<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from_________ to ___________.
COMMISSION FILE NUMBER: 0-15859
RICH COAST RESOURCES LTD.
----------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
British Columbia Not applicable
- -------------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10200 Ford Road, Dearborn, MI 48126
---------------------------------------------
(Address of principal executive offices)
(313) 582-8866
---------------------------
(Issuer's telephone number)
RICH COAST RESOURCES INC.
-------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Check whether the registrant (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
----- -----
The number of shares outstanding of the issuer's classes of common equity, as
of December 12, 1996 is 14,420,843 shares of Common Stock.
Transitional Small Business Disclosure Format (check one): YES NO X
----- -----
<PAGE> 2
[SMYTHE RATCLIFFE LOGO] SMYTHE RATCLIFFE
CHARTERED ACCOUNTANTS
NOTICE TO READER
We have compiled the consolidated balance sheets of Rich Coast Resources Ltd.
as at October 31, 1996 and 1995 and the consolidated statements of operations
and changes in financial position for the six months ended October 31, 1996 and
1995 from information provided by management. We have not audited, reviewed or
otherwise attempted to verify the accuracy or completeness of such
information. Readers are cautioned that these statements may not be
appropriate for their purposes.
/s/ SMYTHE RATCLIFFE
Chartered Accountants
Vancouver, British Columbia
December 12, 1996
1
<PAGE> 3
RICH COAST RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
<TABLE>
<CAPTION>
=========================================================================================
October 31,
1996 1995
- -----------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT
Cash $ 6,516 $ 451,711
Accounts receivable 382,644 336,740
Deposit 9,492 358,327
Prepaid expenses 54,972 1,702
Inventory 90,547 0
Due from shareholder 70,233 0
- -----------------------------------------------------------------------------------------
614,404 1,148,480
DISTILLATION UNIT 2,024,705 2,024,705
INVESTMENT IN AND EXPENDITURES ON MINERAL
PROPERTIES 0 74,175
CAPITAL ASSETS 3,495,774 1,672,233
OTHER ASSETS 34,021 37,162
DUE FROM JOSSCO INC. 0 20,000
- -----------------------------------------------------------------------------------------
$ 6,168,904 $ 4,976,755
=========================================================================================
LIABILITIES
CURRENT
Accounts payable and accrued liabilities $ 1,757,309 $ 1,065,824
Due to shareholder 0 106,088
Current portion of long-term debt 71,332 60,419
- -----------------------------------------------------------------------------------------
1,828,641 1,232,331
LONG-TERM DEBT 2,132,605 188,428
CONVERTIBLE DEBENTURE 105,000 0
- -----------------------------------------------------------------------------------------
4,066,246 1,420,759
=========================================================================================
Shareholders' Equity
CAPITAL STOCK (note 6) 23,577,304 19,521,210
CAPITAL STOCK SUBSCRIBED (note 6) 0 2,641,914
ADJUSTMENT TO ASSETS ON ACQUISITION OF PARTNERSHIP 0 (2,494,771)
DEFICIT (21,474,646) (16,112,357)
- -----------------------------------------------------------------------------------------
2,102,658 3,555,996
- -----------------------------------------------------------------------------------------
$ 6,168,904 $ 4,976,755
=========================================================================================
</TABLE>
See notes to consolidated financial statements. 2
<PAGE> 4
RICH COAST RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
<TABLE>
<CAPTION>
====================================================================================================================================
Three Months Six Months
Ended October 31, Ended October 31,
1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SALES $ 491,203 $ 381,446 $ 1,025,251 $ 688,320
COST OF SALES 416,761 131,679 761,537 206,890
- ------------------------------------------------------------------------------------------------------------------------------------
GROSS PROFIT 74,442 249,767 263,714 481,430
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Consulting 145,604 10,064 506,898 16,575
Wages and salaries 191,491 223,964 275,962 368,069
Audit and accounting 98,939 62,906 115,808 74,777
Office and general 28,308 39,248 100,884 84,442
Interest and bank charges, net 5,488 36,967 62,582 42,782
Travel 22,510 20,641 54,034 38,982
Insurance 24,036 7,081 52,209 28,376
Property taxes 29,623 16,424 42,106 23,757
Shareholder relations 18,223 55,467 37,997 95,816
Financing 0 0 26,741 6,014
Maintenance 12,474 5,905 21,916 36,300
Exchange translation (gain) loss 19,056 (36,647) 19,056 (36,647)
Telephone and facsimile 8,939 16,585 16,449 24,681
Bad debts 0 26,784 5,990 26,784
Listing and filing fees 9 4,191 4,757 8,366
Factoring fee (7,057) 6,415 2,963 33,367
Transfer agent 0 3,265 0 5,334
Oil and gas operations, net 0 0 0 (2,308)
Depreciation 95,106 86,281 202,203 172,600
- ------------------------------------------------------------------------------------------------------------------------------------
692,749 585,541 1,548,555 1,048,067
- ------------------------------------------------------------------------------------------------------------------------------------
NET LOSS FOR PERIOD $ (618,307) $ (335,774) $(1,284,841) $ (566,637)
- ------------------------------------------------------------------------------------------------------------------------------------
LOSS PER SHARE $ 0.01 $ 0.04 $ 0.09 $ 0.07
====================================================================================================================================
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 23,577,304 8,333,544 13,848,630 7,916,260
====================================================================================================================================
</TABLE>
See notes to consolidated financial statements. 3
<PAGE> 5
RICH COAST RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
<TABLE>
<CAPTION>
===========================================================================================================
Three Months Six Months
Ended October 31, Ended October 31,
1996 1995 1996 1995
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CASH USED IN OPERATING ACTIVITIES
Loss for period $ (618,307) $ (335,774) $(1,284,841) $ (566,637)
Item not involving cash
Depreciation 95,106 86,281 202,203 172,600
- -----------------------------------------------------------------------------------------------------------
(523,201) (249,493) (1,082,638) (394,037)
- ------------------------------------------------------------------------------------------------------------
CHANGES IN NON-CASH WORKING CAPITAL
Inventory (90,547) 0 (90,547) 0
Accounts receivable 187,142 (47,005) 132,477 (98,928)
Deposit 4,000 (214,727) (4,032) (354,727)
Prepaid expenses 12,327 760 (13,286) 2,115
Accounts payable 442,285 8,878 322,951 110,038
- -----------------------------------------------------------------------------------------------------------
555,207 (252,094) 347,563 (341,502)
- -----------------------------------------------------------------------------------------------------------
32,006 (501,587) (735,075) (735,539)
- -----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchase of capital assets 0 (2,494,771) (102,296) (12,353)
Adjustment to assets on merger 0 0 0 (2,494,771)
Additions to distillation unit (46,369) 634 0 (16,000)
Advance to Jossco Inc. 0 0 0 (20,000)
- -----------------------------------------------------------------------------------------------------------
(46,369) (2,494,137) (102,296) (2,543,124)
- -----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of capital stock
For cash 0 865,436 539,230 983,632
For services 0 0 350,000 0
Capital stock subscribed 0 2,641,914 0 2,641,914
Repayment of GAP Minerals, Inc. 0 (15,531) 0 (15,531)
Proceeds from convertible
debenture 0 0 105,000 0
Shareholder loan (repayment) (1,786) (41,004) (174,385) 106,088
Long-term debt (repayment) (3,425) (10,751) (7,508) (2,006)
- -----------------------------------------------------------------------------------------------------------
(5,211) 3,440,064 812,337 3,714,097
- -----------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH (19,574) 444,340 (25,034) 435,434
CASH, BEGINNING OF PERIOD 26,090 7,371 31,550 16,277
- -----------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 6,516 $ 451,711 $ 6,516 $ 451,711
===========================================================================================================
</TABLE>
See notes to consolidated financial statements. 4
<PAGE> 6
RICH COAST RESOURCES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
================================================================================
1. BASIS OF PRESENTATION
These unaudited consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in Canada for
interim financial information and conform in all material respects with
those of the United States. These financial statements are condensed
and do not include all disclosures required for annual financial
statements. These financial statements should be read in conjunction
with the Company's audited consolidated financial statements
incorporated by reference in the Company's Annual Report on Form 10-K
for the year ended April 30, 1996.
In the opinion of the Company's management, these financial statements
reflect all adjustments necessary to present fairly the Company's
consolidated financial position at October 31, 1996 and 1995 and the
consolidated results of operations and the consolidated statement of
changes in financial position for the six months then ended. The
results of operations for the six months ended October 31, 1996 are not
necessarily indicative of the results to be expected for the entire
fiscal year.
The October 31, 1995 reorganization of the companies resulted in the
Waste Reduction Systems partnership becoming 100% owned by Rich Coast
Resources Inc., a Michigan corporation ("RCRI"). The acquisition has
been accounted for using the purchase method, and accordingly, the
financial statements have been retroactively restated to include the
financial position and results of operations and cash flows of Waste
Reduction Systems.
Prior to the merger of the partners, the Company reported its share of
the net loss of the partnership as an adjustment of investment in the
partnership. As a result of the merger the Company owns 100% of the
former partnership, consequently all the assets, liabilities and income
and expense of that entity are included in the consolidated financial
statements with effect from the commencement of business of Waste
Reduction Systems in August 1992.
5
<PAGE> 7
RICH COAST RESOURCES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
================================================================================
2. CURRENCY TRANSLATION
Financial statements for reporting periods up to and including the year
ended April 30, 1996 were presented in Canadian dollars, the currency
of the incorporation jurisdiction of the parent company. Effective May
1,1996 financial statements are presented in United States dollars
(except for certain per share issue amounts which are expressed in
Canadian (CDN) dollars) as the operations, effective control and
management are located in the United States. This change has been
given retroactive effect to May 1, 1995 for comparative purposes.
Capital stock and deficit of the Canadian parent have been restated in
United States dollars using historical rates of exchange. At May 1,
1996 and October 31, 1996 the Canadian parent's investments in the U.S.
operating entities are the only assets owned. During the period, the
Canadian parent has taken the steps to domestication in the State of
Delaware.
3. LOSS PER SHARE
Loss per share is computed using the weighted average number of common
shares outstanding during each of the periods.
4. CONVERTIBLE DEBENTURE
The Company issued a 9.25% convertible debenture for $105,000 with a
warrant attached for the purchase of 150,000 shares at $0.70 per share
exercisable on or before July 14, 1998.
5. RELATED PARTY TRANSACTION
Management fees of $1,831 for the six months ended October 31, 1996
(three months ended October 31, 1996 - $1,831 (six months ended October
31, 1995 - $10,950, three months ended October 31, 1995 - $5,470), were
paid to a company controlled by a director.
6
<PAGE> 8
RICH COAST RESOURCES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
================================================================================
6. CAPITAL STOCK
(a) Authorized 100,000,000 common shares without par value
(b) Issued
<TABLE>
<CAPTION>
====================================================================================================================================
Number of Price Per
Shares Share ($) Amount
- ------------------------------------------------------------------------------------------------------------------------------------
(note 2)
<S> <C> <C> <C> <C>
Balance, April 30, 1995 7,749,422 $18,537,578
Shares issued
For cash, private
placement 947,945 CDN $ 1.00 699,014
For cash on exercise
of stock options 316,600 CDN $ 1.22 284,618
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, October 31, 1995 9,013,967 19,521,210
Shares issued
For cash, private placement 1,198,945 CDN $ 0.95 137,630
For cash on exercise of
stock options 442,150 CDN $ 1.13 193,989
For services 250,000 CDN $ 1.34 246,034
For settlement of loan
payable to shareholder 167,376 CDN $ 0.85 104,487
Acquisition of Waste Reduction
Systems 3,383,200 CDN $ 1.00 2,484,724
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1996 14,455,638 22,688,074
Shares issued
For cash, private placements 640,000 $0.765 489,650
For cash on exercise of 61,750 CDN $1.100 49,580
options
For services 400,000 $0.875 350,000
- ------------------------------------------------------------------------------------------------------------------------------------
BALANCE, OCTOBER 31, 1996 15,557,388 $23,577,304
====================================================================================================================================
</TABLE>
7
<PAGE> 9
RICH COAST RESOURCES LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
OCTOBER 31
(UNITED STATES DOLLARS)
(UNAUDITED - SEE NOTICE TO READER)
===============================================================================
6. CAPITAL STOCK (Continued)
(c) At October 31, 1996, the following share purchase options were
outstanding for 3,600,000 shares exercisable at $0.62 per share
to January 10, 2006.
<TABLE>
<CAPTION>
=====================================================================================================
Exercise Number
EXPIRY DATE Price of Shares
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
October 3, 1998 CDN $ 0.84 15,000
October 21, 1996 CDN $ 1.10 72,300
February 1, 1997 CDN $ 1.34 40,218
March 12, 1997 CDN $ 1.27 30,031
May 10, 1997 CDN $ 1.48 184,453
October 26, 2005 CDN $ 0.60 14,450
September 8, 2005 $ 1.00 400,000
December 27, 2005 $ 0.50 800,000
January 15, 2006 $ 0.50 800,000
January 15, 2006 $ 0.75 200,000
- -----------------------------------------------------------------------------------------------------
</TABLE>
(d) At October 31, 1996, share purchase warrants were outstanding for
3,600,000 shares exercisable at $0.62 U.S. per share to January 10,
2006.
7. LONG-TERM DEBT
<TABLE>
<CAPTION>
=====================================================================================================
1996 1995
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
10% senior secured note, due October 1, 2001, interest payable
monthly $2,000,000 $ 0
Land contract payable in monthly instalments of $4,753 each
including principal and interest at 8% 201,450 233,511
Equipment loan 2,487 15,337
- -----------------------------------------------------------------------------------------------------
2,203,937 248,848
Less: Current portion 71,332 60,419
- -----------------------------------------------------------------------------------------------------
$2,132,605 $188,429
=====================================================================================================
</TABLE>
8
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following information should be read in conjunction with the unaudited
consolidated financial statements included herein which are prepared in
accordance with generally accepted accounting principles ("GAAP") in Canada for
interim financial information. There are no material differences between
Canadian GAAP and U.S. GAAP with respect to the Company's unaudited financial
statements. All figures used in this form are in U.S. dollars unless otherwise
stated.
Pursuant to an Agreement of Merger effective October 31, 1995, the Company
acquired the balance of Waste Reduction Systems operations which it did not
previously own by merger of two of its partners into its third partner, the
Company's wholly-owned subsidiary Rich Coast Resources, Inc. ("RCRI"), a
Michigan corporation. This reorganization of the companies has resulted in the
Waste Reduction Systems partnership being 100% owned by RCRI. The acquisition
has been accounted for using the purchase method and, accordingly, the
financial statements for all periods presented have been retroactively restated
to include the financial position and results of operations and cash flows of
Waste Reduction Systems.
RESULTS OF OPERATIONS
To the date of this Report, the Company's business has been speculative. Cash
flow from the Company's operations does not at present, satisfy all operational
requirements and cash commitments. The Company has been dependent and
continues to rely upon the sale of equity and debt securities in order to fund
its development activities and operations and its ability to continue
operations is dependent on ability of the Company to continue to obtain
financing. There is no assurance that the Company's acquisition of Waste
Reduction Systems will provide cash flows sufficient to make the Company a
successful operating enterprise. If Waste Reduction Systems does not generate
sufficient levels of cash flow from operations additional financial support
will be required. Without such funding there could be doubt as the Company's
ability to continue to operate in the normal course of business.
The Company has completed their latest technology system for recycling oils and
start of production using the new system as a result of winning a major
competition for an oil waste stream at one of the big three automotive
companies.
Processing of this new waste stream started mid September, 1996. Processing
facilities are in place and have demonstrated both the capacity and quality
results as planned by Rich Coast. Shipments of processed oil are just
beginning with 150,000 gallons having been delivered to customers to date. The
recycled industrial lube oil has a ready market and is being sold without any
significant finished product inventory build up. In addition, Rich Coast is
performing as a second tier supplier under Browning Ferris Industries, to
process waste oils and liquids from a second big three company.
9
<PAGE> 11
The one million gallon bio treatment system located at Rich Coast's new
Dearborn facility is nearing completion and expected to be in production before
year end. Installation completion was delayed until a scrubber system was
located that satisfied air emission requirements. Capacity of the bio system
is expected to exceed 50,000 gallons per day.
For the next few months Rich Coast's efforts will be concentrated on fulfilling
expectations of its new automotive customers and in accelerating production of
its bio treatment plant. After that, its priorities will be to upgrade the
quality and increase it's price per gallon from recycled oil product, to
increase the company's capacity, and then to pursue the fuel oil market.
In the six months ended October 31, 1996, the Company had sales of $1,025,251
and a gross profit of $263,714.
For the six months ended October 31, 1996, the Company recorded a net loss of
$1,284,841 or $0.09 per share. These results compare with a net loss of
$566,637 for the six months ended October 31, 1995 or $0.07 per share. The
results of operation for the six months ended October 31, 1996 were generally
in line with management's expectations.
REVENUES
For the past several years, the Company has been in the development stage and
therefore has not generated any significant revenues. During the past three
years, the Company received limited revenues from operations of its oil and gas
wells. As at April 30, 1996, the Company had sold all of its oil and gas
wells.
COST AND EXPENSES
PROFESSIONAL FEES (ACCOUNTING, LEGAL AND AUDIT). Professional fees increased
to $115,808 for the six months ended October 31, 1996 from $74,777 for the same
period in 1995. Much of the increase was due to expenses associated with the
Company's proposed continuance to the State of Delaware. The Company continues
to follow a policy of completing much of the regulatory filings within the
Company's head office with review by appropriate outside professionals.
SHAREHOLDER RELATIONS. These costs for the six months ended October 31, 1996
were $37,997 versus $95,816 for the same period in 1995.
TRAVEL COSTS. Travel costs were $54,034 for the period in 1996, versus $38,982
for the 1995 period.
CONSULTING FEES. Expenses in the category increased from $16,575 for the
period in 1995 to $506,898 for the six months ended October 31, 1996. During
the current period, the Board of Directors authorized the issuance of 400,000
shares at a deemed price of $0.875 per share, for a total of $350,000, in lieu
of cash compensation for services provided to the Company by a consultant.
These services included assisting management in developing corporate strategy,
assistance in the
10
<PAGE> 12
establishment of the Company's joint venture in the waste processing industry
and negotiating the Company's acquisition of the minority interest in Waste
Reduction Systems, and assisting the Company's management in completing a due
diligence and business feasibility review of that business.
LOSS FOR THE PERIOD
The net loss for the six month period ended October 31, 1996 amounted to
$1,284,841 versus a net loss for the six months ended October 31, 1995 of
$566,637.
The Company does not believe that inflation has a significant effect on its
business.
LIQUIDITY AND CAPITAL RESOURCES
To date, the Company has not generated sufficient revenue to fund operations.
Since its inception, the Company has financed its exploration and development
costs and its investment in Waste Reduction Systems primarily from the sale of
equity securities through private placements and exercise of director's and
employees' options. As at October 31, 1996 the Company had $6,516 cash on
hand. Current assets totaled $614,404.
The Company does not have any material commitments or anticipated material
capital expenditures to third parties for the coming years, however, the
Company has committed to raising funds through the private sale of equity or
debt instruments in order to facilitate the expansion. The Company presently
has no firm commitments for such financing and there can be no assurance that
adequate financing will be available in a timely manner or on favorable terms
or at all.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
At an Extraordinary General Meeting held on September 16, 1996, the Company's
shareholders approved proposals pursuant to which the Company has changes its
jurisdiction of incorporation from British Columbia, Canada to Delaware by
means of a process called a "continuance" under Canadian law and a
"domestication" under Delaware law (herein referred to as the "Domestication").
Pursuant to the Domestication, the Company will become a Delaware corporation
as if it had originally been incorporated in that jurisdiction and it will be
discontinued in British Columbia, Canada.
The Company has applied to the Registrar of Companies for the Province of
British Columbia for permission to continue the Company to the State of
Delaware. Such approval must be obtained for the Domestication to be
effective.
11
<PAGE> 13
In connection with the Domestication, shareholders approved the change of the
Company's name to Rich Coast Inc. In addition, the authorized capital of the
Company has changed. Previously, the Company was authorized to issue
100,000,000 shares of no par value common stock under B.C. law. Following the
Domestication, the Company will be authorized to issue 100,000,0000 shares of
$0.001 par value Common Stock under Delaware law. As part of the
Domestication, outstanding shares of the previously authorized no par value
common stock are being converted, on a one-for-one basis, to shares of $0.001
par value Common Stock.
As required by British Columbia law, the proposal for Domestication was
approved by the affirmative vote of the holders of 75% of the votes cast in
respect of the resolution at the Meeting. Under British Columbia law,
shareholders were entitled to appraisal rights in connection with the
Domestication proposal. Shareholders who did not vote for the Domestication
were permitted to elect to have the fair value of their shares determined in
accordance with Section 231 of the Company Act (British Columbia), and paid to
them, if the Domestication was consummated and if they comply with the
provisions of said Section 231. One shareholder requested appraisal rights
with respect to 40 shares of Common Stock.
Now that the Company's focus of business development is in the United States as
a result of the Merger, management proposed the Domestication with the belief
that it is preferable that the Company's organizational and governing documents
be governed according to laws of a State of the United States. In particular,
under the B.C. Act, there are requirements that a certain number of the
Directors of the Company must be ordinarily resident in Canada and British
Columbia. With no active business interest in Canada, it has been a continuing
problem for the Company to find qualified individuals in British Columbia who
are prepared to act as Directors and assume the responsibilities and the risks
that are inherent with an individual acting as a Director. Management is,
therefore, of the opinion that it was preferable to eliminate this Canadian
residency requirements.
In addition, the Company's principal trading market is in the United States,
most of its shareholders are located in the United States and the Company's
common stock is traded on the United States NASDAQ system.
The Domestication did not result in any change in the business of the Company
or its assets, liabilities or net worth, nor in the persons who constitute the
Company's Board of Directors and management. It is not necessary for
shareholders to exchange their existing share certificates and their holdings
will not change. The trading of the Company's shares on the Small Cap NASDAQ
Market will not be in any way affected by the continuance, except that the
Company's Nasdaq trading symbol was changed from KRHCF to KRHC.
The Company's principal executive offices have been re-located from Vancouver,
B.C. to Dearborn, Michigan, at the same location as the Company's principal
operations. The Company's new address is 10200 Ford Road, Dearborn, Michigan
48126. Its telephone number is 313-582-8866.
12
<PAGE> 14
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27.1 - Financial Data Schedule
(b) Reports on Form 8-K: None. During the quarter ended
October 31, 1996, the Company filed no reports on Form 8-K.
13
<PAGE> 15
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 thereunto duly authorized.
RICH COAST INC.
Date: December 12, 1996 by:/s/ James P. Fagan
--------------------------------
James P. Fagan, President
Date: December 12, 1996 by:/s/ Michael M. Grujucich
--------------------------------
Michael M. Grujucich, Chief
Financial and Accounting Officer
14
<PAGE> 16
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> OCT-31-1996
<CASH> 6,516
<SECURITIES> 0
<RECEIVABLES> 382,644
<ALLOWANCES> 0
<INVENTORY> 90,547
<CURRENT-ASSETS> 614,404
<PP&E> 6,674,711
<DEPRECIATION> 1,154,232
<TOTAL-ASSETS> 6,168,904
<CURRENT-LIABILITIES> 1,828,641
<BONDS> 2,237,605
0
0
<COMMON> 23,577,304
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 6,168,904
<SALES> 0
<TOTAL-REVENUES> 1,025,251
<CGS> 0
<TOTAL-COSTS> 761,537
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 112,582
<INCOME-PRETAX> (1,284,841)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,284,841)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> (.09)
</TABLE>
