<PAGE> 2
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB
X ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE
-----
SECURITIES EXCHANGE ACT OF 1934
For Fiscal Year ended December 31, 1998
OR
TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
------
SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from ______ to ________.
Commission File Number 0-5833
OASIS OIL CORPORATION
----------------------
(Name of Small Business Issuer in its charter)
Issuer's Former Name: VIDA Medical Systems, Inc.
Nevada 94-1713830
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1800 St. James Place, Suite 101. Houston. Texas 77056
--------------------------------------------------------
(Address of principal executive offices)
Issuer's telephone number: (713) 627-8875
Securities registered under Section 12 (g) of the Act:
Title of each class Name of each exchange
on which registered
-------------------- --------------------
Common Stock, $0.05 Par Value None
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes
______ No ______
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
KSB or any amendment to this Form 10-KSB. [ X ]
<PAGE> 3
State issuer's revenues for its most recent fiscal year. $38,019,931
State the aggregate market value of the voting stock held by non-
affiliates computed by reference to the price at which the stock was sold, or
the average bid and asked prices of such stock, as of a specified date within
the past 60 days. Unknown. The issuer's voting stock has not been actively
traded since 1975. There is presently no known value for the issuer's voting
stock.
Documents Incorporated By Reference: None
Transitional Small Business Disclosure Format (check one):
Yes No X
---- ---
<PAGE> 4
<TABLE>
INDEX TO FORM 10-KSB
of
OASIS OIL CORPORATION
<S> <C> <C>
PAGE NO.
--------
PART I
Item 1. Description of Business 4
Item 2. Description of Property 6
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of
Security Holders 7
PART II
Item 5. Market for Common Equity and Related
Stockholder Matters 7
Item 6. Management's Discussion and Analysis
or Plan of Operation 8
Item 7. Financial Statements 10
Item 8. Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure 10
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance With Section
16(a) of the Exchange Act 11
Item 10. Executive Compensation 12
Item 11. Security Ownership of Certain Beneficial
Owners and Management 13
Item 12. Certain Relationships and Related Transactions 14
Item 13. Exhibits and Reports on Form 8-K 15
</TABLE>
<PAGE> 5
Forward Looking Statements
This form 10-KSB for the year ended December 31, 1998 as well as other
public documents of the Company contains forward-looking statements which
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievement of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward looking statements. Such statements
include, without limitation, the Company's expectations and estimates as to
future financial performance, cash flows from operations, capital expenditures
and the availability of funds from refinancings of indebtedness. Readers are
urged to consider statements which use the terms "believes", "intends",
"expect", "plans", "estimates", "anticipated", or "anticipates" to be uncertain
and forward looking. In addition to other factors that may be discussed in the
Company's filings with the Securities and Exchange Commission, including this
report, the following factors, among others, could cause the Company's actual
results to differ materially from those expressed in any forward looking
statement made by the Company: (i) general economic and business conditions,
acts of God and natural disasters which may effect the demand for the Company's
products and services or the ability of the Company to manufacture and/or
provide such products and services, (ii) the loss, insolvency or failure to pay
its debts by a significant customer or customers; (iii) increased competition,
(iv) changes in customer preferences and the inability of the Company to
develop and introduce new products to accommodate these changes; and (v) the
maturing of debt and the ability of the Company to raise capital to repay or
refinance such debt on favorable terms.
PART 1
Item 1. Description of Business
Business
Oasis Oil Corporation (the "Company"), formerly Vida Medical Systems,
Inc., is a Nevada corporation organized in 1955. The Company was principally
engaged in the service of gathering, transporting and marketing of domestic
crude oil through its wholly owned subsidiary, Oasis Transportation and
Marketing Corporation ("OTMC"). As a first purchaser of crude oil, the Company
offered a complete division order and royalty disbursement service to its
producer accounts.
Sale of OTMC
Effective March 31, 1999, the Company sold 100% of its ownership in OTMC,
representing the discontinuation of all of its existing operations. The
Company received $350,000 in cash and a note receivable for $1,500,000. The
note receivable has no stated interest rate, is due in monthly installments of
$45,000 as defined in the agreement and the installments are payable starting
in May 1999. All amounts that remain unpaid after 24 months are due April 30,
2001.
Crude Oil Marketing
OTMC purchased crude oil at the wellhead and provided transportation to
refiners and other customers. Crude oil acquired at the well head was
transported by truck, with activity primarily concentrated on properties
located in West Texas and Eastern New Mexico. Crude oil purchased at the
<PAGE> 6
wellhead averaged approximately 7630 barrels per day. As part of its crude oil
marketing business, OTMC operated 16 tractor-trailer rigs and maintained 6
pipeline injection stations, within the states of Texas and New Mexico.
Crude oil was generally purchased at field posted prices that fluctuated
with market conditions. The crude oil was transported and either sold outright
at the field level or OTMC entered into buy-sell arrangements (trades) in order
to minimize transportation or to maximize the sales prices. Except in certain
limited situations where back-to-back fixed price trades were in place, the
contract price was also pegged to a posted price that fluctuated with market
conditions, thus reducing OTMC's loss exposure from sudden changes in crude oil
prices. A key element of OTMC's profitability was the differential between
market prices at the field level and the various trade points. Such price
differentials would vary with local supply and demand conditions and unforeseen
fluctuations in price differentials impacted OTMC's financial results in either
a favorable or a unfavorable manner. While OTMC`s policies were designed to
minimize market risk, some degree of exposure to unforeseen fluctuations in
market conditions remained.
Tractor-Trailer Transportation
OTMC transported crude oil on a contractual basis in West Texas and New
Mexico. Transportation services were provided under short-term contracts.
OTMC operated 16 tractors and 16 tank trailers and also operated a truck
terminal in Odessa, Texas. It was situated on 9 acres and included maintenance
facilities, storage facilities and an office building.
Competition
In all phases of its operations, OTMC encountered strong competition from
a number of companies, including some very large companies. Many of these
larger competitors possess and employ financial and personnel resources
substantially in excess of those which were available to OTMC. OTMC faced
competition principally in pricing and in the quality of service. OTMC
competed with integrated oil companies that in some cases own or control a
majority of their own refining and marketing facilities. These major oil
companies may offer their products to others on more favorable terms than those
which were available to OTMC. OTMC was a minor competitor in all the
businesses in which it has operations.
Major Customers
The Company had sales to two customers that represented 61% and 32% of
total sales in 1998, respectively. At December 31, 1998, accounts receivable
from these customers totaled $1,087,983 and $959,009 respectively.
Employees
At December 31, 1998, the Company and OTMC employed 26 full-time persons,
18 of who were employed in the marketing and transportation operations of crude
oil and petroleum products, and 8 of whom were employed in administrative
capacities. There were no employees represented by any union organization.
Management believed its employee relations were satisfactory. Currently the
Company has three active employees.
<PAGE> 7
Environmental Compliance and Regulation
OTMC's tractor-trailer operations were conducted pursuant to authority of
the United States Department of Transportation and various State regulatory
authorities. OTMC's transportation operations were also conducted in
accordance with various laws relating to pollution and environmental control.
OTMC was subject to numerous federal, state and local environmental laws and
regulations, as well as associated permitting and licensing requirements. OTMC
regarded compliance with applicable environmental regulations as a critical
component of its overall operation, and devoted significant attention to
providing quality service and products to its customers, protecting the health
and safety of its employees, and protecting OTMC's facilities from damage.
Management believes OTMC had obtained or applied for all permits and approvals
required under existing environmental laws and regulations to operate its
current business. OTMC had, where appropriate, implemented operating
procedures and each of its facilities is designed to assure compliance with
environmental laws and regulations, given the nature of its business, OTMC
remains subject to environmental risks.
Item 2. Description of Property
The Company maintains its executive offices at 1800 St. James Place,
Suite 101, Houston, Texas 77056, where it leases approximately 5,100 square
feet of office space pursuant to a three year lease, which expires October,
1999, at a monthly rental of $4,561.
Beginning August 1, 1998, the Company sublet 2,157 square feet of its
office space located at 1800 St. James, Suite 101, in Houston, Texas. The
sublease calls for monthly rental payments of $1,898 plus a portion of
operating costs associated with the subleased area. The sublease's expiration
date coincides with the termination of the primary lease on October 31, 1999.
OTMC maintained its primary terminal facility where it leased 9 acres
that included a small frame office building and a metal truck maintenance
building large enough to garage and repair four tractor-trailer rigs at one
time. This facility was leased pursuant to a one year lease for $1,500 per
month, which expired June 1998, and was then operating on a month to month
basis until OTMC was sold in March 1999.
The Company believes that its facilities are adequate for its current and
reasonably foreseeable future needs, are adequately insured and are in good
operating condition.
Item 3. Legal Proceedings
In 1996, a major customer notified the Company that the Company delivered
an improper product into their pipeline that subsequently damaged their
refinery. The customer filed a lawsuit in the 347th Judicial District Court in
Nueces County, Texas asserting damages in the amount of $1,000,000. The
Company is covered by a general liability insurance policy that provides for
defense and indemnity for damages arising from negligence up to $1,000,000 per
occurrence and an aggregate amount of $2,000,000. The policy is subject to a
deductible of $10,000. The Company notified the insurance company of the event
described above and paid the deductible amount. Representatives of the
insurance company took charge of the defense of the case and in April 1999, the
case was settled for $700,000 paid by the insurance company. The Company's
total out-of-pocket cost was the $10,000 deductible.
<PAGE> 8
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were placed before the stockholders of the Company for
consideration.
PART II
Item 5. Market for Common Equity and Related Stockholder Matters
The Company's common stock is not currently traded on any public trading
market. The number of holders of record of the Company's common stock is
3,957.
Dividends
The Company has not paid and does not anticipate paying any dividends on
its Common Stock in the foreseeable future, but instead intends to retain all
working capital and earnings, if any, for use in the Company's business
operations, payment of dividends on preferred stock, and in the expansion of
its business.
Preferred Stock
On June 21, 1997, the Company authorized 150,000 shares of Series B
Preferred stock with a $1 par value as defined in the agreement. During the
year ended December 31, 1997, the Company issued 23,200 shares of Series B
Preferred stock for a total of $232,000 in cash in a private placement. The
Series B Preferred stock pays dividends at 14% per year and has certain
liquidation preferences. At the option of the Series B holders, the preferred
stock may be converted into the Company's common stock using a conversion rate
computed as the lesser of (a) the price at which the Company sells, issues or
agrees to issue common stock during the conversion period; or (b) $2.00 per
share. While outstanding, the preferred stock has voting privileges as if it
had been converted at the conversion price of $2.00 per share. In addition, at
any time subject to the conversion rights, the Company may redeem the Series B
shares at the face value plus accrued dividends. If the Company conducts a
registered public offering of its stock, it may require conversion of its
Series B preferred stock.
Common Stock
During 1998, the Company issued 1,000,000 shares of its common stock to a
shareholder in exchange for a note receivable.
In association with an oil purchase agreement, the Company issued 100,000
shares of its common stock during 1997 totaling $200,000. The agreement
specifies that the Company purchase 1,000,000 barrels of oil during a time
period of approximately one year. The Company recorded these charges as
prepaid expenses and is amortizing them as the purchase agreement is fulfilled.
As of December 31, 1997, the Company had purchased 277,484 barrels of oil
and accordingly, the Company has charged $55,497 to cost of sales leaving a
prepaid balance of $144,503 at December 31, 1997. During 1998, the Company
fulfilled its purchase obligation under the agreement and expensed the
remaining prepaid balance.
<PAGE> 9
Item 6. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
Since February 1996, The Company was principally engaged in the service
of gathering, transporting and marketing of domestic crude oil through its
wholly owned subsidiary, OTMC. As a first purchaser of crude oil, the Company
offered a complete division order and royalty disbursement service to its
producer accounts. During this period the Company sustained substantial
operating losses and effective March 31, 1999, the Company sold 100% of its
ownership in OTMC, representing the discontinuation of all of its existing
operations. Management believes the proceeds from the sale of OTMC is
sufficient to cover the overhead of the existing Company, and the credit
facility due November 6, 1999 will be renewed through the bank or paid through
private financing.
The Company's remaining three employees are currently exploring merger and
acquisition possibilities that will maximize shareholder value. Oasis will
continue to evaluate oil and natural gas ventures as well as pipeline
opportunities. The Company is also exploring areas outside the oil and natural
gas business. The present management believes that internet and high tech
companies may be a positive way to maximize shareholder value, and management
is currently looking into several opportunities.
Results of Operations
Revenue increased $20,778,939 (121%) in 1998 over 1997. The increase is
a result of increased transporting volume. At the beginning of 1998, OTMC was
transporting and marketing approximately 170,000 barrels of crude oil per month
in West Texas and Eastern New Mexico. By December 31, 1998, OTMC was
transporting and marketing approximately 258,000 barrels of crude oil per
month.
The Company's sales and purchase contracts are based upon the purchase
price of crude oil which reduces the effect of normal price fluctuations
because it is considered a widely traded commodity. The Company transports and
markets approximately 258,000 barrels of crude oil per month. Most of the
Company's expenses are fixed except for crude oil purchases and field expenses
(drivers payroll and fuel). These variable expenses are directly related to
the number of barrels transported. As a result, gross margin as a percentage
of sales was 1% in 1998 compared to 2% in 1997.
Selling expenses almost doubled in 1998 to $240,185 while general and
administrative expenses decreased from $726,684 in 1997 to $602,880 for the
same period in 1998. The increase in selling expenses was attributable to
hiring two new marketing personnel in late third quarter 1997 and increased
commission costs in 1998. The increase in general and administrative expenses
in 1998 was primarily due to the Company's move to west Texas along with due
diligence costs associated with potential acquisitions.
Liquidity and Capital Resources
As a result of the 1998 net loss of ($731,293), net cash used in
operating activities was ($84,178).
<PAGE> 10
During 1998, the Company purchased trucks and trailer rigs in the amount
of approximately $537,000 for their west Texas operations.
At December 31, 1998, the Company had a revolving line of credit facility
with a foreign bank. The credit agreement provides for a maximum borrowing
base of 70% of eligible receivables and is due on demand. The credit agreement
bears interest at prime plus 2% (9.75% at December 31, 1998). The line of
credit is collateralized by substantially all the Company's assets. Borrowings
under this agreement at December 31, 1998 were $100,000. The Company was also
contingently liable for $3,205,000 in letters of credit outstanding at December
31, 1998. As of May 21, 1999, the Company had no letters of credit
outstanding.
At December 31, 1998, the Company had a revolving line of credit facility
with a bank. The credit agreement provides for maximum borrowings of $500,000
and is due November 6, 1999. The credit agreement bears interest at prime plus
one percent (8.75% at December 31, 1998), and is guaranteed by directors of the
Company. Borrowings under this agreement at December 31, 1998 were $400,000.
The Company plans to renew the Credit Facility on November 6, 1999, or if they
cannot renew with the Bank, they will seek private financing.
In July 1998, the Company entered into a revolving line of credit with a
bank. The credit agreement provided for maximum borrowings of $250,000. The
credit agreement was due January 1999 or on demand. The Company borrowed the
maximum loan amount in July 1998 and repaid the full amount in November 1998.
The Company had notes payable to various financing companies for the
purchase of transportation equipment totaling $997,990. The notes were
collateralized by certain transportation equipment. The notes bore interest at
rates ranging from 2.9% to 11.5% and required monthly installments totaling
$25,911. Subsequent to year-end, these notes were assigned in connection with
the sale of OTMC. Accordingly, these notes are classified as current on the
accompanying consolidated balance sheet.
At December 31, 1997, the Company had an installment loan due to the
Estate of Edgar Monroe, which estate is administered by Mr. Robert Monroe, who
was a member of the Board of Directors. The amount due under the loan at
December 31, 1997 was $445,779. During 1998, this loan was repaid with the
proceeds of a note payable to a finance company.
New Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 133, "Accounting for Derivative
Instruments and Hedging Activities", ("SFAS 133"). This statement standardizes
the accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, by requiring that an entity recognize
those items as assets or liabilities in the statement of financial position and
measure them at fair value. The statement generally provides for matching the
timing of gain or loss recognition on the hedging instrument with the
recognition of (a) the changes in fair value of hedged assets or liabilities
that are attributable to the hedged risk or (b) the earnings effect of the
hedged forecasted transaction. The statement is effective for all fiscal
quarters for all fiscal years beginning after June 15, 1999, with early
application encouraged, and shall not be applied retroactively to financial
statements of prior periods. Adoption of SFAS 133 is expected to have no
effect on the Company's financial statements.
<PAGE> 11
Year 2000
The Company's internal business information systems are primarily comprised of
commercial application software products offered by recognized providers.
Because these provider's products are widely distributed, commercially
developed applications, the Company anticipates these applications have been or
will be brought into compliance by the manufactures. On January 1, 1999, the
Company began using its new accounting and financial reporting software
implemented during 1998. The reasons for such purchase included the assurance
of Year 2000 compliance. Costs incurred specifically related to Year 2000
issues have totaled less than $2,000 as of December 1998.
The Company does not anticipate any Year 2000 compliance issues to arise
related to its primary internal business information systems. The Company is
not aware of any further material operational issues or costs associated with
preparing internal systems for the Year 2000. However, the Company utilizes
other third party network equipment, telecommunications products, and other
third party software products that may or may not be Year 2000 compliant.
Although the Company is currently taking steps to address the impact, if any,
of the Year 2000 issue surrounding such third party products, failure of any
critical technology to operate properly in the Year 2000 may have an adverse
impact on business operations or financial results.
The Company can not anticipate the impact of Year 2000 compliance on its
clients at this time. The Company is unaware of any client who may be impacted
by the Year 2000 issue. A failure of a client to appropriately handle issues
related to the Year 2000 might have an adverse impact on the financial results
of the Company.
<PAGE> 12
Item 7. Financial Statements
The financial statements filed as part of this report include:
<TABLE>
INDEX TO FINANCIAL STATEMENTS
<S> <C>
PAGE
Oasis Oil Corporation Consolidated Financial Statements:
Report of Independent Certified Public Accountants F-2
Consolidated Financial Statements:
As of December 31, 1998 Balance Sheet F-3
For the Years Ended December 31, 1998 and 1997
Statements of Discontinued Operations F-4
Statements of Stockholders' Equity (Deficit) F-5
Statements of Cash Flows F-6
Notes to Financial Statements............................ F-7 - F-13
</TABLE>
<PAGE> 13
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders of
Oasis Oil Corporation
We have audited the consolidated balance sheet of Oasis Oil Corporation as of
December 31, 1998, and the related consolidated statements of discontinued
operations, stockholders' equity (deficit) and cash flows for the years ended
December 31, 1998 and 1997. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Oasis Oil
Corporation as of December 31, 1998, and the results of its operations and
its cash flows for the years ended December 31, 1998 and 1997 in conformity
with generally accepted accounting principles.
As more fully described in Note 1 to the consolidated financial statements, the
Company sold 100% of its ownership in its only operating subsidiary effective
March 31, 1999, representing the discontinuation of all of its existing
operations.
BDO Seidman, LLP
Houston, Texas
May 21, 1999
<PAGE> 14
OASIS OIL CORPORATION
CONSOLIDATED BALANCE SHEET
December 31, 1998
<TABLE>
<S> <C>
Assets (Note 5)
Current Assets:
Cash $ 377,261
Accounts receivable - trade (Note 9) 2,139,627
Inventories 21,536
Prepaid expenses 28,307
-----------
Total Current Assets 2,566,731
Property, equipment and leasehold improvements,
net (Note 4) 1,211,851
Goodwill, less accumulated amortization of $42,600
176,484
-----------
$ 3,955,066
===========
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Notes payable (Note 5) $ 1,497,990
Accounts payable (Note 6) 2,258,874
Accrued expenses 375,852
Accrued dividends on preferred stock 148,395
Related party debt (Note 6) 150,000
-----------
Total Liabilities 4,431,111
Commitments (Note 10)
Stockholders' Equity (Deficit):
Preferred stock, $1 par value,
150,000 shares authorized; (Note 7) 636,940
Common stock, $.05 par value,
50,000,000 shares authorized (Note 7) 357,500
Additional paid-in capital 2,327,669
Deficit (1,798,154)
Receivable from stockholder (2,000,000)
----------
Total Stockholders' Equity (Deficit) (476,045)
----------
$ 3,955,066
===========
</TABLE>
<PAGE> 15
OASIS OIL CORPORATION
CONSOLIDATED STATEMENTS OF DISCONTINUED OPERATIONS
For the Years ended December 31, 1998 and 1997
<TABLE>
<S> <C> <C>
1998 1997
---- ----
Sales (Note 9) $ 38,019,931 $ 17,240,992
Cost of sales 37,824,573 16,952,246
------------ ------------
Gross margin 195,358 288,746
Operating expenses
Selling 240,185 120,489
General and administrative 602,880 726,684
------------ ------------
Total operating expenses 843,065 847,173
------------ ------------
Net operating loss (647,707) (558,427)
------------ ------------
Other income (expense)
Interest income 87 536
Interest expense (87,551) (60,416)
Loss on sale of fixed assets (623) (554)
Other 4,501 2,045
----------- -----------
Total other expense, net (83,586) (58,389)
----------- -----------
Net loss $ (731,293) $ (616,816)
=========== ===========
Net loss per common share (Note 2):
Net loss per common share - basic and
dilutive $ (.13) $ (.11)
Weighted average number of common
shares outstanding 6,483,333 6,040,274
</TABLE>
<PAGE> 16
OASIS OIL CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For The Years Ended December 31, 1998 and 1997
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additional Receivable
Preferred Stock Common Stock Paid-in From
Shares Amount Shares Amount Capital Deficit Stockholder Total
------- ------ ------ ------ --------- ------- ----------- -----
Balance,
December 31, 1996 40,494 $ 404,940 6,000,000 $ 300,000 $ 85,169 $ (301,650) $ - $ 488,459
Issued shares of
preferred stock in
a private placement 23,200 232,000 - - - - - 232,000
Stock issued for
services - - 50,000 2,500 97,500 - - 100,000
Stock issued under
an oil purchase
agreement - - 100,000 5,000 195,000 - - 200,000
Accrued preferred
stock dividends - - - - - (59,225) - (59,225)
Net loss - - - - - (616,816) - (616,816)
Balance,
December 31, 1997 63,694 636,940 6,150,000 307,500 377,669 (977,691) - 344,418
Stock issued to an
employee - - 1,000,000 50,000 1,950,000 - (2,000,000) (2,000,000) -
Accrued preferred
stock dividend - - - - - (89,170) - (89,170)
Net loss - - - - - (731,293) - (731,293)
Balance,
December 31, 1998 63,694 $ 636,940 7,150,000 $ 357,500 $ 2,327,669 $ (1,798,154)$(2,000,000)$ (476,045)
</TABLE>
<PAGE> 17
OASIS OIL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
For The Years Ended December 31, 1998 and 1997
Increase (decrease) in cash
<TABLE>
<S> <C> <C>
1998 1997
---- ----
Cash flows from operating activities:
Net loss $ (731,293) $ (616,816)
Adjustments to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 248,510 210,617
Stock issued for services - 100,000
Loss on sale of assets 623 554
Changes in assets and liabilities:
Accounts receivable (211,348) (405,915)
Inventories (10,624) 21,894
Prepaid expenses 147,213 27,922
Accounts payable and accrued expenses 472,741 617,772
---------- ---------
Net cash used in operating activities (84,178) (43,972)
---------- ---------
Cash flows from investing activities:
Purchases of fixed assets (537,528) (533,004)
Proceeds from sale of fixed assets 5,500 53,160
---------- ---------
Net cash used in investing activities (532,028) (479,844)
---------- ---------
Cash flows from financing activities:
Net borrowings (repayments) on line of credit 300,000 (250,000)
Proceeds from issuance of preferred stock - 232,000
Proceeds from related party debt 150,000 500,000
Proceeds from long-term debt 827,993 468,763
Payments on related party debt (444,264) (54,221)
Payments on long-term debt (134,042) (212,991)
---------- ---------
Net cash provided by financing activities 699,687 683,551
---------- ---------
Net increase in cash 83,481 159,735
Cash, beginning of year 293,780 134,045
---------- ---------
Cash, end of year $ 377,261 $ 293,780
========== =========
</TABLE>
See Note 11 for Supplemental Cash Flow Information.
<PAGE> 18
NOTE 1 - ORGANIZATION, BUSINESS AND DISCONTINUED OPERATIONS
Business
Oasis Oil Corporation (the "Company"), formerly Vida Medical Systems, Inc.
is a Nevada corporation organized in 1955. The Company, through its
wholly-owned subsidiary Oasis Transportation and Marketing
Corporation (OTMC), is principally engaged in the service of gathering,
transportation and marketing of domestic crude oil. As a first purchaser of
crude oil, the Company also offers a division order and royalty disbursement
service to its customers. OTMC, formerly Acacia Crude Corporation, was
incorporated in the State of Nevada on September 10, 1992.
Effective March 31, 1999, the Company sold 100% of its ownership in OTMC,
representing the discontinuation of all of its existing operations. The
Company received $350,000 in cash and a note receivable for $1,500,000 and
recognized a gain from the sale of approximately $1,700,000
during the first quarter of 2000. The note receivable has no stated interest
rate, is due in monthly installments of varying amounts as defined in
the agreement and the installments are payable starting in May 1999. All
amounts that remain unpaid after 24
months are due April 30, 2001.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
Financial Instruments and Credit Risk Concentration
The Company's financial instruments include accounts receivable, accounts
payable, accrued expenses, related party debt and notes payable. The
carrying value of these instruments approximate market values because
the rates of return and borrowing rates are similar to other financial
instruments with similar maturities and terms. Financial instruments which
potentially subject the Company to concentrations of credit risk consist
primarily of trade accounts receivable. Concentrations of credit risk with
respect to such receivables are limited due to generally short payment terms
(approximately 30 days), the nature of the industry and the size of the
companies (usually Fortune 500 companies or their subsidiaries). See Note 9
for major customers.
At December 31, 1998, the Company had cash deposits in a financial
institution that exceeded the federally insured deposit limit by $246,486.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary (OTMC). All significant intercompany
accounts and transactions have been eliminated.
Inventories
Inventories consist of crude oil and are valued at the current market
price. Market price is determined based on an average monthly quoted price
established by crude oil traders who take into consideration such factors
as the supply and demand of crude oil. Actual cost is not materially different
from market.
<PAGE> 19
Property, Equipment and Leasehold Improvements
Property, equipment and leasehold improvements are stated at cost.
Depreciation and amortization is provided using the straight-line method
over the estimated useful lives of the assets ranging from 3 to 15 years.
For income tax purposes, depreciation is calculated using accelerated methods.
Goodwill
Goodwill is amortized using the straight-line method over fifteen years.
On a periodic basis, the Company estimates the future undiscounted cash
flows of the business to which goodwill relates in order to
determine whether there has been any impairment of goodwill.
Revenue Recognition
Sales are recorded in the periods that crude oil is delivered.
Income Taxes
Deferred income taxes result from the temporary differences between the
financial statement and income tax basis of assets and liabilities. The
Company adjusts the deferred tax asset valuation allowance based on
judgments as to future realization of the deferred tax benefits supported by
demonstrated trends in the Company's operating results. There were no
deferred income taxes recorded at December 31, 1998 (see Note 8).
Loss Per Common Share
The Company provides basic and dilutive earnings (loss) per common share
information for each year presented. The basic net loss per common share is
computed by dividing the net loss, plus the dividends on preferred stock, by
the weighted average number of common shares outstanding. Preferred stock
dividends include dividends stated in the respective certificate of
designation. For the years ended December 31, 1998 and
1997, net loss applicable to common stockholders is as follows:
<TABLE>
<S> <C> <C>
1998 1997
------ -----
Net loss $ (731,293) $ (616,816)
Dividends on preferred stock (89,170) (59,225)
---------- ----------
Net loss applicable to common stockholders $ (820,463) $ (676,041)
========== ==========
</TABLE>
Diluted net income (loss) per common share is computed by dividing the net
income (loss) available to common shareholders, adjusted on an as if
converted basis, by the weighted average number of common shares
outstanding plus potential dilutive securities. For the years ended December
31, 1998 and 1997, potential dilutive securities, which included warrants to
purchase 1,500,000 shares of the Company's common stock, had an anti-
dilutive effect and were not included in the calculation of diluted net loss
per common share.
<PAGE> 20
Management's Estimates and Assumptions
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. The Company reviews all significant estimates
affecting the financial statements on a recurring basis and records the
effect of any necessary adjustments prior to their issuance.
Analysis for Impairment
Management reviews long-lived assets for impairment whenever events or
changes in circumstances indicates the carrying amount of an asset may not be
fully recoverable.
New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 133, "Accounting for Derivative Instruments
and Hedging Activities" ("SFAS 133"). This statement standardizes the
accounting for derivative instruments, including certain derivative
instruments embedded in other contracts, by requiring that an entity
recognize those items as assets or liabilities in the statement of financial
position and measure them at fair value. The statement generally provides for
matching the timing of gain or loss recognition on the hedging instrument
with the recognition of (a) the changes in fair value of hedged asset or
liabilities that are attributable to the hedged risk or (b) the earnings
effect of the hedged forecasted transaction. The statement is effective for
all fiscal quarters for all fiscal years beginning after June
15, 1999, with early application encouraged, and shall not be applied
retroactively to financial statements of prior periods. Adoption of SFAS 133
is expected to have no effect on the Company's financial statements.
NOTE 3 - FINANCIAL CONDITION
The Company sustained substantial operating losses in the past and the
future economic viability of the Company was dependent upon management
achieving certain strategic alliances and acquisitions. Effective
March 31, 1999, the Company sold 100% of its ownership in OTMC. As a result,
the Company believes it has sufficient cash on hand to sustain its current
level of business activity for at least the foreseeable future. In the
meantime, management is pursuing acquisition alternatives.
<PAGE> 21
NOTE 4 - PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Property, equipment and leasehold improvements consisted of the following
at December 31, 1998:
<TABLE>
<S> <C>
Amount
Transportation equipment $ 1,109,663
Oil field equipment 333,294
Automobiles 89,132
Furniture and fixtures 46,968
Shop equipment 34,217
Computer equipment and software 23,738
Leasehold improvements 7,225
-----------
1,644,237
Less: Accumulated depreciation and amortization 432,386
-----------
$ 1,211,851
</TABLE>
NOTE 5 - NOTES PAYABLE
At December 31, 1998, the Company had a revolving line of credit facility
with a foreign bank which is due on demand. The credit agreement provides
for a maximum borrowing base of 70% of eligible receivables.
The credit agreement bears interest at prime plus two percent (9.75% at
December 31, 1998), and is collateralized by substantially all of the
Company's assets. Borrowings under this agreement at December 31,
1998 were $100,000. The Company was also contingently liable for $3,205,000
in letters of credit outstanding at December 31, 1998. As of May 21, 1999,
the Company had no letters of credit outstanding.
At December 31, 1998, the Company had a revolving line of credit facility
with a bank. The credit agreement provides for maximum borrowings of
$500,000 and is due November 6, 1999. The credit agreement bears interest at
prime plus one percent (8.75% at December 31, 1998), and is guaranteed by
directors of the Company. Borrowings under this agreement at December 31,
1998 were $400,000.
In July 1998, the Company entered into a revolving line of credit facility
with a bank. The credit agreement provided for maximum borrowings of
$250,000. The credit agreement was due in January 1999 or on
demand. The Company borrowed the maximum loan amount in July 1998 and repaid
the full amount in November 1998.
The Company had notes payable to various financing companies for the
purchase of transportation equipment totaling $997,990 at December 31, 1998.
The notes were collateralized by certain transportation
equipment. The notes bore interest at rates ranging from 2.9% to 11.5% and
required monthly installments totaling $25,911. Subsequent to year end,
these notes were assigned in connection with the sale of OTMC (see
Note 1). Accordingly these notes are classified as current on the
accompanying consolidated balance sheet.
<PAGE> 22
NOTE 6 - RELATED PARTY TRANSACTIONS
In August 1998, the Company entered into an agreement with an employee,
who is also a shareholder and director of the Company, to purchase the
employee's rights to serve as the general contractor under a pipeline
construction contract. The Company exchanged 1,000,000 shares of the Company's
common stock, warrants for 1,500,000 additional shares of the Company's
common stock and a $50,000 promissory note for these exclusive
rights. The promissory note has no stated interest and, as amended, is due
February 28, 2000.
Under the terms of the contract, the contractor will construct a thirty-
six mile natural gas pipeline for a natural gas association in west Texas
for approximately $9,000,000. The construction project is to begin when
instructed by the natural gas association. Under the terms of the Company's
contract with the employee, as amended, if the construction project has not
begun by February 28, 2000, the promissory note is cancelled and the
employee is required to pay the Company $2,000,000 as consideration for the
1,000,000 shares of common stock issued.
The Company has recorded the estimated $2,000,000 value of the shares paid
to the employee as a receivable from stockholder and classified the
receivable as a component of equity on the accompanying
consolidated balance sheet.
In September 1998, the Company borrowed $30,000 from five shareholders
totaling $150,000. The notes bear interest at 12% and are due on demand.
Interest expense during 1998 related to these notes was $11,648, which
remained unpaid at December 31, 1998.
During the year December 31, 1998, the Company incurred approximately
$47,000 in legal expenses to a law firm that has a partner in the law firm
that is also a stockholder and a director of the Company. At
December 31, 1998 the entire amount remained unpaid.
At December 31, 1997, the Company had an installment loan to a related
party. The amount due under the loan at December 31, 1997 was $445,779.
During 1998, this loan was repaid with the proceeds of a note
payable to a financing company.
NOTE 7 - STOCKHOLDERS EQUITY
Preferred Stock
On June 21, 1997, the Company authorized 150,000 shares of Series B
Preferred stock with a $1 par value as defined in the agreement. During the
year December 31, 1997, the Company issued 23,200 shares of Series B
Preferred stock for a total of $232,000 in cash in a private placement.
The Series B Preferred stock pay dividends at 14% per year. At the option of
the Series B holders, the preferred stock may be converted into the
Company's common stock using a conversion rate computed as the lesser of (a)
the price at which the Company sells, issues or agrees to issue common stock
during the conversion period; or (b) $2.00 per share. While
outstanding, the preferred stock has voting privileges as if it had been
converted. In addition, at any time subject to the conversion rights, the
Company may redeem the Series B shares at the face value plus accrued dividends.
<PAGE> 23
Common Stock
During 1998, the Company issued 1,000,000 shares of its common stock to a
shareholder in exchange for a note receivable. In association with an oil
purchase agreement, the Company issued 100,000 shares of its common stock
during 1997 with a value of $200,000. The agreement specifies that the Company
purchase 1,000,000 barrels of oil during a time period of approximately one
year. The Company recorded these charges as prepaid expenses
and is amortizing them as the purchase agreement is fulfilled. As of December
31, 1997, the Company had purchased 277,484 barrels of oil and accordingly,
the Company has charged $55,497 to cost of sales leaving a prepaid balance
of $144,503 at December 31, 1997. During 1998, the Company fulfilled its
purchase obligation under the agreement and expensed the remaining prepaid
balance.
Stock Warrants
In August 1998, the Company issued 1,500,000 warrants to an employee for
his role in arranging a construction contract for the Company. The warrants
may be exercised at any time through August 2008 for 1,500,000 shares of the
Company's common stock at the exercise price of $2.00 per share.
The Company accounted for the warrants in accordance with Statement of
Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). As the exercise price equaled the
market price per share at the date the warrants were issued, no compensation
was recorded. SFAS 123 requires the Company to provide pro forma information
regarding net loss applicable to common stockholders and loss per
share as if the compensation cost for the Company's stock warrants had been
determined in accordance with the fair value based method prescribed in
SFAS 123. The Company estimates the fair value of each stock warrant at
the grant date using the Black-Scholes model with the following weighted-
average assumptions as follows:
<TABLE>
<S> <C>
Dividend yield 0%
Expected volatility 0%
Risk free interest 5.20%
Expected lives 10 years
</TABLE>
Under the accounting provisions of SFAS 123, the Company's net loss
applicable to common stockholders and loss per share would have been
increased to the pro forma amounts indicated below:
<PAGE> 24
<TABLE>
<S> <C>
Amount
-------
Net loss applicable to common stockholders
As reported $ (731,293)
==========
Pro forma (1,681,145)
----------
Loss per share
As reported $ (0.13)
=======
Pro forma $ (0.26)
=======
</TABLE>
NOTE 8 - INCOME TAX
Deferred income taxes are determined based on the temporary differences
between the financial statement and income tax basis of assets and
liabilities as measured by the enacted tax rates which will be in effect
when these differences reverse. Net deferred income tax asset consisted of
the following at December 31, 1998:
<TABLE>
<S> <C>
Amount
---------
Net operating loss carryforwards $ 604,000
Fixed asset basis difference (234,000)
---------
Gross deferred tax asset 370,000
Valuation allowance (370,000)
---------
Net deferred tax asset $ -
=========
</TABLE>
At December 31, 1998, the Company had a net operating loss carryforward of
approximately $1,776,000 to offset future years' taxable income through
expiration dates as defined by the Internal Revenue Service not to extend
beyond 2018.
NOTE 9 - MAJOR CUSTOMERS
The Company had sales to two customers that represented 61% and 32% of
total sales in 1998, respectively. At December 31, 1998, accounts receivable
from these customers totaled $1,087,983 and $959,009, respectively.
<PAGE> 25
The Company had sales to three customers that represented 27%, 22%, and
20% of total sales in 1997, respectively. At December 31, 1997, accounts
receivable from one of these customers totaled $1,928,279. The
other two customers had no significant receivable balances at December 31, 1997.
NOTE 10 - COMMITMENTS
The Company leases office and warehouse space, a terminaling facility and
certain equipment under noncancellable operating leases for period extending
through October 31, 1999 totaling approximately $55,000. The Company did
sublease a portion of their office space which could reduce the Company's
total lease commitment by approximately $10,000.
NOTE 11 - SUPPLEMENTAL CASH FLOW INFORMATION
For the years ended December 31, 1998 and 1997, the Company paid interest
of $107,462 and $59,900, respectively.
For the years ended December 31, 1998 and 1997, the Company accrued
cumulative preferred stock dividends totaling $89,170 and $59,255, respectively.
During 1998, the Company issued common stock in exchange for a note
receivable from a stockholder totaling $2,000,000.
The Company issued common stock for $200,000 relating to an oil purchase
agreement (see Note 7).
<PAGE> 26
Item 8. Change In and Disagreement With Accountants on Accounting and
Financial Disclosures
None.
PART III
Item 9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act
The persons who were serving as Directors and executive officers of the
Company and the positions they hold with the Company are as follows:
<TABLE>
<S> <C> <C> <C>
EXECUTIVE OFFICERS
------------------
Name Age Position Since
- ----- --- -------- -----
C. A. Beane 62 President and CEO 1996
Susan Penticoff 42 Treasurer and Assistant Secretary 1996
James Hagan 64 Secretary 1980
DIRECTORS
---------
Director of Other Directorships of
Director Age Company Since Publically-Held Companies
- -------- --- ------------- -------------------------
C. A. Beane 62 1996 None
Bruce Withers 73 1996 None
Maurice Duncan 70 1997 None
Robert Monroe 64 1996 None
Dale Hill 58 1998 None
Carl Pfeiffer 69 1996 Quanex Corporation
James Hagan 64 1980 None
</TABLE>
Management Biographies
Brief biographies of the Directors and executive officers of the
Company are set forth below. All Directors hold office until their
resignation, retirement, removal, disqualification, death or until their
successors have been elected, qualified, and take office. Vacancies in the
existing Board of Directors are filled by majority vote of the remaining
Directors. Officers of the Company serve at the will of the Board of
Directors.
C. Arlie Beane. Mr. Beane, age 62, is President and CEO of the Company. He
was the President and Director of Acacia Crude Corporation, now OTMC.
Previously Mr. Beane was Chairman of Eureka International Trading Corporation
<PAGE> 27
and Eureka Production Corporation. He was the managing Director of Arosco,
Ltd., and the Chairman and CEO of Peten Petroleum Corporation. He is the
holder of approximately fifteen percent of the Company's outstanding shares.
Mr. Beane's career has been directed to international trade and the oil and
gas industry.
Bruce Withers. Mr. Withers, age 73, is also on the Board of Allstar Gas
Corporation, in Missouri. Previous to joining Oasis, Mr. Withers was Co-
Chairman of Natural Gas Clearinghouse (NGC) and Trident, a large natural gas
and natural gas liquids company traded on the New York Stock Exchange.
Previous to his involvement with NGC and Trident, Mr. Withers was President
of Mitchell Energy Gas Division.
Carl Pfeiffer. Mr. Pfeiffer, age 69, was on the Board of Acacia Crude
Corporation, now OTMC. Mr. Pfeiffer is presently Chairman Emeritus of Quanex
Corporation, a metals company listed on the New York Stock Exchange, and is a
member of the Board of Directors of Quanex. Previously Mr. Pfeiffer was
Chairman of Quanex.
Robert Monroe. Mr. Monroe, age 64, is a Director of RTL Corporation, a
privately-held construction and equipment services company. Previously Mr.
Monroe has been a Director of more than 20 corporations, both public and
private. Mr. Monroe has extensive experience in the international marine and
aviation transportation business and the investment banking industry.
Dale Hill. Mr. Hill, age 58, has more than thirty five years experience in
all aspects of the oil and gas industry. He entered the field in South Texas
in 1962 and worked through rig and field operations to executive company
management positions. His experience in the industry includes management of
independent oil companies, refining, pipeline construction, exploration,
production, acquisitions, mergers and financial restructuring of energy
companies.
James Hagan. Mr. Hagan, age 64, is an attorney licensed to practice law in
the State of California. He is a partner in Hagan, Saca & Hagan Law
Corporation, of San Francisco, and Palo Alto, California. For the past
thirty years, Mr. Hagan has been engaged in the practice of law in
California.
Maurice Duncan. Mr. Duncan, age 70, is presently a director of the Company.
He is a retired partner of KPMG Peat Marwick, LLP. He was formerly the
managing partner of the Tulsa Office of KMG Main Hurdman before it merged
with Peat Marwick. He is a graduate of the University of Oklahoma and
attended graduate school at the University of Tulsa. He is a past president
of the Tulsa Executives Association and has served on its Board of Directors.
Susan L. Penticoff. Ms. Penticoff, age 42, was previously employed by Acacia
Crude Corporation. She currently serves as Treasurer and Assistant Secretary.
She has actively worked in the oil and gas industry since 1982.
Family Relationships
There are no family relationships among Directors, executive officers,
or other persons employed by the Company.
<PAGE> 28
Attendance of Meetings of the Board of Directors
During 1998, the Company's Board of Directors held eight meetings,
which were attended by a majority of directors then in office.
Item 10. Executive Compensation
All out of pocket business expenses are paid through a corporate credit
card or reimbursed. Officers that are employees of the Company, are
reimbursed for their family health insurance premiums provided by the
Company. No other fringe benefits are associated with officers and
Directors.
The following discloses all compensation awarded to, earned by, or paid to
the named officers and Directors for the year ending 1998.
<TABLE>
<S> <C> <C>
Annual Compensation
Name and Position Year Salary
C. A. Beane, President and CEO 1996 $ 71,000
1997 81,200
1998 141,750
</TABLE>
Stock Option Plan
The Company adopted the 1996 Stock Option Plan as of November 1, 1996.
This plan was not presented to or approved by shareholders within one year
and so lapsed. The Company adopted a 1998 stock option plan as of July 3,
1998. This plan was not presented to or approved by shareholders within one
year and so lapsed. There are no outstanding stock options. Dale Hill has a
warrant to purchase up to 1,500,000 shares of the Company's common stock at
$2.00 per share.
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of December 31, 1998, certain
information with regard to beneficial ownership of outstanding shares of the
Company's common stock by (i) each person known by the company to
beneficially own five percent or more of the outstanding shares of the
Company's common stock; (ii) each Director individually; and (iii) all
executive officers and Directors of the Company as a group.
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C>
Name and Address of Amount and Nature of Amount and Nature
Beneficial Owner Common Beneficial of Series B Preferred
Ownership (1) % Stock Ownership %
Beneficial Holders
W. Guerry Bangert 516,016 8.4%
146 Sugarberry Circle
Houston, TX 77024
Gupco Finanzaria, S.A. 678,516 11.0%
c/o Heinrich Kohler
Favona S. A. Societe
Fid 15-17,
Rue de la Cite BP 452
1211 Geneve 11, Switzerland
Neil Lande (former director) 20,065 directly 12.4%
4265 San Felipe, Suite 230 19,440 trustee
Houston, Texas 77027
Kestral Establishment 22,745 7.1%
Pflugstrasse 20
9490 Vaduz
Liechtenstein
Officers and Directors
C. A. Beane (2) 737,290 12.0% 18,245 5.7%
9145 Briar Forest
Houston, TX 77024
Dale Hill (3)(6) 2,500,000 14.0% -- --
5212 Valley Springs Way
El Paso, TX 79932
Maurice Duncan (3) 528,516 8.6% 65,750 20.6%
4325 East 87th Street
Tulsa, OK 74137
James R. Hagan (2) 215,063 * 12,500 --
1585 Madrono Avenue
Palo Alto, CA 94306
Boland Machine and 495,484 8.0% 12,500 --
Manufacturing Co. Inc. (3)(5)
288 St. Charles Avenue
New Orleans, LA 70130
Susan L. Penticoff (4) 49,548 * -- --
11802 Basilica
Houston, TX 77099
<PAGE> 30
Carl Pfeiffer (3) 214,710 * 52,005 16.3%
2112 Fulham Court
Houston, TX 77063
Bruce Withers (3) 103,226 * 12,500 --
2915 Summersweet Place
The Woodlands, TX 77380
All Executive Officers 3,343,837 46.8% 173,500 54.3%
and Directors as a group
(8 persons)
</TABLE>
* Less than 5%.
(1) Unless otherwise noted, the Company believes that all persons named
in the table have sole voting and dispositive power with respect to
all securities owned by them.
(2) Officer and Director
(3) Director
(4) Officer
(5) The shares owned by Boland Machine & Manufacturing Co., Inc. are
voted by Mr. Robert J. Monroe, a director of the Company.
(6) Includes warrant to purchase 1,500,000 shares of the Company's
common stock as described in item 12.
Item 12. Certain Relationships and Related Transactions
At December 31, 1997, the Company had an installment loan due to the
Estate of Edgar Monroe, which estate is administered by Mr. Robert Monroe,
a member of the Board of Directors. The amount due under the loan at
December 31, 1997 was $445,779. During 1998, this loan was repaid with the
proceeds of a note payable to a finance company.
In August 1998, the Company entered into an agreement with Dale Hill,
who is also a shareholder and director of the Company, to purchase the
employee's rights to serve as the general contractor under a pipeline
construction contract. The Company exchanged 1,000,000 shares of the
Company's common stock, warrants for 1,500,000 additional shares of the
Company's common stock and a $50,000 promissory note for these exclusive
rights. The promissory note has no stated interest and, as amended, is due
February 28, 2000.
Under the terms of the contract, the contractor will construct a
thirty-six mile natural gas pipeline for a natural gas association in west
Texas for approximately $9,000,000. The construction project is to begin
when instructed by the natural gas association. Under the terms of the
Company's contract with the employee, as amended, if the construction
project has not begun by February 28, 2000, the promissory note is
cancelled and the employee is required to pay the Company $2,000,000 as
consideration for the 1,000,000 shares of common stock issued.
Due to the employee's contingent liability to the Company under the
contract, the Company has recorded the estimated $2,000,000 value of the
shares paid to the employee as a receivable from stockholder and classified
the receivable as a component of equity on the accompanying consolidated
balance sheet.
<PAGE> 31
In September 1998, the Company borrowed $30,000 from five
shareholders (C.A. Beane, Bruce Withers, Carl Pfeiffer, Maurice Duncan and
James Hagen) totaling $150,000. The notes bear interest at 12% and are due
on demand. Interest expense during 1998 related to these notes was
$11,648, which remained unpaid at December 31, 1998.
During the year December 31, 1998, the Company incurred approximately
$47,000 in legal expenses to a law firm that has a partner in the law firm,
Mr. James R. Hagan, that is also a stockholder and a director of the
Company. At December 31, 1998 the entire amount remains unpaid.
Item 13. Exhibits and Reports on Form 8-K
(a.) Exhibits
None.
(b) Reports on Form 8-K
NONE
<PAGE> 32
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed
on its behalf by the undersigned, thereunto duly authorized on this 15th day
of August, 1999.
OASIS OIL CORPORATION
By: /s/ C. A. Beane
-----------------
C. A. Beane
President and CEO
By: /s/ Susan L. Penticoff
------------------------
Susan L. Penticoff
Treasurer and Assistant Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report is signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
By: /s/ C. A. Beane President and CEO August 15, 1999
----------------
C. A. Beane
By: /s/ James Hagan Secretary, and Director August 15, 1999
-----------------
James Hagan
By: /s/ Dale Hill Director August 15, 1999
---------------
Dale Hill
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 377
<SECURITIES> 0
<RECEIVABLES> 2,140
<ALLOWANCES> 0
<INVENTORY> 22
<CURRENT-ASSETS> 2,567
<PP&E> 1,212
<DEPRECIATION> 0
<TOTAL-ASSETS> 3,955
<CURRENT-LIABILITIES> 4,431
<BONDS> 0
0
637
<COMMON> 358
<OTHER-SE> (1,470)
<TOTAL-LIABILITY-AND-EQUITY> (476)
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> (731)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (731)
<EPS-BASIC> (.13)
<EPS-DILUTED> (.13)
</TABLE>
