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As filed with the Securities and
Exchange Commission on January 29, 1999 File No. 333-63289
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM S-3/A No. 1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
RICH COAST INC.
---------------------------------------------
(Name of Registrant as specified in its charter)
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NEVADA 91-1835978
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
James P. Fagan, President
Rich Coast Inc.
10200 Ford Road 10200 Ford Road
Dearborn, Michigan 48126 Dearborn, Michigan 48126
(313) 582-8866 (313) 582-8866
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(Address, including zip code, and telephone (Name, address, including zip code
number, including area code, of and telephone number, including area
Registrant's principal executive offices) code, of agent for service)
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____________________
It is requested that copies of all correspondence be sent to: Theresa M.
Mehringer, Esq., Smith McCullough, P.C., 4643 S. Ulster Street, Suite 900,
Denver, Colorado 80237, telephone number (303) 221-6000, facsimile number
(303) 221-6001.
____________________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box:
- -----
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: X
-----
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering.
-----
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
-----
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
-----
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the registration statement becomes
effective on such date as the Securities and Exchange Commission acting pursuant
to said Section 8(a) may determine.
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CALCULATION OF REGISTRATION FEE
=========================================================================================================
Title of each
class of Proposed maximum Proposed maximum Amount of
securities to be Amount to offering price per aggregate offering registration
registered/(1)/ be registered share(2) price(2) fee(2)
<S> <C> <C> <C> <C>
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Common Stock 960,000 Shares $0.78125 $ 750,000 $221
issuable upon
exercise of
Warrants
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Common Stock 2,601,457 Shares/(3)/ $0.78125 $2,032,388 $600
issuable upon
conversion of
Debentures
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Total 3,561,457 Shares/(4)/ $0.78125 $2,782,388 $821
- ---------------------------------------------------------------------------------------------------------
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(1) For a description of the various securities referred to herein and
the transactions in which they were issued, See "Description of
Securities -Securities Registered Hereby."
(2) Proposed maximum offering price and registration fee is based on
the average of the bid and asked prices reported by Nasdaq on
September 9, 1998 (a date within five business days prior to the
initial filing hereof) pursuant to Rule 457(c).
(3) Includes the registration for resale of such presently
indeterminate number of shares of Common Stock issuable upon
conversion of $1,500,000 principal amount of 8% Convertible
Debentures (the "Debentures"). Estimated solely for purposes of
calculating the registration fee in connection with this
Registration Statement and assumes that all of the Debentures are
converted into shares of Common Stock based on a price of $0.76875
per share of Common Stock (the average closing bid price of the
Common Stock for the five trading days ending on August 27, 1998)
and using a discount rate of 25%.
(4) All shares offered pursuant to this Registration Statement relate
only to resales by Selling Shareholders.
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RICH COAST INC.
CROSS REFERENCE SHEET
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FORM S-3 Sections in Prospectus
Item No. Caption or Registration Statement
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PART I INFORMATION REQUIRED IN PROSPECTUS
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1 Forepart of the Registration Statement and
Outside Front Cover Page of Prospectus....... Outside Front Cover Page
2 Inside Front and Outside Back Cover Pages of
Prospectus................................... Inside Front Cover Pages;
Table of Contents
3 Summary Information, Risk Factors and Ratio
of Earnings to Fixed Charges................. Risk Factors; Prospectus Summary
4 Use of Proceeds.............................. Prospectus Summary; Use of Proceeds
5 Determination of Offering Price.............. Plan of Distribution
6 Dilution..................................... Not Applicable
7 Selling Security Holders..................... Selling Shareholders
8 Plan of Distribution......................... Plan of Distribution
9 Description of Securities to be Registered... Description of Securities
10 Interest of Named Experts and Counsel........ Not Applicable
11 Material Changes............................. Prospectus Summary - The Company and
Recent Developments
12 Incorporation of Certain Information by
Reference.................................... Documents Incorporated by Reference
13 Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities.................................. Plan of Distribution - Indemnification
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
14 Other Expenses of Issuance and Distribution.. Other Expenses of Issuance and
Distribution
15 Indemnification of Directors and Officers.... Indemnification of Directors and
Officers
16 Exhibits..................................... Exhibits
17 Undertakings................................. Undertakings
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SUBJECT TO COMPLETION - PRELIMINARY PROSPECTUS DATED JANUARY 29, 1999
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
RICH COAST INC.
3,561,457 SHARES OF COMMON STOCK TO BE ISSUED TO AND OFFERED BY SELLING
SHAREHOLDERS
An aggregate of 3,561,457 shares (the "Shares") of $.001 par value Common
Stock (the "Common Stock") of Rich Coast Inc. ("Rich Coast" or the "Company")
may be offered by certain shareholders (the "Selling Shareholders") from time to
time in the public market. The shares of Common Stock offered hereby include
the resale of such presently indeterminate number of shares of Common Stock as
shall be issued in respect of all shares of Common Stock issuable upon
conversion of $1,500,000 principal amount of 8% Convertible Debentures. The
number of shares of Common Stock indicated to be issuable in connection with
such transactions and offered for resale hereby is an estimate determined in
accordance with a formula based on the market prices of the Common Stock, as
described in the Prospectus, and is subject to adjustment and could be
materially less or more than such estimated amount depending upon the market
price of the Common Stock at the time the Debentures are converted.
All proceeds received from the sale of the Shares offered by the Selling
Shareholders will accrue to the benefit of the Selling Shareholders and not to
the Company. None of the Shares which may be offered by the Selling
Shareholders are outstanding on the date of this Prospectus, but may be issued
by the Company after the date of this Prospectus upon exercise of outstanding
warrants (the "Warrants") or conversion of outstanding debentures (the
"Debentures") held by Selling Shareholders. These Shares may be resold in the
public market by the Selling Shareholders. The Company will receive the
exercise price paid upon exercise of Warrants for issuance of those shares;
however, any difference between that price and the price at which the shares are
sold in the market by the Selling Shareholders will accrue to the benefit of the
Selling Shareholders. Sales of any of these previously restricted Shares into
the public market could impact the market adversely so long as this Offering
continues. See "Risk Factors."
The Common Stock is traded in the over-the-counter market and quoted on the
National Association of Securities Dealers Automated Quotation System ("Nasdaq")
Small-Cap Market under the symbol "KRHC". On January 25, 1999, the average of
the bid and asked prices of the Common Stock as reported by Nasdaq was
$1.19.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" ON PAGES FOUR THROUGH SEVEN FOR DISCUSSION OF CERTAIN
MATERIAL RISKS IN CONNECTION WITH THE COMPANY WHICH PROSPECTIVE INVESTORS SHOULD
CONSIDER PRIOR TO PURCHASING THE SECURITIES OFFERED HEREBY.
The Shares will be offered by the Selling Shareholders through dealers or
brokers in the over-the-counter market. The Shares may also be sold in
privately negotiated transactions. Sales through dealers or brokers are
expected to be made with customary commissions being paid by the Selling
Shareholders. Payments to persons assisting the Selling Shareholders with
respect to privately negotiated transactions will be negotiated on a
transaction-by-transaction basis. The Selling Shareholders have advised the
Company that prior to the date of this Prospectus they have made no agreements
or arrangements with any underwriters, brokers or dealers regarding the sale of
the Shares. See "Plan of Distribution." Any commissions and/or discounts on
the sale of Shares offered by the Selling Shareholders will be paid by the
Selling Shareholders, and all other expenses related to the filing of the
registration statement to which this offering relates are being paid by the
Company. Other expenses to be paid by the Company may include SEC filing fee,
printing costs, Edgar costs, legal fees and accounting fees.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS _________, 1998.
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Proceeds to
Price Per Total Number Aggregate Offering Selling
Share of Shares Price Shareholder
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Shares to be
Outstanding
Offered by Selling
Shareholders (1) $0.78125(2) 3,561,457(3) $2,782,388 $2,782,388
- -----------------------------------------------------------------------------------------------------
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(1) These Shares will be offered by the Selling Shareholders after exercise of
outstanding Warrants and conversion of Debentures. See "Description of
Securities."
(2) The Price per Share represents the average of the bid and asked price as
reported by Nasdaq on September 9, 1998. These Shares will be offered from
time to time by the Selling Shareholders at market prices. Underwriting
discounts or commissions may be paid by the Selling Shareholders. See "Plan
of Distribution."
(3) The shares offered hereby include the resale of such presently indeterminate
number of shares of Common Stock issuable upon conversion of the $1,500,000
principal amount of 8% Convertible Debentures.
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AVAILABLE INFORMATION; DOCUMENTS INCORPORATED BY REFERENCE
----------------------------------------------------------
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("the 1934 Act"), and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). The Company's Common Stock and
Redeemable Common Stock Purchase Warrants are quoted on Nasdaq and, therefore,
copies of such documents and other information are provided to the National
Association of Securities Dealers, Inc. Such reports, proxy statements and
other information can be inspected and copied at the public reference facilities
maintained by the Commission at its principal office at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: in Chicago, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and in New York, 7 World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials can be obtained at prescribed
rates by written request addressed to the Commission, Public Reference Section,
450 Fifth Street, N.W., Washington, D.C. 20549. In addition, copies of such
documents and other information are provided to Nasdaq and can be inspected at
the Nasdaq offices maintained at the National Association of Securities Dealers,
Inc., 1735 "K" Street, Washington, D.C. 20549. The Commission maintains a Web
site that contains reports, proxy and information statements and other
information regarding the Company and the address of such Web site is
(http://www.sec.gov).
The Company provides annual reports, including audited financial
statements, to its shareholders on request and as required under the 1934 Act.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 under the Securities Act of 1933, as amended
(the "1933 Act"), with respect to the Common Stock offered hereby. As permitted
by the rules and regulations of the Commission, this Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
thereto. For further information with respect to the Company and the Common
Stock offered hereby, reference is made to the Registration Statement, including
the exhibits filed or incorporated as a part thereof, copies of which can be
inspected at, or obtained at prescribed rates from, the Public Reference Section
of the Commission at the address set forth above.
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference: (1) Annual Report on Form 10-
KSB/A No.1 for the fiscal year ended April 30, 1998 filed with the Commission on
February 2, 1999; (2) Quarterly Reports on Form 10-QSB/A No.1 for the quarters
ended July 31, 1998 and October 31, 1998, filed with the Commission on February
2, 1999; (3) Report on Form 8-K dated June 5, 1998, filed with the Commission
June 18, 1998; and (4) all other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act after the date hereof and
prior to the termination of the offering of the Shares, which documents shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing such documents. Any statement contained herein or in any
documents incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that statements contained herein, or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any such statement
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so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any and all of the documents
incorporated by reference herein (not including exhibits to those documents,
unless such exhibits are specifically incorporated by reference into the
information that this Prospectus incorporates). Requests for such documents
should be directed to Shareholder Relations, Rich Coast Inc., 10200 Ford Road,
Dearborn, Michigan 48126, telephone (313) 582-8866.
FORWARD-LOOKING STATEMENTS
--------------------------
Statements made in this Prospectus, including statements contained in
information incorporated by reference, that are not historical or current facts
are "forward-looking statements" made pursuant to the safe harbor provisions of
Section 27A of the 1933 Act and Section 21E of the 1934 Act. The Company
intends that such forward-looking statements be subject to the safe harbors for
such statements. Forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results of operations and events and those presently anticipated or
projected. The Company wishes to caution readers not to place undue reliance on
any such forward-looking statements, which speak only as of the date made.
Actual events may differ materially from those projected in any forward looking
statement. There are a number of important factors beyond the control of the
Company that could cause actual events to differ materially from those
anticipated by any forward looking information. These factors include those
discussed in this Prospectus under the heading "Risk Factors" and in the
"Management's Discussion and Analysis" sections of the Company's Securities and
Exchange Commission Filings incorporated herein by reference as well as factors
described in the Company's Current Reports on Form 8-K and other documents
incorporated herein by reference. The Company disclaims any obligation
subsequently to revise any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of
anticipated or unanticipated events.
PROSPECTUS SUMMARY
------------------
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and the documents
incorporated by reference herein.
The Company and Recent Developments
- -----------------------------------
Rich Coast Inc. is a non-hazardous waste treatment facility specializing in
recycling of waste oils. The Company's executive offices are located at 10200
Ford Road, Dearborn, Michigan 48126, telephone (313) 582-8866.
The Company is in the process of consolidating and relocating its
operations at its Wyoming Road facility. The Company has entered into a
contract for the sale of its Ford Road facility that will result in net proceeds
to the Company of $250,000. However, the closing for the sale of that property
is contingent on the purchaser obtaining a federal loan guarantee. Once the
sale occurs, all
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of the Company's operations will be conducted at its 17 acre
Wyoming site. The Company's plans for relocation and consolidation of
operations include expansion of capability by installation of a 250 gallon per
minute primary wastewater treatment (the air sparged hydro cyclone, or "ASH")
system. The Company also entered into an exclusive agreement with ZPM, Inc.
whereby ZPM and the Company will establish joint application development teams.
The agreement provides that Rich Coast and ZPM will each assign two members to a
team. Each team will be responsible for coordinating development efforts of the
two companies. No teams have been established yet.
Any changes in the Company's affairs which have occurred since the end of
the latest fiscal year for which audited financial statements were included in
the Company's latest Annual Report incorporated herein by reference are
described in subsequent reports on Form 10-QSB or Form 8-K which are also
incorporated herein by reference.
The Offering
- ------------
Pursuant to this Prospectus, the Selling Shareholders may from time to time
offer all or any portion of an aggregate of 3,561,457 Shares of Common Stock in
the over-the-counter market through underwriters, dealers or brokers or in
independently negotiated transactions. This amount includes an indeterminate
number of shares as shall be issued upon conversion of $1,500,000 principal
amount of 8% Convertible Debentures. See "Selling Shareholders" and "Plan of
Distribution." The Company will not receive any proceeds from the sale of
Shares offered by the Selling Shareholders. As of the date of this Prospectus,
none of the Shares registered for public sale are outstanding, and none of the
Shares have yet been issued, but may be purchased from the Company by Selling
Shareholders and resold by them pursuant to this Prospectus. See "Description
of Securities." These Shares of Common Stock underlie outstanding warrants and
convertible debentures exercisable or convertible at varying prices.
The Company may receive the cash proceeds from the exercise of outstanding
Warrants and will benefit through reduction of indebtedness by conversion of
outstanding debentures; however, the prices at which the Company is obligated to
issue the Shares upon conversion of Debentures are, as of the date of this
Prospectus, below the market price. In addition holders of Warrants may be able
to exercise the Warrants through a cashless exercise procedure, which would
result in no cash proceeds to the Company.
Risk Factors
- ------------
The securities offered are speculative and involve a high degree of risk.
Factors which may affect the Company's business and the securities offered
hereby include uncertain financial condition, lack of profitability, possible
need for additional capital, dependence on management, substantial debt and the
likely adverse effect of this Offering on the market price of the Company's
Common Stock. See "Risk Factors."
Use of Proceeds
- ---------------
4
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Net proceeds, if any, to the Company from the exercise of outstanding
warrants will be used for working capital. See "Use of Proceeds."
RISK FACTORS
------------
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following factors in
evaluating the Company and its business before purchasing the Common Stock
offered hereby.
FINANCIAL CONDITION; WORKING CAPITAL NEEDS. The Company reported net
losses of $1,373,921 and $1,928,329 for the fiscal years ended April 30, 1998
and 1997, respectively. There is no assurance that the Company can generate net
income, increase revenues or successfully expand its operations in the future.
In June 1998 the Company received $1,292,330 in net proceeds from the sale of
Debentures. Management believes that cash on hand and operating revenues, plus
the $250,000 net proceeds from the sale of the Company's Ford Road facility,
will be sufficient to fund working capital requirements through the fiscal year
ending April 30, 1999. However, the Company may seek additional debt or equity
financing to expand the biological treatment system and two new oil process
systems. Any issuance of equity securities would result in dilution to the
interests of the Company's shareholders and any issuance of debt securities
would subject the Company to risks that interest rates may increase or cash flow
may be insufficient to repay such indebtedness. See Consolidated Financial
Statements and Notes thereto and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," all of which is included in the
Company's Form 10-KSB and Forms 10-QSB incorporated herein by reference.
DEPENDENCE ON MANAGEMENT. The Company's prospects for success currently
are greatly dependent upon the efforts and active participation of its
management team, including its President and Chief Executive Officer, James P.
Fagan, and Chairman, Robert Truxell. The Company has an employment contract
with Mr. Truxell expiring December 31, 2002, and an employment contract with Mr.
Fagan which terminates December 31, 2000. The loss of the services of Messrs.
Fagan and Truxell could be expected to have an adverse effect on the Company.
The Company does not maintain key person insurance for Messrs. Truxell and
Fagan.
SIGNIFICANT DEBT; ASSET ENCUMBRANCES; RESTRICTIVE COVENANTS. As of the
date of this Prospectus, the Company's annual debt service requirement is
$278,648, all of which is required for interest payments under the Company's 10%
Senior Secured Note due January 10, 2001 (the "10% Senior Note"). Under the 10%
Senior Note, interest only payments must be made until the $2,000,000 principal
amount is repaid. The Company also has outstanding $1,500,000 in 8% Convertible
Debentures due June 2003, on which interest accrues until repayment.
The Company's debt could have important consequences to the holders of
Common Stock by restricting the Company's ability to obtain additional financing
for working capital, acquisitions or other purposes in the future and by
creating the risk that violation of a covenant or other term of the loan
agreements could cause the outstanding balance of the loans to become due,
putting all of its assets at risk. The Company's ability to make scheduled
payments of principal or interest on, or
5
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to refinance, the Company's debt will depend on future operating performance and
cash flow, which are subject to prevailing economic conditions and financial,
competitive and other factors beyond its control. A failure to comply with the
loan agreements could result in an event of default which could permit
acceleration of the Company's debts. The obligations of the Company under the
loan agreement for the 10% Senior Note is secured by a pledge of substantially
all of the assets of the Company and its subsidiaries. If the Company becomes
insolvent or is liquidated, or if payment under the loan agreement is
accelerated, the investor would be entitled to exercise remedies available to
secured creditors under applicable law and pursuant to the loan agreement.
Accordingly, the holder of the 10% Senior Note will have a prior claim on the
assets of the Company and its subsidiaries. The holders of the Debentures also
have a security interest (junior to the holders of the 10% Senior Note) in
substantially all of the assets of the Company and its subsidiaries. Foreclosure
on the assets pledged to secure repayment of debt could reduce the Company's
assets to a level at which assets would not be sufficient to make any
distribution to shareholders in the event of liquidation.
MARKET OVERHANG. As of the date of this Prospectus, the Company has
reserved 2,987,513 shares for issuance upon exercise of outstanding options and
warrants, and 2,601,457 shares for issuance upon conversion of the Debentures,
and has registered 3,561,457 shares for public sale by the holders. Shares are
issuable upon exercise of warrants and options at prices as low as $.80 per
Share. There is no floor on the conversion price of the Debentures since the
conversion price is determined by the bid price of the Company's Common Stock
for the five trading days immediately preceding the conversion. Any sale into
the public market of Shares purchased privately at prices below the current
market price could be expected to have a depressive effect on the market price
of the Company's Common Stock. See "Description of Securities."
NO DIVIDENDS. The Company has not paid dividends since inception on its
Common Stock, and it does not contemplate paying dividends in the foreseeable
future on its Common Stock in order to use all of its earnings, if any, to
finance expansion of its operations.
POSSIBLE DELISTING OF COMMON STOCK ON NASDAQ; POSSIBLE ADVERSE EFFECT ON
TRADING MARKET. The Common Stock is quoted on the Nasdaq Small-Cap Market.
There are a number of continuing requirements that must be met in order for the
Common Stock to remain eligible for quotation on Nasdaq. In order to continue
to be quoted on Nasdaq, a company must maintain (i) net tangible assets of at
least $2,000,000, a market capitalization of at least $35,000,000 or net income
in two of the last three fiscal years of at least $500,000, (ii) a minimum of
500,000 shares publicly held, (iii) a minimum of $1,000,000 market value of
public float, (iv) a minimum bid price of $1.00 per share and (v) a minimum of
300 shareholders. By letter dated October 19, 1998, the Nasdaq Stock Market,
Inc. advised the Company that the Company is not in compliance with requirement
(i), has failed to demonstrate its ability to achieve and maintain compliance
with the maintenance requirements, and that the Company's Common Stock would be
delisted. The Company appealed this decision and requested an oral hearing
with Nasdaq, which took place December 18, 1998. The Company has not received
any further correspondence from Nasdaq regarding the hearing determination.
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The bid price of the Company's Common Stock has recently been less than
$1.00. The failure to meet these maintenance criteria could result in the
delisting of the Company's Common Stock from Nasdaq. In such event, trading, if
any, in the Common Stock may then continue to be conducted in the non-Nasdaq
over-the-counter market. As a result, an investor may find it more difficult to
dispose of, or to obtain accurate quotations as to the market value of, the
Common Stock. In addition, the Company's Common Stock would then be defined as a
"penny stock" by rules adopted by the Commission. In such event, brokers and
dealers effecting transactions in the Common Stock with or for the account of a
customer must obtain the written consent of a customer prior to purchasing the
Common Stock, must obtain certain information from the customer and must provide
certain disclosures to such customer. These requirements may have the effect of
reducing the level of trading in the secondary market, if any, of the Common
Stock and reducing the liquidity of the Common Stock.
POTENTIAL VOLATILITY OF STOCK PRICE. The Company's Common Stock is traded
on the Nasdaq Small-Cap Market. There can be no assurance that an active public
market will continue for the Common Stock, or that the market price for the
Common Stock will not decline below its current price. Such price may be
influenced by many factors, including, but not limited to, investor perception
of the Company and its industry and general economic and market conditions. The
trading price of the Common Stock could be subject to wide fluctuations in
response to announcements of business developments by the Company or its
competitors, quarterly variations in operating results, and other events or
factors. In addition, stock markets have experienced extreme price volatility
in recent years. This volatility has had a substantial effect on the market
prices of companies, at times for reasons unrelated to their operating
performance. Such broad market fluctuations may adversely affect the price of
the Common Stock.
DILUTION. The Company had a net tangible book value of $1,428,767 or $0.29
per share of the Company's Common Stock on October 31, 1998. Net tangible book
value per share is determined by dividing the tangible net worth of the Company
(tangible assets less total liabilities) by the total number of outstanding
shares of Common Stock. Since the conversion price of the Debentures and the
exercise price of the Warrants is currently in excess of the net tangible book
value per share of the Company's Common Stock, such conversion or exercise will
not be dilutive to existing shareholders. However, in the event that the
Company's net tangible book value per share exceeds the conversion price of the
Debentures or the exercise price of the Warrants on the date of conversion or
exercise, such conversion or exercise would have a dilutive effect.
YEAR 2000 ISSUES. Management does not believe that the consequences of its
Year 2000 issues will have a material effect on the Company's business, results
of operations, or financial condition. The Company's operations are not
dependent on computer software or automated systems that operate with reference
to the date. In addition, the Company's customers are primarily Tier I waste
disposal companies that are not automated with respect to date references.
However, if Year 2000 issues would cause a shutdown or delays in operations of
the waste generators, who in turn have contracts with the Tier I disposal
companies, then the Company would likely experience a slow down in operations
(and revenues) consistent with the slow down in waste delivered to the Company.
The Company has no contingency plans should such a slowdown occur.
7
<PAGE>
USE OF PROCEEDS
---------------
The Company will not receive any proceeds from sales of Shares by the
Selling Shareholders. The Company may receive cash proceeds from the exercise,
if any, of outstanding Warrants. However, certain holders of the Warrants have
the option to exercise the Warrants through a cashless exercise program, which
would result in no cash proceeds to the Company. As of the date of this
Prospectus, based on recent market prices for the Company's Common Stock,
management believes that it is unlikely that all of the Warrants will be
exercised since the exercise prices of the Warrants are $1.20 per share and
$2.46 per share. However, if all of the Warrants were exercised with cash at
the exercise prices of $1.20 and $2.46 per share, then proceeds of the Offering
to the Company would total an aggregate of $1,227,600 in cash. After deduction
of expenses of this Offering payable by the Company, estimated to total $15,000,
net cash proceeds are estimated to total $1,212,600. Any net proceeds to the
Company from the exercise of outstanding warrants will be used for working
capital.
8
<PAGE>
SELLING SHAREHOLDERS
--------------------
The following table sets forth information known to the Company regarding
the beneficial ownership of Shares of the Company's Common Stock as adjusted to
reflect the sale of the shares offered hereby by each Selling Shareholder. The
information set forth below is based upon information concerning beneficial
ownership provided to the Company by each Selling Shareholder. Except as
otherwise indicated below, each of the persons named in the table has sole
voting and investment power with respect to the shares set forth opposite such
person's name.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Owned Prior to Number of Shares Owned After
Name Offering(1)(2) Offered Hereby(1) Offering(1)(3)
- ---- ------------------- ---------------------- -----------------------
<S> <C> <C> <C>
Alan Moore 925,000 900,000(4) 25,000
Canadian Advantage Limited 346,861 346,861 0
Partnership
Sovereign Partners, LP 867,152 867,152 0
Dominion Capital Fund Ltd. 1,387,444 1,387,444 0
Domain Investments Ltd. 60,000 60,000 0
</TABLE>
_________________
(1) The number of Shares underlying the Warrants or Debentures are those Shares
registered for sale upon exercise or conversion of the Warrants or
Debentures held by Selling Shareholders. The number of shares of Common
Stock indicated to be issuable in connection with conversion of the
Debentures and offered for resale hereby is an estimate determined in
accordance with a formula based on the market prices of the Common Stock,
as described in this Prospectus, and is subject to adjustment and could be
materially less or more than such estimated amount depending upon the
market price of the Common Stock at the time the Debentures are converted.
(2) Assumes that the Warrants are exercised and the Debentures are converted
and all Shares are sold by the Selling Shareholders.
(3) Beneficial ownership is calculated in accordance with Rule 13d-3 (d) of the
Securities Exchange Act of 1934, as amended. Under Rule 13d-3 (d), shares
not outstanding that are subject to options, warrants, rights or conversion
privileges exercisable within 60 days are deemed outstanding for the
purpose of calculating the number and percentage owned by such person of
the class, but not deemed outstanding for the purpose of calculating the
percentage owned of the class by any other person.
(4) Includes Shares subject to a lock-up agreement with the holders of the
Debentures whereby Mr. Moore has agreed that without prior consent he will
not sell any Shares for six months from the registration statement
registering these shares for resale.
9
<PAGE>
Relationships and Transactions with Certain Selling Shareholders
- ----------------------------------------------------------------
Domain Investments Ltd. acted as placement agent for the Company in
connection with issuance of the Debentures and pursuant to which Domain received
warrants to purchase 60,000 Shares of Common Stock, which Shares are registered
for public sale pursuant to this Prospectus. Except as described above, none of
the Selling Shareholders has had any position, office or other material
relationship with the Company during the past three years.
PLAN OF DISTRIBUTION
--------------------
SALE OF SECURITIES BY SELLING SHAREHOLDERS
- ------------------------------------------
The Selling Shareholders have advised the Company that prior to the date of
this Prospectus they have not made any agreements or arrangements with any
underwriters, brokers or dealers regarding the resale of the Shares. The
Company has been advised by the Selling Shareholders that the Shares may at any
time or from time to time be offered for sale either directly by the Selling
Shareholders or by their transferees or other successors in interest. Such
sales may be made in the over-the-counter market or in privately negotiated
transactions.
The Selling Shareholders have exercised their right to require the Company
to register the Shares which the Selling Shareholders purchased from the Company
in private transactions. The Selling Shareholders were granted certain
registration rights pursuant to which the Company has agreed to maintain a
current registration statement to permit public sale of the Shares for a period
of at least nine months from the date of this Prospectus or until the Shares
have been sold, whichever first occurs. The Company will pay all of the
expenses incident to the offering and sale of the Shares to the public by the
Selling Shareholders other than commissions and discounts of underwriters,
dealers or agents, if any. Expenses to be paid by the Company include legal and
accounting fees in connection with the preparation of the Registration Statement
of which this Prospectus is a part, legal fees in connection with the
qualification of the sale of the Shares under the laws of certain states,
registration and filing fees, printing expenses, and other expenses. The
Company will not receive any proceeds from the sale of the Shares by the Selling
Shareholders. However, the Company will receive the exercise price of the
Warrants if and when the Warrants are exercised, unless the cashless exercise
feature is used by the Selling Shareholders.
The Company anticipates that the Selling Shareholders from time to time
will offer the Shares through: (i) dealers or agents or in ordinary brokerage
transactions; (ii) direct sales to purchasers or sales effected through an
agent; (iii) privately negotiated transactions; or (iv) combinations of any such
methods. The Shares would be sold at market prices prevailing at the time of
sale or at negotiated prices. Dealers and brokers involved in the offer and
sale of the Shares may receive compensation in the form of discounts and
commissions. Such compensation, which may be in excess of ordinary brokerage
commissions, may be paid by the Selling Shareholders and/or the purchasers of
Shares for whom such underwriters, dealers or agents may act. The Selling
Shareholders and any dealers or agents which participate in the distribution of
the Shares may be deemed to be "underwriters" as defined in the 1933 Act and any
profit on the sale of the Shares and
10
<PAGE>
any discounts, commissions or concessions received by any dealers or agents
might be deemed by the NASD to constitute underwriting compensation.
If the Company is notified by the Selling Shareholders that any material
arrangement has been entered into with an underwriter for the sale of Shares, a
supplemental prospectus will be filed to disclose such of the following
information as the Company believes appropriate: (i) the name of the
participating underwriter; (ii) the number of Shares involved; (iii) the price
at which such
11
<PAGE>
Shares are sold; (iv) the commissions paid or discounts or concessions allowed
to such underwriter; and (v) other facts material to the transaction.
Sales of Shares in the over-the-counter market may be by means of one or
more of the following: (i) a block trade in which a broker or dealer will
attempt to sell the Shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction; (ii) purchases by a dealer as
principal and resale by such dealer for its account pursuant to this Prospectus;
and (iii) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by the
Selling Shareholders may arrange for other brokers or dealers to participate.
The Company is unable to predict the effect which sales of the Shares by
the Selling Shareholders might have upon the market price of the Company's
Common Stock or the Company's ability to raise further capital. See "Risk
Factors - Market Overhang."
PRIVATE SALE OF COMMON STOCK BY THE COMPANY
- -------------------------------------------
The Company will issue Shares of "restricted" Common Stock to the Selling
Shareholders upon their exercise of the outstanding Warrants or conversion of
Debentures which they received from the Company in private transactions. The
Company anticipates that Shares issued upon exercise of the Warrants or
conversion of the Debentures will be sold by the Selling Shareholders as
described above.
INDEMNIFICATION
- ---------------
The Company's Articles of Incorporation provide that the Company shall
indemnify any officer, employee, agent or director against liabilities
(including the obligation to pay a judgment, settlement, penalty, fine or
expense), incurred in a proceeding (including any civil, criminal or
investigative proceeding) to which the person was a party by reason of such
status. Such indemnity may be provided if the person's actions resulting in the
liabilities: (i) were taken in good faith; (ii) were reasonably believed to
have been in the Company's best interest with respect to actions taken in the
person's official capacity; (iii) were reasonably believed not to be opposed to
the Company's best interest with respect to other actions; and (iv) with respect
to any criminal action, the director had no reasonable grounds to believe the
actions were unlawful. Unless the person is successful upon the merits in such
an action, indemnification may generally be awarded only after a determination
of independent members of the Board of Directors or a committee thereof, by
independent legal counsel or by vote of the shareholders that the applicable
standard of conduct was met by the director to be indemnified.
A director, employee, agent, or officer who is wholly successful, on the
merits or otherwise, in defense of any proceeding to which he or she was a
party, is entitled to receive indemnification against reasonable expenses,
including attorneys' fees, incurred in connection with the proceeding. In
addition, a corporation may indemnify or advance expenses to an officer,
employee or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with
12
<PAGE>
law and if provided for by its articles of incorporation, bylaws, resolution of
its shareholders or directors or in a contract.
In connection with this Offering the Company and the Selling Shareholders
have agreed to indemnify each other against certain civil liabilities, including
liabilities under the 1933 Act. Insofar as indemnification for liabilities
arising under the 1933 Act may be permitted to directors, officers and
controlling persons of the issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act, and is, therefore, unenforceable.
DESCRIPTION OF SECURITIES
-------------------------
As of the date of this Prospectus, the Company is authorized to issue
100,000,000 shares of $.001 par value Common Stock. No holder of any shares has
any preemptive right to subscribe for any of the Company's securities.
NO CUMULATIVE VOTING. Each holder of Common Stock is entitled to one vote
per Share with respect to all matters that are required by law or its articles
to be submitted to shareholders. Shareholders are not entitled to cumulative
voting in the election of directors. Accordingly, the holders of more than 50%
of the Shares voting for the election of directors can elect 100% of the
directors if they choose to do so; and, in such event, the holders of the
remaining Shares voting for the election of the directors will be unable to
elect any person or persons to the Board of Directors.
ISSUED AND OUTSTANDING. As of January 25, 1999, the Company had issued and
outstanding 5,638,259 Shares of Common Stock.
SECURITIES REGISTERED HEREBY.
- ----------------------------
Effective January 10, 1996 the Company issued Warrants to purchase 900,000
Shares of Common Stock at an exercise price of $1.20 per share to Alan Moore in
connection with the issuance of the 10% Senior Note with a face amount of
$2,000,000. These Warrants were issued in a transaction exempt from
registration under Section 4(2) of the Securities Act. The Shares underlying
these Warrants are registered for public sale pursuant to this Prospectus.
Effective June 11, 1998 the Company issued $1,500,000 aggregate principal
amount of 8% Convertible Debentures. These Debentures are convertible into
Shares of Common Stock at the conversion price for each Share of Common Stock
equal to the lesser of (i) $3.00, or (ii) 75% of the five day average closing
bid price of the Common Stock for the five trading days immediately preceding
the conversion date of the Debentures. Except in the case of mandatory
conversion of the Debentures, no holder of Debentures is entitled to convert an
amount of Debentures that would result in beneficial ownership of more than 4.9%
of the Company's outstanding common stock. The Shares of Common Stock issuable
upon conversion of the Debentures are registered for public sale pursuant to
this Prospectus.
13
<PAGE>
In connection with the issuance of the Debentures, Domain Investments, Ltd.
received, as placement agent, warrants to purchase 60,000 Shares of Common Stock
at an exercise price of $2.50 per Share. The Shares of Common Stock issuable
upon exercise of these Warrants are registered for public sale pursuant to this
Prospectus.
TRANSFER AND WARRANT AGENT.
Montreal Trust Company, 510 Burrard Street, Vancouver, B.C. V6C 3B9, serves as
transfer agent for the Common Stock.
The Company serves as agent for its privately issued notes, options,
debentures and warrants.
LEGAL MATTERS
-------------
The legality of the issuance of the Shares of Common Stock being offered by
the Selling Shareholders hereunder will be passed upon on behalf of the Company
by Smith McCullough, P.C., 4643 S. Ulster Street, Suite 900, Denver, Colorado
80237.
EXPERTS
-------
The consolidated balance sheet of Rich Coast Inc. and subsidiaries as of
April 30, 1998 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended April 30, 1998 and 1997,
which appear in the Company's Form 10-KSB/A No.1 for the year ended April 30,
1998 have been incorporated by reference herein in reliance upon the report,
dated July 27, 1998, (except for notes 2(k), (l) and 9, which are as of January
19, 1999) of Smythe Ratcliffe, Chartered Accountants, Vancouver, British
Columbia, independent auditors, and upon the authority of said firm as experts
in accounting and auditing.
14
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE DELIVERY
OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
RICH COAST INC.
TABLE OF CONTENTS
Available Information; Documents Incorporated
by Reference.................................
Forward Looking Statements.....................
Prospectus Summary............................. 3,561,457 Shares
Risk Factors................................... of Common Stock
Use of Proceeds................................
Selling Shareholders...........................
Plan Of Distribution........................... PROSPECTUS
Description Of Securities......................
Legal Matters..................................
Experts........................................ _______, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table shows all expenses of the offering, other than
underwriting discounts and commissions.
<TABLE>
<CAPTION>
<S> <C>
SEC Filing fee $ 821
Printing costs $ 200
Edgar cost $ 1,000
Legal fees $10,000
Accounting fees $ 1,500
Miscellaneous $ 1,000
Total $14,521
=======
</TABLE>
All amounts listed above, except for the registration fee, are estimates.
All expenses itemized above will be paid by the Registrant. Sales agent
discounts and commissions to any brokers or dealers will be borne by the Selling
Shareholders for the Shares offered by the Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation provide that the Company shall
indemnify any officer, employee, agent or director against liabilities
(including the obligation to pay a judgment, settlement, penalty, fine or
expense), incurred in a proceeding (including any civil, criminal or
investigative proceeding) to which the person was a party by reason of such
status. Such indemnity may be provided if the person's actions resulting in the
liabilities: (i) were taken in good faith; (ii) were reasonably believed to
have been in the Company's best interest with respect to actions taken in the
person's official capacity; (iii) were reasonably believed not to be opposed to
the Company's best interest with respect to other actions; and (iv) with respect
to any criminal action, the director had no reasonable grounds to believe the
actions were unlawful. Unless the person is successful upon the merits in such
an action, indemnification may generally be awarded only after a determination
of independent members of the Board of Directors or a committee thereof, by
independent legal counsel or by vote of the shareholders that the applicable
standard of conduct was met by the director to be indemnified.
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of the expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding), is asserted by
such director, officer or controlling person in connection with the securities
being registered, the small business issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
II-1
<PAGE>
ITEM 16. EXHIBITS. The following is a complete list of exhibits filed as part
of this Registration Statement, which exhibits are filed herewith or
incorporated by reference herein.
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<C> <S>
3.3 Articles of Incorporation.(1)
3.4 Bylaws.(1)
5.1 Opinion of Smith McCullough, P.C. as to the legality of the
securities registered hereby. Filed herewith.
21.1 List of Subsidiaries. Filed herewith.
23.1 Consent of Smith McCullough, P.C. See Exhibit 5.1.
23.2 Consent of Smythe Ratcliffe, Chartered Accountants. Filed
herewith.
</TABLE>
- ---------------------
(1) Previously Filed.
ITEM 17. UNDERTAKINGS.
A. The undersigned small business issuer will:
(1) file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to include any
additional or changed material information on the plan of distribution.
(2) for the purpose of determining liability under the 1933 Act, treat
each post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to be
the initial bona fide offering thereof.
(3) file a post-effective amendment to remove from registration any of
the securities remaining unsold at the termination of the offering.
B. Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to directors, officers and controlling persons of the issuer
pursuant to the foregoing provisions, or otherwise, the small business issuer
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable.
II-2
<PAGE>
In the event that a claim for indemnification against such liabilities
(other than the payment by the small business issuer of the expenses incurred or
paid by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by the
director, officer or controlling person in connection with the securities being
registered, the small business issuer will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by its is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issue.
C. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the 1934 Act that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-3 and has duly caused this Form S-3/A No. 1 to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of Dearborn, State of Michigan, on January 29, 1999.
RICH COAST INC., Registrant
By /s/ James P. Fagan
-------------------------------------
James P. Fagan, President and CEO
II-4
<PAGE>
Exhibit 5.1
Opinion of Counsel
January 29, 1999
The Board of Directors
Rich Coast Inc.
10200 Ford Road
Dearborn, MI 48126
RE: FORM S-3 REGISTRATION STATEMENT
OPINION OF COUNSEL
Dear Sirs:
As securities counsel for Rich Coast Inc. (the "Company") a Nevada
corporation, we have examined the originals or copies, certified or otherwise
identified, of the Articles of Incorporation and Bylaws of the Company,
corporate records of the Company, including minute books of the Company as
furnished to us by the Company, certificates of public officials and of
representatives of the Company, statutes and other records, instruments and
documents pertaining to the Company as a basis for the opinions hereinafter
expressed. In giving such opinions, we have relied upon certificates of
officers of the Company with respect to the accuracy of the factual matters
contained in such certificates.
We have also, as such counsel, examined the Registration Statement on Form
S-3/A No.1, File No. 333-63289 (the "Registration Statement") to be filed with
the Commission on or about February 2, 1999 covering the resale of up to
3,561,457 shares of Common Stock of the Company by the Selling Shareholders, as
more particularly described in the Registration Statement.
Based upon the foregoing and subject to the other qualifications and
limitations stated in this letter, we are of the opinion that the shares of
Common Stock to be issued to holders of the warrants or debentures held by the
Selling Shareholders, upon exercise and payment of the exercise price stated in
the warrants, or upon conversion of the debentures, will have been duly
authorized, validly issued, fully paid and non-assessable.
This opinion is a legal opinion and not an opinion as to matters of fact.
This opinion is limited to the laws of the State of Nevada and the federal law
of the United States of America, and to the matters stated herein. This opinion
is made as of the date hereof, and after the date hereof, we undertake no, and
disclaim any, obligation to advise you of any change in any matters set forth
herein. This opinion is furnished to you solely in connection with the
transactions referred to herein, and may not be relied on by any other person,
firm or entity without our prior written consent.
We acknowledge that we are referred to under the caption "Legal Matters"
included in the Registration Statement. We hereby consent to such use of our
name in the Registration Statement and to the filing of this opinion as an
Exhibit thereto. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of the
<PAGE>
The Board of Directors
Rich Coast Inc.
January 29, 1999
Page 2
United States Securities Act of 1933 or the Rules and Regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Smith McCullough, P.C.
<PAGE>
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
- --------------------------------------------------------------------------------
NAME OF SUBSIDIARY JURISDICTION OF INCORPORATION
- --------------------------------------------------------------------------------
Rich Coast Resources, Inc. Michigan
- --------------------------------------------------------------------------------
Rich Coast Oil, Inc. Michigan
- --------------------------------------------------------------------------------
Rich Coast Pipeline, Inc. Michigan
- --------------------------------------------------------------------------------
Waste Reduction Systems, Inc. Michigan
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
-----------------------------
We consent to the incorporation by reference in the Form S-3/A No. 1
Registration Statement of Rich Coast Inc. of our report dated July 27, 1998,
(except for notes 2(k), (l) and 9 which are as of January 19, 1999) accompanying
the consolidated financial statements of Rich Coast Inc., which financial
statements are also incorporated by reference in such Registration Statement,
and to the use of our name and the statements with respect to us, as appearing
under the heading "Experts" in the Prospectus.
/s/ SMYTHE RATCLIFFE, CHARTERED ACCOUNTANTS
Vancouver, British Columbia
January 29, 1999
