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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): December 31, 1998
LOCH EXPLORATION, INC.
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(Exact Name of Registrant as Specified in Charter)
Texas
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State or Other Jurisdiction of
Incorporation or Organization)
0-9129 75-1657943
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(Commission File Number) (I.R.S. Employer Identification No.)
3200 Wilcrest, Suite 370, Houston, Texas 77042
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(Address of principal executive offices including zip code)
(713) 784-2374
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(Registrant's telephone number, including area code)
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT
In connection with the acquisition described in Item 2 below, Carl R. Rose
was issued 14.4 million shares of the Company's common stock which constitutes
71% of the issued and outstanding stock of the Company. The consideration paid
for the stock was all of the issued and outstanding stock of Design Automation
Systems, Inc. of which Mr. Rose was the majority shareholder. Upon the closing
of the transaction there were 20,160,000 shares of Company common stock issued
and outstanding.
To the best of the Company's knowledge, there are no known arrangements
which may at a subsequent date result in a change of control of the Company.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Effective close of business December 31, 1998, Loch Exploration, Inc., a
Texas corporation (the "Company") acquired all of the stock of Design
Automation Systems, Inc., a Texas corporation ("DASI") in the business of
system integration, custom programming and a premier dealer of Sun, Hewlett
Packard, IBM and Digital products and Internet security solutions. In
connection with the acquisition, the Company issued DASI's sole shareholder
14.4 million shares of authorized but unissued Company common stock, $.001
par value, valued at approximately $4.3 million. The transaction was funded
Janaury 4, 1999. The amount of consideration was negotiated through an arm's
length transaction. The transaction was accounted for as a purchase. The
acquisition of DASI was deemed "significant," accordingly, separate historical
and pro forma financial statements will be filed no later than seventy-five
days after the consummation of the acquisition.
On January 27, 1999, the Exchange Agreement was amended adding Charles
Leaver and Kelly Knake as shareholders of DASI and parties to the Agreement.
In addition, the consideration paid by the Company for 100% of the DASI issued
and outstanding stock was increased from 14,400,000 to 16,560,000.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Inapplicable.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
In connection with the above captioned acquisition, the Company changed its
certifying accountant from Farmer, Fuqua, Hunt & Munselle, P.C. to Hein &
Associates, LLP. The dismissal of Farmer, Fuqua, Hunt & Munselle, P.C. was not
the result of any disagreements on any matter involving accounting principles or
practices, financial statement disclosure or auditing scope or procedure. The
engagement of Hein and Associates was approved by the Company's board of
directors.
ITEM 5. OTHER EVENTS
Inapplicable.
ITEM 6. RESIGNATIONS OR REGISTRANT'S DIRECTORS
In connection with the acquisition, the Company's board of directors,
consisting of Glenn L. Loch and Michael Black, resigned and elected Carl R.
Rose, Charles Leaver and Robert E. Nelson as the new directors. Messrs. Loch
and Black did not have any disagreements with the Company on any matter relating
to the Company's operations, policies or practices. The new directors will
serve until the next respective annual meeting of the stockholders or until
their respective successors have been elected or they resign.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Business Acquired.
The appropriate financial statements will be filed with the Securities
and Exchange Commission no later than seventy-five days after the
consummation of the acquisition.
(b) Pro Forma Financial Information.
The appropriate pro forma financial information relating to the
acquisition will be filed with the Securities and Exchange Commission
no later than seventy-five days after the consummation of the
acquisition.
ITEM 8. CHANGE IN FISCAL YEAR
Inapplicable.
3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LOCH EXPLORATION, INC.
By: /s/ Robert E. Nelson
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Robert E. Nelson
Chief Financial Officer, Principal
Financial and Accounting Officer
DATE: January 27, 1999
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EXHIBITS
Exhibit
No. Page
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2.1(1) Exchange Agreement by and between by and between
Loch Exploration, Inc and Design Automation
Systems, Inc.
2.2(2) Amendment to Exchange Agreement A-1
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(1) Previously filed as an exhibit to the Company's Current Report on Form 8-K
filed January 27, 1999 and incorporated herein by reference.
(2) Filed herewith.
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AMENDMENT TO EXCHANGE AGREEMENT
THIS AMENDMENT is entered into this 27th day of January, 1999, amending
that certain Exchange Agreement effective the 31st day of December 1998, by
and among Loch Exploration, Inc., a Texas corporation ("LOCX"), its
wholly-owned subsidiary Loch Energy, Inc. ("LEI"), Design Automation Systems
Incorporated, a Texas corporation ("DASI") and Carl R. Rose (the "DASI Sole
Shareholder").
RECITALS
WHEREAS, the Exchange Agreement provides for the acquisition by LOCX of
all of the issued and outstanding shares of DASI solely in exchange for 14.4
million shares of LOCX common stock, on the terms and conditions provided
therein, all for the purpose of effecting a so-called "tax-free"
reorganization pursuant to Sections 368(a)(1)(B) of the Internal Revenue Code
of 1954, as amended,
WHEREAS, prior to the Closing of the Exchange Agreement, certain
individuals where issued shares of DASI common stock as follows:
<TABLE>
<CAPTION>
Name Number of DASI shares
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<S> <C>
Charles Leaver 144
Kelly Knake 72
</TABLE>
WHEREAS, thereafter the shareholders of DASI approved a 10,000 for 1
reverse split of the DASI common stock,
WHEREAS, the DASI shareholders of record as of December 31, 1998 were as
follows:
<TABLE>
<CAPTION>
Name Number of DASI shares
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<S> <C>
Carl R. Rose 9,400,000
Carl R. Rose, Trustee 5,000,000
Charles Leaver 1,440,000
Kelly Knake 720,000
</TABLE>
WHEREAS, the parties agree that there were errors in the Exchange
Agreement regarding the number of DASI shareholders and the amount of
consideration to be issued to said shareholders, and
WHEREAS, the parties wish to amend the Exchange Agreement in order to
correct those errors,
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed to amend
the Exchange Agreement as follows:
1. In the preamble, Carl R. Rose, Trustee, Charles Leaver and Kelly Knake
shall be added as parties to the Exchange Agreement. Carl R. Rose, Carl
R. Rose, Trustee, Charles Leaver and Kelly Knake shall be collectively
referred to as the "DASI Shareholders."
2. Section 3.02 shall be amended to read as follows:
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Section 3.02 CAPITALIZATION. The authorized capitalization of DASI consists
of 50,000,000 shares of common stock, no par value per share, of which
16,560,000 shares are currently issued and outstanding. The DASI
Shareholders and the number of shares beneficially owned by them are set
forth on Schedule 3.02. All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
pre-emptive or other rights of any person. There are no options, warrants,
rights or convertible securities outstanding to purchase any capital stock of
DASI.
Schedule 3.02 shall be amended as follows:
<TABLE>
<CAPTION>
Name Number of DASI shares
- ---- ---------------------
<S> <C>
Carl R. Rose 9,400,000
Carl R. Rose, Trustee 5,000,000
Charles Leaver 1,440,000
Kelly Knake 720,000
</TABLE>
2. Section 4.01 of the Exchange Agreement be amended as follows:
Section 4.01 THE EXCHANGE. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 4.05),
each DASI Shareholder hereby agrees to assign, transfer, and deliver to
LOCX, free and clear of all liens, pledges, encumbrances, charges,
restrictions, or known claims of any kind, nature, or description, the number
of shares of common stock of DASI set forth in Schedule 4.01, which in the
aggregate constitute all of the issued and outstanding shares of common stock
of DASI, or 16,560,000 shares, and LOCX agrees to acquire such shares on such
date by issuing and delivering in exchange solely therefor 16,560,000 shares
of LOCX restricted common stock, par value $0.01. Upon the consummation of
the transaction contemplated herein, all shares of capital stock of DASI
shall be held by LOCX.
3. All references to the "DASI Sole Shareholder" shall be amended to read
the "DASI Shareholders."
4. The foregoing amendments shall be the only alterations to the Exchange
Agreement, all other terms and conditions shall remain the same.
MISCELLANEOUS
5. GOVERNING LAW. This Amendment shall be governed by, enforced, and
construed under and in accordance with the laws of the United States of
America and, with respect to matters of state law, with the laws of Texas.
6. COUNTERPARTS. This Amendment may be executed in multiple counterparts,
each of which shall be deemed an original and all of which taken together
shall be but a single instrument.
7. AMENDMENT OR WAIVER This Amendment may be amended by a writing
signed by all parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Amendment may be
waived or the time for performance hereof may be extended by a writing
signed by the party or parties for whose benefit the provision is
intended.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above-written.
LOCH EXPLORATION, INC.
By: //s// Glenn L. Loch
Glenn L. Loch, President
LOCH ENERGY, INC.
By: //s// Michael Black
Michael Black, Secretary
LEI MAJORITY SHAREHOLDERS
GLENN L. LOCH, INDIVIDUALLY
By: //s// Glenn L. Loch
Glenn L. Loch
SOUTHPORT CAPITAL CORPORATION
By: //s// Frank H. Moss
Frank H. Moss, President
DESIGN AUTOMATION SYSTEMS INCORPORATED
By: //s// Carl R. Rose
Carl R. Rose, Chief Executive Officer
DASI SHAREHOLDERS
By: //s// Carl R. Rose
Carl R. Rose
By: //s// Carl R. Rose, Trustee
Carl R. Rose, Trustee
By: //s// Charles Leaver
Charles Leaver
By: //s// Kelly Knake
Kelly Knake
