SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 1, 1998
Lyric International, Inc.
___________________________________________
(Exact name of registrant as specified in its charter)
Colorado 0-09800 75-1711324
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
16901 Dallas Parkway, #111, Dallas, Texas 75248
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (972) 713-7163
THIS AMENDMENT ON FORM 8-K/A TO THE REGISTRANT'S FORM 8-K FOR THE EVENT
OCCURRING ON SEPTEMBER 1, 1998, FILED ON SEPTEMBER 15, 1998, IS BEING FILED TO
INCLUDE ADDITIONAL REQUIRED FINANCIAL STATEMENTS FOR THE BUSINESS ACQUIRED.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
F-1 Report of Independent Certified Public Accountants
F-2 Balance Sheet as of August 31, 1998
F-3 Statement of Operations for the period from Inception to
August 31, 1998
F-4 Statement of Changes in Stockholders' Equity for the period
from Inception to August 31, 1998
F-5 Statements of Cash Flows for the period from Inception to
August 31, 1998
F-6 Notes to Consolidated Financial Statements
(c) Exhibits
10.1 Agreement between the Registrant and Redbank Petroleum, Inc.
dated September 1, 1998.
# # #
This report may contain forward-looking statements regarding Lyric
International, Inc.'s future plans based on assumptions that Lyric believes to
be reasonable. A number of risks and uncertainties could cause actual results
to differ materially from these statements, including without limitation, the
timeliness of development activities, fluctuations in oil and gas prices, and
other risk factors described from time to time in Lyric's reports filed with
the Securities and Exchange Commission. In addition, Lyric operates in an
industry in which security values are volatile and may be influenced by
economic and other factors beyond Lyric's control.
WOODMAN ENTERPRISES, INC.
(A Development Stage Enterprise)
AUDITED FINANCIAL STATEMENTS
For the Period from Inception to August 31, 1998
ROBERT EARLY & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
WOODMAN ENTERPRISES, INC.
Abilene, Texas
We have audited the accompanying consolidated balance sheets of Woodman
Enterprises, Inc. (a development stage enterprise) as of August 31, 1998 and
the related statements of operations, changes in shareholders' equity and cash
flows for the period from inception to August 31, 1998. 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 financial statements referred to above present fairly, in
all material respects, the financial position of Woodman Enterprises, Inc. as
of August 31, 1998, and the results of their operations and cash flows for the
period then ended, in conformity with generally accepted accounting
principles.
Robert Early & Company, P.C.
Abilene, Texas
November 30, 1998
2500 S. WILLIS, SUITE 200 ABILENE, TX 79605 (915) 691-5790
WOODMAN ENTERPRISES, INC.
(A Development Stage Enterprise)
Balance Sheet
August 31, 1998
___________________________________________________________________________
<TABLE>
Assets
<S> <C>
Current Assets:
Cash $ 12,036
Accounts receivable 63,751
Equipment held for resale 4,370
Notes receivable-related parties 8,220
__________
Total Current Assets 88,377
__________
Property and equipment 337,210
Accumulated depreciation and depletion (7,206)
___________
Total fixed assets 330,004
___________
TOTAL ASSETS $ 418,381
===========
Liabilities and Stockholder's Equity
Liabilities
Accounts payable (primarily to related party) $ 13,208
Sales taxes payable 5,972
Accrued payroll expenses 14,794
___________
Total Current Liabilities 33,974
___________
Stockholder's Equity
Preferred stock, $10.00 par value (5,000,000
shares authorized, none outstanding) -
Common stock, $.001 par (15,000,000 shares
authorized, 1,000 outstanding) 1
Additional paid-in capital 397,463
(Deficit) accumulated during the Development Stage (13,057)
____________
Total Stockholder's Equity 384,407
____________
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 418,381
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
WOODMAN ENTERPRISES, INC.
<TABLE>
<CAPTION>
(A Development Stage Enterprise)
Statements of Operations
For the Period from Inception to August 31, 1998
___________________________________________________________________________
<S> <C>
Service fees $ 75,694
Other income 2,798
____________
Total Revenues 78,492
____________
Costs of Sales:
Materials and supplies 5,186
Labor costs and insurance 37,500
Crew travel 6,109
Fuel and oil 3,008
Depreciation 7,206
Other 3,026
____________
Total Cost of Sales 62,035
____________
Gross Profit 16,457
____________
Other Operating Expenses:
Insurance 9,142
Personnel costs 10,072
Rent 1,450
Repairs and maintenance 1,586
Other expenses 7,264
_____________
Total Other Operating Expenses 29,514
_____________
NET (LOSS) $ (13,057)
=============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<TABLE>
<CAPTION>
WOODMAN ENTERPRISES, INC.
(A Development Stage Enterprise)
Statement of Changes in Stockholders' Equity
For the Period from Inception to August 31, 1998
____________________________________________________________________________
Deficit
Accumulated
Additional During the
Date of Common Stock Paid-In Development
Transaction Shares Amount Capital Stage
<S> <C> <C> <C> <C> <C>
Stock issued
for cash 02/28/98 1,000 $ 1 $ 70,393 $ -
Other contributed
capital 07/01/98 -
08/31/98 - - 327,070 -
Net (loss) - - - (13,057)
_______ ________ ________ __________
BALANCES,
August 31, 1998 1,000 $ 1 $397,463 $(13,057)
======== ======== ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<TABLE>
<CAPTION>
WOODMAN ENTERPRISES, INC.
(A Development Stage Enterprise)
Statements of Cash Flows
For the Period from Inception to August 31, 1998
____________________________________________________________________________
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (13,057)
Adjustments to reconcile net income/(loss) to
net cash provided by operations:
Depreciation, depletion and amortization 7,206
(Increase)/decrease in:
Accounts receivable (63,751)
Equipment held for resale (4,370)
Prepaid expenses (8,220)
Increase/(decrease) in:
Accounts payable 13,208
Sales taxes payable 5,972
Accrued expenses 14,794
_______________
NET CASH (USED) BY OPERATING ACTIVITIES (48,218)
_______________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (337,210)
_______________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of stock 70,393
Additional capital contributions 327,071
_______________
NET CASH PROVIDED BY FINANCING ACTIVITIES 397,464
_______________
Increase/(decrease) in cash for period 12,036
Cash, Beginning of period -
_______________
Cash, End of period $ 12,036
===============
Supplemental Disclosures:
Cash payments for:
Interest $ -
Income taxes -
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
WOODMAN ENTERPRISES, INC.
(A Development Stage Enterprise)
Notes to Consolidate Financial Statements
August 31, 1998
___________________________________________________________________________
GENERAL:
Woodman Enterprises, Inc. ("the Company") was incorporated on February 25,
1998 and began providing services in June 1998. The Company has acquired a
used oil field service unit and a reverse drilling unit along with auxiliary
water and cement trucks. During the period between February and June, the
Company's efforts consisted of going through the equipment, making
improvements, and acquiring tools. By the end of June, the Company had begun
its well rework operations. As of August 31, 1998, the Company is a wholly
owned subsidiary of Redbank Petroleum, Inc.
Development Stage Enterprise -- The Company is in the development stage.
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the Company conform with generally
accepted accounting principles. Policies that materially affect the
determination of financial position, changes in financial position, and
results of operations are summarized as follows:
Federal Income Taxes For Federal income tax purposes, the Company reports
its operations on the accrual basis of accounting. Depreciation is calculated
using MACRS percentages. First year expensing under Section 179 is utilized
when it is available and has been determined to be advantageous.
Statement No. 109 (SFAS 109) "Accounting for Income Taxes" requires that a
liability approach to providing for deferred taxes be used. That is, deferred
taxes must be recorded for all temporary differences between the book and tax
bases of assets and liabilities. (See Note 11.)
Cash and Cash Flows The Company considers cash to be its only cash
equivalent for purposes of presenting its Statement of Cash Flows. The Company
had cash at two banks at August 31, 1998. Accounts at each institution are
insured by the Federal Deposit Insurance Corporation up to $100,000.
Use of Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.
NOTE 2: STOCK TRANSACTIONS
The Company's only stock transaction was its initial issuance of 1,000 common
shares in exchange for cash and equipment purchased for the Company by
Ameritech Petroleum, Inc. The Company was incorporated as a wholly owned
subsidiary of Ameritech. During July, Ameritech sold its shares to Redbank
Petroleum, Inc. and the Company became a subsidiary of Redbank.
F-6
NOTE 3: TRANSACTIONS WITH RELATED PARTIES
All services to date have been provided to West Texas Recovery, Inc. (WTR) and
Wagman Petroleum, Inc. (Wagman). The services provided to WTR were on
properties owned by the Lyric International, Inc. (Discussed at subsequent
events below.) Due to common control with Wagman and Lyric International,
these entities are parties related to the Company and all services through
August 1998 have been provided to related parties. Although no work has been
done for unrelated entities, prices charged to related parties during this
period are the same prices as have been quoted to unrelated entities for
similar work and are believed to be in line with prices generally charged by
the industry.
NOTE 4: PROPERTY AND EQUIPMENT
Property and equipment consisted of the following at August 31, 1998:
<TABLE>
<S> <C>
Field equipment $ 311,391
Vehicles 22,084
Other fixed assets 3,735
___________
337,210
Less accumulated depreciation (7,206)
___________
$ 330,004
===========
</TABLE>
Depreciable lives of field equipment is ten years for the rig, five years for
the trucks, and seven years for other equipment. Vehicles are being
depreciated over three years. Other fixed assets have depreciable lives of
five years. All assets are being depreciated on a straight line basis for book
purposes and under the applicable MACRS categories and rates for income tax
purposes.
NOTE 5: INCOME TAXES
There is no provision for income taxes due to the loss generated. The loss
carries forward to be applied against future taxable income.
The following temporary differences gave rise to the deferred tax assets and
liabilities at August 31, 1998:
<TABLE>
<S> <C>
Tax depreciation over book $ 17,411
Operating loss carry-forward 30,467
</TABLE>
The deferred tax asset and liability are comprised of the following at August
31, 1998:
<TABLE>
Asset Liability
<S> <C> <C>
Depreciation $ - $ 2,612
Operating loss carry-forward 4,570 -
Less valuation allowance (1,958) -
____________ __________
Gross deferred tax assets $ 2,612 $ 2,612
============ ==========
</TABLE>
Due to the way future utilization of tax benefits is analyzed under SFAS 109,
an allowance for the amount of the benefits that may arise from operating loss
carry-forwards in excess of the offsetting liability has been made and no
asset has been recorded as a result at August 31, 1998.
F-7
NOTE 6: SUBSEQUENT EVENTS
Effective September 1, 1998, Redbank, the Company's parent, agreed to sell
the Company to Lyric International, Inc. Lyric intends to use the Company's
equipment to rework properties which it has acquired and other properties
which it intends to acquire. All of the work done for WTR has been on a
property operated by WTR for Lyric.
During November 1998, the Company has worked for and accepted engagements for
future work for several unrelated entities.
F-8
SIGNATURE
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.
Date: December 9, 1998 LYRIC INTERNATIONAL, INC.
/s/ Michael G. Maguire
By:________________________________
Michael G. Maguire, President
EXHIBIT 10.1
CONTRACT FOR SALE AND PURCHASE OF BUSINESS
THIS CONTRACT FOR SALE AND PURCHASE OF BUSINESS, hereinafter referred to
as "Contract" or "Agreement," is executed this 1st day of September, 1998, by
and between Redbank Petroleum, Inc., a Texas corporation, (as "Seller"), and
Lyric International, Inc., a Colorado corporation, doing business in Texas as
Lyric Energy, Inc. (as "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is the owner of the real property, including but not
limited to, the equipment, furniture, fixtures and other tangible assets, any
and all stock issued or outstanding, and any and all intellectual property of
Woodman Enterprises, Inc., a Texas corporation, hereinafter referred to as the
"Property" or "Seller's Property," located in Dallas County, State of Texas;
and
WHEREAS, Buyer desires to purchase Seller's Property and Seller desires
to sell said Property to Buyer;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises hereinafter contained, the Seller agrees to sell and the Buyer agrees
to buy the Property upon the following terms and conditions,
1. PURCHASE PRICE AND METHOD OF PAYMENT. The Purchase Price of the
Property is Five Hundred Thousand and No/100 Dollars ($500,000.00). Buyer
shall pay and Seller shall accept the purchase price for the Property in the
manner of five thousand (5,000) shares of Lyric International, Inc.'s
Preferred Stock B, at One Hundred and No/100 Dollars ($100.00) par value per
share.
2. CLOSING. The closing of the transactions contemplated by this
Agreement, hereinafter referred to as the "Closing," shall be held at the
corporate offices of Lyric International, Inc., located in Dallas, Texas, on
the 1st day of September, 1998, at 3:30 p.m. (such date to be referred to in
this Agreement as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer the correctness, truthfulness and accuracy of the matters
above-written, all of which shall survive the Closing. In addition, Seller
represents and warrants to Buyer that Seller is the true and rightful owner of
all of the real property, intellectual property, and stock of Woodman
Enterprises, Inc. and it has the legal right to sell such real property,
intellectual property, and stock.
4. REPRESENTATIONS AND WARRANTIES. Buyer and Seller hereby represent
and warrant the following: There has been no act or omission by Buyer or
Seller which would give rise to any valid claim against any of the parties
hereto for a brokerage commission, finder's fee, or other like payment in
connection with the transactions contemplated hereby.
5. TRANSACTIONS PRIOR TO CLOSING. Seller hereby covenants the
following:
a. Conduct of Seller's Business Until Closing. Except as Buyer
may otherwise consent in writing prior to the Closing Date, Seller will not
enter into any transaction, take any action or fail to take any action which
would result in, or could reasonably be expected to result in or cause any of
the representations and warranties of Seller contained in this Agreement to be
void, invalid or false on the Closing Date.
b. Resignations. Seller shall deliver to Buyer prior to the
Closing Date, such resignations of officers or employees of the business
(including Brent Wagman its Chairman of the Board and President), as Buyer
shall indicate, each such resignation to be effective on the Closing Date.
c. Documents. Seller shall deliver to Buyer at closing such
documents which are, in Buyer's sole discretion, necessary to fully satisfy
the objectives of this Agreement in content and form reasonably intended to do
so.
6. EXPENSES. Each of the parties hereto shall pay its own expenses in
connection with this Agreement and the transactions contemplated hereby,
including the fees and expenses of its counsel and its certified public
accountants.
7. GENERAL.
a. Survival of Representations and Warranties. Each of the
parties to this Agreement covenants and agrees that their respective
representations, warranties, covenants, statements, and agreements contained
in this Agreement shall survive the Closing Date and terminate on the second
anniversary of such date. Except as set forth in this Agreement, or in the
documents and papers delivered by Seller to Buyer in connection herewith,
there are no other agreements, representations, warranties, or covenants by or
among the parties hereto with respect to the subject matter hereof.
b. Waivers. No action taken pursuant to this Agreement, including
any investigation by or on behalf of any party shall be deemed to constitute a
waiver by the party taking such action of compliance with any representation,
warranty, covenant or agreement contained herein or therein and in any
documents delivered in connection herewith or therewith. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate
or be construed as a waiver of any subsequent breach.
c. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall
be in writing and shall be deemed to have been duly given if delivered or
mailed, first class mail, postage prepaid,
To Seller: Redbank Petroleum, Inc.
16901 Dallas Parkway, Suite 111
Dallas, Texas 75248
To Buyer: Lyric International, Inc.
16775 Addison Road, Suite 300
Dallas, Texas 75248
or to such other address as such party shall have specified by
notice in writing to the other party.
d. Sections and Other Headings. The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect the meaning or interpretations of this Agreement,
e. Governing Law. This Agreement, and all transactions
contemplated hereby, shall be governed by, construed and enforced in
accordance with the laws of the State of Texas. The parties herein waive
trial by jury and agree to submit to the personal jurisdiction and venue of a
court of subject matter jurisdiction located in Dallas County, State of Texas.
In the event that litigation results from or arises out of this Agreement or
the performance thereof, the parties agree to reimburse the prevailing party's
reasonable attorney's fees, court costs, and all other expenses, whether or
not taxable by the court as costs, in addition to any other relief to which
the prevailing party may be entitled. In such event, no action shall be
entertained by said court or any court of competent jurisdiction if filed more
than one year subsequent to the date the cause(s) of action actually accrued
regardless of whether damages were otherwise as of said time calculable.
f. Captions. The Captions of this contract are for convenience
and reference only and in no way define, describe, extend, or limit the scope
or intent of this contract, or the intent of any provisions hereof.
g. Time of the Essence. Time and timely performance are of the
essence of this contract and of the covenants and provisions hereunder.
h. Successors and Assigns. Rights and obligations created by this
Agreement shall be binding upon and inure to the benefit of the parties
hereto, their successors and assigns. Whenever used, the singular number
shall include the plural, the plural the singular, and the use of any gender
shall include all genders.
i. Contractual Procedures. Unless specifically disallowed by law,
should litigation arise hereunder, service of process therefore may be
obtained through certified mail, return receipt requested; the parties hereto
waiving any and all rights they may have to object to the method by which
service was perfected.
8. AMENDMENTS OR ADDENDA. As of the date above-written, there are no
amendments, addenda, modifications, or changes to this Agreement.
9. SIGNATURES. This Agreement shall not be valid and enforceable
unless it is property executed by Buyer and Seller and their signatures
affixed below.
IN WITNESS WHEREOF, this Agreement has been executed by each of the
individual parties hereto and signed by an officer thereunto duly authorized,
on the date and year first above-written.
Signed and delivered in the presence of:
SELLER:
REDBANK PETROLEUM, INC.
a Texas corporation
/s/ Brent A. Wagman
By: _______________________
Brent A. Wagman
President
BUYER
LYRIC INTERNATIONAL, INC.
a Colorado corporation
/s/ Michael G. Maguire
By: _______________________
Michael G. Maguire
President
