SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
AMENDMENT TO
FORM 10-QSB
[ X ] Quarterly report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] Transition report under section 13 or 15 (d) of the Exchange Act
COMMISSION FILE NUMBER 0-14136
CASMYN CORP.
(Exact name of registrant as specified in Charter)
COLORADO
(State or other jurisdiction of incorporation)
84-0987840
(IRS Employer Identification No.)
1335 GREG STREET, UNIT #104
SPARKS, NEVADA 89431
(702) 331-5524
(Address and Telephone Number of Principal Executive Offices)
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 registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ].
As of July 15, 1996, 6,675,931 shares of the issuer's common stock were
outstanding.
This report contains 11 pages. There are no exhibits.
<PAGE>
CASMYN CORP.
FORM 10-QSB
INDEX
Page
PART I. Financial Information: No.
Condensed Consolidated Balance Sheet - March 31, 1996 3
Condensed Consolidated Statements of Operations - Three Months
and Six Months ended March 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash Flows - Six Months
ended March 31,1996 and 1995 5
Notes to Condensed Consolidated Financial Statements 6
Management's Discussion and Analysis or Plan of Operation 8
PART II. Other Information:
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 11
<PAGE>
<TABLE>
<CAPTION>
CASMYN CORP.
CONDENSED CONSOLIDATED BALANCE SHEET
MARCH 31, 1996
(UNAUDITED)
ASSETS
CURRENT ASSETS:
<S> <C>
Cash and cash equivalents $ 12,027,949
Accounts receivable, net 337,311
Inventories 909,383
Prepaid expenses and other assets 95,925
---------------
Total Current Assets 13,370,568
---------------
Investment in Related Party 204,227
Equipment and Improvements, net 1,302,214
Mineral Properties 6,739,908
Other Assets 1,310,919
---------------
$ 22,927,836
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued Liabilities $ 2,875,402
Due to related parties 119,209
---------------
Total Liabilities 2,994,611
---------------
Convertible Debt 5,000,000
---------------
Stockholders' Equity:
Preferred stock, $.10 par value; 20,000,000
shares authorized; 2,707,000 shares issued
and outstanding 270,700
Common stock, $.04 par value; 300,000,000 shares
authorized; 6,675,931 shares issued and
outstanding 267,037
Additional paid-in capital 20,958,450
Accumulated deficit ( 6,489,827)
Foreign currency translation adjustment ( 73,135)
---------------
Total and Stockholders' Equity 14,933,225
---------------
Total Liabilities and Stockholders' Equity $ 22,927,836
===============
<FN>
See accompanying notes to condensed, consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASMYN CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
FOR THE SIX MONTHS FOR THE THREE MONTHS
ENDED MARCH 31, ENDED MARCH 31,
1996 1995 1996 1995
------------------------- ----------------------------
<S> <C> <C> <C> <C>
SALES $ 659,657 $ 395,795 $ 418,878 $ 289,888
COST OF GOODS SOLD 433,419 446,820 161,239 366,407
------------------------- ---------------------------
GROSS PROFIT 226,238 ( 51,025) 257,639 ( 76,519)
------------------------- ---------------------------
COSTS AND EXPENSES:
Selling, general and
administrative expense 2,772,610 1,442,130 1,314,018 654,817
Depreciation, depletion
and amortization 48,183 39,274 26,225 14,573
Mineral exploration 319,783 291,867 113,291 106,521
Research and development 165,860 305,708 63,462 101,441
------------------------- ---------------------------
3,306,436 2,078,979 1,516,996 877,352
------------------------- ---------------------------
LOSS FROM OPERATIONS (3,080,198) (2,130,004) (1,259,357) (953,871)
------------------------- ---------------------------
OTHER INCOME:
Minority interest in
net loss of consolidated
subsidiary 498,663 1,751,200 - 875,600
Interest and other income 251,511 111,159 96,016 62,422
Interest expense ( 92,020) ( 23,376) ( 42,006) ( 12,438)
------------------------ ---------------------------
658,154 1,838,983 54,010 925,584
------------------------ ---------------------------
LOSS FROM CONTINUING
OPERATIONS (2,422,044) ( 291,021) (1,205,347) ( 28,287)
------------------------ ---------------------------
GAIN FROM DISCONTINUED
OPERATIONS - 32,429 - 109,783
------------------------ ---------------------------
NET INCOME (LOSS) $(2,422,044)$ (258,592) $(1,205,347) $ 81,496
======================== ===========================
INCOME (LOSS) PER COMMON SHARE:
Loss from Continuing
Operations $ (.41)$ (.04) $ (.20) $ -
Income from Discontinued
Operations - .01 - .01
------------------------ ---------------------------
NET INCOME (LOSS) $ (.41)$ (.03) $ (.20) $ .01
======================== ===========================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 5,942,251 7,481,115 5,927,861 7,515,629
========================= ===========================
<FN>
SEE ACCOMPANYING NOTES TO CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CASMYN CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
1996 1995
-------------- --------------
<S> <C> <C>
Cash flows from operating activities $( 1,267,924) $( 2,827,226)
-------------- --------------
Cash flows from investing activites ( 7,579,384) 216,522
-------------- --------------
Cash flows from financing activities 16,016,797 1,614,884
-------------- --------------
Foreign currency translation adjustment ( 80,485) 9,972
-------------- --------------
Net increase (decrease) in cash and
cash equivalents 7,089,004 ( 985,848)
Cash and cash equivalents, beginning
of period 4,938,945 1,075,876
------------- -------------
Cash and cash equivalents, end
of period $ 12,027,949 $ 90,028
============= =============
<FN>
DISCLOSURE OF ACCOUNTING POLICY:
For purposes of cash flows, the Company considers all short-term investments
with an original maturity of three months or less to be cash equivalents.
SEE ACCOMPANYING NOTES TO CONDENSED, CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
CASMYN CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements are unaudited;
however, in the opinion of management, such statements include all adjustments
(which are of a normal, recurring nature) necessary for a fair statement of
the results for the interim periods. The financial statements included herein
have been prepared by Casmyn Corp. (the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information
and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although the Company
believes that the disclosures included herein are adequate to make the
information not misleading.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the notes to the Company's
consolidated financial statements filed as part of the Company's September 30,
1995 Form 10-KSB. The Form 10-KSB should be read in conjunction with this
quarterly report.
2. INVESTMENT IN RELATED PARTY
At March 31, 1996, the Company holds 425,750 shares of common stock of Auromar
Development Corporation ("Auromar"), a related party. The Company has
announced an agreement in principle to merge with Auromar.
3. RELATED PARTY TRANSACTIONS
The Company conducts business with various companies that are related through
the existence of certain common officers, directors and significant
stockholders. These related parties include: Diamond Fontein International
Limited; Auromar Development Corp.; Dahya Holdings, Inc.; and Casmyn Research
and Engineering, Ltd.. As a result of these related party transactions, cash
advances from and to the Company and other transactions, the Company had a net
amount due to related parties at March 31, 1996 of $119,209. This amount is
non-interest bearing and contains no formal repayment terms.
4. PROPOSED AUROMAR MERGER
On March 29, 1995, the Company announced that it had reached an agreement in
principle to effect a merger with Auromar Development Corp. Under the terms
of the agreement, as amended October 11, 1995, shareholders of Auromar would
receive one (1) share of Casmyn Corp. common stock for two and six tenths
(2.6) shares of Auromar common stock. The merger has been approved by the
shareholders of Auromar Development Corp. The agreement has been approved by
the British Columbia (Canada) Supreme Court. The Company anticipates that
this transaction will be completed in the near future.
5. ZIMBABWE ACQUISITIONS
Effective Janaury 31, 1996, in accordance with the terms and conditions of a
formal Purchase Agreement concluded in August 1995, the Company completed the
acquisition of 100% of the shares of a group of five (5) private mining
companies controlled by the Muir Family in Zimbabwe through E.W.B. Properties
(Private) Limited ("EWB"). The total consideration for this acquisition was
$4,071,415 million plus applicable taxes which are currently estimated at
approximately $1,018,000. The acquisition includes several mining claims on
producing gold mining properties covering approximately 1,200 hectares
(approximately 2,965 acres) in the Bubi Greenstone Gold Belt of Zimbabwe.
These properties include infrastructure, mining and milling equipment.
In a separate transaction, also effective January 31, 1996, the Company
completed the acquisition of a 100% interest in the Dawn Mine property from
Olympus Gold Mines Ltd. in Zimbabwe for approximately $455,000. The Dawn Mine
is adjacent to the mines acquired in the EWB transaction.
The acquisitions were accounted for using the purchase method. The purchase
price has been allocated to mineral properties.
6. PREFERRED STOCK
On October 3, 1995, the Company converted 2,707,000 of its common shares held
directly or beneficially by the Company's President, Chief Executive Officer
and Chairman of the Board, into 2,707,000 Series A preferred shares. Each
Series A preferred share is convertible, at the holder's option, into one
share of the Company's common stock and is entitled to receive dividends equal
to that of common shares, without preference. Preferred shares are entitled
to vote with common shares with the further provision that each preferred
share will be entitled to the equivalent of five (5) common share votes.
7. SUBSEQUENT EVENTS
On May 24, 1996, the Company issued 606,061 commons shares in exchange for
5,680,514 common shares of WestAmerica Corporation ("WestAmerica",
approximately a 65% interest). WestAmerica is engaged in the oil and gas
exploration and production business primarily in the states of Oklahoma and
Texas. WestAmerica also engages in the securities and investment banking
businesses through it's ownership of WestAmerica Investment Group, Inc. and
its subsidiary WIC, a registered broker dealer. The Company has accounted for
the transaction using the equity method since the shares acquired are subject
to a repurchase agreement by WestAmerica and have been placed in a voting
trust controlled by an officer and director of WestAmerica. As such the
Company exercises no effective control over the operations or management of
WestAmerica, however, the Company has the ability to appoint two out of five
board members. The transaction has been valued at approximately $6,970,000,
which was calculated based upon an $11.50 per common share value for the
Company's common stock. This value reflects a discount from recent similar
sized transactions to compensate for the restricted nature of the shares
issued in the transaction
On May 7, 1996, the Company entered into a 50:50 joint venture with Newgold
Incorporated, a private company based in Reno, Nevada, for the development of
the Relief Canyon Mine located in Pershing County, Nevada. The Company will
contribute approximately $1,400,000 for its 50% interest in the venture.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATION
RESULTS OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1996 COMPARED TO THE SIX MONTHS ENDED MARCH 31,
1995
Revenues for the six months ended March 31, 1996, were $659,657 compared to
$395,795 for the six months ended March 31, 1995. The $263,862 increase was
due to an increase of $158,484 in sales of water purification systems and
$105,378 from the sale of gold produced in Zimbabwe. Overall gross profit for
the six months ended March 31, 1996 was 34% compared to a loss for the six
months ended March 31, 1995. Gross profit on water purification equipment
sales was 26% for the six month period ended March 31, 1996 compared to a loss
in the same period ended March 31, 1995 due to lower freight charges and lower
component costs. Gross profit on gold sales was 77% for the six months ended
March 31, 1996, there were no gold sales in the six month period ended March
31, 1995.
Costs and expenses were $3,306,436 for the six months ended March 31, 1996,
compared to $2,078,979 for the six months ended March 31, 1995, an increase of
$1,227,457. Compensation and benefits increased $445,867 for the six month
period ended March 31, 1996 compared to the six month period ended March 31,
1995 due primarily to the Company recording $243,040 in compensation expense
related to the granting of 246,000 non-qualified stock options and increased
staff levels in the six month period ended March 31, 1996 compared to the
period ended March 31, 1995. Expenses related to professional services,
primarily legal, audit and marketing increased by $393,961 in the six month
period ended March 31, 1996 compared to the six month period ended March 31,
1995. Travel related expenses increased $145,673 in the six month period
ended March 31, 1996 compared to the six month period ended March 31, 1995 due
to increased trips to Africa, India and Vietnam related to the Company's
operations in those countries. Mineral exploration expense and depreciation
increased a total of $36,825 in the six month period ended March 31, 1996
compared to the six months ended March 31, 1995. These increases were offset
by a decrease in research and development related expenses of $139,848.
General and administrative costs increased $344,979 for the six months ended
March 31, 1996 compared to 1995 due primarily to higher costs related to
business activities in Vietnam, and increased costs related to the U.S.
rollout of water purification products.
Other income, exclusive of minority interest, was $159,491 for the six month
period ended March 31, 1996, compared to $87,783 for the six months ended
March 31, 1995, an increase of $71,708. This increase was due primarily to
interest income earned on short term investments made by the Company offset by
interest expense. Minority interest in the net loss of VETI decreased by
$1,252,537 for the six months ended March 31, 1996 due to a limitation on the
amount of loss which could be absorbed by the minority shareholders.
The Company anticipates that expenditures related to upgrading the newly
acquired mining properties in Zimbabwe will exceed revenues derived from the
sale of gold from the mines. The Company is in the process of preparing a
capital improvement budget for the Zimbabwe properties. Additionally, the
Company anticipates that expense levels experienced in the six months ended
March 31, 1996 relating to active exploration programs in South Africa will
continue for the foreseeable future. The Company charges to expense all
mineral resource exploration and development costs until the mineral property
to which they relate is determined to have proven reserves for which recovery
is economically feasible. Costs are then capitalized until the mineral
property to which they relate is placed into production, sold, abandoned or
written down where there is an impairment in value. Capitalized costs are to
be charged to future operations on a unit-of-production basis. The Company
estimates that total gold resources at the Turk Mines are 5,000,000 ounces.
Independent engineering studies are currently underway which may cause this
estimate to change. The gold occurs in sulfides, oxides and old mill
tailings.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH 31,
1995
Revenues for the three months ended March 31, 1996 were $418,878 compared to
$289,888 for the three months ended March 31, 1995. The $128,990 increase is
due primarily to the sale of gold produced at the Zimbabwe mine of $105,378
and an increase in sales of water purification equipment
Costs and expenses were $1,516,996 for the three months ended March 31, 1996
compared to $877,352 for the three months ended March 31, 1995, an increase of
$639,644. Compensation and benefits increased $287,141 for the three month
period ended March 31, 1996 compared to the three month period ended March 31,
1995 due to $44,190 in compensation expense related to certain non-qualified
stock options and increased staff levels in the three month period ended March
31, 1996 compared to the three month period ended March 31, 1995. Expenses
related to professional services, primarily legal, audit and marketing
increased by $349,648 in the three month period ended March 31, 1996 compared
to the three month period ended March 31, 1995. Depreciation and mineral
exploration expense increased marginally in the three months ended March 31,
1996 compared to the prior year three month period. These increases were
partially offset by a decrease in research and development related expenses of
$37,979.
Minority interest in the net loss of VETI decreased by $875,600 for the three
months ended March 31, 1996 due to a limitation on the amount of losses that
could be absorbed by the minority shareholders. Other income, exclusive of
minority interest, was $54,010 for the three month period ended March 31,
1996, compared to $49,984 for the three months ended March 31, 1995, an
increase of $4,026. This increase is comprised of an increase in interest and
other income of $33,594 offset by an increase in interest expense of $29,568.
CAPITAL RESOURCES AND LIQUIDITY
At March 31, 1996, the Company's working capital was $10,375,957, including
$12,027,949 in cash and cash equivalents. The Company's mineral resource
development business segment has acquired certain mineral properties in South
Africa and on January 31, 1996 concluded the acquisition of certain mining
properties and assets in Zimbabwe for $4,526,415 cash plus applicable taxes of
$1,017,854 to be paid upon assessment subject to certain adjustments. In
addition, the water purification business segment has begun sales and
marketing programs in North America and in various third world countries.
Management anticipates that the net use of cash by operations will increase
during the foreseeable future due to expenditures on mineral resource
development projects in South Africa, mineral exploration and facility
upgrades at the Zimbabwe mining properties and development of various markets
for VETI's water purification technologies. The Company will use current cash
and cash equivalents to fund the on-going projects in the short term and
anticipates that it will be able to secure additional debt and/or equity
financing, to fund longer term projects. As evidence of the Company's ability
to secure debt and/or equity financing in the six month period ended March 31,
1996 the Company has received $8,815,555, net of commissions and other
expenses related to the transaction, through issuance of 750,000 shares of
restricted common stock in an exempt private transaction.
Net Cash Used in Operating Activities. Net cash used in operating activities
was $1,267,924 for the six months ended March 31, 1996 compared to $2,827,226
for the six months ended March 31, 1995. The decrease in net cash used in
operations was due principally to a decrease in minority interest in the net
loss of VETI of $1,252,537 offset by increases in the net loss because of
active exploration programs conducted on mineral properties in fiscal 1996 and
expenses related to sales of water purification systems.
Net Cash Used in Investing Activities. Net cash used in investing activities
was $7,579,384 for the six months ended March 31, 1996 compared to net cash
provided by investing activities of $216,522 for the six months ended March
31, 1995. The decrease in net cash provided by investing activities was due
to the purchase of certain mineral properties and assets in Zimbabwe, and
purchases of equipment and improvements, primarily related to a water bottling
plant under construction in Vietnam.
Net Cash Provided by Financing Activities. Net cash provided by financing
activities was $16,016,797 for the six months ended March 31, 1996 compared to
$1,614,884 for the six months ended March 31, 1995. The increase is due to
the Company receiving $16,115,557 from the collection of funds from private
placements of common stock of the Company and VETI, offset by the repayment of
long-term debt of $98,760.
The Company is organized with a relatively small, highly trained staff and
anticipates that the overall staff level will remain low in the foreseeable
future because the majority of mineral resource development activities are
performed by independent contractors on a project by project basis. The
Company believes that these arrangements will not require a significant
investment by the Company in either personnel or facilities.
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
None
B. Forms 8-K
1. The Company filed an 8-K on February 15, 1996, reporting that it
completed its acquisition of 100% of the shares of a group of five (5)
private mining companies located in Zimbabwe. The total consideration for
this acquisition was approximately $4,017,415 cash plus applicable taxes of
approximately $1,017,854 to be paid upon assessment of said taxes as defined
in the terms of the acquisition agreement.
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.
Casmyn Corp.
July 18, 1996 By _____________________________
Dennis E. Welling, Controller
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<CIK> 0000772320
<NAME> CASMYN CORP.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 12028
<SECURITIES> 0
<RECEIVABLES> 337
<ALLOWANCES> 0
<INVENTORY> 909
<CURRENT-ASSETS> 13371
<PP&E> 1477
<DEPRECIATION> 175
<TOTAL-ASSETS> 22928
<CURRENT-LIABILITIES> 2995
<BONDS> 0
0
271
<COMMON> 267
<OTHER-SE> 14395
<TOTAL-LIABILITY-AND-EQUITY> 22928
<SALES> 660
<TOTAL-REVENUES> 660
<CGS> 433
<TOTAL-COSTS> 433
<OTHER-EXPENSES> 3306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 63
<INCOME-PRETAX> (2422)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2422)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2422)
<EPS-PRIMARY> (.41)
<EPS-DILUTED> (.41)
</TABLE>
