SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 14, 1995
Utah Resources International, Inc.
(Exact name of registrant as specified in its charter)
Utah 0-9791 87-0273519
(State of incorporation) (Commission File No.) (IRS Employer Id. No.)
297 W. Hilton Drive, Suite #4
St. George, Utah 84770
(Address of principal executive offices including zip code)
Issuer's telephone number (801) 628-8080
(Not Applicable)
(Former name or former address, if changed since last report)
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired
Balance sheet of MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING as of December 31, 1994, and the
related statements of income, retained earnings and cash
flows for the year then ended, including independent
auditors report.
Balance sheet of MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING as of December 31, 1993, and the
related statements of income, retained earnings and cash
flows for the year then ended, including independent
auditors report.
(b) Pro forma financial information.
Unaudited condensed pro forma combined balance sheet at
December 31, 1994 and June 30, 1995 of Utah Resources
International, Inc., and Midwest Railroad Construction
and Maintenance Corporation of Wyoming, and unaudited
condensed pro forma combined statements of income
for the year ended December 31, 1994 and six months
ended June 30, 1995 for Resources and Midwest, and
accompanying explanatory notes.
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MIDWEST RAILROAD CONSTRUCTION AND
MAINTENANCE CORPORATION OF WYOMING
(A Wyoming Corporation)
FINANCIAL STATEMENTS
DECEMBER 31, 1994
TABLE OF CONTENTS
Pages
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS -
BALANCE SHEET 2
STATEMENT OF INCOME AND RETAINED EARNINGS 3
STATEMENT OF CASH FLOWS 4
NOTES TO FINANCIAL STATEMENTS 5-9
SUPPLEMENTARY INFORMATION 10
INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY
INFORMATION 11
SCHEDULE OF NOTES PAYABLE 12
SCHEDULE OF GROSS PROFIT ON CONTRACTS 13
SCHEDULE OF SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 14
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Midwest Railroad Construction and Maintenance
Corporation of Wyoming
Salt Lake City, Utah
We have audited the accompanying balance sheet of MIDWEST RAILROAD
CONSTRUCTION AND MAINTENANCE CORPORATION OF WYOMING (a Wyoming
corporation) as of December 31, 1994, and the related statements of income,
retained earnings and cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with 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 statements presentation. We believe that our audit provides 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 MIDWEST RAILROAD
CONSTRUCTION AND MAINTENANCE CORPORATION OF WYOMING as of December 31, 1994,
and the results of its operations and its cash flows for the year then ended
in conformity with generally accepted accounting principles.
Morris, Tulsky & Company [SIGNATURE]
May 12, 1995
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
BALANCE SHEET
AS OF DECEMBER 31, 1994
ASSETS
CURRENT ASSETS:
Cash in banks $ 129,201
Accounts receivable - completed contracts (Note 6) 605,302
- uncompleted contracts 95,529
Inventory (Note 2B) 66,622
Prepaid insurance 13,947
Due from shareholder (Note 5) 91,821
Other current assets 9,406
Deferred income taxes (Note 2D) 3,000
Total Current Assets $1,014,828
FIXED ASSETS - Book Value (Notes 2C & 3) $ 919,002
TOTAL ASSETS $1,933,830
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable - current portion $ 192,180
Accrued payroll and payroll taxes 103,927
Accounts payable - trade 646,748
Billings in excess of costs and estimated
earnings on uncompleted contracts (Note 7) 4,478
Total Current Liabilities $ 947,333
LONG-TERM LIABILITIES:
Notes payable - long-term portion $ 424,367
Deferred income taxes (Note 2D) 43,000
Total Long-Term Liabilities $ 467,367
SHAREHOLDER'S EQUITY:
Common stock - authorized 1,000 shares, issued
and outstanding 1,000 shares, no par value $ 1,000
Paid-in capital 223,000
Retained earnings 295,130
Total Shareholder's Equity $ 519,130
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $1,933,830
The accompanying independent auditor's report and notes are an integral part
of this statement.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1994
REVENUE:
Income from contracts $9,160,477
Cost of contracts 8,376,530
Gross Profit on Contracts $ 783,947
Gain on sale of materials and other operations 41,032
Gross Profit On Operations $ 824,979
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 625,509
Income From Operations $ 199,470
OTHER INCOME AND (EXPENSES):
Interest expense $ (90,192)
Loss on disposal of fixed assets (4,121)
Interest income 747
Net Income Before Provision For
Income Taxes $ 105,904
PROVISION FOR DEFERRED INCOME TAXES 6,100
NET INCOME FOR THE YEAR $ 99,804
RETAINED EARNINGS AT JANUARY 1, 1994 372,725
PRIOR PERIOD ADJUSTMENT (Note 6) (177,399)
RETAINED EARNINGS AT END OF YEAR $ 295,130
The accompanying independent auditor's report and notes are an integral
part of this statement.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year $ 99,804
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 85,434
Loss on disposal of fixed assets 4,121
(Increase) decrease in: accounts receivable (92,943)
security deposits (1,650)
travel advances 2,097
inventory 34,887
prepaid insurance (13,947)
prepaid income taxes 178
miscellaneous receivable (5,140)
deferred income taxes (3,000)
(Decrease) increase in: accrued payroll and payroll
taxes 79,366
accounts payable - trade (1,353)
billings in excess of costs and
earnings on uncompleted
contracts (5,834)
deferred income taxes 9,100
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 191,120
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets $ (325,162)
Proceeds from sale of fixed assets 6,170
NET CASH USED BY INVESTING ACTIVITIES $ (318,992)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt $ (471,012)
Proceeds from long-term debt 594,754
Repayment of loan to shareholder 15,082
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 138,824
NET INCREASE IN CASH $ 10,952
CASH AT BEGINNING OF THE YEAR 118,249
CASH AT END OF THE YEAR $ 129,201
Supplemental Disclosures:
Cash payments for interest $ 90,192
Cash payments for taxes $ -0-
The accompanying independent auditor's report and notes are an integral
part of this statement.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 1 - BUSINESS ACTIVITY:
The Company is a Wyoming corporation formed in 1988 and has two divisions.
Railroad Division - Contracts for repair, maintainance and construction of
privately owned railroad tracks in Wyoming, Utah, Colorado and other west-
ern states.
Switching Division - Contracts to move railroad cars on private railroad
tracks to and from common carrier interchange points. All of this divi-
sion's business is in the Gillette, Wyoming area.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Revenue and Cost Recognition -
The company recognizes revenues from fixed-priced and modified fixed-
price construction contracts on the percentage-of-completion method,
measured by the percentage of cost incurred to date to estimated total
cost for each contract. That method is used because management consid-
ers total cost to be the best available measure of progress on the
contracts.
Contract costs include all direct material, labor cost and indirect
costs such as indirect labor, supplies, tools and repairs. Selling,
general, and administrative costs are charged to expense as incurred.
Provisions for estimated losses on uncompleted contracts are made in the
period in which such losses are determined. Changes in job performance,
job conditions, and estimated profitability may result in revisions to
costs and income, which are recognized in the period in which the revi-
sions are determined. Changes in estimated job profitability resulting
from job performance, job conditions, contract penalty provisions,
claims, change orders, and settlements, are accounted for as changes in
estimates in the current period.
The asset, "Costs and estimated earnings in excess of billings on uncom-
pleted contracts," represents revenues recognized in excess of amounts
billed. The liability, "Billings in excess of costs and estimated
earnings on uncompleted contracts" represents billings in excess of
revenues recognized.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd)
B. Inventory -
Inventories consist primarily of raw materials and are stated at the
lower of cost (first-in, first-out) or market value.
C. Fixed Assets -
Property is recorded at cost. Management has examined the fixed asset
records and established depreciation schedules reflecting the estimated
useful lives of the equipment and estimated salvage values, on an item
by item basis. Estimated useful straight-line life ranges are as fol-
lows:
Life
Furniture 5-10 years
Leasehold improvements 30 years
Machinery and equipment 3-10 years
Vehicles 3-8 years
D. Income Taxes -
The Company uses the completed contract method of accounting for income
tax reporting. Deferred income taxes are provided for timing difference
between financial and tax reporting.
E. Non-Cash Transactions -
The company normally purchases equipment and vehicles in non-cash trans-
actions. Assets are acquired in exchange for debt and in lease purchase
transactions. In the following year these items are refinanced by the
Company's main lender. Management has elected to report these items in
the same manner as purchases originally financed through their main
lender, not as non cash transactions. Management believes that this
accurately represents the final result of these transactions.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 3 - FIXED ASSETS AND DEPRECIATION -
Total depreciation expense was $85,434 for the year ended December 31,
1994. Of this amount, $78,185 was charged to costs of contracts.
Fixed asset, accumulated depreciation and net book value detail for Decem-
ber 31, 1994 is as follows:
Accumulated Net Book
Cost Depreciation Value
Furniture and fixtures $ 46,652 $ 15,744 $ 30,908
Leasehold improvements 38,194 1,710 36,484
Vehicles 196,858 45,094 151,764
Machinery and equipment 878,458 178,612 699,846
Totals $1,160,162 $241,160 $919,002
NOTE 4 - INCOME TAXES -
Deferred income taxes are provided for the differences between tax and
financial reporting. The company has carryovers with expiration dates as
follows:
Amount Expires
Charitable contributions $ 12,000 1999
Net operating loss 239,000 2008
NOTE 5 - RELATED PARTY TRANSACTIONS:
The company rents its Gillette building from the shareholder on a month to
month basis. The rent calls for monthly payments of $1,119 plus real
estate taxes. Rent expense for this building for 1994 was $14,232.
The Company had leased the administrative offices in Park City, Utah from
the shareholder for monthly payments of $1,750. Total lease expense for
1994 was $7,000. This lease expired October 1993 and the company continued
to occupy the property on a month to month basis until June 1994, the final
two months rent were forgiven.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 5 - RELATED PARTY TRANSACTIONS: (Cont'd)
Beginning June 1994 the Salt Lake City offices are rented from the share-
holder on a month to month basis for $1,660 monthly plus real estate taxes.
Rental expense for the year was $12,148.
A portion of the above rents and lease is reflected in cost of contracts.
The sum of $91,821 is due from the shareholder at December 31, 1994. This
amount is represented by a note due January 1, 1997. Amounts due to or
from this shareholder accrue interest at the applicable federal rate for
long term debt as published by the Internal Revenue Service. No interest
on these amounts has ever been paid or recorded. At December 31, 1994 they
net to $3,633 due to the shareholder and are not material to the financial
statements.
The shareholder's wife loaned $40,000 to the corporation for purchase of a
truck. At December 31, 1994 $19,554 was unpaid. The detail is reported in
the schedule of notes payable.
Interest due to and from the shareholder will be recorded as paid.
NOTE 6 - ACCOUNTS RECEIVABLE:
Accounts receivable includes a disputed claim for payment of $96,672 that
is being arbitrated. Accounts receivable is shown net of a provision for
uncollectable accounts receivable of $46,672 related to this claim. No
other provision is made for uncollectable receivables as management expects
that all other accounts will be collected.
NOTE 7 - UNCOMPLETED CONTRACTS:
Information with respect to contracts in progress at December 31, 1994 is
as follows:
Billings on uncompleted contracts $176,317
Expenditures on uncompleted (124,572)
Estimated earnings on uncompleted contracts (47,267)
Balance $ 4,478
Included in the accompanying balance sheet
under the following caption:
Billings in excess of costs and estimated
earnings on uncompleted contracts $ 4,478
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1994
NOTE 8 - OTHER:
A material part of the company's Switching Division is dependent upon one
customer. The loss of this customer would have a material adverse effect
on the Division. During the year ended December 31, 1994 the customer
accounted for all of the division revenues. The company has a contract
with this customer that expires on August 1, 1997.
NOTE 9 - PRIOR PERIOD ADJUSTMENT:
During l994 company management became aware of several accounting errors
made in prior periods. The details of these errors are as follows:
1993 expenses recorded in 1994 $(113,761)
1993 duplicate sales invoices, reversed in 1994 (47,835)
Fixed assets disposed of and never removed
from the books (42,748)
Depreciation never recorded (3,622)
Payment on capital lease recorded as net
expense 567
Gross errors in accounting $(207,399)
Generally accepted accounting principles require that accounting errors be
reported as a change in retained earnings for the beginning of the period,
and that they be reported net of the tax affect of the errors. A deferred
income tax asset of $30,000 is being provided for the increase in net
operating loss carryover to future years (See Note 2D).
The prior period adjustment is being computed as follows:
Gross errors in accounting $(207,399)
Tax affect of correction 30,000
Net prior period adjustment to beginning
retained earnings $(177,399)
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<PAGE>
SUPPLEMENTARY INFORMATION
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INDEPENDENT AUDITOR'S REPORT
ON SUPPLEMENTARY INFORMATION
Board of Directors
Midwest Railroad Construction and Maintenance
Corporation of Wyoming
Park City, Utah
Our report on our audit of the basic financial statements of Midwest
Railroad Construction and Maintenance Corporation of Wyoming for the year ended
December 31, 1994, appears on page 1. That audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
Schedule of Notes Payable, which appears on page 12, Schedule of Gross Profit
on Contracts, which appears on page 13, and the Schedule of Selling, General
and Administrative Expenses, which appears on page 14, are presented for
supplementary analysis purposes and is not a required part of the basic
financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Morris, Tulsky & Company [SIGNATURE]
May 12, 1995
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
SCHEDULE OF NOTES PAYABLE
AS AT DECEMBER 31, 1994
(A Compilation)
Total
Original Original Due Non-
Loan Loan December 31, Current Current
Payable To Date Amount 1994 Portion Portion
American National Bank 4/20/93 $ 127,750 $ 104,200 $ 15,840 $ 88,360
1/25/94 260,974 221,442 43,160 178,282
11/17/94 35,000 35,000 35,000 -0-
First Interstate Bank 4/20/94 17,054 14,637 4,526 10,111
First Security Leasing 9/23/94 37,318 31,037 17,105 13,932
First United Leasing 12/20/94 2,500 2,500 1,043 1,457
Ford Motor Credit 3/19/92 21,759 11,123 4,641 6,482
8/23/93 18,548 14,337 3,508 10,829
1/25/94 7,916 4,579 4,200 379
8/18/94 25,716 23,934 5,707 18,227
8/22/94 16,516 15,196 4,255 10,941
Grayrock Capital 9/27/94 17,325 15,584 8,103 7,481
Olympic Financial 8/12/94 15,823 14,639 4,067 10,572
Jeffrey Wass 12/10/94 24,000 17,159 7,941 9,218
Judy Wolff 3/19/93 40,000 19,554 14,370 5,184
Xerox Leasing 6/17/93 4,721 2,887 1,472 1,415
Zions Credit Corp. 3/10/94 37,050 31,865 8,192 23,673
5/11/94 35,000 30,697 6,779 23,918
5/26/94 7,000 6,177 2,271 3,906
Totals $616,547 $192,180 $424,367
FIVE YEAR DEBT MATURITIES
Year Ending December 31, 1995 $192,180
1996 157,928
1997 125,606
1998 130,228
1999 10,605
Total $616,547
The accompanying independent auditor's report on supplementary information is
an integral part of this statement.
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<PAGE>
Final
Monthly Interest Payment
Payment Rate Due Security
$ 2,064 9.00 % 4/20/98 All inventory, accts. rec., contract rights
5,377 8.50 4/20/98 equip., general intangibles, fixt., and the
N/A 10.25 2/17/95 personal guarantee of the 100% stockholder
487 10.47 % 11/05/98 1986 Ford Pick-Up Truck and 2 1987
Chevrolet Pick-Ups
1,905 24.40 % 8/26/96 Welding equipment, hydraulic pump and tools
112 14.937 % 1/20/97 Konica Photocopier
461 9.90 % 3/19/97 1992 Ford F-350 Pick-Up
376 7.91 8/23/98 1993 Ford F-150 Pick-Up
384 15.00 1/25/96 1988 Ford F-150 Pick-Up
649 9.75 8/18/98 1984 Ford F-351 Crewcab 4wd Pick-Up
474 10.75 2/28/98 1991 Ford F-350 Crewcab
917 24.10 % 9/27/96 1979 Peterbuilt Model #359-A-19F
Tractor Truck
461 11.40 % 2/26/98 1989 Ford F-360 Pick-Up
832 N/A 12/10/96 Difco Ballast car, rail saw, switch
grinder
1,329 12.00 % 4/19/96 None
151 15.00 % 7/17/96 Xerox Photocopier
1,047 15.26 % 3/22/98 Canron Ballast Regulator Model BEB 17
1,014 17.24 5/17/98 1985 Canron Tie Inserter/Remover
258 16.05 5/26/97 1986 Ford F-350 Crewcab with Fairmont
and Hy-rail
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
SCHEDULE OF GROSS PROFIT ON CONTRACTS
FOR THE YEAR ENDED DECEMBER 31, 1994
Railroad Switching
Total Division Division
Income from - completed contracts $8,988,638 $8,341,518 $647,120
- uncompleted contracts 171,839 171,839 -
Total $9,160,477 $8,513,357 $647,120
Cost of - completed contracts $8,251,958 $7,682,142 $569,816
- uncompleted contracts 124,572 124,572 -
Total $8,376,530 $7,806,714 $569,816
GROSS PROFIT ON CONTRACTS $ 783,947 $ 706,643 $ 77,304
The accompanying independent auditor's report on supplementary information
is an integral part of this statement.
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
SCHEDULE OF SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1994
Salaries - Officer $105,248
- Engineers 38,800
- Office 99,188
Telephone 54,191
Bad debts 46,672
Rent 43,384
Consulting fees 33,243
Legal and accounting 32,968
Insurance 24,525
Travel expense 23,954
Licenses and titles 23,812
Payroll taxes 20,439
Office supplies 20,276
Group insurance 13,725
Donations 12,100
Sales and use tax 12,078
Depreciation 6,649
Personal property taxes 3,905
Penalties 3,753
Bidding expense 3,144
Advertising 1,682
Other 1,385
Dues and subscriptions 388
TOTAL SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES $625,509
The accompanying independent auditor's report on supplementary information
is an integral part of this statement.
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<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND
MAINTENANCE CORPORATION OF WYOMING
(A Wyoming Corporation)
FINANCIAL STATEMENTS
DECEMBER 31, 1993
TABLE OF CONTENTS
Pages
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS -
BALANCE SHEET 2
STATEMENT OF INCOME AND RETAINED EARNINGS 3
STATEMENT OF CASH FLOWS 4
NOTES TO FINANCIAL STATEMENTS 5-11
SUPPLEMENTARY INFORMATION 12
INDEPENDENT AUDITOR'S REPORT ON SUPPLEMENTARY INFORMATION 13
SCHEDULE OF GROSS PROFIT ON CONTRACTS 14
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Midwest Railroad Construction and Maintenance Corporation of Wyoming
Salt Lake City, Utah
We have audited the accompanying balance sheet of MIDWEST RAILROAD
CONSTRUCTION AND MAINTENANCE CORPORATION OF WYOMING (a Wyoming corporation)
as of December 31, 1993, and the related statements of income and retained
earnings and cash flows for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with 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 statements presentation.
We believe that our audit provides a reasonable basis for our
opinion.
As described in Note 2A to the financial statements the Company has adopted
a method of depreciation consistent with Generally Accepted Accounting
Principles, as of the beginning of the current year. As described in Note 9
to these financial statements certain errors resulting in an overstatement of
fixed assets and income previously reported as of December 31, 1992 were
discovered. Accordingly an adjustment has been made to retained earnings as
of the beginning of this year.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of MIDWEST RAILROAD
CONSTRUCTION AND MAINTENANCE CORPORATION OF WYOMING as of December 31, 1993,
and the results of its operations and its cash flows for the year then ended
in conformity with generally accepted accounting principles.
Morris, Tulsky & Company [SIGNATURE]
July 27, 1995
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MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
BALANCE SHEET
AS OF DECEMBER 31, 1993
ASSETS
CURRENT ASSETS:
Cash in banks $ 119,034
Accounts receivable - completed contracts (Note 2C) 487,231
- uncompleted contracts 120,657
Inventory (Note 2D) 99,077
Due from shareholder 106,903
Travel advances 2,097
Income tax refund receivable 2,792
Total Current Assets $ 937,791
FIXED ASSETS - Book Value (Note 2E) $ 691,211
TOTAL ASSETS $1,629,002
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable - current portion (Note 7) $ 159,203
Accrued payroll and payroll taxes 24,561
Accounts payable - trade 648,101
Billings in excess of costs and earnings on
uncompleted contracts (Note 6) 10,312
Deferred income taxes 7,400
Total Current Liabilities $ 849,577
LONG-TERM LIABILITIES:
Notes payable - long-term portion (Note 7) $ 333,599
Deferred income taxes (Note 2F) 26,500
Total Long-Term Liabilities $ 360,099
SHAREHOLDER'S EQUITY:
Common stock - authorized 1,000 shares, issued
and outstanding 1,000 shares, no par value $ 1,000
Paid-in capital 223,000
Retained earnings 195,326
Total Shareholder's Equity $ 419,326
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $1,629,002
See accompanying notes and auditors' opinion.
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<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED DECEMBER 31, 1993
REVENUE:
Income from contracts $4,812,788
Cost of contracts 4,402,236
Gross Profit on Contracts $ 410,552
Gain on sale of materials and other transactions 23,651
Gross Profit On Operations $ 434,203
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (456,200)
Loss From Operations $ (21,997)
INTEREST EXPENSE (34,337)
Net Loss Before Provision For Moving
Expenses and Income Taxes $ (56,334)
MOVING EXPENSE (Note 5) (38,820)
$ (95,154)
PROVISION FOR INCOME TAXES - Current $ (4,405)
- Deferred 2,900
Net Provision for Income Taxes $ (1,505)
NET LOSS BEFORE CUMULATIVE AFFECT OF CHANGE
IN ACCOUNTING PRINCIPLE $ (93,649)
CUMULATIVE AFFECT OF CHANGE IN ACCOUNTING PRINCIPLE
(Note 2A) 165,358
NET INCOME FOR THE YEAR $ 71,709
RETAINED EARNINGS BEGINNING OF YEAR 180,323
PRIOR PERIOD ADJUSTMENT (56,706)
RETAINED EARNINGS AT END OF YEAR $ 195,326
See accompanying notes and auditors' opinion.
- 3 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income for the year $ 71,709
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 63,230
Loss on sales of equipment 6,664
Abandoned fixed assets (Note 5) 38,820
Cumulative affect of change in accounting
principles (165,358)
(Increase) decrease in: accounts receivable - completed
contracts (402,059)
travel advances 346
due from affiliate 26,590
inventory (68,576)
Decrease (increase) in: accrued payroll and payroll
taxes 15,884
accounts payable - trade 561,161
liability for federal
income taxes (24,644)
billings in excess of costs and
earnings on uncompleted
contracts 10,312
deferred income taxes 2,900
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES $ 136,979
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets $ (285,923)
Proceeds from sale of fixed assets 22,163
NET CASH USED BY INVESTING ACTIVITIES $ (263,760)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt $ (232,275)
Proceeds from long-term debt 526,452
Repayment of loans from and loans to shareholder (101,789)
NET CASH PROVIDED BY FINANCING ACTIVITIES $ 192,388
NET INCREASE IN CASH $ 65,607
CASH AT BEGINNING OF THE YEAR 53,427
CASH AT END OF THE YEAR $ 119,034
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest $ 34,337
Cash payments for taxes $ 20,877
See accompanying notes and auditors' opinion.
- 4 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 1 - BUSINESS OWNERSHIP AND ACTIVITY:
The Company was owned 100% by the individual who remains the president of
this Company. This Company was purchased on June of 1995 and is now a
wholly owned subsidiary of Utah Resources International, Inc., a Utah
corporation.
This Company is a Wyoming corporation formed in 1988 and has
two divisions.
Railroad Division - Contracts for repair, maintenance and construction of
privately owned railroad tracks in Wyoming, Utah, Colorado and other west-
ern states.
Switching Division - Contracts to move railroad cars on private railroad
tracks, to and from common carrier interchange points. All of this divi-
sion's business is in the Gillette, Wyoming area.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
A. Change in Accounting Principle -
In 1994 the Company changed to the straight-line method of depreciation
for all fixed assets. In 1993 and prior years the Company kept its records
and prepared its financial statements using the tax basis of accounting.
Management believes that the straight-line method more fairly presents the
company's financial position and results of operations, which is consistent
with Generally Accepted Accounting Principles. The prior method resulted
in a substantial understatement of the book value of these assets as compared
to the straight-line method.
The following schedule details the changes in accumulated depreciation at
December 31, 1992:
Before After
Adjustment Adjustment Adjustment
Furniture $ 14,985 $ (8,877) $ 6,108
Leasehold improvements 4,516 294 4,810
Vehicles 53,740 (13,057) 40,683
Equipment 271,055 (184,718) 86,337
Totals $344,296 $(206,358) $137,938
- 5 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd)
Management has provided for $41,000 of deferred income taxes on the above
discussed adjustment to accumulated depreciation. The cumulative affect
of change in accounting principle is computed as follows:
Increase from adjustment to accumulated depreciation $206,358
Decrease from provision for deferred income taxes (41,000)
Cumulative affect of change in accounting principle $165,358
B. Revenue and Cost Recognition -
The Company recognizes revenues from fixed-priced and modified fixed-
price construction contracts on the percentage of completion method,
measured by the percentage of cost incurred to date to estimated total
cost for each contract. That method is used because management consid-
ers total cost to be the best available measure of progress on the contracts.
Contract costs include all direct material, labor cost and indirect costs
such as indirect labor, supplies, tools and repairs. Selling, general, and
administrative costs are charged to expense as incurred. Provisions for
estimated losses on uncompleted contracts are made in the period in which
such losses are determined. Changes in job performance, job conditions, and
estimated profitability may result in revisions to costs and income, which
are recognized in the period in which the revisions are determined. Changes
in estimated job profitability resulting from job performance, job conditions,
contract penalty provisions, claims, change orders, and settlements, are
accounted for as changes in estimates in the current period.
The asset, "Costs and estimated earnings in excess of billings on uncom-
pleted contracts", represents revenues recognized in excess of amounts
billed. The liability, "Billings in excess of costs and estimated
earnings on uncompleted contracts" represents billings in excess of
revenues recognized.
C. Accounts Receivable -
No provision has been made for uncollectable receivables. All receiva-
bles were collected as reported.
- 6 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Cont'd)
D. Inventory -
Inventories consist primarily of raw materials and are stated at the lower
of cost (first-in, first-out) or market value.
E. Fixed Assets -
Property is recorded at cost. Management examined the fixed asset records
and established depreciation schedules reflecting the estimated useful
lives of the equipment and estimated salvage values, on an item by item
basis. Estimated useful straight-line life ranges are as follows:
Life
Furniture 5-10 years
Leasehold improvements 30 years
Machinery and equipment 3-10 years
Vehicles 3-8 years
F. Income Taxes -
The Company uses the completed contract method of accounting for income
tax reporting. Deferred income taxes are provided for timing differences
between financial and tax reporting.
G. Non-Cash Transactions -
The Company normally purchases equipment and vehicles in non-cash trans-
actions. Assets are acquired in exchange for debt and in lease purchase
transactions. In the following year these items are refinanced by the
Company's main lender. Management has elected to report these items in
the same manner as purchases originally financed through their main
lender, not as a non-cash transactions. Management believes that this
accurately represents the final result of these transactions.
- 7 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 3 - FIXED ASSETS AND DEPRECIATION:
Changes to the opening accumulated depreciation are discussed in Note 2A.
Depreciation expense for the year as reported under tax basis depreciation
was $138,252 of this amount $94,732 was charged to costs of contracts.
Using straight-line depreciation total depreciation is $63,230 of which
$43,845 is charged to the costs of the contracts.
Fixed asset, accumulated depreciation and net book value detail for Decem-
ber 31, 1993 is as follows:
Accumulated Net Book
Cost Depreciation Value
Furniture $ 32,380 $ 9,853 $ 22,527
Leasehold improvements 7,304 952 6,352
Vehicles 104,587 25,075 79,512
Equipment 706,229 123,409 582,820
Totals $850,500 $159,289 $691,211
NOTE 4 - INCOME TAXES:
Deferred income taxes are provided for the differences between tax and
financial reporting. The company has carryovers with expiration dates as
follows:
Amount Expires
Charitable contributions $ 12,000 1999
Net operating loss 239,000 2008
NOTE 5 - RELATED PARTY TRANSACTIONS AND MOVING EXPENSE:
The company rented one of its buildings from the shareholder on a month to
month basis. The rent called for monthly payments of $565 plus real estate
taxes of $345. Rent expense for this building for 1993 was $7,125.
The Company had leased the administrative offices in Park City, Utah from a
related party for monthly payments of $1,833. Total lease expense for 1993
was $18,330. This lease expired October 1993 and the company continued to
occupy the property on a month to month basis until June 1994.
- 8 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 5 - RELATED PARTY TRANSACTIONS AND MOVING EXPENSE (Cont'd):
In June 1994 the Company moved its administrative offices from Park City,
Utah to Salt Lake City, Utah. The Salt Lake City offices were rented on a
month to month basis from a related party for $1,660 monthly plus real
estate taxes. The move resulted in the abandonment of the leasehold im-
provements and some furniture in Park City. Management believes that the
information provided about the assets of the Company is more useful if this
abandonment is reported on these statements. The moving expense of $38,820
on page 3 represents the net book value of these assets.
A portion of the above rents and lease is reflected in cost of contracts.
The shareholder's wife loaned $40,000 to the corporation for purchase of a
truck. At December 31, 1993 $33,301 was unpaid. The detail is reported in
the schedule of notes payable.
The sum of $106,903 was due from the shareholder at December 31, 1993. The
amount is represented by a note due January 1, 1997. Amounts due to or from
this shareholder accrue interest at the applicable federal rate for long term
debt as published by the Internal Revenue Service. No interest on these
amounts has ever been paid or recorded. At December 31, 1993 they net to
$10,284 due to the shareholder and by December 31, 1994 this amount had
decreased to $3,638.
Interest to and from the shareholder will be recorded as paid.
NOTE 6 - UNCOMPLETED CONTRACTS:
There were two contracts in progress at December 31, 1993. The total
billings on work in process were $120,657 and the costs associated were
$60,995.
These items are reported as follows:
Balance sheet - Billings in excess of costs and
estimated earnings on uncompleted contracts $ 10,312
Schedule of Gross Profit on Contracts:
Income from uncompleted contracts $110,345
Costs of uncompleted contracts 60,955
- 9 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 7 - LONG-TERM DEBT:
Long-term notes payable at December 31, 1993, consisted of the following:
Due to Judith Wolff, 12%, due May 19, 1996 $ 33,301
Xerox lease 4,155
American National Bank, 9.25%, due July 15, 1995,
Secured by substantially all assets of the
corporation 323,441
American National Bank, line of credit, 7.75%,
due February 1, 1998, renewed November 6, 1993 75,000
Due to Jeff Was - unsecured equipment purchase
36 payments @ 15%, final payment December, 1996 24,000
Various installment loans, due from July 1, 1989
to August 1, 1994. Secured by certain vehicles
and a computer 32,905
Total $492,802
Less short term portion (159,203)
Long-Term Portion $333,599
Five year debt maturities are as follows:
Year Ending 12-31-94 $159,203
95 97,134
96 93,123
97 80,434
98 62,908
Total $492,802
Truck loan was made by a related party.
NOTE 8 - OTHER:
A material part of the company's Switching Division is dependent upon one
customer. The loss of this customer would have a material adverse effect
on the Division. During the year ended December 31, 1993 the customer
accounted for all of the division revenues. The company has a contract with
this customer that expires on August 1, 1997.
- 10 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
NOTE 9 - PRIOR PERIOD ADJUSTMENT:
Management became aware of several accounting errors made in prior periods.
The details of these errors are as follows:
1992 expenses recorded in 1993 $ (31,586)
Fixed assets disposed of and never removed
from the books (31,970)
Depreciation never recorded (3,150)
Gross errors in accounting $ (66,706)
Generally accepted accounting principles require that accounting errors be
reported as a change in retained earnings for the beginning of the period,
and that they be reported net of the tax affect of the errors. A deferred
income tax asset of $30,000 is being provided for the increase in net
operating loss carryover to future years (See Note 2E).
The prior period adjustment is being computed as follows:
Gross errors in accounting $ (66,706)
Tax affect of correction 10,000
Net prior period adjustment to beginning
retained earnings $ (56,706)
- 11 -
<PAGE>
SUPPLEMENTARY INFORMATION
- 12 -
<PAGE>
INDEPENDENT AUDITOR'S REPORT
ON SUPPLEMENTARY INFORMATION
Board of Directors
Midwest Railroad Construction and Maintenance
Corporation of Wyoming
Salt Lake City, Utah
Our report on our audit of the basic financial statements of Midwest
Railroad Construction and Maintenance Corporation of Wyoming for the year
ended December 31, 1993, appears on page 1. That audit was made for the
purpose of forming an opinion on the basic financial statements taken as
a whole. The Schedule of Gross Profit on Contracts, which appears on
page 14, is presented for supplementary analysis purposes and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Morris, Tulsky & Company [SIGNATURE]
July 27, 1995
- 13 -
<PAGE>
MIDWEST RAILROAD CONSTRUCTION AND MAINTENANCE
CORPORATION OF WYOMING
(A Wyoming Corporation)
SCHEDULE OF GROSS PROFIT ON CONTRACTS
FOR THE YEAR ENDED DECEMBER 31, 1993
Railroad Switching
Total Railroad Switching
Division Division
Income from - completed contracts $4,702,443 $4,070,330 $632,113
- uncompleted contracts 110,345 110,345 -
Total $4,812,788 $4,180,675 $632,113
Cost of - completed contracts $4,341,281 $3,826,574 $514,707
- uncompleted contracts 60,955 60,955 -
Total $4,402,236 $3,887,529 $514,707
GROSS PROFIT ON CONTRACTS $ 410,552 $ 293,146 $117,406
The accompanying independent auditor's report on supplementary information is
an integral part of this statement.
<PAGE>
UTAH RESOURCES INTERNATIONAL, INC.
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
The following unaudited condensed pro forma combined balance sheet at
December 31, 1994 and June 30, 1995 of Utah Resources International, Inc.,
(Resources) and Midwest Railroad Construction and Maintenance Corporation of
Wyoming (Midwest), respectively, assumes the acquisition of Midwest by
Resources. It combines the historical balance sheets of Resources and Midwest.
The business combination has been accounted for as a purchase of Midwest giving
effect to the acquisition of 100 percent of the outstanding common shares of
Midwest. The surviving entity reflects the assets and liabilities of Resources
and Midwest at their historical book value. The unaudited condensed pro forma
combined balance sheet should be read in conjunction with the historical
financial statements and related notes.
The following unaudited condensed pro forma combined statements of income
for the year ended December 31, 1994 and six months ended June 30, 1995 for
Resources and Midwest, respectively, assumes the acquisition of Midwest by
Resource as of the beginning of the fiscal year (January 1, 1994) of the
companies.
The pro forma results of operations are not necessarily indicative of the
results of operations that would actually have been obtained if the transactions
had occurred as of the beginning of the year and nine month period. These
statements should be read in conjunction with the historical financial
statements and related notes.
<PAGE>
<TABLE>
UTAH RESOURCES INTERNATIONAL, INC.
AND SUBSIDIARIES
Pro Forma Consolidated Condensed Combined Balance Sheet
December 31, 1994
(Unaudited)
Historical Pro Forma Pro Forma
Resources Midwest Adjustments Combined
---------- --------- ----------- ---------
<S> <C> <C> <C>
Assets
Cash and cash equivalents $2,138,795 129,201 - 2,267,996
Accounts receivable 254,312 700,831 - 955,143
Receivable from related party 10,899 91,821 - 102,720
Notes receivable 200,267 - - 200,267
Inventory - 66,622 - 66,622
Property and equipment, net 30,027 919,002 - 949,029
Real estate held for resale 627,214 - - 627,214
Royalty interest in petroleum
and mineral production, net 12,523 - - 12,523
Other assets 19,799 26,353 - 46,152
---------- --------- -------- ---------
$3,293,836 1,933,830 - 5,227,666
========== ========= ======== =========
Liabilities and Stockholders' Equity
Accounts payable $ 160,534 646,748 - 807,282
Accrued expenses 291,331 108,405 - 399,736
Earnest money deposits 36,000 - - 36,000
Notes payable 657,545 616,547 - 1,274,092
Income taxes payable 201 - - 201
Deferred income taxes 300,000 43,000 - 343,000
---------- -------- -------- ---------
Total liabilities 1,445,611 1,414,700 - 2,860,311
---------- --------- -------- ---------
Minority interest 183,121 - - 183,121
Stockholders' equity:
Common stock 128,403 1,000 58,000 (1) 187,403
Additional paid-in capital 127,174 223,000 237,130 (1) 587,304
Retained earnings 1,409,527 295,130 (295,130)(1) 1,409,527
--------- --------- -------- ---------
Total stockholders' equity 1,665,104 519,130 - 2,184,234
--------- --------- -------- ---------
$3,293,836 1,933,830 - 5,227,666
========== ========= ======== =========
<PAGE>
UTAH RESOURCES INTERNATIONAL, INC.
AND SUBSIDIARIES
Pro Forma Consolidated Condensed
Combined Statement of Income
Year Ended December 31, 1994
(Unaudited)
Pro Forma Pro Forma
Resources Midwest Adjustments Combined
---------- --------- ----------- ----------
Sales $2,274,222 9,160,477 - 11,434,699
Cost of sales 567,453 8,376,530 - 8,943,983
---------- --------- -------- ----------
Gross profit 1,706,769 783,947 - 2,490,716
General and administrative
expenses 678,368 629,630 - 1,307,998
--------- --------- -------- ----------
Income from operations 1,028,401 154,317 - 1,182,718
--------- --------- -------- ----------
Other income (expense):
Rental income 32,183 - - 32,183
Royalty income 92,455 - - 92,455
Interest and dividend income 50,458 747 - 51,205
Interest expense (60,020) (90,192) - (150,212)
Other income (expense) (18,074) 41,032 - 22,958
--------- -------- -------- ----------
Total other income (expense) 97,002 (48,413) - 48,589
--------- -------- -------- ----------
Income before minority interest
and provision for income taxes 1,125,403 105,904 - 1,231,307
Minority interest in net
income of subsidiaries 29,109 - - 29,109
--------- -------- -------- ----------
Income before provision
for income taxes 1,154,512 105,904 - 1,260,416
Income tax (provision) (436,000) (6,100) - (442,100)
--------- -------- -------- ----------
Income (loss) from
continuing operations 718,512 99,804 - 818,316
Discontinued operations:
Income from discontinued
operations - - - -
Income from disposal of
discontinued operations
net of income taxes (benefit) (31,416) - - (31,416)
--------- --------- -------- ----------
Total discontinued operations (31,416) - - (31,416)
--------- --------- -------- ----------
Net income $ 687,096 99,804 - 786,900
========== ========= ======== ==========
Earnings per share $.42
====
Weighted average shares 1,874,030
=========
<PAGE>
UTAH RESOURCES INTERNATIONAL, INC.
AND SUBSIDIARIES
Pro Forma Consolidated Condensed Combined Balance Sheet
June 30, 1995
(Unaudited)
Historical Pro Forma Pro Forma
Resources Midwest Adjustments Combined
--------- ------- ----------- ---------
Assets
Cash and cash equivalents $1,098,653 7,368 - 1,106,021
Accounts receivable 374,582 850,291 - 1,224,873
Receivable from related party 168,000 183,915 (168,000) 183,915
Notes receivable 441,846 - - 441,846
Inventory - 158,731 - 158,731
Property and equipment, net 42,339 896,011 - 938,350
Real estate held for resale 645,803 - - 645,803
Royalty interest in petroleum
and mineral production, net 12,523 - - 12,523
Other assets 9,824 2,550 - 12,374
---------- --------- -------- ---------
$2,793,570 2,098,866 (168,000) 4,724,436
========== ========= ======== =========
Liabilities and Stockholders' Equity
Accounts payable $ 160,535 736,685 - 897,220
Accrued expenses 336,461 65,769 - 402,230
Earnest money deposits 36,000 - - 36,000
Notes payable 656,070 741,765 (168,000) 1,229,835
Deferred income taxes 30,201 40,000 - 70,201
---------- --------- -------- ---------
Total liabilities 1,219,267 1,584,219 (168,000) 2,635,486
---------- --------- -------- ---------
Minority interest 183,121 - - 183,121
Stockholders' equity:
Common stock 138,628 1,000 58,000 (1) 197,628
Additional paid-in capital 321,449 223,000 232,647 (1) 777,096
Retained earnings 931,105 290,647 (290,647)(1) 931,105
---------- --------- -------- ---------
Total stockholders' equity 1,391,182 514,647 - 1,905,829
---------- --------- -------- ---------
$2,793,570 2,098,866 (168,000) 4,724,436
========== ========= ======== =========
<PAGE>
UTAH RESOURCES INTERNATIONAL, INC.
AND SUBSIDIARIES
Pro Forma Consolidated Condensed
Combined Statement of Operations
Six Months Ended June 30, 1995
(Unaudited)
Pro Forma Pro Forma
Resources Midwest Adjustments Combined
--------- --------- ----------- ---------
Sales $ 303,925 2,265,745 - 2,569,670
Cost of sales 60,167 1,756,351 - 1,816,518
--------- --------- -------- ---------
Gross profit 243,758 509,394 - 753,152
General and administrative
expenses 754,020 535,112 - 1,289,132
---------- --------- -------- ---------
Income (loss) from
operations (510,262) (25,718) - (535,980)
Other income (expense):
Royalty income 25,952 - - 25,952
Interest and dividend income 6,187 - - 6,187
Interest expense (1,500) (8,565) - (10,065)
Other income (expense) - 27,800 - 27,800
---------- -------- -------- ---------
Total other income (expense) 30,639 19,235 - 49,874
---------- -------- -------- ---------
Income (loss) before minority
interest and provision for
income taxes (479,623) (6,483) - (486,106)
Minority interest in net
income of subsidiaries - - - -
---------- --------- -------- ---------
Income (loss) before provision
for income taxes (479,623) (6,483) - (486,106)
Income tax benefit 164,000 2,000 - 166,000
---------- --------- -------- ---------
Income (loss) from
continuing operations (315,623) (4,483) - (306,106)
Discontinued operations:
Income from discontinued
operations (34,376) - - (34,376)
Income from disposal of
discontinued operations net
of income taxes (benefit) - - - -
---------- --------- -------- ---------
Total discontinued
operations (34,376) - - (34,376)
---------- --------- -------- ---------
Net income (loss) $ (349,999) (4,483) - (354,482)
========== ========= ======== =========
Earnings (loss) per share $(.18)
=====
Weighted average shares 1,976,280
=========
<PAGE>
</TABLE>
UTAH RESOURCES INTERNATIONAL, INC.
Notes to Pro Forma Condensed Combined Financial Statements
(Unaudited)
The pro forma combined financial statements have been prepared assuming the
acquisition of Midwest Railroad Construction and Maintenance Corporation of
Wyoming (Midwest) by Utah Resources International, Inc., as of January 1, 1994.
The pro forma combined statements include the financial statement balances
for Resources and Midwest at December 31, 1994 and for the year then ended and
June 30, 1995 and the six months then ended.
Pro Forma Adjustments
(1) To record the acquisition of Midwest by Resources through the issuance of
590,000 shares of Resources common stock for 100 percent of Midwest. The net
assets of Midwest are reflected at their historical costs.
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.
Date: August 28, 1995
Utah Resources International, Inc.
By R. Dee Erickson (SIGNATURE)
Chairman of the Board
