SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 13-D
Under the Securities Exchange Act of 1934
TATONKA ENERGY, INC.
(Name of Issuer)
COMMON STOCK, $.001 PAR VALUE
(Title of Class of Securities)
835758103
(CUSIP Number)
George C. Barker.
9603 White Rock Trail, Suite 100
Dallas, Texas 75238
(214) 340-9912
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
(April 3, 1998)
(Date of Event which Requires the Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[_].
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom copies
are to be sent.
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SCHEDULE 13-D
CUSIP NO. 835758103
1 Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
GEORGE C. BARKER SS. No. 254660611
2 Check the Appropriate Box if a Member of a Group (a) [_] (b) [_]
3 SEC Use Only
4 Source of Funds SC
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e) [_]
6 Citizenship or Place of Organization
USA
Number of Shares Beneficially Owned by Each Reporting Person With
7 SOLE VOTING POWER
68,915,409
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
68,915,409
10 SHARED DISPOSITIVE POWER
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
68,915,409
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [_]
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13 Percent of Class Represented by Amount in Row (11)
87.9%
14 Type of Reporting Person
IN
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AMENDMENT NO. 1 TO SCHEDULE 13D
This is Amendment No. 1 to the Schedule 13D filed April 13 , 1998, by
George C. Barker, a United States citizen who is a resident of Dallas, Texas,
and whose business address is 9603 White Rock Trail, Suite 100, Dallas, Texas
75238. The Schedule 13D and this Amendment No. 1 were and are being filed by Mr.
Barker in his individual capacity and as Trustee of the Phy.Med., Inc.
Employee Stock Ownership Trust.
Item 1. Security and Issuer.
The title and class of equity securities to which this statement
relates is the Common Stock, $.001 par value (the "Company Common Stock"), of
Tatonka Energy, Inc., an Oklahoma corporation,(the "Registrant"). The
Registrant's principal executive offices are located at 9603 White Rock Trail,
Suite 100 Dallas, Texas 75238.
Item 5. Interest in Securities of the Issuer.
(a)-(e) On April 3, 1998, George C. Barker, ("Barker"), individually
and as Trustee for the Phy.Med., Inc. Employee Stock Ownership Plan (the
"ESOP"), acquired control of the Registrant. Prior to such date, such parties
owned all the outstanding shares of Phy.Med., Inc., a Texas corporation
("PhyMed"), and on such date they acquired from the Registrant, in the
aggregate, immediate ownership of and the right to receive an aggregate of
68,915,409 authorized but unissued shares of Common Stock, $.001 par value, of
the Registrant, as presently constituted, which, if all such shares were
presently outstanding, would constitute 87.9% of the Registrant's then
outstanding 78,430,965 shares of Common Stock (86.9% of the 79,331,896 shares
which would be outstanding on a fully diluted basis).
The terms of the acquisition contemplate a 1-for-10 reverse stock split
which will become effective shortly after the 1998 Annual Meeting of
Shareholders. Upon the effectiveness of such reverse split, Barker and the ESOP
will own 6,891,541 shares of 7,843,097 shares, $.01 par value, outstanding
(7,933,190 shares on a full diluted basis). (The Registrant will continue to
have 50,000,000 shares of Common Stock authorized.)
Barker is the sole trustee of the ESOP and as such has the power to
vote the shares owned by the ESOP on matters such as the uncontested election of
Directors. Barker and his wife, Judith F. Barker, own in the aggregate
approximately 70% of the vested interests of the participants in the ESOP.
On March 6, 1998, certain parties entered into an Agreement and Plan of
Reorganization and Merger (the "Agreement"). The parties were Barker and the
ESOP, in their capacity as the shareholders of PhyMed, PhyMed itself, the
Registrant and Tatonka Subsidiary, Inc., a newly-formed and wholly-owned
subsidiary of the Registrant. The Agreement was consummated on April 3, 1998,
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by means of a statutory merger of Tatonka Subsidiary, Inc. into PhyMed, with
PhyMed being the surviving corporation. As a result of the merger, PhyMed is now
an 80% owned subsidiary of the Registrant, and the ESOP owns the remaining 20%
of PhyMed.
Prior to the merger, there were 800 common shares of PhyMed
outstanding, of which 500 were owned by Barker, individually, and 300 were owned
by the ESOP.
In the merger, the 500 PhyMed common shares owned by Barker were
converted into immediate ownership of and the right to receive 53,840,163 shares
of Common Stock of the Registrant, and 140 of the 300 PhyMed common shares owned
by the ESOP were converted in like manner into 15,075,246 shares of Common Stock
of the Registrant. The remaining 160 PhyMed common shares held by the ESOP now
constitute the 20% of PhyMed common shares not owned by the Registrant.
The Registrant has 50,000,000 shares of Common Stock authorized for
issuance and, at the time of the merger, had 9,916,487 shares issued and
outstanding or reserved for issuance. To the extent that the terms of the merger
would have resulted in the issuance of more than 50,000,000 shares, the excess
over 50,000,000 shall not be issued until such time as the stockholders of the
Registrant have approved an appropriate amendment to the Registrant's
Certificate of Incorporation. Prior to such approval, Barker and the ESOP will
continue to have a contractual right, pursuant to the Agreement and the Articles
of Merger filed with the Secretary of State of Texas at the time of the merger,
to receive such excess shares, subject to such required stockholder approval.
In summary, Barker and the ESOP received an aggregate of 39,583,513
shares of the Registrant at the time of the merger, the same being 80.6% of the
49,099,069 shares outstanding immediately after the merger. Of such number,
Barker, individually, received 30,924,620 shares (approximately 63%) of the
outstanding shares, and the ESOP received 8,658,893 shares (approximately
17.6%), both percentages on a fully-diluted basis.
Barker and the ESOP continue to have a contractual right to receive, in
the aggregate, an additional 29,331,896 shares, which will result in their
having, collectively, 86.9% of the then outstanding Common Stock of the
Registrant on a fully-diluted basis. Of such additional shares, 22,915,544 will
be received by Barker, individually, and 6,416,352 shares will be received by
the ESOP.
The parties to the Agreement contemplate that the Board of Directors
and stockholders of the Registrant will approve an amendment to the Registrant's
Certificate of Incorporation approving a 1-for-10 reverse stock split (including
an increase in the par value of the Common Stock from $.001 to $.01) and a
change of the Registrant's name to "PhyMed, Inc.". Upon the effectiveness of
such reverse stock split, all outstanding shares of common stock of the
Registrant, including the shares which were issued to Barker and the ESOP upon
the effectiveness of the merger, will represent one-tenth (1/10th) as many
shares. In addition, all shares reserved for issuance, including the shares
which the Registrant will still have a contractual obligation to issue to Barker
and the
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ESOP, will become rights to receive one-tenth (1/10th) as many shares. The
unissued shares due Barker and the ESOP from the merger will then be immediately
issued because the Registrant will then have a sufficient number of authorized
but unissued shares to issue for this purpose.
Possible Change of Control
The 800 shares of PhyMed owned by Barker and the ESOP at the time of
the merger were pledged to Patrick Alan Luckett ("Luckett") to secure the
payment of (a) two promissory notes payable to the order of Luckett, which were
issued to him as partial payment for shares of PhyMed purchased from him, and
(b) a guaranty of such notes.
On September 21, 1993, Barker and Luckett owned all the then
outstanding common shares of PhyMed, Inc., each of them owning of 500 common
shares. On such date Luckett sold 200 of his shares to PhyMed and 300 shares to
the ESOP. The sales were for cash and promissory notes. One note was issued by
PhyMed in the original principal amount of $800,000 pursuant to the terms of a
Loan and Security Agreement dated September 21, 1993, and the second promissory
note was issued by the ESOP in the original principal amount of $800,000. Both
notes were guaranteed by Barker. The PhyMed note was secured by the 200 shares
repurchased from Luckett by PhyMed; the ESOP note was secured by the 300 shares
the ESOP purchased from Luckett; and the 500 shares already owned by Barker were
pledged to secure his guaranty of the two notes.
The aggregate of 68,915,409 shares of Common Stock of the Registrant
received and to be received by Barker and the ESOP as a result of the merger
have been and will be substituted in the pledge for the 640 PhyMed shares which
were released from the pledge and converted into such shares of Common Stock of
the Registrant. The 20% of PhyMed still owned by the ESOP remains pledged for
such purpose.
As of April 1, 1998, the unpaid principal balance on the PhyMed note
was $186,008, and the ESOP note was $384,167.
At November 24, 1998, a non-monetary event of default existed under
this financing. It was waived by Mr. Lucket on October 24, 1998, See the
Registrant's Form 10-QSB for the quarter ended June 30, 1998, Item 2(b),
"Liquidity and Capital Resources.
Except as set forth in this Schedule 13D, including Item 6 below,
there have been no transactions by Barker or the ESOP in the Common Stock of the
Registrant within the last 60 days.
See Item 6 below.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
See Item 5 above.
Effective December 31, 1997, the Board of Directors authorized the
Company to issue to Joe P. Foor 1,000,000 shares of Common Stock, as presently
constituted (which will be 100,000, after giving effect to a proposed 1-for-10
reverse stock split), as a finder's fee for his services in
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introducing the Company and Phy.Med., Inc., and assisting in the consummation of
an acquisition of PhyMed, such shares to be issuable only in the event of the
consummation of a business combination transaction whereby the Company acquires
Phy.Med., Inc. On such date, the Common Stock was trading at about $0.06 per
share (or $20,000). The 1,000,000 shares were valued at $0.02 per share, on the
basis of the market value of the stock, discounted for being "restricted
securities" and lack of liquidity, as well as the Company's lack of earnings and
book value. The Company became obligated to issue such 1,000,000 shares of
Common Stock to Joe Foor for his services when the merger transaction which
became effective on April 3, 1998, and the shares are deemed to have been issued
on such date.
On March 31, 1998, the Company entered into a letter agreement with Joe
P. Foor and CCDC, Inc., a company controlled by Joe R. Love. Mr. Foor and CCDC,
Inc. (the "consultants") have agreed to provide certain specified consulting and
advisory services of a corporate development nature as the Company may need.
These include the identification, evaluation and negotiation of acquisitions,
strategic planning, optimization of capital structure, access to capital
markets, and similar services. The agreement is for a term of one year and will
continue after one year until terminated by either party upon 30 days' notice.
The Company will pay the consultants a $36,000 annual retainer, plus
out-of-pocket expenses. The consultants will also earn a transaction fee for
each acquisition or capital placement completed the Company completes. The
amount of the retainer will be credited against any transaction fees earned by
the consultants. The transaction fee will be based on the total amount paid by
the acquiring party or the total capital raised and will be a minimum of 3% of
such transaction amount. If greater than 3%, the transaction fee will be
determined by what is generally referred to as the "Lehman Formula," which is an
amount equal to the sum of:
5% of the first $1,000,000 of transaction amount;
4% of the second $1,000,000;
3% of the third $1,000,000;
2% of the fourth $1,000,000; and
1% of the remainder of the transaction amount.
The Company is currently seeking to raise additional capital for the
expansion of the business of PhyMed and is conducting a private offering of
securities. The offering is being made to accredited investors only and seeks to
raise a minimum of $200,000 and a maximum of $3,000,000 from the sale of Units
of a new Series B 12% Convertible Preferred Stock and Warrants to purchase
Common Stock.. The consultants will earn a transaction fee on any capital the
Company raises in this securities offering.
Effective May 4, 1998, the Board of Directors granted stock options to
Messrs. Barker, Love and Foor, subject to the approval of the shareholders. Each
of the options is subject to a separate stock option agreement and is not part
of a plan. The three options are exercisable to purchase a total of 10,000,000
shares of the Company's Common Stock at $0.075 per share, as presently
constituted
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(1,000,000 shares at $.75 per share, after the effectiveness of the 1-for-10
reverse stock split).
Mr. Barker's option is exercisable to purchase 5,000,000 shares of
Common Stock, as presently constituted (500,000 shares, after the effectiveness
of the 1-for-10 reverse stock split). The option is not immediately exercisable.
It vests and becomes exercisable in full at the end of any quarter during any
fiscal year when the cumulative "Operating Profit Before Corporate Overhead" for
such fiscal year to date equals or exceeds $1,065,483.
Mr. Barker's option has a term of 10 years and expires on May 4, 2008.
The purpose of Mr. Barker's stock option is to retain and incentivise him as
Chairman of the Board, President and Chief Executive Officer of the Company.
The options granted to Mr. Love and Mr. Foor are each exercisable to
purchase 2,500,000 shares, as presently constituted (250,000 shares, after the
effectiveness of the 1-for-10 reverse stock split). Each option can be exercised
in whole or in part at any time after the effectiveness of the 1- for-10 reverse
stock split, has a term of 10 years and expires on May 4, 2008. The purpose of
the options granted to Mr. Love and Mr. Foor is to compensate them for serving
as Directors of the Company.
The number of shares subject to an option is subject to proportional
adjustment for any increase or decrease in the number of shares issued by the
Company without receipt of consideration by the Company, such as a stock
dividend or a stock split.
The options are non-qualified stock options under the Internal Revenue
Code of 1986. As a general rule, no tax is imposed on the optionee upon the
grant of an option, nor will the Company be entitled to a tax deduction by
reason of such grant. Generally, upon the exercise of an option, an optionee
will be treated as receiving compensation taxable as ordinary income in the year
of exercise in an amount equal to the excess of the fair market value of the
shares on the date of exercise over the exercise price. Thereafter, if the
holder holds the stock for a period of one year or less the sale will be treated
as subject to ordinary income tax rates. Stock held for a period exceeding one
year receives capital gain tax rate treatment. The Company will be entitled to a
tax deduction in an amount equal to the compensation recognized by the optionee.
Item 7. Material to Be Filed as Exhibits
Attached as Exhibits are the following documents:
Exhibit Number Description
-------------- -----------
1. Agreement and Plan of Reorganization and Merger dated as of March
6, 1998 by and among Tatonka Energy, Inc., Tatonka Energy
Subsidiary, Inc., Phy.Med., Inc. and the Stockholders of PhyMed,
Inc.*
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2. Amendment dated as of March 6, 1998, to Agreement and Plan of
Reorganization and Merger dated as of March 6, 1998 by and among
Tatonka Energy, Inc. Tatonka Energy Subsidiary, Inc. Phy. Med.,
Inc. and the Stockholders of PhyMed, Inc.
- ------------------------------
* Previously filed with the original Schedule 13D filed on April 13, 1998.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: December 3, 1998 /s/ George C. Barker
--------------------
George C. Barker
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EXHIBIT 2 TO SCHEDULE 13D
AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
This Amendment to Agreement and Plan of Reorganization and Merger (this
"Amendment"), is dated as of March 6, 1998, by and among TATONKA ENERGY, INC.,
an Oklahoma corporation ("Tatonka"), TATONKA ENERGY SUBSIDIARY, INC., a Texas
corporation and a wholly-owned subsidiary of Tatonka ("Tatonka Sub"), PHY. MED.,
INC., a Texas corporation (the "Company") and GEORGE C. BARKER, a Texas resident
("Barker") and the EMPLOYEE STOCK OWNERSHIP PLAN OF PHY. MED., INC. (the
"ESOP")(Barker and the ESOP are collectively the "Stockholders").
Recitals
A. The parties have entered into an Agreement and Plan of
Reorganization and Merger dated as of March 6, 1998 (the "Agreement"), pursuant
to which Tatonka, Tatonka Sub, and the Company intend that Tatonka Sub be merged
with and into the Company, and that the Company be the sole surviving
corporation (sometimes called the "Surviving Corporation"), and Tatonka Sub be
the disappearing corporation (sometimes called the "Disappearing Corporation").
B. Tatonka, Tatonka Sub and the Company have each determined to engage
in the transactions contemplated hereby, pursuant to which (i) Tatonka Sub will
merge with and into the Company upon the terms and conditions set forth in this
Agreement and in accordance with the laws of the State of Texas, (ii) 80% of the
outstanding shares of the Company Common Stock shall be converted at such time
into shares of common stock, par value $.001 per share, of Tatonka (the "Tatonka
Common Stock") as set forth in this Agreement, and (iii) the Company shall
become an 80% owned subsidiary of Tatonka.
C. Recital F of the Agreement incorrectly states that Tatonka has
9,916,487 shares of Common Stock issued and outstanding or reserved for
issuance, when the correct number is 10,416,487 shares issued and outstanding or
reserved for issuance.
D. Section 2.11 contains several erroneous numbers of shares and
percentages.
E. "Exhibit A-Merger Consideration" to Exhibit "A" to the Articles of
Merger erroneously states:
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"The Stockholders shall receive the following Tatonka Common Stock as
their Merger Consideration:
George C. Barker......................................54,230,788 shares
The ESOP...............................................5,184,621 shares
Total Merger Consideration...........................69,415,409 shares"
NOW, THEREFORE, in consideration of the preceding recitals and their
mutual desire that the Agreement read correctly, the parties mutually agree to
correct said errors, as follows:
1. Recital F correctly reads as follows:
"F. Tatonka has 50,000,000 shares of Common Stock authorized
for issuance and 10,416,487 shares issued and outstanding or reserved
for issuance. Issuance at the effective Time of all the shares
representing the Merger Consideration would result in the issuance of
more than such 50,000,000 authorized shares."
2. Section 2.11 of Exhibit "A" attached to the Articles of Merger
correctly reads as follows:
"Section 2.11 Percentage Protection Provision. The parties to
this Agreement agree that they are entering into this Agreement with
the intention that Barker and the ESOP will have at least 86.87% of the
shares of Tatonka Common Stock outstanding after (a) the Effective Time
and (b) the conversion of all the Tatonka Preferred Stock, but before
the exercise of any of the three stock options contemplated to be
issued by Tatonka (after the Effective Time) and referred to in Section
4.4 of this Agreement. The numbers of shares of Tatonka Common Stock
set forth on Exhibit A as being issued to Barker and the ESOP at the
Effective Time are based on the assumptions that (a) no more than
9,515,556 shares of Tatonka Common Stock, as presently constituted,
will be outstanding at the Effective Time (exclusive of any shares that
may be issued upon conversion of Tatonka Preferred Stock prior to the
Effective Time), (b) no more than 900,931 shares will be issued upon
conversion of all the Tatonka Preferred Stock, (c) no other shares of
Tatonka Common Stock will be issued by virtue of any rights to receive
any shares of Tatonka Common Stock or other securities of Tatonka that
exist at the date of this Agreement or will exist at the Effective
Time, and (d) the aggregate of 10,416,487 shares enumerated in (a) and
(b) above will constitute no more than 13.13% of the shares of Tatonka
Common Stock outstanding after the events described above.
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The parties to this Agreement covenant and agree that if more
than the 10,416,487 shares of Tatonka Common Stock referred to in the
foregoing paragraph are ultimately issued by Tatonka as a consequence
of the matters referred to in such paragraph, Tatonka shall issue to
Barker and the ESOP, pro rata, such additional number of shares of
Tatonka Common Stock as shall be necessary to increase their collective
ownership percentage of all shares of Tatonka Common Stock outstanding
after the events described above to 86.87%."
3. (2) "Exhibit A-Merger Consideration," which is attached to Exhibit
"A" to the Articles of Merger, correctly reads as set forth below:
"Exhibit A - Merger Consideration
(As Corrected)
The Stockholders shall receive the following Tatonka Common Stock as
their Merger Consideration:
George C. Barker......................................53,840,164 shares
The ESOP..............................................15,075,245 shares
Total Merger Consideration...........................68,915,409 shares"
IN WITNESS WHEREOF, the parties have duly executed this Amendment to
Agreement and Plan of Reorganization and Merger as of the date first written
above.
TATONKA: TATONKA ENERGY, INC.
By: /s/ Joe Foor
------------------------------
Joe Foor
President
TATONKA SUB: TATONKA ENERGY SUBSIDIARY, INC.,
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By: /s/ Joe Foor
-----------------------------
Joe Foor
President
THE COMPANY: PHY. MED., INC.
By: /s/ George C. Barker
-----------------------------
George C. Barker
President
BARKER:
/s/ George C. Barker
-----------------------------
George C. Barker
ESOP: EMPLOYEE STOCK OWNERSHIP
PLAN OF PHY. MED, INC.
By: /s/ George C. Barker
------------------------------
George C. Barker, Trustee
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