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): April 19, 2000
(February 8, 2000)
Empire Energy Corporation
---------------------------------------------------
(Exact Name of Registrant as specified in its charter)
Utah 1-10077 87-0401761
---- ------- ----------
(State or other jurisdiction) (Commission file number) (IRS Employer ID No.)
11011 King Street, Suite 260, Overland Park, Kansas 66210
- --------------------------------------------------- -----
(address of principal executive offices) (zip code)
(913) 469-5615
- --------------
(Registrant's telephone number,
including area code)
<PAGE>
Item 7. Financial Statements and Exhibits.
----------------------------------
(a) Financial Statements
--------------------
Audited financial statements of Omega International, Inc. are filed
herewith.
(b) Pro forma Financial Statements
------------------------------
Pro forma financial information of Registrant and Omega are filed
herwith.
(c) Exhibits
---------
2.04 Previously filed.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, as
amended, the Registrant has caused this report to be signed on its behalf by the
undersigned duly authorized officer.
Empire Energy Corporation
(Registrant)
Dated: April 19, 2000 By: /s/ Norman L. Peterson
--------------------------------
Norman L. Peterson President
2
<PAGE>
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
AND
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
Attached are the historical audited financial statements of Omega International,
Inc. (Omega) (a development stage company) for the acquisition of Omega by
Empire Energy Corporation (Empire) (a development stage company). The unaudited
pro forma combined financial information has been prepared utilizing the
historical financial statements of Empire. The unaudited pro forma combined
financial statements should be read in conjunction with the attached historical
financial statements of Empire and Omega.
The following unaudited pro forma combined statements of operations for the year
ended December 31, 1999 and for the period from March 21, 1995 (inception) to
December 31, 1999 and the unaudited pro forma combined balance sheet as of
December 31, 1999 give effect to the business combination of Empire and Omega
(effective February 8, 2000) including the related pro forma adjustments
described in the notes thereto. Due to common ownership within the companies,
the transaction between Empire and Omega has been accounted for in a manner
similar to pooling of interests. The unaudited pro forma statements of
operations include the business combination as if the transaction occurred on
January 1, 1999. The unaudited pro forma balance sheet has been prepared as if
the transaction occurred on December 31, 1999. The pro forma statements are not
necessarily indicative of the results of operations or the financial position as
they may be in the future or as they might have been had the transaction become
effective on the above-mentioned dates.
The unaudited pro forma combined statements of operations for the year ended
December 31, 1999 include the results of operations of Empire for the year ended
December 31, 1999 and Omega for the period from December 18, 1997 (inception) to
December 31, 1999. The unaudited pro forma combined statements of operations for
the period from March 21, 1995 (inception) to December 31, 1999 include the
results of operations of Empire for the period from March 21, 1995 (inception)
to December 31, 1999 and Omega for the period from December 18, 1997 (inception)
to December 31, 1999.
F-1
<PAGE>
<TABLE>
<CAPTION>
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
- ------------------------------------------------------------------------------------------------------------------
ASSETS
------
Unaudited
Historical December 31, 1999 Pro Forma
----------------------------- Pro Forma December 31,
Empire Omega Adjustments 1999
----------- ----------- ----------- -----------
CURRENT ASSETS
<S> <C> <C> <C> <C>
Cash $ 35,756 $ 14,887 (b) $ (26,475) $ 24,168
Accounts receivable, net 28,300 -- -- 28,300
Notes receivable -
related parties -- 25,000 (c) (25,000) --
----------- ----------- ----------- -----------
TOTAL CURRENT ASSETS 64,056 39,887 (51,475) 52,468
PROPERTY AND EQUIPMENT, NET 7,589 1,370 -- 8,959
OIL AND GAS PROPERTIES, NET 71,959 -- -- 71,959
OTHER ASSETS 1,000 -- -- 1,000
----------- ----------- ----------- -----------
TOTAL ASSETS $ 144,604 $ 41,257 $ (51,475) $ 134,386
=========== =========== =========== ===========
LIABILITIES
-----------
CURRENT LIABILITIES
Accounts payable and accrued
expenses $ 24,035 $ -- $ -- $ 24,035
Notes payable - related parties 52,500 -- (c) (25,000) 27,500
Convertible debentures 342,500 -- -- 342,500
----------- ----------- ----------- -----------
TOTAL CURRENT LIABILITIES 419,035 -- (25,000) 394,035
----------- ----------- ----------- -----------
STOCKHOLDERS' EQUITY
--------------------
STOCKHOLDERS' EQUITY
Common stock 11,109 2,325 (a) (1,765) 11,669
Additional paid-in-capital 1,978,308 243,675 (a) 1,765 2,197,273
Previous retained deficit (1,867,999) -- -- (1,867,999)
Deficit accumulated during
development stage (395,849) (204,743) -- (600,592)
----------- ----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY (274,431) 41,257 (26,475) (259,649)
----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 144,604 $ 41,257 $ (51,475) $ 134,386
=========== =========== =========== ===========
- ------------------------------------------------------------------------------------------------------------------
See notes to unaudited pro forma financial information.
F-2
<PAGE>
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
- ------------------------------------------------------------------------------------------------------------------
For the Year Ended December 31, 1999
-----------------------------------------------------------------
Pro Forma Unaudited
Empire Omega Adjustments Pro Forma
------------ ---------- ----------- ------------
OIL AND GAS SALES $ 69,401 $ -- $ -- $ 69,401
EXPENSES
Lease operating 1,100 -- -- 1,100
Depreciation, depletion, amortization
and impairment 72,345 147,500 -- 219,845
Interest 24,250 4,888 -- 29,138
General and administrative 559,588 46,440 -- 606,028
------------ ------------ --- ------------
TOTAL EXPENSES 657,283 198,828 -- 856,111
------------ ------------ ------ ------------
OPERATING LOSS (587,882) (198,828) -- (786,710)
Provision for income taxes -- -- -- --
------------ ------------ --- ------------
Loss before extraordinary item (587,882) (198,828) -- (786,710)
Extraordinary item -- -- -- --
------------ ------------ ------ ------------
Net Loss $ (587,882) $ (198,828) $ -- $ (786,710)
============ ============ ====== ============
Net loss per common share $ (0.07)
=============
Weighted Average Shares Outstanding 11,442,785
=============
- ------------------------------------------------------------------------------------------------------------------
See notes to unaudited pro forma financial information.
F-3
<PAGE>
EMPIRE ENERGY CORPORATION
(A DEVELOPMENT STAGE COMPANY)
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Period from March 21, 1995 (Inception) to December 31, 1999
-----------------------------------------------------------------
Pro Forma Unaudited
Empire Omega Adjustments Pro Forma
----------- --------- ----------- -----------
OIL AND GAS SALES $ 69,401 $ -- $-- $ 69,401
EXPENSES
Lease operating 1,100 -- -- 1,100
Depreciation, depletion, amortization
and impairment 72,345 147,500 -- 219,845
Interest 24,250 4,888 -- 29,138
General and administrative 622,783 52,355 -- 675,138
----------- ----------- --- -----------
TOTAL EXPENSES 720,478 204,743 -- 925,221
----------- --- -----------
OPERATING LOSS (651,077) (204,743) -- (855,820)
Provision for income taxes (300) -- -- (300)
----------- ----------- --- -----------
Loss before extraordinary item (651,377) (204,743) -- (856,120)
Extraordinary item 255,528 -- -- 255,528
----------- ----------- --- -----------
Net Loss $ (395,849) $ (204,743) $-- $ (600,592)
=========== =========== === ===========
Loss per share before extraordinary item (0.33)
Extraordinary item 0.10
-----------
Net loss per common share ($ 0.23)
===========
Weighted Average Shares Outstanding 2,620,231
===========
- ------------------------------------------------------------------------------------------------------------------
See notes to unaudited pro forma financial information.
F-4
</TABLE>
<PAGE>
Notes to Unaudited Pro Forma Combined Financial Statements
On February 8, 2000, Empire acquired Omega. Empire issued 560,000 shares of
common stock for Omega's 560,000 outstanding shares of common stock. Prior to
the acquisition, Omega was required to repurchase 1,765,000 shares of its common
stock for $.015 per share in order to reduce its number of outstanding shares to
560,000. At the time of the acquisition, Empire and Omega had common ownership;
therefore, the acquisition will be accounted for in a manner similar to pooling
of interests. Pursuant to the requirements of Accounting Principles Board
Opinion No. 16, the assets and liabilities of Omega will be recorded at
historical cost.
The unaudited pro forma adjustments are as follows:
a. To record the issuance of 560,000 shares of Empire stock with a par
value of $.001.
b. To record the repurchase of 1,765,000 shares of Omega common stock at
$.015 per share prior to the acquisition. Omega was required to have a
maximum of 560,000 shares of common stock outstanding at the time of
the merger.
c. To eliminate intercompany notes.
F-5
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
CONTENTS
- --------------------------------------------------------------------------------
Page
----
Independent Auditors' Report F-7
Financial Statements:
Balance Sheet F-8
Statements of Operations F-9
Statements of Stockholders' Equity F-10
Statements of Cash Flows F-11
Notes to Financial Statements F-12 to F-15
F-6
<PAGE>
Independent Auditors' Report
To the Board of Directors and Stockholders
Omega International, Inc.
Overland Park, Kansas
We have audited the accompanying balance sheet of Omega International, Inc. (a
development stage company) as of December 31, 1999, and the related statements
of operations, stockholders' equity, and cash flows for the year ended December
31, 1999 and the period from December 18, 1997 (inception) to December 31, 1999.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Omega International, Inc. as of
December 31, 1999 and the results of its operations and its cash flows for the
year ended December 31, 1999 and the period from December 18, 1997 (inception)
to December 31, 1999, in conformity with generally accepted accounting
principles.
January 24, 2000 /s/Sartain Fischbein & Co.
F-7
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
- --------------------------------------------------------------------------------
December 31, 1999
- --------------------------------------------------------------------------------
ASSETS
Current Assets:
Cash $ 14,887
Notes receivable, net 25,000
---------
Total Current Assets 39,887
Equipment, net of accumulated depreciation of $331 1,370
---------
$ 41,257
=========
STOCKHOLDERS' EQUITY
Stockholders' Equity
Common stock, $.001 par value, 55,000,000 shares
authorized, 2,325,000 shares issued and outstanding 2,325
Additional paid-in capital 243,675
Deficit accumulated during development stage (204,743)
---------
Total Stockholders' Equity 41,257
---------
$ 41,257
=========
F-8
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
Period from
December 18,
Year 1997 (inception)
Ended to
December 31, December 31,
1999 1999
- --------------------------------------------------------------------------------
Revenue $ -- $ --
General and Administrative Expenses 46,440 52,355
----------- -----------
Operating Loss (46,440) (52,355)
Other Expenses:
Interest expense 4,888 4,888
Impairment of notes receivable 147,500 147,500
----------- -----------
152,388 152,388
----------- -----------
Net Loss $ (198,828) $ (204,743)
=========== ===========
Basic Loss Per Share $ (0.11) $ (0.18)
=========== ===========
Basic Weighted Average Shares Outstanding 1,820,833 1,160,417
=========== ===========
F-9
- --------------------------------------------------------------------------------
The accompanying ntoes are an integral part of the financial statements.
<PAGE>
<TABLE>
<CAPTION>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
- --------------------------------------------------------------------------------------------------------------------
Period from December 18, 1997 (inception) to December 31, 1999
- --------------------------------------------------------------------------------------------------------------------
Deficit
Accumulated
Common Stock Additional During
-------------------------- Paid-in Development
Shares Amount Capital Stage Total
--------- --------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Balance at Inception,
December 18, 1997 -- $ -- $ -- $ -- $ --
Issue shares for cash at
$.01 per share 500,000 500 4,500 -- 5,000
--------- --------- --------- --------- ---------
Balance, December 31, 1997 500,000 500 4,500 -- 5,000
Net loss for period -- -- -- (5,915) (5,915)
--------- --------- --------- --------- ---------
Balance, December 31,1998 500,000 500 4,500 (5,915) (915)
Issue shares for cash
at $.01 per share 1,600,000 1,600 14,400 -- 16,000
Issue shares for cash at $1.00 per
share in a private placement 225,000 225 224,775 -- 225,000
Net loss -- -- -- (198,828) (198,828)
--------- --------- --------- --------- ---------
Balance, December 31, 1999 2,325,000 $ 2,325 $ 243,675 $(204,743) $ 41,257
========= ========= ========= ========= =========
F-10
- --------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
</TABLE>
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
Period from
Year 1997 (inception)
Ended to
December 31, December 31,
1999 1999
- --------------------------------------------------------------------------------
Cash Flows From Operating Activities:
Net loss $(198,828) $(204,743)
Adjustments to reconcile net loss to net cash
used inoperating activities:
Depreciaition 331 331
Impairment of notes receivable 147,500 147,500
--------- ---------
Net Cash Used in Operating Activities (50,997) (56,912)
--------- ---------
Cash Flows from Investing Activities:
Advances on notes receivable (172,500) (172,500)
Purchase of equipment (1,701) (1,701)
--------- ---------
Net Cash Used in Investing Activities (174,201) (174,201)
--------- ---------
Cash Flows From Financing Activities:
Borrowing on notes payable 65,000 66,500
Repayments on notes payable (66,500) (66,500)
Proceeds from the sale of common stock 241,000 246,000
--------- ---------
Net Cash Provided By Financing Activities 239,500 246,000
--------- ---------
Net Increase in Cash 14,302 14,887
Cash, beginning of period 585 --
--------- ---------
Cash, end of period $ 14,887 $ 14,887
========= =========
Cash Paid During the Year For:
Interest $ 4,888 $ 4,888
========= =========
F-11
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM DECEMBER 18, 1997 (INCEPTION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. SUMMARY OF Nature of Operations: Omega International, Inc. (the
SIGNIFICANT "Company") was incorporated in December 1997 to recognize
ACCOUNTING various business opportunities, primarily in Africa.
POLICIES
Equipment: Expenditures for equipment are recorded at cost.
Depreciation is provided on a straight-line basis over the
estimated useful life of the equipment of 3 years.
Per Share Information: The computation of earnings per share
is based on the loss applicable to common stockholders,
divided by the weighted average number of common shares
outstanding during the period.
Income Taxes: The Company uses the asset and liability
method of accounting for income taxes. Under the asset and
liability method, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
difference between the financial statement carrying amounts
of existing assets and liabilities and their respective tax
basis. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income
in the years in which those temporary differences are
expected to be recovered or settled.
Use of Estimates: The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amount 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.
F-12
- --------------------------------------------------------------------------------
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM DECEMBER 18, 1997 (INCEPTION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
2. DEVELOPMENT The Company was incorporated on December 18, 1997. The
STAGE operations to date have consisted primarily of raising
OPERATIONS capital and developing a business plan. The Company
currently is focusing on business opportunities in Africa
through its consulting agreement with Omega Ghana (See Note
6). The Company intends to provide management consulting
services, administrative functions and capital to Omega
Ghana and other African entities to develop existing
opportunities.
The Company anticipates merging with Empire Energy
Corporation ("Empire"), a publicly traded company in order
to facilitate its business plan. Certain Company
stockholders are stockholders in Empire.
There can be no assurances the Company will be successful in
merging with Empire or in its current business plan.
3. NOTES The Company loaned Empire $25,000 with interest at 10%. The
RECEIVABLE note is due on demand and is without collateral. The balance
outstanding on the note at December 31, 1999 is $25,000.
In addition, during 1999 the Company loaned Omega Ghana and
a stockholder in Omega Ghana, $147,500. The notes are due on
demand, accrue interest at 10% and are collateralized by 52%
of the stock of Omega Ghana owned by this stockholder.
Management of the Company has fully impaired the $147,500 of
notes due to uncertainty as to their ultimate collection .
Therefore, an allowance of $147,500 has been recorded
against the Omega Ghana notes.
A summary of notes receivable is as follows:
Note receivable - Empire $ 25,000
Notes receivable - Omega Ghana
and related individual 147,500
---------
Total notes receivable 172,500
Allowance for uncollectible notes (147,500)
---------
Net balance, December 31, 1999 $ 25,000
=========
F-13
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<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM DECEMBER 18, 1997 (INCEPTION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
4. INCOME TAXES Components of the net deferred tax asset at December 31,
1999 are as follows:
Net operating loss carryforwards $ 75,000
Valuation allowance (75,000)
--------
Net deferred tax asset $ --
========
At December 31, 1999, the Company has net operating loss
carryforwards of approximately $205,000 which expire through
2014. Due to uncertainty as to realization, a deferred tax
asset valuation allowance has been provided and no net
provision for income taxes is included in the statements of
operations.
5. STOCKHOLDERS' Sales of Common Stock
EQUITY ---------------------
During December 1997 and March 1999, the Company sold
500,000 shares and 1,600,000 shares, respectively at $.01
per share.
In June 1999, the Company completed a private placement for
225,000 shares of the Company's common stock for proceeds of
$225,000. Offering costs related to the private placement
were immaterial.
Subsequent Repurchase of Common Stock
-------------------------------------
In connection with the Company's anticipated merger with
Empire, in January 2000, the Company repurchased 635,000
shares of common stock for $9,525 and has committed to
repurchase another 690,000 shares for $10,350 (see Note 6).
F-14
- --------------------------------------------------------------------------------
<PAGE>
OMEGA INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
PERIOD FROM DECEMBER 18, 1997 (INCEPTION) TO DECEMBER 31, 1999
- --------------------------------------------------------------------------------
6. AGREEMENTS Consulting Agreement
--------------------
The Company has entered into a consulting agreement with
Omega Ghana to provide consulting and administrative
services for 60% of the gross revenue of Omega Ghana from
service provided pursuant the agreement. The agreement can
be terminated upon 30 days written notice by either party or
if Omega Ghana files bankruptcy. No fees have been realized
through December 31, 1999.
Merger Agreement
----------------
In November 1999, the Company's board of directors approved,
subject to stockholder approval and completion of definitive
documents, a merger agreement with Empire to be effective in
the first quarter of 2000. The Company tentatively, would
exchange its 1,000,000 remaining outstanding shares of
common stock (see stock repurchase at Note 5) for 1,000,000
shares of Empire common stock. The Company would operate as
a wholly owned subsidiary of Empire.
F-15
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