paid or refunds received, as
provided under currently enacted law. Valuation allowances are established when
necessary to reduce the deferred tax assets to the amounts expected to be
realized. Income tax expense or benefit is the tax payable or refundable,
respectively, for the period plus or minus the change during the period in the
deferred tax assets and liabilities.
Stock based compensation
SFAS No. 123, "Accounting for Stock-Based Compensation" permits the use of
either a "fair value based method" or the "intrinsic value method" defined in
Accounting Principles Board Opinion 25, "Accounting for Stock Issued to
Employees" (APB 25) to account for stock-based compensation arrangements.
F-9
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
Companies that elect to use the method provided in APB 25 are required to
disclose pro forma net income and pro forma earnings per share information that
would have resulted from the use of the fair value based method. The Company has
elected to continue to determine the value of stock-based compensation
arrangements with employees under the provisions of APB 25. No pro forma
disclosures have been included with the accompanying financial statements as
there was no pro forma effect on the Company's net loss or loss per share.
Unaudited financial statements
The financial statements presented as of September 30, 2001, for the eleven
months ended March 31, 2000, for the six months ended September 30, 2001 and
2000, and for the period from April 9, 1998 (inception) through September 30,
2001 are unaudited.
In the opinion of management, all adjustments (consisting only of normal
recurring adjustments), which are necessary to provide a fair presentation of
financial position as of September 30, 2001 and the operating results for the
eleven months ended March 31, 2000 for the six months ended September 30, 2001
and 2000, and for the period from April 9, 1998 (inception) through September
30, 2001, have been made.
Note B: Related party transactions
During the six months ended September 30, 2001, an officer paid travel and
administrative expenses totaling $18,403 (unaudited) on behalf of the Company,
in addition to the $6,115 paid prior to March 31, 2001. The Company repaid the
$24,518 (unaudited) and advanced the officer an additional $12,687 (unaudited).
The advance is expected to be offset against future travel expenses. The $12,687
(unaudited) is included in the accompanying financial statements as expense
advance to officer.
The Company incurred an expense of $100 per month through March 31, 2001 for
office space contributed by Corporate Management Services, Inc. ("CMS"), an
affiliate of the Company. The Company reported rent expense of $1,100, $1,100
(unaudited), $1,200, and $3,600, respectively, for the eleven months ended March
31, 2001 and 2000, the year ended April 30, 2000, and the period from April 9,
1998 (inception) through March 31, 2001. The rent expense has been offset by
charges to additional paid-in capital. In July 2001, the Company leased office
space in Burlington, Kansas for $350 per month.
On February 28, 2001, an officer advanced the Company $10,500 for working
capital. The advance carries no interest rate and is payable on demand. The
$10,500 is included in the accompanying financial statements as due to officer.
The Company repaid the advance subsequent to March 31, 2001.
The officer also paid travel and administrative expenses totaling $6,115 on
behalf of the Company during the eleven months ended March 31, 2001. The $6,115
is included in the accompanying financial statements as accounts payable,
related party. The Company repaid the expenses subsequent to March 31, 2001.
On April 11, 1998, the Company issued an affiliate 1,000,000 shares of common
stock in exchange for services related to management and organization costs of
$500. The affiliate will provide administrative and marketing services as
needed. The affiliate may, from time to time, advance to the Company any
additional funds that the Company needs for operating capital and for costs in
connection with searching for or completing an acquisition or merger.
F-10
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
During 1998, the Company sold 230,000 shares of common stock in a private
placement for $2,300. The private placement also included the offering of common
shares in nineteen other corporations. The costs related to the offering and
certain legal fees and general and administrative fees were allocated to each of
the twenty companies participating in the offering. The Company's pro rate one
twentieth share of the costs and expenses were deducted from the gross proceeds
from the sale of the Company's common shares. The gross proceeds of $2,300 were
transferred to the Company net of offering costs of $127 and certain general and
administrative costs incurred by the affiliate of $89.
Note C: Income taxes
Following are reconciliations of U.S. statutory federal income tax rate to the
effective rate:
Eleven Six
Months ended Year Ended Months ended
March 31, April 30, March 31,
2001 2000 2001
-------- --------- ---------
U.S. statutory federal rate ............ 15.00% 15.00% 15.00%
State income tax rate,
net of federal benefit ............... 4.04% 4.04% 3.60%
Net operating loss (NOL) for
which no tax benefit is
benefit is currently available ....... -19.04% -19.04% -27.84%
----- ----- -----
0.00% 0.00% 0.00%
===== ===== =====
The valuation allowance offsets the net deferred tax asset for which there is no
assurance of recovery. The change in the valuation allowance for the eleven
months ended March 31, 2001, the year ended April 30, 2000, and for the period
from April 9, 1998 (inception) through March 31, 2001 were $1,226, $657, and
$2,483, respectively. NOL carryforwards at March 31, 2001 will expire through
2021.
The change in the valuation allowance for the six months ended September 30,
2001 was $33,167 (unaudited).
The valuation allowance will be evaluated at the end of each year, considering
positive and negative evidence about whether the asset will be realized. At that
time, the allowance will either be increased or reduced; reduction could result
in the complete elimination of the allowance if positive evidence indicates that
the value of the deferred tax asset is no longer impaired and the allowance is
no longer required.
Should the Company undergo an ownership change, as defined in Section 382 of the
Internal Revenue Code, the Company's tax net operating loss carryforwards
generated prior to the ownership change will be subject to an annual limitation
which could reduce or defer the utilization of those losses.
Note D: Shareholders' equity (deficit)
The preferred stock may be issued in series as determined by the Board of
Directors. As required by law, each series must designate the number of share in
the series and each share of a series must have identical rights of (1)
dividend, (2) redemption, (3) rights in liquidation, (4) sinking fund provisions
for the redemption of the share, (5) terms of conversion and (6) voting rights.
F-11
VISTA EXPLORATION CORPORATION
(Formerly Bail Corporation)
(A Development Stage Company)
Notes to Financial Statements
During April of 2001, the Company conducted a private placement offering of
5,000,000 shares of its no par value common stock for $.01 per share pursuant to
an exemption from registration claimed under Rule 506 of Regulation D of the
Securities Act of 1933, as amended (the "Act"). The Company closed the offering
after selling 3,300,000 (unaudited) shares. The Company received net proceeds of
$22,813 (unaudited) after deducting offering costs totaling $10,187 (unaudited).
During June of 2001, the Company conducted a private placement offering of
800,000 shares of its no par value common stock for $.10 per share pursuant to
an exemption from registration claimed under Rule 504 of Regulation D of the
Act. The Company closed the offering after selling 750,000 (unaudited) shares.
The Company received net proceeds of $64,813 (unaudited) after deducting
offering costs totaling $10,187 (unaudited).
During June of 2001, the Company conducted a private placement offering of
1,000,000 shares of its no par value common stock for $.25 per share pursuant to
an exemption from registration claimed under Rule 504 of Regulation D of the
Act. The Company closed the offering after selling 360,000 (unaudited) shares.
The Company received net proceeds of $79,812 (unaudited) after deducting
offering costs totaling $10,188 (unaudited).
F-12
VISTA EXPLORATION CORPORATION
1,440,000 Shares of Common Stock
----------------
PROSPECTUS
----------------
______, 2001
You should only rely on the information contained in this prospectus. We have
not authorized anyone to provide you with information different from that
contained in this prospectus. The selling security holders are offering to sell,
and seeking offers to buy, shares of common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of common stock.
Until ________, 2001 (25 days after the commencement of the offering), all
dealers that effect transactions in these securities, whether or not
participating in this offering, may be requested to deliver a prospectus. This
is in addition to the dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.
PART II - Information Not Required In Prospectus
Item 24. Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation eliminate the personal
liability of its directors to the Registrant or its shareholders for monetary
damages for breach of fiduciary duty to the extent permitted by Colorado law.
The Colorado Business Corporation Act does not eliminate personal liability for
monetary damages for (i) any breach of the director's duty of loyalty to the
Registrant or its shareholders, (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) voting
for or assenting to a distribution in violation of Colorado law or the
Registrant's Articles of Incorporation, or (iv) any transaction from which the
director directly or indirectly derived an improper personal benefit.
The Registrant's Articles of Incorporation and Bylaws provide that the
Registrant shall indemnify its officers and directors to the extent permitted by
Colorado law, which authorizes a corporation to indemnify directors, officers,
employees or agents of the corporation in non-derivative suits if such party
acted in good faith and in a manner such party reasonably believed to be in or
not opposed to the best interest of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful. The Colorado Business Corporation Act further provides
that indemnification shall be provided if the party in question is wholly
successful, on the merits or otherwise.
There is no litigation pending, and neither the Registrant nor any of
its directors know of any threatened litigation, which might result in a claim
for indemnification by any director or officer.
Item 25. Other Expenses of Issuance and Distribution.
The estimated expenses of the offering, all of which are to be borne
by the Registrant, are as follows:
Total Registration Fee under Securities Act of 1933 $ 90.00
Printing and Engraving $10,000*
Accounting Fees and Expenses $10,000*
Legal Fees and Expenses $50,000*
Blue Sky Fees and Expenses (including related legal fees) $ 3,000*
Transfer Agent Fees $ 1,000*
Miscellaneous $ 6,000*
Total $80,100*
* Estimated
Item 26. Recent Sales of Unregistered Securities.
Since its inception, the Registrant has sold securities which were not
registered as follows:
Date Name No. of Shares Consideration
---- ---- ------------- -------------
(1) April 11, 1998 Corporate Management Services, Inc.* 1,000,000 Services valued at $500
(2) April 22, 1998 to 46 shareholders (listed under "Selling 5,000 each/ $50.00 each/
August 26, 1998 Security Holders") 230,000 total $2,300 total
(3) April 23, 2001 Jeffery P. Frazier 1,000,000 $10,000
(4) April 23, 2001 Terrie L. Pham 1,000,000 $10,000
(5) April 25, 2001 Gary J. Grieco 1,000,000 $10,000
(6) April 30, 2001 3 shareholders 100,000 each/ $1,000 each/
300,000 total $3,000 total
(7) June 7, 2001 Gary J. Grieco 250,000 $25,000
(8) June 7, 2001 Mallard Management Inc. 250,000 $25,000
(9) June 7, 2001 Harvey M. Burstein 250,000 $25,000
(10) June 28, 2001 The Hedge Fund, LLC 360,000 $90,000
* Mr. George Andrews, the sole officer and director of the Registrant until
April of 2001, is the sole director and a 50% shareholder of Corporate
Management Services, Inc. Mr. Andrews is also a selling security holder.
24
No underwriter or selling or placement agent was involved in any of
the transactions described above. The sales by the Registrant listed in lines
(1) and (2) were made pursuant to Section 4(2) of the Securities Act of 1933. 23
of the purchasers listed in lines (1) and (2) were "accredited investors" as
defined in Rule 501 of Regulation D and represented their status as such to the
Registrant in writing. The sales by the Registrant listed in lines (3) through
(10) were made pursuant to Section 4(2) and Rule 506 of Regulation D adopted
under the Securities Act of 1933. All of the purchasers listed in lines (3)
through (10) are "accredited investors" as defined in Rule 501 of Regulation D
and represented their status as such to the Registrant in writing.
All of the individuals and/or entities listed above that purchased the
unregistered securities were all known to the Registrant and its management
through pre-existing business or personal relationships, as long standing
business associates, friends, employees, relatives or members of the immediate
family of management or other shareholders. All purchasers were provided access
to the material information which they requested and all information necessary
to verify such information, and were afforded access to management of the
Registrant in connection with their purchases. All purchasers of the
unregistered securities acquired such securities for investment and not with a
view toward distribution, acknowledging such intent to the Registrant.
Item 27. Exhibits.
Reference is made to the Exhibit Index appearing on Page 29.
Item 28. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment thereto) which, individually
or the aggregate, represent a fundamental change in the information
set forth in this Registration Statement; and
(iii) to include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(4) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
25
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
26
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and has authorized this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Shawnee Mission, State of Kansas, on November 29,
2001.
VISTA EXPLORATION CORPORATION
By: /s/ Charles A. Ross
--------------------------------
Charles A. Ross, Sr.,
President
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
----------------------------- ---------------------- ----------------
/s/ Charles A. Ross Director November 29, 2001
-----------------------------
Charles A. Ross, Sr.
27
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
------------------
EXHIBITS
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933, AS AMENDED
VISTA EXPLORATION CORPORATION
-------------------------------------------
(Name of Company as specified in its charter)
28
VISTA EXPLORATION CORPORATION
FORM SB-2 REGISTRATION STATEMENT
EXHIBIT INDEX
The following exhibits are filed as part of Registrant's Registration
Statement on Form SB-2:
Exhibit
No. Description
------- -----------
3.1 Articles of Incorporation (incorporated by reference to Exhibit 2.1 to
Registrant's Registration Statement on Form 10-SB filed with the
Commission on September 13, 1999).
3.2 First Articles of Amendment to Articles of Incorporation (incorporated
by reference to Exhibit 3.1 of the Form 8-K filed August 16, 2001).
3.3 Bylaws (incorporated by reference to Exhibit 2.2 to Registrant's
Registration Statement on Form 10-SB filed with the Commission on
September 13, 1999).
3.4 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1
of the Form 8-K filed August 16, 2001).
5.1 Opinion of Ballard Spahr Andrews & Ingersoll, LLP*
10.1 Agreement for the Purchase of Common Stock dated as of February 27,
2001, and effective as of March 3, 2001, by and between Corporate
Management Services, Inc., Bail Corporation and Charles A. Ross, Sr.
(incorporated by reference herein to Exhibit 7.1 of the Form 8-K filed
March 9, 2001).
10.2 Mutual Release dated as of April 30, 2001, between Bail Corporation
and Corporate Management Services, Inc. (incorporated by reference
herein to Exhibit 10.2 of the Registrant's 10-KSB for the period ended
March 31, 2001).
10.3 Agreement dated June 22, 2001, between Bail Corporation, TCC Royalty
Corp. and Austin Exploration L.L.C. regarding Shiloh Project /
Cherokee Basin Coal Bed Methane (incorporated by reference herein to
Exhibit 10.3 of the Registrant's 10-KSB for the period ended March 31,
2001).
23.1 Consent of Cordovano & Harvey, P.C.**
23.2 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in Exhibit
5.1)*
----------------------------
* Previously filed.
** Filed herewith.
29