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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 20, 1996
WASATCH PHARMACEUTICAL, INC.
- ----------------------------
(Exact name of registrant as specified in its charter)
UTAH 2-35700 84-0854009
- ---------------------------- ----------------------- --------------------
(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of incorporation)
714 East 7200 South, Midvale, Utah 84047
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(Address of principal executive office)
Registrant's telephone number, including area code: (801) 566-9688
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N/A
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS
(b)(1) Pro Forma Financial Statements.
The registrant acquired, from an independent party in negotiated
arms-length transaction, a partial and minority interest in 50 nominally
producing oil and gas wells located in West Virginia. The registrants
investment in the 50 wells was made because the current operator, Mountaineer
Gas Transmission, Inc., has a plan to rework and recomplete the 50 wells in a
production improvement program projected to recover over 15,000,000 MCF of
natural gas.
The registrant requested financial information for the properties from
the former operator to comply with Rule 3-05 of Regulation S-X. However,
registrant was advised that such information was proprietary and consequently,
the operator would not be able to divulge the information the registrant
requested. The registrant then obtained from the West Virginia Office of Oil
and Gas Production data on the wells in which it had purchased an interest.
The production data was for the three years ending in 1995 (1996 data not
available) and revealed the following:
Reported Revenue to
MCF Gross Registrant's
Year Production Revenue 25% Interest
---- ---------- ------- ------------
(A) (B) (C)
1993 23,226 $53,420 $10,293
1994 17,767 49,392 9,518
1995 16,976 56,870 10,958
(A) MCF production is based upon reported MCF of gas and the MCF equivalent
of oil.
(B) Based upon an average price per MCF of: 1993 $2.30
1994 2.78
1995 3.35
(C) The registrant's revenue is before operating expenses
The acquisition was predicated upon the future value of the developed
properties, therefore historical information is not representative of the
scope and purpose of the Registrant's investment. Consequently, the financial
statements submitted in accordance with Regulation S-X, Rule 3-05 is the
following proforma balance sheet of the registrant combined with the fair
market value of the assets acquired.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunder duly authorized.
WASATCH PHARMACEUTICAL, INC.
Date: February 27, 1997 /s/ David K. Giles
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David K. Giles, Secretary
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WASATCH PHARMACEUTICAL, INC.
PRO FORMA FINANCIAL INFORMATION
The following consolidated historical balance sheets of Wasatch
Pharmaceutical, Inc. (the "Registrant") and Subsidiaries at December 31, 1995
(Audited) and September 30, 1996 (Unaudited) have been combined with the
value attributed to oil and gas properties(OGP) purchased by the Registrant on
November 20, 1996 as if the event had taken place on December 31, 1995 and
September 30, 1996, respectively. The presentation gives effect to the
Registrant's acquisition of a 25% working interest in 50 oil and gas wells
that are part of the operator's plan to enhance production in proven
formations through improved rework and completion techniques. This
historical financial presentation should be read in conjunction with the Forms
10KSB and 10QSB for the periods ended December 31, 1995 and September 30,
1996, respectively, and the Form 8-KSB filed on December 13, 1996.
<TABLE>
<CAPTION>
Historical and Pro Forma Condensed
Combined
Balance Sheets As of
- -------------------------------------------
December 31,
1995 September 30,
Wasatch OGP Adjustments
Combined 1996
------- ------- -----------
- -------- -------------
(5) (Unaudited)(1)
ASSETS
<S> <C> <C> <C>
<C> <C>
Current Assets.................... $ 13,332 $ -0- $ -0- $
13,333 $ 15,243
Property & Equipment, at Cost
Oil and Gas Properties.......... -0- -0- 3,719,536
3,719,536 3,719,536
Furniture & Equipment........... 45,205 -0- -0-
45,205 39,739
-------- ------ ----------
- ---------- -----------
Total 45,205 -0- 3,719,536
3,764,741 3,759,275
Accumulated Depreciation and
Amortization................... (10,749) -0- -0-
(10,749) (13,211)
-------- ------ ----------
- ---------- -----------
34,456 -0- 3,719,536
3,753,992 3,746,064
Other Assets...................... 266 -0- -0-
265 132
-------- ------ ----------
- ---------- -----------
Total Assets...................... $ 48,054 $ -0- $3,719,536
$3,767,590 $ 3,761,439
======== ====== ==========
========== ===========
LIABILITIES
Current Liabilities
Notes Payable................... $649,640 $ -0- $ -0- $
649,640 $ 766,741
Other........................... 280,081 -0- -0-
280,081 357,015
-------- ------ ----------
- ---------- -----------
Total Liabilities................. 929,721 -0- -0-
929,721 1,123,756
SHAREHOLDERS' EQUITY
Preferred Stock................. 2,463 -0- -0-
2,463 2,463
Common Stock Issued
Historical..................... 3,022 -0- -0-
3,022 3,230
For Working Interest........... -0- -0- 2,000
2,000 2,000
Addition Paid-in Capital
Historical..................... 193,118 -0- -0-
193,118 341,643
For Working Interest........... -0- -0- 3,717,536
3,717,536 3,717,536
Accumulated Development
Stage Deficit.................. (1,080,270) -0- -0-
(1,081,270) (1,429,189)
---------- ------ ----------
- ---------- -----------
Total Shareholders' Equity........ (881,667) -0- 3,719,536
2,836,869 2,637,683
---------- ------ ----------
- ---------- -----------
TOTAL LIABILITIES AND EQUITY $ 48,054 $ -0- $3,719,536
$3,767,590 $ 3,761,439
========== ====== ==========
========== ===========
</TABLE>
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NOTES TO PRO FORMA FINANCIAL STATEMENTS
(1) The September 30, 1996, unaudited, pro forma balance sheet is on a pro
forma adjusted and combined basis and is included as supplementary data.
(2) The value attributed to the oil and gas properties is based upon a
recoverable reserve analysis obtained by the Registrant from independent
sources.
(3) On August 16,1996, the Registrant effected a four to one reverse split of
its issued common stock. All effected share amounts have been restated to
reflect that split.
(4) The Registrant has executed a contract to issue 12 million shares at $5.00
per share based upon the occurrence of particular future events. In as much as
those events are neither determinable or measureable at this time, nothing has
been reflected in the financial statements.
(4) In November, 1996, the Registrant issued options to purchase 1,500,000
shares of its common stock. The option price was more than market value and,
consequently, was not recorded.
(5) The Pro Forma Adjustment reflects the fair value of the tangible assets
acquired on November 20, 1996 in a stock for asset exchange. The Registrant
issued 2 million common shares in exchange for a 25% working interest in 50
oil and gas wells located in three counties of western West Virginia.
