<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-KSB/A
AMENDMENT NO. 1
X ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
- ------ SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
- ------ SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM _________ TO _________
COMMISSION FILE NUMBER: 2-73389
UNICORP, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
NEVADA 75-1764386
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION
600 TRAVIS, SUITE 6500
HOUSTON, TEXAS 77002
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 229-9100.
-----------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE.
SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: COMMON
STOCK, PAR VALUE $0.01 PER SHARE.
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY
SECTION 13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR SUCH
SHORTER PERIOD THAT THE ISSUER WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS
BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES . NO X.
---- ----
CHECK IF THERE IS NO DISCLOSURE OF DELINQUENT FILERS IN RESPONSE TO
ITEM 405 OF REGULATION S-B IS NOT CONTAINED IN THIS FORM, AND NO DISCLOSURE
WILL BE CONTAINED, TO THE BEST OF THE REGISTRANT'S KNOWLEDGE, IN DEFINITIVE
PROXY OR INFORMATION STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS
FORM 10-KSB OR ANY AMENDMENT TO THIS FORM 10-KSB. [ ]
THE ISSUER HAD NO REVENUES IN ITS MOST RECENT FISCAL YEAR.
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES
COMPUTED BY REFERENCE TO THE PRICE AT WHICH STOCK WAS SOLD, OR THE AVERAGE BID
AND ASKED PRICES OF SUCH STOCK, AS OF MARCH 2, 1998 WAS: $125,000.
THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON EQUITY, AS OF MARCH 2, 1998, WAS: 1,040,000.
DOCUMENTS INCORPORATED BY REFERENCE: NONE.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 1. Description of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 2. Description of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . 3
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters . . . . . . . . . . . . . 3
Item 6. Management's Discussion and Analysis of Financial Condition
and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 8. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 9 Directors, Executive Officers, Promoters and Control Persons;
Compliance With Section 16(a) of the Exchange Act. . . . . . . . . . . . . . . . . . . . 6
Item 10. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Compensation of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 11. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . . . 7
Item 12. Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 13. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
</TABLE>
i
<PAGE> 3
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
UNICORP, Inc., (the "Company" or the "Registrant") is a Nevada
corporation. As used herein, the terms the "Company" and the "Registrant"
refer to the Company and its wholly owned subsidiaries, unless the context
otherwise requires.
For financial information regarding the segments of the Registrant's
operations, see the information contained in the Consolidated Financial
Statements incorporated by reference in Item 7 hereof. The Registrant has not
had any revenues since 1991.
The Registrant was incorporated on May 8, 1981 under the name of
Texoil, Inc. for the purpose of minerals exploration, discovery, production,
refining, and transportation. In August 1988, the Registrant participated in
the minerals business through its then wholly-owned subsidiary, Whitsitt Oil
Company, Inc., a Texas corporation. The Registrant changed its name to
UNICORP, Inc. in 1989. Concurrent with the change of its name, the Registrant
acquired 90 percent of the outstanding capital stock of Med-X, Inc. As a
result of adverse business circumstances, no material business operations have
been conducted by the Registrant since 1992.
On December 15, 1997, the Registrant executed an Agreement and Plan of
Reorganization (the "Agreement") with L. Mychal Jefferson II ("Jefferson"),
the sole shareholder of The Laissez-Faire Group, Inc., a Texas corporation
("Laissez- Faire"), whereby the Registrant, in a tax-free exchange, agreed to
acquire all of the outstanding shares of the capital stock of Laissez-Faire in
exchange for shares of the Registrant's common stock (the "Common Stock"). The
Agreement closed on December 31, 1997. Pursuant to the terms of the Agreement,
Mr. Jefferson was to acquire 530,000 shares of the Class C Common Stock of the
Registrant. However, at the time of the closing of the Agreement, the
Registrant did not have the requisite capital structure in place to issue to
Mr. Jefferson the Class C Common Stock. The necessary change in the
Registrant's Articles of Incorporation will have to occur by vote of the
stockholders of the Registrant at a later date. In the meantime, Mr. Jefferson
agreed to take shares of the Registrant's existing Common Stock, so that after
the closing, Mr. Jefferson owned 94 percent of the issued and outstanding
shares of the Common Stock of the Registrant. Management expects to change the
focus of the Registrant to a petroleum refining and distribution business. The
Registrant anticipates that through an affiliated business, it can achieve
certain purchasing and marketing advantages in purchases of raw crude and the
sale of refined petroleum products to governmental agencies.
On January 20, 1998, the Board of Directors of the Registrant voted to
effectuate a reverse split of the outstanding shares of the Common Stock of the
Registrant, so that thereafter, for every 273 shares of the Common Stock of the
Registrant held by a stockholder of the Registrant, such stockholder shall now
hold one share of the Common Stock of the Registrant. There were no fractional
shares issued or cash paid in lieu of fractional shares, and consequently, all
shares received as a result of the reverse split were be rounded up to nearest
whole share. No vote of the stockholders was necessary to implement the
change.
Competition. The market for distribution of refined petroleum
products is very competitive, which results in narrow margins. Because the
distribution industry for refined petroleum products is highly fragmented, the
Registrant will have numerous competitors in each of its markets, some of which
may have significantly greater resources and name recognition than the
Registrant. The Registrant will have very little control over its cost of
product and will rely on its ability to provide value-added reliable services
to maintain its margins and competitive position. If the Registrant were to
fail to maintain the quality of its services, customers could choose
alternative distribution sources and the Registrant's margins could decrease,
which would have a material adverse effect on its business, results of
operations and financial condition. Furthermore, there can be no assurance
that major oil companies will not decide to distribute their own products in
direct competition with the Registrant or that large customers will not attempt
to buy directly from the major oil companies. The Registrant will also compete
with other companies in petroleum products supply. Each of these businesses is
competitive and includes competitors with significantly greater resources and
brand name recognition than the Registrant, including major and large
independent oil companies.
1
<PAGE> 4
Government Regulations. The Registrant's expected refining and
transport operations will be subject to various federal, state, and local
governmental regulations which may be changed from time to time in response to
economic or political conditions. Matters subject to regulation include
operating bonds, reports concerning operations, and environmental inspections.
From time to time, regulatory agencies have imposed price controls and
limitations on production by restricting the rate of flow from oil and gas
wells below actual production capacity to conserve supplies of oil and gas. In
addition, the production, handling, and storage transportation and disposal of
oil and gas, by- products thereof and other substances and materials produced
or used in connection with oil and gas operations are subject to regulation
under federal, state and local laws and regulations primarily relating to
protection of human health and the environment. These laws and regulations
have continually imposed increasingly strict requirements for water and air
pollution control and solid waste management.
EMPLOYEES
At December 31, 1997, the Registrant had no employees.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current offices of the executive officers of the
Registrant, who are to serve until the next regular meeting of the Board of
Directors to be held in 1998, and serving as of the date of this Report, are
set forth below. Also indicated is the date when each such person commenced
serving as an executive officer of the Registrant.
<TABLE>
<CAPTION>
DATE BECAME
NAME AND AGE OFFICE EXECUTIVE OFFICER
------------ ------ -----------------
<S> <C> <C>
Henry A. Schulle (34) . . . . . . . . . . Chairman of the Board November 1991
L. Mychal Jefferson II (29) . . . . . . . Chief Executive Officer, President, January 1998
Secretary and Chief Financial Officer
</TABLE>
A description of the business experience during the past several years
for each of the executive officers of the Registrant and certain significant
employees of the Registrant is set forth below.
Henry A. Schulle has served as Chairman of the Board since November
1991. He attended Schreiner College in Kerrville, Texas, majoring in business
administration. Mr. Schulle is currently employed by Dell Computer Corporation
as its liaison with vendors.
L. Mychal Jefferson II has served as President of the Registrant since
January 20, 1998 when he acquired 94 percent of the Common Stock in exchange
for all of his common stock in The Laissez-Faire Group, Inc., a Texas
corporation ("Laissez-Faire"). He has served as President of Laissez-Faire
since its founding in 1997. Mr. Jefferson began his career with Monmouth
Investments, a prominent regional investment banking firm. Thereafter, he
managed portfolios of major institutions and high net worth individuals at
Oppenheimer & Co. Mr. Jefferson is widely engaged in professional and civic
activities, including Chairman of the President's Advisory Board of the Houston
Development Council. Mr. Jefferson attended the University of Southern
Mississippi and the University of South Florida, majoring in Finance.
ITEM 2. DESCRIPTION OF PROPERTY.
Not applicable.
ITEM 3. LEGAL PROCEEDINGS
From time to time, the Registrant is involved in litigation relating
to claims arising out of its operations in the normal course of its business.
The Registrant maintains insurance coverage against potential claims in an
amount which it believes to be adequate. The Registrant believes that it is
not presently a party to any litigation the outcome of which would have a
material adverse effect on its results of operations or financial condition.
2
<PAGE> 5
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Registrant's Common Stock trades on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc. (the "NASD") in the United
States. The range of the high and low bid information for the Common Stock for
each full quarterly period within the two most recent fiscal years is shown on
the following table. As of December 31, 1997, the Registrant was authorized to
issue 50,000,000 shares of the Common Stock, of which there were issued and
outstanding 16,342,000 shares. On January 20, 1998, the Board of Directors of
the Registrant voted to effectuate a reverse split of the outstanding shares of
the Common Stock of the Registrant, so that thereafter, for every 273 shares of
the Common Stock of the Registrant held by a stockholder of the Registrant,
such stockholder shall now hold one share of the Common Stock of the
Registrant. There were no fractional shares issued or cash paid in lieu of
fractional shares, and consequently, all shares received as a result of the
reverse split were rounded up to nearest whole share. No vote of the
stockholders was necessary to implement the change. As a result of such
reverse split, the Registrant is still authorized to issue 50,000,000 shares of
the Common Stock, but only 1,040,000 shares are issued and outstanding as of
the date of this Report. The par value of the Common Stock remains unchanged
at $0.01 per share. No dividends were declared or paid during the below
described quarterly periods.
<TABLE>
<CAPTION>
COMMON STOCK
BID PRICE
---------------------- ------------------------
CALENDAR YEAR 1996 LOW HIGH
-------- ---- ---- ---------------------- ------------------------
<S> <C> <C>
First Quarter $0.008 $0.01
Second Quarter $0.008 $0.01
Third Quarter $0.008 $0.01
Fourth Quarter $0.008 $0.01
CALENDAR YEAR 1997 LOW HIGH
-------- ---- ---- ---------------------- ------------------------
First Quarter $0.008 $0.01
Second Quarter $0.008 $0.01
Third Quarter $0.008 $0.01
Fourth Quarter $0.008 $0.01
</TABLE>
As of March 2, 1998, the high and low bids with respect to the price
of the Common Stock were $2.50 and $1.50, respectively. These prices represent
interdealer prices, without adjustments for retail mark-ups, mark-downs or
commissions, and do not necessarily represent actual transactions.
As of December 31, 1997, there were 997 holders of record of the
Common Stock.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following is a discussion of the Registrant's financial condition
and results of operations. This discussion should be read in conjunction with
the Consolidated Financial Statements of the Registrant appearing under Item 7
of this Report. Statements contained in this "Management's Discussion and
Analysis of Financial Conditions and Results of Operations," which are not
historical facts may be forward-looking statements. Such information involves
risks and uncertainties, including those created by general market conditions,
competition and the possibility that events may occur which could limit the
ability of the Registrant to maintain or improve its operating results or
execute its primary growth strategy. Although management believes that the
assumptions underlying the forward-looking statements are reasonable, any of
the assumptions could be inaccurate, and there can therefore be no assurance
that
3
<PAGE> 6
the forward-looking statements included herein will prove to be accurate. The
inclusion of such information should not be regarded as a representation by
management or any other person that the objectives and plans of the Registrant
will be achieved. Moreover, such forward-looking statements are subject to
certain risks and uncertainties which could cause actual results to differ
materially from those projected. Readers are cautioned not to place undue
reliance on these forward-looking statements that speak only as of the date
hereof.
GENERAL
Management intends for the Registrant to proceed in its efforts to
expand holdings through the purchase of existing, profitable, private,
companies where there is a demonstrable gain in productivity through the
minimization of general and administrative costs which are duplicative.
Management will seek to implement a capital structure which affords the
greatest flexibility for future acquisitions while maintaining an adequate base
of equity to cushion against fluctuations in the business cycle. It is the
belief of management that numerous opportunities for vertical expansion in the
refining and petrochemical business are available. Many smaller private fuel
distributors and convenience store operators are available near current
acquisition candidates, and given the proper capital structure, could enhance
the worth and viability of the Registrant.
A public relations agreement has been signed with Jaz Bermaine &
Company to provide public relations and market exposure for the Registrant. It
is expected that the Registrant will be traded on the OTC Bulletin Board until
such time as the Registrant can qualify for a listing on different exchange.
Pending Acquisitions. As of the end of 1997, the Registrant had
examined nine potential acquisition candidates. Of these, a letter of intent
has been signed with Sellers Petroleum Products, Inc. ("Sellers") of Yuma,
Arizona, and negotiations continue with the others. Sellers engages in the
marketing and distribution of refined petroleum products in Arizona and
California. Expected consideration for the purchase is $7,000,000. The
Registrant has also elected to pursue an agreement to purchase a refinery
located at the Valverde refurbishment facility in Houston, Texas and a refinery
and site, located in Nixon, Texas. The Registrant continues its search for
undervalued private and public entities in related businesses. Meetings with
several investment banking relationships have been held pursuant to financing
for these anticipated purchases.
Management expects that the Registrant's proposed acquisitions will
expand the business of the Registrant through the acquisition of an
established, growing distribution business in the southwestern United States.
Management is of the opinion, that the purchase of refining, and distribution
facilities in Texas will limit the Registrant's reliance upon outside refiners
for refined petroleum products. The Registrant is also currently negotiating
for the purchase of a third existing company which operates a distribution and
convenience store operation in the southwestern United States.
Sellers Petroleum. Sellers Petroleum Products, Inc. (herein
"Sellers") is one of the largest distributors of wholesale petroleum products
in the Yuma, Arizona and El Centro, California regions. Products offered
include fuels (gasoline, oil, and diesel), lubricants, maintenance services,
and tires, batteries, and accessories. Sellers maintains two modern bulk plant
facilities located in Yuma, Arizona and El Centro, California, as well as seven
state-of-the-art cardlock facilities throughout its regions. The facilities
are the only ones of all regional competitors that are in compliance with all
applicable EPA standards through 1998, including above ground tank storage,
storm water compliance, and product transportation regulations.
Sellers is a branded Unocal 76 jobber, although fuel is also rack
purchased from various other major refiners and independents refiners based
upon pricing. Unocal, Chevron, and Texaco lubricant products are also offered.
Sellers has maintained a strong relationship with Unocal since its inception in
1954, and continues to be its premier distributor in the region. Sellers is
currently Unocal's third largest lubricant jobber nationwide, and has been
approached by Unocal to expand its service region further into both Southern
California and Arizona. Its customers include both commercial and retail
(cardlock and service station) accounts. Management strongly emphasizes
service, with customer satisfaction evident in its 95 percent + rate of repeat
business. Customer service is further augmented by through excellent staffing,
characterized by low employee turnover and average employee tenure of 10 years.
The Registrant expects that the current Sellers management will be retained
post acquisition. Sellers has over 1,300 active accounts which order at least
once per month.
4
<PAGE> 7
Nixon, Texas Refinery. The Nixon refinery is located on a 50 acre
site approximately 40 miles south of San Antonio, Texas. The plant is
certified by the U.S. Department of Energy at a rate of 17,033 barrels per day
of 42 API Crude. The plant was designed to refine military jet fuel in
addition to propane, C3/C4, Naptha, kerosene, diesel, gas, oil, and residuals.
The refinery ran for several years delivering Military Jet fuel to all three
U.S. Air Force bases in San Antonio prior to its closure after Desert Storm.
The refinery can be tuned to produce the standard range of refined petroleum
products to meet demand in its market area. The Registrant feels that through
an association with a minority owned petroleum distributor, profit margins
exceeding $3.00 per barrel refined may be realized. The refinery is currently
being refurbished in Houston, Texas. Management believes that by combining its
additional 6,000 to 7,000 barrels of refining capacity to the Nixon Refinery,
the Registrant can process approximately 20,000 barrels of petroleum daily.
Fluid Catalytic Catalyst. The Registrant has recently entered into a
letter of intent to purchase from Equitable Assets, Inc. approximately 58,000
tons of fluid catalytic catalyst (Zeolite), which is used in the refining,
agriculture, water purification, turf management, and air purification markets,
in exchange for 420,000 shares of the Registrant's Class A Common Stock and
$5,800,000 of $100 Par Series A Callable Preferred Stock. The Registrant does
not yet have in place the requisite capital structure to conclude the sale and
purchase, but after the expected stockholders' meeting to be called for the
purpose of amending the Registrant's articles of incorporation, the transaction
can go forward. The proposed purchase price for the Zeolite is approximately
$175 per ton. The current market price for Zeolite ranges from $300 to $1,100
per ton. The Registrant plans to sell 20,571 tons of the Zeolite to Equitable
Assets, Inc. in exchange for notes and commercial paper equaling $5,000,000, or
$243 per ton. Management is currently examining the wholesale markets to find
customers who might be consistent purchasers for its remaining inventory of
fluid catalytic catalyst. The material will also be tested to determine its
efficacy in any refinery that the Registrant may purchase.
LIQUIDITY AND CAPITAL RESOURCES
In order to complete the proposed acquisitions, the Registrant will
require additional funding. Management believes that this funding is available
through investment bankers who have expressed an interest in providing equity
and debt funding. There can be no assurance as to the availability or terms of
this financing.
If the Registrant is to be successful in concluding the above
described proposed acquisitions, it will be obligated to spend at least
$400,000 in earnest money, $200,000 in purchase money, at least $100,000 in
acquisition costs, plus shares of the Common Stock and other costs before
formal contracts can be executed or closed. Certain anticipated transactions
may require the Registrant to incur additional debt, and the degree to which
the Registrant may be leveraged could have important consequences, including
the following: (i) the possible impairment of the Registrant's ability to
obtain financing in the future for potential acquisitions, working capital,
capital expenditures or general corporate purposes; (ii) the necessity for a
substantial portion of the Registrant's cash flow from operations to be
dedicated to the payment of principal and interest on its indebtedness; (iii)
the potential for increased interest expense due to fluctuations in interest
rates; and (iv) the potential for increased vulnerability of the Registrant to
economic downturns and possible limitation of its ability to withstand
competitive pressures. The Registrant's ability to meet its debt service
obligations will be dependent upon the Registrant's future performance, which
will be subject to general economic conditions and to financial, business and
other factors affecting the operations of the Registrant, many of which are
beyond its control.
RESULTS OF OPERATIONS
The Registrant has generated no revenues since 1991, and has had no
activity since 1992.
ITEM 7. FINANCIAL STATEMENTS.
The information required by this Item 7 appears on pages 10 through
12 of this Report, and is incorporated herein by reference.
5
<PAGE> 8
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The information set forth under "Item 1. Description of Business -
Executive Officers of the Registrant" is incorporated herein by reference. At
the date of this Report, the executive officers of the Registrant were Henry A.
Schulle and L. Mychal Jefferson II.
In the years prior to December 31, 1997, various officers and
directors of the Registrant have failed to file a Form 3 on a timely basis upon
becoming an executive officer and director of the Registrant.
Set forth below are the directors of the Registrant, together with
their ages as of the date of this Report. Each director is elected for a one
year term and serves until his successor is elected and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITION DIRECTOR SINCE
---- --- -------- -------------
<S> <C> <C> <C>
Henry A. Schulle . . . . . . . . . . . 34 Chairman of the Board of Directors November 1991
L. Mychal Jefferson II . . . . . . . . 29 Director January 1998
Azie Taylor Morton . . . . . . . . . . 64 Director January 1998
</TABLE>
Ms. Azie Taylor Morton is the mother-in-law of L. Mychal Jefferson II.
Ms. Morton served as the 36th Treasurer of the United States during the Carter
Administration. She has also served on the Board of Directors of Wendy's
International and Scholtzsky's, Inc. She currently serves on the advisory
Board of Horizon Bank of Virginia and is president of Exeter Capital Asset
Management in Austin, Texas.
Certain information with respect to the other members of the Board of
Directors of the Registrant is set forth above in "Item 1. Description of
Business - Executive Officers of the Registrant."
ITEM 10. EXECUTIVE COMPENSATION.
Since 1991, the Registrant has not paid salaries or other form
compensation to any of its officers or directors. Effective as of January 20,
1998, L. Mychal Jefferson II will receive an annual salary of $36,000.
COMPENSATION OF DIRECTORS
The Registrant does not compensate any of its directors for their
services to the Registrant as directors. However, the Registrant does
reimburse its directors for expenses incurred in attending board meetings.
6
<PAGE> 9
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table presents certain information regarding the
beneficial ownership of all shares of the Common Stock at February 28, 1998
(i) each person who owns beneficially more than five percent of the outstanding
shares of the Common Stock, (ii) each director of the Company, (iii) each named
executive officer, and (iv) all directors and officers as a group.
<TABLE>
<CAPTION>
Shares Beneficially Owned
-------------------------
Name of Beneficial Owner (1) Number Percent (2)
---------------------------- ------ -----------
<S> <C> <C>
L. Mychal Jefferson II . . . . . . . . . . . . . . . . . . . . 940,000 90.38
Henry A. Schulle . . . . . . . . . . . . . . . . . . . . . . . 3,810 *
All directors and officers
as a group (two persons) . . . . . . . . . . . . . . . . . . 943,810 90.38
- -----------------
* Less than one percent.
(1) Unless otherwise indicated, each person named in the above-described table has the sole voting and investment power
with respect to his shares of the Common Stock beneficially owned.
(2) Unless otherwise provided, the calculation of percentage ownership is based on the total number of shares of the
Common Stock outstanding as of February 28, 1998. Any shares of the Common Stock which are not outstanding as of
such date but are subject to options, warrants, or rights of conversion exercisable within 60 days of February 28,
1998 shall be deemed to be outstanding for the purpose of computing percentage ownership of outstanding shares of
the Common Stock by such person but shall not be deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Not applicable.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) List of Documents Filed with this Report.
<CAPTION>
PAGE
----
<S> <C> <C>
(1) Consolidated Financial Statements, UNICORP, Inc. and subsidiary companies--
Report of Alvin L. Dahl & Associates, P.C.,
independent certified public accountants, dated January 28, 1998 . . . . . . . . . . . . . . . . . 10
Balance Sheet-for the Years Ended December 31, 1997 . . . . . . . . . . . . . . . . . . . . . . . . 11
Notes to Consolidated Financial Statements as of December 31, 1997 . . . . . . . . . . . . . . . . . 12
</TABLE>
All schedules have been omitted since the information required to be
submitted has been included in the financial statements or notes or has been
omitted as not applicable or not required.
7
<PAGE> 10
<TABLE>
<S> <C>
(2) Exhibits--
The exhibits indicated by an asterisk (*) are incorporated by reference.
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
----------- -------------------------
3(a)* Articles of Incorporation of Texoil, Inc. filed on May 8, 1981 with the Secretary
of State of Nevada, described in the Registration Statement on Form S-2 of the
Registrant effective October 13, 1981. Commission File No. 2-73389.
3(b)* Certificate of Amendment to Articles of Incorporation of Texoil, Inc. filed on
October 10, 1989 with the Secretary of State of Nevada, described in Form 10-KSB
for the year ended December 31, 1997, filed March 6, 1998. Commission File No. 2-
73389.
3(c)*
Bylaws, as Amended January 20, 1998, described in Form 10-KSB for the year ended
December 31, 1997, filed March 6, 1998. Commission File No. 2-73389.
10(a)*
Agreement and Plan of Reorganization dated December 15, 1997 by and between
UNICORP, Inc., The Laissez-Faire Group, Inc., and L. Mychal Jefferson II with
respect to the exchange of all of the shares owned by L. Mychal Jefferson II in
The Laissez-Faire Group, Inc. for an amount of shares of UNICORP, Inc. equal to 94
percent of the issued and outstanding shares of its capital stock, described in
Exhibit "1" to Form 8-K for the Registrant dated February 13, 1998 and filed
February 18, 1998. Commission File No. 2-73389.
21*
Subsidiaries of the Registrant, described in Form 10-KSB for the year ended
December 31, 1997, filed March 6, 1998. Commission File No. 2-73389.
23(a)*
Consent of Alvin L. Dahl & Associates, P.C., certified public accountants,
described in Form 10-KSB for the year ended December 31, 1997, filed March 6,
1998. Commission File No. 2-73389.
27*
Financial Data Schedule, described in Form 10-KSB for the year ended December 31,
1997, filed March 6, 1998. Commission File No. 2-73389.
(b) Reports on Form 8-K.
-------------------
(1) Current Report on Form 8-K for the Registrant dated February 13, 1998, and filed on February 18, 1998.
Commission File No. 2-73389, reporting a change in the control of the Registrant and the acquisition of
assets. ("Item 1. Changes in Control of Registrant," and "Item 2. Acquisition of Assets").
(c) Financial Statement Schedules.
-----------------------------
No schedules are required as all information required has been presented in the audited financial
statements.
</TABLE>
8
<PAGE> 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
UNICORP, INC.
By /s/ L. Mychal Jefferson II
---------------------------------
L. Mychal Jefferson II, President
March 24, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Henry A. Schulle Chairman of the Board March 24, 1998
-----------------------------
Henry A. Schulle
/s/ L. Mychal Jefferson II Chief Executive Officer, March 24, 1998
----------------------------- President, Secretary, Chief
L. Mychal Jefferson II Financial Officer, and Director
</TABLE>
9
<PAGE> 12
[ALVIN L. DAHL & ASSOCIATES, PC LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
And Stockholders
Unicorp, Inc.
2800 Post Oak, Suite 5260
Houston, Texas
We have audited the accompanying consolidated balance sheet of Unicorp, Inc.
and subsidiaries as of December 31, 1997. This financial statement is the
responsibility of the Company's management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted accounting
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.
In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material aspects, the financial position of Unicorp, Inc. as of
December 31, 1997, in conformity with generally accepted accounting principles.
The accompanying financial statement has been prepared assuming that the
Company will continue as a going concern. As discussed in note 10 to the
financial statement, the Company has a history of recurring losses from
operations, has been dormant for several years, and has a net capital
deficiency that raise substantial doubt about its ability to continue as a
going concern. Management's plans in regard to these matters are also described
in notes 5 and 10. The financial statement does not include any adjustments
that might result from the outcome of this uncertainty.
/s/ ALVIN L. DAHL & ASSOCIATES, PC
ALVIN L. DAHL & Associates, PC
January 28, 1998
Dallas, Texas
-10-
<PAGE> 13
UNICORP, INC.
BALANCE SHEET
FOR THE YEARS ENDED DECEMBER 31, 1997
ASSETS
<TABLE>
<CAPTION>
1997
----------
<S> <C>
Current Assets:
Cash 0
Total Current Assets 0
Property, Plant & Equipment 0
----------
Total Assets 0
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable $ 7,500
----------
Total Current Liabilities 7,500
Stockholders' Equity:
Common Stock 163,780
50,000,000 shares authorized, 16,377,951
issued and outstanding, par value $0.01
Paid In Capital 2,932,474
Retained Earnings (deficit) (Notes 9 & 10) ($3,103,754)
----------
Total Liabilities & Stockholders' Equity 0
</TABLE>
THE ACCOMPANYING NOTES ARE AND INTEGRAL PART OF THIS FINANCIAL STATEMENT
-11-
<PAGE> 14
UNICORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENT
AS OF DECEMBER 31, 1997
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Financial Statement Presentation. The consolidated financial statement
includes the accounts of the Company and its subsidiaries. Intercompany
transactions and accounts are eliminated.
Cash Equivalents. Holdings of highly liquid investments with maturity of three
months or less when purchased are considered to be cash equivalents.
Inventories. Inventories are valued at the lower of cost or market.
Property, Plant, and Equipment. Property, plant, and equipment are valued at
cost less depreciation and amortization. Depreciation and amortization are
primarily accounted for on the straight-line method based on estimated useful
lives. Betterments and large renewals, which extend the life of the asset, are
capitalized whereas maintenance and repairs and small renewals are expensed as
incurred.
Sales. Income is recognized in the financial statements (and the customer
billed) when products are shipped.
Income Taxes. The Company uses the asset and liability method as identified in
SFAS 109, Accounting for Income Taxes.
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 and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Earnings Per Share. Primary Earnings Per Share are based upon 16,377,951
weighted average shares of common stock outstanding. No effect has been given
to common stock equivalents since none are outstanding.
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128 Earnings Per Share
effective for financial statement periods ending after December 15, 1997. This
statement specifies the computation, presentation, and disclosure requirements
for earnings per share for entities with publicly held common stock or
potential common stock.
-12-
<PAGE> 15
NOTE 2. OPERATIONS AND SUBSIDIARIES
The company was incorporated in the State of Nevada on May 8, 1988, the
Stockholders voted to change the name to "Unicorp, Inc." In 1992, the Company
ceased active operations; However, the president personally continued to pay
state corporate fees to keep the corporations in good standing. During its
active life, the Company was an oil and gas operator and a medical insurance
claims processor through its wholly owned subsidiaries.
The Company owns one (1) subsidiary: Med-X Systems, Inc. (90% owned), and has
evidence of ownership of two (2) additional subsidiaries: Texas Nevada Oil &
Gas Company, and Whitsitt Oil Company, Inc. All are currently inactive with no
known assets or liabilities. Whitsitt Oil & Texas Nevada continued to operate
for a period after the parent ceased day to day operations. The oil and gas
operations were liquidated and the proceeds as well as income from the oil &
gas leases was used to pay accounts payable and day to day operating expenses.
Since the subsidiaries were inactive and the oil and gas operations have
previously been liquidated, the subsidiaries are given no value in the
financial statements. The Company has not been able to locate stock
certificates evidencing ownership of two of its subsidiaries: Whitsitt Oil
Company, Inc. and Texas Nevada Oil & Gas Company. The Company will take the
necessary actions in the future to prove ownership of these subsidiaries.
NOTE 3. INCOME TAXES
The Company uses the accrual method of accounting for tax and financial
reporting purposes. At, December 31, 1997, the Company had net operating loss
carryforwards for financial and tax reporting purposes of approximately
$3,000,000. these carryforwards expire through the year 2005, and are further
subject to provisions of the Internal Revenue Code, Section 382. Pursuant to
Statement of Financial Accounting Standards No. 109, the Company has recognized
a deferred tax asset attributable to the net operating loss carryover, which
has been fully offset by a valuation allowance in the same amount.
Loss Carry Forward Expirations
1998 $ 619,398
1999 $ 483,096
2000 $ 442,083
2001 $ 280,604
2002 $ 238,837
2003 $ 377,905
2004 $ 353,886
2005 $ 91,588
----------
$2,887,397
Valuation allowance ($2,887,397)
-13-
<PAGE> 16
NOTE 4. RELATED PARTY TRANSACTIONS
Before ceasing daily operations, the former President advanced funds to the
Company to cover operating expenses. These funds are not reflected on the
balance sheet as a note payable. Additionally, the former President has
advanced personal funds on the Company's behalf to keep the Company and
Subsidiary Corporations in "good standing" with State authorities. These
advances were forgiven in 1991.
Note 5. COMMITMENTS/SUBSEQUENT EVENTS
On December 15, 1997, the Company entered an agreement and plan of
reorganization with The Laissez-Faire Group, Inc., a Texas Corporation and
L. Mychal Jefferson II, its stockholder. This agreement requires the Company
(Unicorp, Inc.) to acquire The Laissez-Faire Group, Inc. in an exchange of
common stock. The Board of Directors approved this on December 31, 1997 with a
closing date to be established in 1998.
Subsequent to the balance sheet date, the Company, as required by the
aforementioned reorganization agreement, entered into a commitment to purchase
the oil distribution business of Sellers Petroleum ("Sellers") of Yuma,
Arizona. Expected consideration for purchase is $7,000,000. The Company is also
pursuing an agreement to purchase a refinery located at the Valverde
refurbishment facility in Houston, Texas and a refinery and site, located in
Nixon, Texas. The Company is currently seeking financing necessary to
consummate these purchases.
Subsequent to the balance sheet date, the Company has committed to purchase
approximately 58,000 tons of Fluid Catalytic Catalyst (Zeolite) in exchange for
420,000 shares of Class A common stock and $5,800,000 of $100 Par Series A
Callable Preferred stock. A sale of 20,571 tons of the Zeolite has been
arranged in exchange for collateralized notes and commercial paper equaling
$5,000,000. The sale is contingent closing of the Laissez-Faire transaction.
NOTE 6. STOCKHOLDERS' EQUITY
At December 31, 1997, the number of authorized and issued Common Shares
outstanding and the related par value and dividends paid are as follows:
<TABLE>
<CAPTION>
1997
-----------
<S> <C>
Common Stock authorized 50,000,000
Common Stock issued 16,377,951
Common Stock outstanding 16,377,951
Common Stock, per share par value $ 0.01
Cash dividends paid on common stock 0
</TABLE>
-14-
<PAGE> 17
At the December 31, 1997 Director's meeting, a proposal was approved to reverse
split the Company's common stock on a 270 to 1 basis as required by the plan of
reorganization and agreement with The Laissez-Faire Group, Inc. The Company
also voted to amend its charter to issue (i) one hundred million (100,000,000)
shares of Class A voting common stock having a par value of $0.01 per share
(ii) fifty million (50,000,000) shares of Class B non-voting common stock,
having a par value of $0.01 per share (iii) ten million (10,000,000) shares of
Class C voting common stock having a par value of $0.01 per share and (iv)
twenty-five million (25,000,000) shares of Series A preferred stock, having a
par value of $100.00 per share.
NOTE 7. YEAR 2000 ISSUES
The Company currently has no computer systems. It is anticipated that any
future purchases of computer hardware or software will be evaluated to
eliminate any potential Year 2000 problems. The Year 2000 Issue is the result
of computer programs being written using two digits rather than four to define
the applicable year. Any programs that have time-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a major system failure or miscalculations.
NOTE 8. OMISSION OF INCOME STATEMENT AND STATEMENT OF CASH FLOWS
The Company has not had any business activity since 1991. Expenses advanced by
the former President were nominal and were advanced to keep the Company and its
Subsidiaries current with the respective State Government authorities. Since
there was no income, only nominal expenses, which were advanced by a related
party; the Income Statement, and Statement of Cash Flows has been omitted from
this presentation.
NOTE 9. MINORITY INTEREST IN MED EX
The Company's Subsidiary, Med Ex, operated for one year (1988) and contributed
approximately $25,160 of positive net income to the Company's retained earnings
for that year. The ten-percent minority interest amounts to $2,516 and is
deemed not material to the financial statement.
NOTE 10. GOING CONCERN ISSUES
The accompanying financial statement was prepared assuming that the Company
would begin new operations as a going concern. The Company has a history of
operating losses during the period 1988 through 1992; and, as of the balance
sheet date, has no business activity. Although management has made commitments;
and agreements have been entered into subsequent to the balance sheet date (see
note 5), no assurance can be given that the new "start up" will be successful.
If the agreements and commitments, which have been made by management, are not
completed during 1998, the Company will have no on-going business activities or
operations.
-15-
